Pension risk transfer report

Reaching cruising altitude

Our 2024 report reveals that market dynamics have broadly stabilised in 2024 as market volumes reach what we view as 'cruising altitude'. Our analysis shows that the appetite for insurance remains high, with forward-looking annual volumes averaging out at broadly 2024 levels over the next decade.

There have been significant regulatory, market and industry developments in the last couple of years, and with funding much improved, there is a wider range of endgame options and timescales being assessed. For most schemes, we see the key question being 'when' not 'if' they move to insurance, and the discussion being around what the triggers will be to do that.

Insurer capacity has expanded to reach comfortably over £50bn a year, with new insurer entrants taking total market participants to record numbers. These emerging supply / demand dynamics are yielding some of the most competitive full scheme buy-in pricing seen in years and delivering great outcomes in current transactions.

The report addresses key questions for schemes and corporate sponsors. Is insurance – through a buy-in or buy-out – the right answer for your scheme? How can pension schemes make the most of changing market dynamics? Will insurer pricing continue to remain attractive?

Inside the report:

• Endgame strategy: Whether insurance is the right answer for your scheme and, if so, when?
• Market dynamics: Analysis of future demand for buy-ins and buy-outs in the light of record funding levels and shifting views on endgame strategy.
• Insurer capacity: How insurers have significantly ramped up their operations with established insurers and new entrants contributing positively to the market.
• Pricing dynamics: How expanded capacity has led to some of the most favourable full scheme buy-in pricing in years.
• Implementation post-transaction: Analysis of the increasing pressure on insurers and administrators as more schemes move to buy-out.
• Case studies:
  • WHSmith’s £1bn efficient transition to buy-out.
  • Coats’ £1.3bn full buy-in which solved complex illiquid asset challenges.