Insurers up their game, as LCP forecasts up to £550bn of buy-ins over the next decade

LCP’s flagship annual report on the pension risk transfer market – now in its 19th year – reveals how insurers have upped their game in the face of growing innovation in endgame strategies. 

The report highlights record funding levels, growing insurer capacity and a strong pipeline of insurance transactions that could lead to £550bn of buy-ins over the next decade.

Key findings in the report are:

• Record funding levels: 45% of schemes (approximately 2,250) are now estimated to be fully funded on buy-out, a figure expected to rise to 80% within five years. 
• Growing innovation in endgame options: Recent developments in the alternative endgame area – such as the Pension Schemes Bill 2025 surplus flexibilities and TPT launching a DB superfund – are causing schemes to think hard about their endgame strategies. Valuable new options are opening up for schemes – an area where LCP expects to see significant activity.
• Strong and sustained demand for insurance: Despite the widening endgame options, demand for buy-ins remains strong, with major transactions by blue-chip sponsors such as Rolls-Royce and Ford over the summer. LCP projects a continued healthy pipeline of £350bn to £550bn of buy-ins over the next decade. The true level of activity is masked by higher yields – if restated at 2020 gilt yields, the upper end of the projected pipeline would exceed £1,000bn.
• Record insurer capacity: LCP estimates insurer capacity could stretch up to £70bn in 2026, comfortably supporting projected demand of £40bn to £55bn.  Insurers have been upping their game with growing capacity and asset-sourcing capabilities and a focus on offering the best member experience. Capacity will be boosted by the acquisitions of Just and PIC and strategic partnerships such as L&G’s with Blackstone. This should help sustain long-term competition and attractive pricing.
• Addressing the buy-out ‘bottleneck’: The post-transaction process has come into sharp focus with the number of schemes moving to buy-out forecast to be over 250 next year – up from just 15 in 2021. Insurers have grown their post-transaction teams by 145% in the past three years to handle this workload and cite GMP equalisation and other data correction activities as the biggest blocker to a timely buy-in to buy-out transition.

Charlie Finch, Partner at LCP commented: “Insurers have been upping their game over 2025. Fierce competition drove record pricing levels, a trend we expect to continue into 2026 as insurer appetite and capacity reach new highs. While endgame innovation continues apace, demand for the insurance route remains strong – as demonstrated by the £4bn+ buy-ins completed by the Rolls-Royce and Ford schemes in recent months. 

Ruth Ward, Principal at LCP, added: “We expect a record 350 buy-in transactions this year – but that remains modest compared with the 2,250 schemes we estimate are already fully funded on buy-out. Some of these schemes may be preparing for a transaction, some may be running on for a period before insurance, and others may be weighing up longer-term run-on or emerging alternative endgame options. The right approach will be specific to each scheme, but at its core the buy-in market offers attractive pricing and a strong focus on member experience. Schemes are in a powerful position to compare options and deliver positive outcomes for their members.”

LCP will be hosting a webinar on the 2 December, exploring the key conclusions from the report and the questions schemes should be considering to set the right strategy.