Unprecedented Growth in DB Pension Scheme Buy-Ins
The year 2024 marked a remarkable milestone in the realm of defined benefit (DB) pension scheme buy-ins, with a record 299 buy-ins completed. This represented a significant increase, rising by one-third compared to the previous high of 226 buy-ins recorded in 2023, as per the insightful analysis conducted by Hymans Robertson.
The total value of transactions for 2024 is anticipated to hit £47.6 billion, making it the second-highest annual volume, trailing only behind the £49.1 billion record set in the prior year, 2023. Among the transactions, six insurers managed to finalize 14 buy-in deals, each exceeding £1 billion. Notably, the bulk of these transactions occurred in the latter half of the year, totaling an unprecedented £32.4 billion — the largest six-month transaction volume ever recorded. This surpasses the previous six-month record of £28 billion, which was achieved in late 2023.
Industry Insights and Future Outlook
James Mullins, Partner and Risk Transfer Specialist at Hymans Robertson, remarked on the bustling nature of the risk transfer market in 2024, as evidenced by the sheer number and cumulative value of the completed transactions. He stated, “Closing in on 300 transactions is a noteworthy achievement for the buy-in market. Insurers have diligently enhanced efficiencies through streamlined processes and inventive approaches; the outcomes are evident. However, there remains a need for insurers to further invest in their post-transaction operations.”
Mullins further elaborated on the market’s trajectory, noting, “2025 has already commenced with a vibrant start, suggesting that the levels of buy-in transactions seen in 2024 may become the new standard. The introduction of three new players in the buy-in market, including Royal London and Utmost in 2024 and Blumont this month, has bolstered the capacity and variety available to pension schemes.”
He also highlighted the expansion efforts of established market insurers, explaining how firms like Aviva, Just, and PIC achieved record transaction values, with others nearing their peak. “This expansion results in exceptional risk transfer opportunities for pension schemes,” Mullins concluded.
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