This year is expected to be another record year for buy-in volumes of defined benefit plans in the U.K., exceeding the £50 billion ($63.8 billion) in 2023, according to an annual pension risk transfer report from consultant Hymans Robertson.
The report also anticipated more insurers competing for buy-ins, a record volume of multibillion-pound transactions, and more use of alternative risk transfer options and captive insurance solutions.
Hymans Robertson also noted that new entrants into the field would lead to increased competition. M&G re-entered the bulk annuity market in 2023 through its insurance company, Prudential Assurance Co., making it the first new entrant since 2017.
James Mullins, partner and head of risk transfer solutions at Hymans Robertson, said in a news release: "At the larger, multi-billion pound end of the market, more insurers are demonstrating that they have the capability and appetite to complete record-breaking transaction sizes. Insurers also currently have access to a large amount of capital, which increases their capacity for transactions of all sizes. This gives the potential for all insurers to complete record transaction volumes during 2024."
In February 2023, Pension Insurance Corp. concluded buy-ins with the trustees of two pension funds sponsored by insurance firm RSA Group, London, totaling £6.5 billion. In November, Legal & General made a £4.8 billion buy-in with the Boots Pension Scheme, Beeston, England. These are the largest DB plan transactions completed with an insurer in the U.K.
The Hymans Robertson team grew by a third in 2023 and has led risk transfer transactions totaling more than £30 billion since 2006.