Consultants and professional trustees have urged pension insurers to be more open about customer service metrics as boards place greater emphasis on them when selecting a bulk annuity provider.
In a new report, LCP and Law Debenture set out a series of measures that would help trustee boards to compare insurers on customer service measures. Attractive pricing in the bulk annuity market and strong competition among insurers have led trustees and consultants to explore non-financial factors to differentiate providers.
The two companies explained in their report that there can be significant differences between administration capabilities and situations at different insurers. Some have large populations of annuity holders that have transferred through buyouts, while others have smaller customer bases that are growing rapidly, placing different pressures on resources.
“Many insurers are already collecting information to assess the quality of member services, but these are not shared publicly… Making information public could incentivise insurers to continue to provide a high-quality service well into the future.”
In particular, LCP and Law Debenture said insurers should disclose targets and performance related to retirement and transfer quotations, settlements, and member bereavement cases, across written, telephone and digital channels and covering solely buyout customers.
Insurers should also report on complaints, resolution and compensation information, customer satisfaction, service interruptions, and data errors, as well as “actual and near-miss data incidents”.
Lynne Rawcliffe, a trustee director at Law Debenture, said: “A buyout should secure more than the promise of a pension. It should secure a good experience of receiving it.
“Many insurers are already collecting information to assess the quality of member services but these are not shared publicly. This makes it difficult to compare providers without incurring additional advice costs. Making information public could also incentivise insurers to continue to provide a high-quality service well into the future.”
Katie North-Walker, a senior consultant at LCP, added: “Insurers currently share a wealth of information about their member experience offerings with professional advisers, but as demand continues to grow and insurers look to innovate and differentiate, it can be difficult for trustees to accurately rank providers on the basics.
“Clear and transparent reporting would make it much easier to benchmark performance across the market, driving higher standards and helping insurers demonstrate how they are meeting their Consumer Duty obligations to deliver good outcomes for policyholders.”
Consultants are predicting an increase in bulk annuity activity over the final few months of 2026 as pricing remains attractive for pension schemes.
Lara Desay, head of risk transfer at Hymans Robertson, said this competition meant that “the smallest differences are having the strongest sway”.
She added that member experience “must be a focal point for both innovation and service delivery for insurers”.
“Members must be supported through their journey with realistic expectations and service-led approaches,” Desay said. “An increased number of schemes are now nearing the end of their buy-out journey with increasingly busy post-transaction activity.”
