Pensions - Articles - Comments on the British Airways bulk annuity buy in


Moody's and JLT comment on the completion of Legal & General’s £4.4bn buy-in with the British Airways PLC's pension scheme, Airways Pension Scheme

 Benjamin Serra, a Vice President and Senior Credit Officer at Moody’s Investors Service: “A number of UK life insurers remain focused on growing risk products such as bulk annuities, and the £4.4 billion deal announced today by Legal & General illustrates that the demand for these products is high. However, bulk annuity players rely on reinsurers to off-load longevity risk, and the ability to source higher-yielding illiquid assets is critical to their profitability”.

 “Legal & General, thanks to its expertise in funding real estate and infrastructure developments, is one of the few insurers able to compete on very large bulk annuity deals and make them profitable”.

 Moody's Investors Service in a report published today has confirmed the stable outlook for the UK life insurance sector for the next 12 to 18 months as continued performance resiliency underpins operating profit growth for the sector.
  

 Ruth Ward, Senior Consultant at JLT Employee Benefits, said: “Today’s announcement will make 2018 a record year for the bulk annuity market with over £26bn of business written year to date – and that’s before we hit Q4. It’s encouraging to see many schemes taking advantage of better market conditions and improved funding levels and taking steps to future proof their schemes. We’re seeing trustee and sponsor appetite to settle costly legacy pension liabilities, whether via transfer payments, traditional insurance or new consolidation vehicles, continue to rise. Volatility will remain a permanent feature of bulk annuity prices and those schemes in the market and actively monitoring pricing will be at an advantage, as we are seeing for the schemes we advise.”

Back to Index


Similar News to this Story

PPF marks 20 years of protection in its Annual Report
The Pension Protection Fund (PPF) has published its 2024/25 Annual Report and Accounts, marking its 20th anniversary with a year of strong financial p
DC pensions continue to back Net Zero despite ESG backlash
Barnett Waddingham’s latest DC Sustainability Report finds a 34% increase in allocations to funds with a climate target in the growth stage since orig
Chancellors focus on guided retirement for pensions savers
Ahead of the Mansion House speech to be delivered by UK Chancellor Rachel Reeves on the evening of 15 July, Glyn Bradley, Chair of Pensions Board at t

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.