Founded as the Abbey Life Assurance Company in the United Kingdom by Mark Weinberg in 1961, Abbey Life plc was a London- and Bournemouth-based life assurance company that was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index. However, after a turbulent course of banking and loans events over the subsequent decades, it ended up being sold to Deutsche Bank. Here is how it happened, and where Abbey Life stands today.
Prior to 2007
In 1964, a 50 per cent interest in Abbey Life (not to be confused with Abbeynational) was bought by ITT Corporation. Six years later, ITT Corporation bought the remainder. Then, in 1988, Lloyds TSB bought a majority stake in the company, at which point, it was renamed as Lloyds Abbey Life. In 1996, Lloyds TSB took full ownership of the firm. However, Abbey Life was never fully integrated into Scottish Widows, Lloyds' life assurance company, and conducted business as a standalone entity. However, it lost its sales force in 2000, and in 2007, it was sold to Deutsche Bank (DB). Deutsche Bank acquisition
Abbey Life was sold to DB for around £977 million after an auction that had lasted many months. Lloyds TSB said at the time that it had reviewed the business and decided that selling Abbey Life would benefit both the group as well as the life assurance firm's policyholders and staff.
The current situation
Longevity insurance transaction
Far from fading from public view after its sale by Lloyds TSB, Abbey Life proved that it was as ambitious as ever by announcing in early 2010 that it had executed the largest ever longevity insurance transaction. DB said that the transaction will provide the BMW (UK) Operations Pension Scheme with a hedge for life expectancy risks associated with nearly £3 billion of pension scheme liabilities related to about 60,000 pensioners.
Abbey Life said that the transaction had shown its capability to combine its balance sheet strength and internal expertise with the specialist pensions and longevity know-how at Paternoster to bring about a landmark transaction. Indeed, Abbey Life's partnership with Paternoster, in which DB is the largest shareholder, shows that the life assurance company is using its current status as a wholly owned subsidiary of DB to flex its muscles in the UK's pensions market.