The bulk annuities market opened up dramatically yesterday when Birmingham's Wesleyan Assurance became the first life office to take on giants Legal & General and Prudential in the field.
A number of companies, including the likes of Aegon, Aviva and Canada Life, are thought to be close to moving into a market that is estimated to be worth a potential #1,000 billion.
But the comparatively small Wesleyan beat them to the punch by signing a deal with trustees of two pension funds belonging to the crashed Allied Steel & Wire group - many of whose employees lost much of their nest egg in the failure.
Under the agreement, Wesleyan has taken charge of assets worth about #230 million which it will use to pay out annuities to about 5,300 fund members.
Doug Bright, the society's head of product development, who helped to negotiate the deal, said a further three staff would be recruited to handle the ASW business. And he signalled that Wesleyan was looking at further bulk annuity business, albeit on a limited scale.
ASW pension trustees and their actuarial advisers, Mercer and Hymans Robertson, picked Wesleyan after a "beauty parade" of applicants for the business.
The two schemes, ASW Pension Plan and ASW Sheerness Steel Group Pension Fund, have been wound up following the collapse of the group in 2002 and members' benefits converted to annuities.