16 September 2022
Analysis of insurers’ H1 2022 results by Lane Clark & Peacock (LCP) shows that the UK pension risk transfer market has started strongly in 2022 with £12.0bn of buy-ins and buy-outs. This is an increase of over 50% compared to H1 2021 (£7.8bn) and is the third largest first half ever.
LCP’s analysis is based on the insurers’ final reported results for H1 2022 that have been published in the past few days. Key findings include:
Charlie Finch, partner at LCP, commented: “Buy-in and buy-out activity has continued strongly into 2022 with volumes increasing by over 50% in the first half of the year compared to 2021. Activity has been ramping up over the second half and we expect to increase further in 2023.
“The activity has been driven by surging pension scheme funding positions on the back of the biggest rise in long-term interest rates this century (20-year gilt yields have more than trebled to 3.7% pa since the start of the year). We expect this to turbo-charge demand from pension schemes looking to de-risk next year. The challenge is that insurers simply do not have the resources to quote on all of the opportunities that could come to market. The schemes that win will be those who have invested in preparation across cleaning data, drawing up detailed benefit specifications, getting their investments transaction ready and putting in place suitable governance arrangements with the sponsor. Such preparation will pay dividends over the coming years.”Source: LCP
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