On the go: Despite a quieter start to the year in the UK’s bulk annuities market, the second half of the year is “expected to be very busy” reaching a volume of around £25bn in deals, analysis from Legal & General has shown.
The insurer’s Pension Risk Transfer Monitor, published on Friday, stated that there have been fewer jumbo risk transfer transactions in the UK market in 2021 when compared with previous years.
However, the trend towards opportunities for smaller and mid-sized schemes has continued as the market has proven its strength and resilience over the past 15 months, it added.
Pensions Expert reported in May that few defined benefit schemes signed bulk annuity deals in the first quarter of 2021, with many building on existing arrangements with insurers.
L&G has seen a pronounced uptick in quote activity, with a “healthy pipeline of larger transactions, suggesting that the second half of the year will be very busy”, with a volume of around £25m in deals.
John Towner, head of new business at L&G Retirement Institutional, said: “With the improvement in pension plan funding levels this year, we continue to see strong demand in both the UK and US for pension risk transfer."
He added: “Sponsoring companies in both countries are increasingly looking to insurers to take on responsibility for their pension obligations and help them reduce their pension exposures.
“We are expecting a very strong second half of the year in both the UK and US with a number of large transactions coming to market.”
