To collect the health and well-being information from members, the trustees used Aon Hewitt's AHEAD platform which has been developed to give insurers the underwriting information they need in order to provide their most competitive quotation.
John Baines, principal consultant at Aon Hewitt said:
“This is the largest full scheme medically underwritten bulk annuity yet completed in the UK. Being able to secure all benefits in a scheme of this size is yet another milestone in this rapidly expanding market. We estimate that pricing was around 10% cheaper than a traditional bulk annuity would have cost.
“By using AHEAD we gained a 90% member response – a figure we have seen on all our AHEAD transactions so far – which gave the trustees access to a significantly better price than would otherwise have been available.”
Graham Smith, Chair of Trustees of the Kuwait Petroleum Services Company Pension Scheme, said:
"We have been working with our advisers with the aim of securing long term benefits for our scheme members. The culmination of this deal means that we can now provide additional security for these benefits. Aon Hewitt was able to offer us an integrated service throughout the process, and the deal they negotiated with Partnership offered great value for both members and the scheme sponsor."
Costas Yiasoumi, Director of Defined Benefit Solutions at Partnership, said:
“Over time we expect that an increasing proportion of bulk annuity transactions under £100 million will be medically underwritten. We’re pleased to have worked with Aon Hewitt and the trustees to fully secure the member benefits.
“Our analysis shows that 93% of medically underwritten bulk annuity processes over 2013 and 2014 ended with successful insurer selection, an enviable achievement for the bulk annuity market*. The evidence is that when trustees have chosen the medically underwritten route the resulting pricing has met or beaten expectations.”
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