Corporate Adviser
  • Content Hubs
  • Magazine
  • Alerts
  • Events
  • Video
    • Master Trust Conference 2024 videos
  • Research & Guides
  • About
  • Contact
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG
No Result
View All Result
Corporate Adviser
No Result
View All Result

Record number of DB buy-outs in 2019

by Emma Simon
April 16, 2020
funds
Share on FacebookShare on TwitterShare on LinkedInShare on Pinterest

Increasing numbers of pension schemes are looking to protect against longevity risk with a record numbers of buy-ins, buy-outs and longevity swaps in 2019.

New analysis by Hymans Robertson shows these totalled around £43.8bn in 2019, up from a previous record of £24.2bn  in 2018. 

Since 2007, when this market started, pension schemes have now insured around £0.25 trillion of longevity risks via these various methods. 

Hymans Robertson found that last year there were 153 buy-in and buy-out transactions, worth an average of £286m per transaction. This was an increase of 39 per cent on the size of the average transaction the year before.

There were also five buy-in and buy-out transactions last years worth over £3bn each, whereas prior to this there had only ever been one transaction of this size. 

Hymans Robertson says just three insurance companies — Rothersay Life, Legal & General and Pension Insurance Company — completed 75 per cent of all buy-in and buy-out transactions, equivalent to £34bn.

Hymans Robertson head of risk transfer James Mullins says: “The last decade saw the market for pension scheme buy-ins and buy-outs truly come of age as it grew from relative infancy to the impressive £43.8bn of premiums we saw written in 2019. An eight-fold increase compared to 2010.

“There were five buy-in and buy-out transactions that were each over £3bn in 2019: Allied Domecq, Asda, British American Tobacco and Rolls Royce, and telent.”

He says while these mega-transaction hit the headlines it is interesting to note that smaller transactions of less than £1bn each still accounted for around £15bn of buy-ins and buy-outs during 2019 alone, which he says is a further sign of how this market is maturing.

“The UK pension scheme risk transfer market is leading the world in terms of volume, maturity and innovation, with around £0.25 trillion of pension scheme longevity risk now having been insured via buy-ins, buy-outs and longevity swaps.  

“To put that into context, that means that the longevity risk associated with around 15 per cent of all defined benefit pension scheme liabilities in the UK has now been insured, up from just 1 per cent ten years ago. 

“Pension scheme risk transfer is developing rapidly in other countries too, such as the USA, Netherlands and Canada and those countries are watching with interest how the market develops in the UK.”

 

Corporate Adviser Special Report

REQUEST YOUR COPY

Most Popular

  • Death-in-service benefits excluded from IHT grab

  • Aviva launches ‘flex first, fix later’ retirement option for master trust savers

  • Laura Mason: This is the moment for targeted pension support

  • Baroness Drake leads revived Pensions Commission re-examining AE levels and SPA

  • Mansion House speech signals pensions reform but omits phase 2 review: industry reaction

  • Industry welcomes revived Pension Commission

Corporate Adviser

© 2017-2024 Definite Article Media Limited. Design by 71 Media Limited.

  • About
  • Advertise
  • Privacy policy
  • T&Cs
  • Contact

Follow Us

X
No Result
View All Result
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG

No Result
View All Result
  • Home
  • News
  • In Depth
  • Profile
  • Pensions
    • Auto-enrolment
    • DB
    • DC
    • Defaults
    • Investment
    • Master Trusts
    • Sipps & SSAS
    • Taxation
  • Group Risk
    • Group Life
    • Group IP
    • Group CIC
    • Mental Health
    • Rehab
    • Wellbeing
  • Healthcare
    • Musculoskeletal
    • Mental Health
    • IPT
    • Wellbeing
    • Trusts
    • Cash Plans
  • Wellbeing
    • Mental Health
    • Health & Wellbeing
    • Financial resilience
  • ESG

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.