On the go: The first half of this year witnessed 78 bulk annuity deals, a record for the period, which registered 19 more transactions than the first six months of 2021.
Nearly £20bn of risk transfer deals covering bulk annuities and longevity swaps occurred in the first half of 2022, according to Mercer. Total bulk annuity deal premia made up £12bn, with more than half of the deals worth between £10mn and £100mn.
Mercer expects a number of deals worth at least £1bn in the second half of the year, with total bulk annuity volumes predicted to reach £30bn to £35bn.
There were £7.6bn of UK longevity swaps across three deals in the first half of 2022, bringing the total value of bulk annuities and longevity swaps to £19.6bn.
Mercer expects the value of UK longevity swaps to rise by £10bn to £15bn in the second half, with a number of swaps expected to complete before the year closes.
“At this point of the year the insurers know which transactions they will complete in 2022, but with recent market movements many schemes are now seeing buyout affordability coming towards them far quicker than expected, and may be looking to a 2023 transaction,” said Mercer risk transfer partner Ben Stone.
“It is too early to say whether 2023 will be the time at which the insurers’ capacity to quote on increased volumes will lead to significant backlog, but our advice to schemes is to control the controllable.”
