General Insurance Article - JLT comment on merger between Justretirement & Partnership

 “The merger between Partnership and Just Retirement will create a 'Goliath' in the medically underwritten annuity market. This would lead to a near monopoly, at least in the short term, as the two companies have accounted for the vast majority of the medically underwritten transactions so far.

  

 One would think that the deal would result in less competitive pricing in the market. However, this won’t necessarily be the case as insurers have rarely agreed to accept a single set of underwriting data, preferring instead to use their own questionnaires, so that rarely pension schemes could simply, quickly and cost effectively get a quote from more than one insurer. Whilst having a negligible effect on competition, the merger could boost the financial strength of the new company, reducing trustees’ worries about counterparty risk.

  

 Overall, this could turn out to be a good deal for pension schemes.”