General Insurance Article - Aon Hewitt comment on Just Retirement and Partnership merger


Aon Hewitt, has commented on the merger of Just Retirement and Partnership, and on its potential effect on the bulk annuity market. John Baines, principal consultant in the Risk Settlement Group at Aon Hewitt, said:

 “The medically underwritten bulk annuity market has become mainstream with close to £1 billion of business written in the past 18 months. With one of the main reasons for the proposed merger between Just Retirement and Partnership being a focus on growing in the defined benefit pension market, we don’t expect that this growth trend is likely to change.
  
 “As with any merger, there is a risk of reduced competition driving up prices. However, in this case, that risk is likely to be mitigated by the new entrants that are poised to enter the market imminently, by the increased interest of traditional insurers in using medical data to sharpen their pricing, and also by the need to retain a competitive pricing basis relative to traditional insurers.”
  
 John Baines continued:
 “The view we have given when advising clients, is that there would be a reasonable chance that one or both of Just Retirement and Partnership might not remain as stand-alone insurers, given their size and the specialist nature of the marketplace. While the timing was not necessarily expected, the focus of the combined group on enhancing the covenant ought to be good news for both existing and future policyholders.

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