Consultants Aon expect to see continued development and innovation in the bulk annuity market in 2025.
The insurance market has responded to meet the growing demand for de-risking solutions for defined benefit pension funds with both innovation and new participants and further developments are anticipated.
“Over the course of last year, there were various market changes that benefited smaller to mid-sized schemes, dispelling any myths that the market was only open to mega schemes,” said Mike Edwards, Partner in Aon’s UK risk settlement team.
“New market entrants, including Royal London and Utmost, completed their first deals below £100 million, while most of the established participants expanded their offerings at the smaller end of the market to give a better service via streamlined processes,” he added.
“Deals over £1bn have become ‘business as usual’, with size no longer viewed by insurers as a particular challenge. This demonstrates both the maturity of the market and the availability of capital to support continued growth. Even so, large schemes often bring unique structuring challenges. We worked with several insurers over the last year to develop innovative solutions to meet these challenges. This included issues relating to schemes’ illiquid asset holdings and the insurance of complex benefit features. Each year, this market breaks new ground and paves the way for more schemes to achieve their future aims. We expect 2025 to be no different,” Edwards said.
