Nearly one-third of U.K. pension risk transfers use an exclusive process

Nearly one-third of pension risk transfers in the U.K. in 2022 skipped an auction and ran an exclusive process instead, according to analysis by consultant Hymans Robertson.

A guide on the exclusive process published Oct. 6 noted that for smaller pension funds, "exclusivity can be powerful" for getting insurers' interest. "Some insurers are also making exclusivity a condition of quoting for a small scheme," the guide said.

Advantages of going exclusive — choosing one insurer upfront and requesting pricing from only that one — include a nimbler process than a traditional bulk annuity auction and engaging with insurers better suited to meet objectives.

"In our experience, exclusivity still leads to competitive pricing, as experienced advisers and professional trustees know what excellent pricing looks like. Insurers also know if they do not give an excellent price the transaction is unlikely to proceed, and the advisers and trustee will be less likely to select them for an exclusive process in the future," Iain Church, head of core transactions and risk transfer specialist for Hymans Robertson, said in a statement.

"For some schemes, going exclusive could lead to a better outcome" and insurers not interested through a competitive process may take a different view if offered exclusivity, Church said.