PIC records £1.9bn of new pension insurance business

Written by Talya Misiri
12/09/17

The Pension Insurance Corporation recorded new pension insurance business of £1.9bn of premiums in the six months to 30 June 2017, it has revealed.

In the insurers’ half year results published today, 12 September 2017, PIC reported new pension insurance business of £1.9bn and £24.2bn in financial investments, up from £22.6bn in the year ending 2016.

Underlying operating profit grew by 18 per cent the same period in 2016 from £79m to £93m.

In addition to pension insurance transactions for 3i, Smiths Industries and Alcatel-Lucent, PIC also converted a longevity swap to a buy-in for an unnamed pension scheme. Over the half year, 145,400 pension fund members were insured in total, up from 134,900 to the year-end 2016.

Furthermore, the insurer maintained its investments in social housing and student accommodation in the six months as part of a private debt investment programme totalling £500m.

PIC noted that policyholder satisfaction levels were maintained at almost 99 per cent.

Pension Insurance Corporation CEO Tracy Blackwell said: “It was pleasing that we were able to build on our momentum from the second half of 2016 by completing our strongest ever first half, with £1.9 billion of premiums. This means we now manage a portfolio of financial investments which is just over £24bn in value. During the period we invested a further £500m in private debt transactions, primarily in university accommodation and social housing, as well as funding our first equity release mortgages. As we develop and the value of our business continues to grow, it is also vital to maintain our focus on customer service. I am therefore delighted that we have once again reported very high policyholder satisfaction levels.

“We continue to see a positive outlook for bulk annuities and, after welcoming CVC as a significant shareholder in PIC’s ultimate parent company in April, we have a strong ownership structure, with a group of shareholders who are eager to work with us to meet any significant increase in demand. Finally, we are very pleased to be working with the Institute and Faculty of Actuaries on a mentoring scheme for female actuaries across the industry, to help promote diversity in the higher echelons of the profession.”

Last month Lane Clark & Peacock noted that among the eight active providers in the buy-in and buyout market, there is currently the highest level of competition since 2008.

Looking at insurers individually, PIC wrote the highest business, 37 per cent, totalling £1.9bn in the first half of 2017, while Legal & General (L&G) was second with 30 per cent, £1.5bn of business. Last year, L&G write the largest volume of transactions with 33 per cent of market share, followed by PIC with 25 per cent.

LCP noted that there has been a record number of mid-sized bulk annuity deals with 14 transactions between £100m and £1bn in the first half of 2017. The largest was an unnamed £690m pensioner buy-in with PIC and two further unnamed transactions over £500m.

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