Insurance and pensions provider Royal London has announced that it has been preparing to enter the UK’s booming bulk annuity market.
The firm announced its 2023 results on 8 March, with the top line being a profit share of £163m, up from £155m in 2022, to be shared in April 2024 with over two million eligible customers who have life and pensions policies with Royal London.
But the talking point for the pension risk transfer market in the UK was a bullet point further down the press release, that stated that the firm: “Extended our annuity capabilities in advance of an intended participation in the bulk purchase annuities market, focused on providing a competitive solution to the trustees of defined benefit pension schemes”.
Before the announcement, there were eight insurers participating in the UK’s bulk annuity market, which has been on a growth trajectory in the past few years.
Consulting firm Hymans Robertson published Risk Transfer Report 2024 on 1 February, its annual deep dive into the bulk annuities market in the UK.
The appendix to the report contains a timeline of aggregated values of longevity swaps, buy-out and buy-in transactions since 2009. The report states that more than £40bn worth of longevity swaps, buy-ins and buy-outs had been completed in 2019-2022, and that: “We expect 2023 to have been a record year for risk transfer transactions”. (Full year data for 2023 was not finalised at the time).
