Rothesay Life has raised £900m of fresh capital to back a surge in new business and played down the possibility that it might float on the stock market.
The privately owned insurer said on Tuesday it had signed £4.4bn of deals this year, with more in the pipeline.
Like rivals such as Legal & General and Pension Insurance Corporation, Rothesay takes on pension schemes from companies that no longer want to run them, via deals known as bulk annuities.
The market has been booming this year as pension scheme deficits have fallen. The insurers will only take on fully funded schemes.
Addy Loudiadis, Rothesay’s chief executive, said the company had “the biggest pension pipeline we’ve ever seen”.
Rothesay said it expects to write more than £10bn of new business in 2019, a big jump on the £1bn of pension deals signed last year. It also anticipates finishing the year as the third-biggest annuity provider in the UK.
To back the new business, the company has raised £500m in equity from existing shareholders and £400m in a bond issue.
Rothesay is owned by Blackstone, Singaporean sovereign wealth fund GIC and MassMutual, the US-based insurer. All three contributed to the fundraising.
Rothesay has often been seen as a candidate for an initial public offering but Ms Loudiadis said the support of these shareholders meant it did not need to consider a flotation. “It is unclear that public investors understand the complexities [of insurance companies],” she said.
“In August, four deals came up and we won them because we could call up and secure the capital from our shareholders,” she added. “Imagine [raising this money] publicly. How could we guarantee to trustees that we’d have the cash?”
ReAssure, a life insurance business that operates in similar markets, attempted to float in July but owner Swiss Re pulled the £3bn IPO citing weak demand from investors.
Rothesay had a setback last month when the High Court blocked the proposed transfer of £12bn of annuities from fellow insurer Prudential after complaints from customers.
In a ruling some lawyers described as “unprecedented”, the judge said customers might have chosen Prudential because of its age, reputation and diversification, and that Rothesay did not have the same sort of reputation.
Ms Loudiadis said Rothesay was “disappointed” with the ruling, and that it was considering whether to appeal.
Hymans Robertson, a consultancy, has forecast a record year for the bulk annuity market. It expects £18bn of pension promises to be transferred in 2019, passing the previous record of £13bn set in 2014.