Buy-in and buyout volumes hit £15.8bn in H2 2022

Written by Adam Cadle

21/04/2023

Total pension scheme buy-in and buyout volumes reached £15.8bn in the second half of 2022, after “unparalleled market volatility” resulted in an “extremely busy” second half the year, according to analysis from Hymans Robertson.

The firm pointed out that the number of transactions during the period were at their highest volume for nearly 10 years, with a total of £15.8bn of buy-ins and buyouts completed across 124 transactions, and an average transaction size of £127m. 

In particular, around 80% of that volume was in relation to buy-ins, while the remaining 20% related to buyouts.

Commenting on the findings, Hymans Robertson head of risk transfer, James Mullins, said: “As 2022 reached its halfway point, the risk transfer market remained resilient, despite concerns about rising inflation and economic uncertainty concluding with a turbulent political landscape in early Autumn.

“Large yield rises triggered a feedback loop of defined benefit pension schemes selling gilts to deleverage or potentially scale back hedging. As the dust settled after the market volatility, schemes reassessed their endgame journey plans.”

Mullins also stated that the risk transfer market has remained strong at “a time of unparalleled market volatility” as well as challenges for pension scheme trustees.

“Market volatility led to widening of credit spreads, resulting in excellent pricing opportunities for some pension schemes already in the market during Q4 2022,” he added. “The risk transfer market is expected to be extremely busy in 2023 and beyond.

“Insurers are looking for innovative ways to adapt to the growing demand, and some insurers have already put in place structures for smaller schemes who are prepared to work with that insurer on an exclusive basis.”

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