Risk transfer volumes are expected to exceed £8bn in the first half of 2021, but this is below expected levels, according to new analysis by Hymans Robertson.
The pension consultants have looked at the total pension scheme buy-in and buy-out volumes over the first half of the year. The estimated volume of over £8bn includes £7.7bn of confirmed transactions over the first half of the year.
Hymans says these are lower volumes than insurers expected, there should be opportunities for well-prepared schemes to gain competitively priced buy-in quotations over the next few months.
Hymans Robertson head of risk transfer James Mullins says: “With just £7.7bn of confirmed buy-ins and buy-outs so far in the first half of this year, the market has been quieter than anticipated. The slow start was partly due to the fact that the end of 2020 was so busy and a quieter period has followed. It’s not a reflection of lockdown or a sign of reduced appetite.
“Despite the slow start, insurers still have business targets to aim for and the market has become extremely busy in recent weeks.
“As a result, the expectation is that the market will still reach over £25bn this year. We could well be in for a repeat of 2018, where the business written over the second half of the year more than doubles the business written over the first half of the year.”
Hymans Robertson’s risk transfer team has led the advice on over £2bn of buy-ins during 2021 and says it has seen a further increase in demand from schemes. It says it expects this trend to continue for the rest of the year.