2025 saw a shift in the risk transfer market towards smaller pension schemes, says Hymans Robertson in its latest report. Buy-in deal volumes in 2025 of £38.2bn represented a fall of more than 20% compared with the prior year (£47.8bn), while the volume of deals less than £100m in value increased by over 30%. The overall number of deals of 370 set a new record for the market, an increase of more than 20% year-on-year (2024: 299), driven almost entirely by smaller pension schemes. While the number of deals sized over £100m stayed broadly flat year-on-year, the number smaller than £100m increased by more than 30%.
Although the year was characterised by an increase in smaller buy-in deals, larger scheme de-risking activity remained significant, according to the leading pensions and financial services consultancy. Four insurers completed deals in excess of £1bn covering £8bn overall, and over £18bn of liabilities was covered by longevity swaps. Competition in the market was strong for deals of all sizes, with 11 insurers actively participating over the year, and an increasing number participating in buy-ins below £100m. This helped to drive competitive pricing and innovation across the market.
2025 also saw developments in the alternative risk transfer space, with TPT announcing its intention to launch a superfund.
“2025 saw a more than 20% fall in bulk annuity volumes year-on-year. While this drop will have left some insurers disappointed, it hides a growing de-risking trend in smaller pension schemes, with the number of deals less than £100m actually increasing by more than 30% during the year. This is a result of both improved pension scheme funding levels and intense insurer competition,” said Michael Abramson, Partner and Risk Transfer Specialist, Hymans Robertson.
“Recent insurer M&A activity has reduced the number of market participants from 11 to 10, but it has also brought new capital and asset sourcing capabilities into the market. We expect that this will bring excess supply relative to demand from pension schemes, which is likely to continue to provide attractive pricing opportunities for schemes that are seeking to insure. In addition to competing on price, insurers are continuing to invest in their operational and administrative capabilities, with a focus on offering a high-quality of customer service and a positive member experience.”
