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A seismic shift in buy-ins and buy-outs – how is the market adapting?

Future demand and supply in the buy-in and buy-out market

Our 2023 de-risking report analyses the seismic shift in the buy-in / out market this year and how the market is adapting to this.

The report estimates that around 20% of UK defined benefit pension schemes – some 1,000 schemes – are fully funded on buy-out. This has led to a dramatic acceleration in demand for buy-ins and buy-outs, with insurers reporting an increase of over 50% in the number of schemes seeking quotations in the first half of the year.

Early indications of this seismic shift can be seen in the record £21.2bn of assets transferred to insurers in the first half of 2023, putting the year on track to exceed the previous record of £43.8bn of buy-ins / outs in 2019. The record for the largest scheme to reach full insurance has also been broken twice – once by RSA at £6.5bn in February and again by the British Steel Pension Scheme at £7.5bn in May. Case studies for both transactions are included in the report.

The report addresses key questions for schemes and corporate sponsors. How are the insurers responding to accelerating demand? Will insurer pricing persist at current attractive levels? And how can larger, mid-sized and smaller schemes adapt to a fundamentally changed marketplace?

Explore the pension risk transfer report

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Inside the report:

  • Market dynamics – accelerating demand for buy-ins and buy-outs, with nearly 50% of DB schemes projected to be fully funded on buy-out within five years
  • Case studies – RSA £6.5bn ‘big bang’ full buy-in transaction with PIC and British Steel Pension Scheme’s £7.5bn full buy-in across four buy-ins via a strategic partnership with Legal & General
  • How are insurer participation rates changing for larger, mid-sized and smaller schemes?
  • How can larger, mid-sized and smaller schemes tailor their approaches to maximise insurer engagement in this new marketplace?

Read previous versions of our pension risk transfer report

2022: Insurance enters a new phase - a skyrocketing market

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2021: Finding a safe landing

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