The sector’s newest entrant has completed two transactions worth a combined £130m, while Aviva has insured the Thomas Miller pension scheme for £140m.
Royal London this week announced two buy-ins, its first since it completed two transactions with subsidiary pension schemes earlier this year.
It backed a £30m full scheme buy-in for The Retreat York Pension Scheme, sponsored by a non-profit organisation.
The deal, completed in July, secured the benefits of more than 300 retired and deferred members.
Adam Davis, managing director at K3 Advisory, which advised on the transaction, said: “As is the case with many deals of this size, the smooth and successful transaction came down to preparation and the ability to move quickly.
“Affordability was an issue for the scheme and, working with Royal London, we were able to confidently secure attractive pricing after a short period of monitoring to enable a transaction at a level affordable to the scheme.”
Duncan Willsher, client director at Vidett, the sole corporate trustee for the scheme, added: “The bulk annuity market is very busy as more and more schemes look to remove risk from the company balance sheets and secure member benefits.
“Although [it is] becoming increasingly popular thanks to improvements in funding, it doesn’t mean it’s easy for schemes, particularly small ones. The process can be complex if you aren’t working with the right people.
“Working closely with the sponsor, our advisors and Royal London, we were able to be decisive when inevitable challenges arose and ready to act swiftly.”
Royal London’s formal entry into bulk annuities
Royal London also completed a £100m transaction last month, but has not provided any more details.
In a statement earlier this week, the company said it was targeting smaller scheme transactions of up to £500m. It has built a 40-strong team, led by Paul Bowker as director of bulk annuity solutions, and is using its in-house administration capabilities.
Bowker joined the company in 2016 and moved to lead its individual annuities business in 2022.
“We have invested significantly to build a compelling bulk annuity offering for trustees and their members,” he said. “They will be able to partner with a well-known mutual brand with proven financial strength, in the confidence we only have their members’, and all our customers’, interests at the core of our long-term decision making.”
Barry O’Dwyer, Royal London Group’s chief executive officer, highlighted that his company was the only mutual operating in the bulk annuity market, which he said would be a “very attractive proposition for many trustees”.
Thomas Miller insures scheme for £140m
Meanwhile, Aviva has insured the UK defined benefit scheme of Thomas Miller & Co – an insurance services company – in a deal worth £140m.
The transaction is a full-scheme buy-in, covering all members, with advice provided by LCP and law firm Reed Smith.
Daniel Barlow of Law Debenture, chair of the scheme’s trustee board, said strong governance and collaboration between scheme and sponsor meant there was “an extremely positive response from the market”.
David Salter, partner at LCP, said the transaction demonstrated that “even in a busy market, well prepared schemes can present themselves in an attractive manner, achieve a high level of engagement from a range of insurers and therefore transact with attractive terms”.
