Pensions - Articles - Final annuity figures show trends in Risk Transfer Market


Comments from James Mullins, Head of Risk Transfer, Hymans Robertson

 Bulk annuity insurers’ final figures for 2020 highlight trends in the Risk Transfer Market -

 • The total value of buy-ins and buy-outs in 2020 was £31.3bn across 140 transactions, compared to £43.8bn across 153 buy-ins/buy-out in 2019.
 • Around £25bn (c80%) of this was transacted by four of the eight insurers in the market, Legal & General, Rothesay, Aviva and Pension Insurance Corporation.
 • The average buy-in/buy-out size in 2020 was £224m compared to £286m in 2019.
 • Longevity swaps in 2020 covered £24.1bn of liability across eight transactions, compared to £10.8bn across three transactions in 2019.

 “Buy-ins/buy-outs and longevity swaps have now insured £300bn of risk from DB pension schemes in the last 14 years, since this market took off in 2007. Interestingly, over half of that amount (over £150bn) has been transacted in just the last four years, which is a clear sign of the acceleration of growth in this market. Our projections show that we expect to see over £40bn of buy-ins and buy-outs on average over the next ten years. In 2020 the transactions were heavily weighted towards buy-ins, as opposed to buy-outs. However, over the next few years we expect to see a significant increase in the number of buy-outs as more pension schemes are seeing their funding levels improve.”
  

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