Total bulk purchase annuity (BPA) premiums written by Standard Life doubled year-on-year in the first half of 2023, its half-year report has revealed.

During H1 2023, Standard Life wrote £3.2bn of BPA premiums, up from £1.6bn in the first half of 2022.

Its workplace and BPA businesses reported new business long-term cash of £885m in the first half of this year, up from £430m in the same period last year.

Standard Life’s retirement solutions business made up £665m of the £885m total, with the remaining £220m coming from its capital-light fee-based businesses.

The report stated that its workplace business was current quoting on a “significant” pipeline of new schemes, while around £3bn of new scheme assets are due to transfer to Standard Life over the next two years.

Commenting on the BPA market and the firm’s half-year report, Standard Life managing director of defined benefit solutions and reinsurance, Kunal Sood, said: “The BPA market is seeing record levels of demand, due to higher interest rates narrowing the funding gap of many defined benefit pension schemes, and therefore making buy-ins and buyouts more affordable for trustees.

“This market is large and growing, and all signs are pointing to 2023 being a record-breaking year, with the total BPA market expected to reach more than £40bn in 2023, as schemes look to capitalise on their improved funding levels through insurance de-risking.

“With the predicted surge in bulk annuity demand now materialising, this is a market that continues to grow, and Standard Life is well positioned to support in meeting this demand and ensure more members’ benefits are secured.

“The outlook for the second half of the year looks positive, with a strong pipeline of activity as the funding levels for many schemes allow them to position themselves for de-risking activity much earlier than anticipated.

“With no end in sight, and as the industry starts looking ahead to 2024, for trustees and sponsors looking to de-risk, the priorities should remain on solid preparation, and flexibility, to ensure they are effectively navigating a constantly evolving market.”

Standard Life CEO, Andy Curran added that the firm’s ability to support both auto-enrolment schemes and de-risking of defined benefit schemes meant it was aligned to several growth markets.

“The challenges posed by the cost-of-living crisis means customers are increasingly seeking greater certainty as they plan for their future,” he continued.

“We have taken a number of significant steps to help them, launching our first open market individual annuity to meet this need and rolling out Money Mindset, our financial wellness digital coaching tool that helps customers better understand and manage their finances.

“However, the current environment puts the financial needs of people in sharp focus and more needs to be done in the UK to provide support for all to help them make more sense of their finances and give them more personal information and support.”

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