Hymans Robertson reveals in its Half Year Risk Transfer Report that total pension scheme buy-in and buy-out volumes totalled £27.7bn in 2021.
According to the report, Aviva had the greatest market share in the buy-in and buy-out market for the year to 31 December 2021, with around 22 per cent by value, followed by Standard Life with 20 per cent. There were at least 39 deals for more than £200m last year, with at least 14 worth more than £500m. Over the last year, pension scheme risk transfer deals totalled over £42.9bn in liabilities. The entire average buy-in/buy-out deal size for the prior year was £177m, down from £222m the year before.
Hymans Robertson head of risk transfer James Mullins says: “The impact of the pandemic continued to influence in early 2021, however increased innovation in the longevity hedging space, led to a busy second half of the year with total transactions at the second-highest ever level for a six-month period. With many of the insurers having been behind target by mid-2021, this created particularly strong competition toward the second half of the year.
“The rapid growth in demand for pension schemes to insure their risks, along with improved pension scheme funding levels, attractive insurer pricing and new alternative risk transfer options, means that we expect around £50bn a year of buy-ins and buy-outs on average over the next 10 years, in addition to longevity swaps. That means that, by the end of 2031, £1 trillion of pension scheme liabilities will have been insured, covering 5 million members’ benefits.”
