Over £25bn of bulk annuity deals completed in the UK in 2022

Written by Adam Cadle

27/02/2023

More than £25bn of bulk annuity transactions were completed between pension schemes and insurers in 2022, according to Legal & General (L&G).

L&G Group’s Global Pension Risk Transfer (PRT) business, L&G Retirement Institutional (LGRI) and L&G Retirement America (LGRA), has released its latest edition of the Global PRT Monitor, which analyses industry trends and market outlooks in the UK and US.

Around £12bn of the more than £25bn of deals in the UK were secured in the first half in the year.

L&G noted that a surge in the second half of the year translated to another strong performance.

Overall, five transactions of more than £1bn were announced during the year.

The monitor found that improved pension scheme funding levels had greatly accelerated the journey to buyout for many pension schemes, with some market participants projecting that demand for buy-ins and buyouts could total £200bn over the next few years.

In the US, an estimated US $53bn of bulk annuity deals were completed, exceeding the 2021 record of US $38bn.

Commenting on the findings, LGRI head of UK pension risk transfer, John Towner, said: “Increasing numbers of UK pension schemes are looking to insurance to provide security to their members.

“Our market has continued to deliver for pension schemes in all varieties of environments. We are excited for what we expect will be a busy few years ahead.”

LGRA VP head of distribution, Sheena McEwan, added: “We saw yet another record-breaking year in the US PRT market, signalling the growing strength and resiliency of the market.

“As the market has evolved, we’ve seen volumes continue to rise and more transactions being announced publicly – which is helping to broaden knowledge and understanding of PRT as a key risk mitigation strategy for US insurers.

“Momentum from 2022 has carried over into 2023 and we are anticipating another busy H1 with several transactions over US $1bn already in the pipeline.”

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