New analysis from consulting firm Hymans Robertson suggests that the first half of 2024 delivered a record number of buy-in transactions in the UK bulk purchase annuity market for a six-month period.
Hymans Robertson says that there were 134 buy-ins in the first half of 2024 – a record number for a six-month period – covering £15.3bn of pension scheme liabilities. This compares to 96 buy-ins that were completed during the same period in 2023 – a growth of nearly 40% year on year. The firm says that its risk transfer team led the advice on two-fifths of all buy-ins by value during the first half of 2024 and has used this data set, along with information from the insurance companies, to analyse buy-in market activity.
Looking towards the remainder of 2024, the firm anticipates over 250 buy-ins, which would be a record number for a calendar year since the market began in 2006. It is expected that these buy-ins will cover around £40bn of pension scheme liabilities during the whole of 2024.
“Building on the £49.1bn record set in 2023, 2024 has been a fascinating year for the risk transfer market. The insurers have demonstrated that they can handle record buy-in transaction numbers. Helped by the new entrants, I expect it won’t be long before we see 300 buy-ins in a single calendar year,” said James Mullins, Partner and Head of Risk Transfer at Hymans Robertson.
“The vast majority of these transactions are ‘whole-scheme buy-ins’, many of which will subsequently be looking to move to buy-out. That could create an administration bottleneck, and so trustees need to carefully test their chosen insurance company’s capacity for ongoing administration and the transition to buy-out. The superfund and captive insurance transactions, that we completed this year, show that there is now a wider range of transaction types than ever before. Pension scheme trustees and sponsoring employers need to understand the pros and cons of the different options to work out which risk transfer transaction best meets their objectives,” he added.