The value of liabilities insured through U.K. bulk annuity and risk transfer deals in the first half of 2017 totaled £5.1 billion ($6.6 billion), up 88% vs. the same period last year.
Research by actuarial consultant Lane Clark & Peacock found a record number of buy-ins and buyouts were registered over the six months ended June 30, with 14 transactions sized between £100 million and £1 billion taking place in the period.
For the first half 2016, five bulk annuity deals were completed. There were seven deals in the first half of 2015.
The largest named transaction was a £270 million full buyout for the Tullett Prebon Pension Scheme, London, with Rothesay Life.
Insurers completed two longevity swaps so far this year, covering £800 million of liabilities with Legal & General and £300 million with Zurich. The pension funds were not disclosed.
“The start of 2017 has also seen the biggest fall in life expectancies this century with the latest mortality projections from the Continuous Mortality Investigation knocking 2% to 3% off pension liabilities,” said Charlie Finch, partner at LCP in a statement accompanying the research. “This reduction benefits pension plan funding and will make full buyout transactions more affordable."
He said pricing "remains keen" due to a high level of competition among insurers.
"Looking ahead, 2017 is well on track to exceed £10 billion of buy-ins and buyouts for the fourth year running and has the potential to exceed the record £13.2 billion set in 2014,” Mr. Finch added.
