Bulk annuity market reaches £12.7bn in H1 as 'return buyers' drive markets

UK bulk annuity sales reached a “substantial” £12.7bn in the first half of 2020, with 'repeat buyers' predominantly driving market volume, analysis by Aon has found.

Aon’s latest Risk Settlement UK Market Update revealed a “strong trend” of repeat buyers driving market volumes during the “challenging market conditions” stemming from the Covid-19 pandemic, with this subset representing over half of the disclosed 2020 market.

The firm also stated that this trend is continuing in deals being considered for this autumn.

It clarified that whilst a significant number of repeat buyer transactions are not in the public domain, even the publicised deals show significant activity, highlighting recent return buyers such as the Co-op, which has completed 4 deals this year, and MNOPF, which has completed six transactions since 2009.

Aon argued that the increase in repeat buyers has shown how establishing ways of integrating an annuity into your scheme’s operation can make it “considerably easier” to plan for the next one.

It noted that schemes that have done this are better able to capture market opportunities, whilst their working procedures have proved “robust” enough to deal with unpredictable markets and remote working.

In addition to this, it argued that repeat buyers often develop “nimble governance” enabling “swift and effective decisions”, stating that this trend has reinforced the necessity for schemes to plan ahead and be able to execute as opportunities arise.

The update emphasised that in a busy market, where resources have been further stretched by Covid-19 challenges, insurers have been forced to look for transaction certainty, noting that a track record of successive deals can also help schemes stand out in this way.

The firm also emphasised that whilst other schemes can “bridge the gap” in getting market attention, this would require "due preparation" and a “clear proposition”, in addition to strong information on market activity.

    Share Story:

Recent Stories


Climate Investing
Laura Blows speaks to Aled Jones, Head of Sustainable Investing for Europe at FTSE Russell, and Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board, about the role of climate investing within a pension fund portfolio.

Managing volatility
In the latest Pensions Age podcast, Laura Blows speaks to Cambridge Associates head of European pension practice, Alex Koriath, about the Covid-related market volatility and how pension funds can prepare for the challenges ahead

De-risking options for pension schemes
In this latest Pensions Age podcast, Linklaters' Sarah Parkin talks to Laura Blows about the wide range of choice available to pensions schemes for the partial, or full, removal of their risks

Risk transfer opportunities
Laura Blows speaks to Lisa Purdy, Head of Fiduciary Distribution at Legal & General Investment Management and Gavin Smith, Pricing and Execution Director - UK PRT at Legal & General, about the impact of the recent market volatility on the bulk annuity and risk transfer market and the potential opportunities for the future

Bulk annuities during coronavirus
Laura Blows speaks to Just business development manager Prash Mehta about the impact of coronavirus on transactions