DLA Piper’s Insurance de-risking team has collaborated with all the UK insurers operating in the bulk annuity market (Aviva, Canada Life, Just Retirement, Legal & General, Pension Insurance Corporation (PIC), Rothesay, Scottish Widows and Standard Life) to produce the first ever insurer-led best practice guide on ‘Preparing Pension Schemes for a Bulk Annuity Quotation’.
The guide, which is being launched at an event today, is aimed at all stakeholders involved in bringing transactions to insurers, including trustees of Defined Benefit (DB) pension schemes and their risk settlement advisers, scheme sponsors, legal advisers, actuarial advisers, scheme administrators and investment advisers.
Over the past decade, more than £200 billion of retirement income has been secured through buy-in and buy-out transactions with insurers in the UK. In 2021, the market agreed transactions totalling almost £30 billion. Most industry commentators forecast that the volume in 2022 will comfortably surpass this, making it one of the largest ever years in the history of the market.
Demand for buy-ins and buy-outs is expected to grow significantly as funding levels improve and DB pension schemes move closer to their endgame objectives.
The authors of this guide have come together to create the first ever insurer led guide for the increasing number of DB pension schemes approaching the market. The intention is to drive greater efficiency within the industry by providing more transaction certainty for trustees whilst helping insurers to increase their quote capacity.
The principles in the guide apply to any size of transaction, regardless of what stage the scheme is at in its de-risking journey.
Amrit Mclean, Head of Pensions De-risking at DLA Piper who has helped the insurers collate and launch the guide, said: “This remarkable industry continues to thrive and will only get busier. We know all insurers are keen to quote on and to write as many deals as possible. This guide is a first step in making the whole quotes process more efficient for the entire industry. We look forward to working with the insurers on further updates to the guide over the coming months and years, as the industry continues to evolve and innovate.”