The deal insures the benefits of 4,900 retirees and 5,600 deferred members, and follows a £760m buy-in completed in 2021.
The deal insures the benefits of 4,900 retirees and 5,600 deferred members, according to a press release from the insurer.
It means that the pension scheme is now fully insured with L&G, following a 2021 buy-in worth £760m.
The transaction comes just six years after the Pensions Regulator raised concerns about the strength of the Sanofi Pension Scheme’s covenant.
It led to an agreement in 2021 between the trustees and the sponsor to match dividend payments with payments into the scheme, alongside other protections.
Hannah Absolom, secretary to the trustees, said: “The trustee [board] is delighted to have now achieved pension security for all members of the Sanofi Pension Scheme.
“The trustees selected Legal & General following a rigorous selection process and it has been a tremendous effort by all parties, with special thanks to Aon for leading the process, and to the CMS, XPS and Aptia teams in supporting the trustees through the transaction.”
Mike Edwards, partner at Aon, explained that the deal “required a high degree of insurer flexibility and innovation”.
“In an increasingly busy market for large pension schemes looking to de-risk via insurance, this transaction highlights that the best value can be achieved by schemes with well-defined requirements and a collaborative stakeholder group,” Edwards added.
L&G’s asset management business has run money for the Sanofi scheme since 1999, making it one of the latest L&G clients to transition from an asset management client to insurance.
Andrew Kail, chief executive officer of L&G’s institutional retirement division, said: “The buy-in with the Sanofi Pension Scheme strengthens our existing relationship with the client and creates greater security for its members.
“This latest transaction is another example of how our synergistic model, across our Asset Management and Institutional Retirement divisions, is supporting pension schemes at every stage of their lifecycle.”
L&G completed four transactions worth more than £1bn each in the second half of 2024, including the UK defined benefit schemes for Deutsche Bank and Essity.
In total, the insurer reported £8.4bn worth of new bulk annuity business written in 2024.
Large deals ‘business as usual’ for insurers
Aon’s Edwards pointed out that deals worth more than £1bn “have become business as usual” for insurers.
“This demonstrates both the maturity of the market and the availability of capital to support continued growth,” he said.
However, large deals often come with complexities and Edwards said transactions had included elements such as managing illiquid assets and insuring unusual or complex benefit structures.
“Each year, this market breaks new ground and paves the way for more schemes to achieve their future aims,” he added. “We expect 2025 to be no different.”
Looking ahead to the 2025 bulk annuity market, Aon’s John Baines, a senior partner in the risk settlement team, highlighted the renewed scrutiny of insurers from the Prudential Regulatory Authority (PRA).
The PRA wants to make sure that insurers “do not weaken their pricing discipline and do not incentivise weaker risk management standards” as they compete for new business, Baines said.
“At a time when the market continues to enjoy significant growth, it is vital that appropriate controls are in place to maintain policyholder protection,” he said.
