Over £900m of buyout deals have been completed during the third quarter of 2012, resulting in £2.5bn of total business written during the year so far, according to JLT Pension Capital Strategies (PCS).

The larger deals were predominantly pensioner buy-ins, with the largest being the £320m Cookson deal with Pension Insurance Corporation. JLT PCS expects a number of transactions still to be completed during the rest of 2012, particularly at the small and medium end of the market.

However, continued concerns over the eurozone crisis means that conditions will remain difficult and buyouts may remain unaffordable for many schemes. Based on business written during the first three quarters of the year, 2012 business levels look set to be lower than previous years.

JLT PCS director and head of buyout consulting Martyn Phillips said: “Whilst low yields have led to higher absolute prices compared to 12 months ago, schemes with significant gilt holdings will have seen significant growth in assets, so that the affordability of the buyout route may actually have increased over the period. These well matched schemes are expected to continue to consider opportunities to de-risk via the purchase of a bulk annuity.”

He added that the demand for bulk annuities is likely to increase following the European Commission’s Quantitative Impact Study on its plans to revise the IORP Directive, the results of which are due by spring 2013. “This is because the QIS could include Solvency II capital requirements for UK schemes, making DB provisions so expensive that bulk annuity prices would become cheaper in comparison.”

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