Solvency II to push annuity providers to gilts

The impending Solvency II insurance regulation is forcing UK insurers to move back their annuity liabilities with gilts rather than the traditional corporate bonds, according to the rating agency Fitch.

In a conference call to present the findings of their paper Solvency II: Far-reaching Implications, the firm's analysts concluded the corporate sector would see a marked drop in demand for its debt as a result.

"UK life insurers hold more than half of UK corporate bonds. If annuity providers move