The Legal & General Group’s Global Pension Risk Transfer (PRT) businesses has released the latest edition of the Global PRT Monitor, which analyses industry trends and market outlooks in the UK and US.
In the UK, the Monitor reported an unprecedented acceleration in demand, driven by more pension schemes being closer to buyout than ever before. The Monitor noted that the market reached an all-time first half high in 2023. Over £20 billion of transactions have been publicly announced, with some commentators speculating that the volume could reach around £25 billion – which would be just below the total achieved over the full year in 2022.
Market movements in the past year coupled with structurally higher interest rates have significantly improved pension scheme funding levels and taken five years off the average scheme’s projection to its full funding date.
The Monitor observed that this increase in demand is happening across pension schemes of all sizes, but the real dial-mover is proving to be large transactions of over £1 billion coming to market. Around 20 such cases have already been quoted on in 2023 with six announced in the year to date, including the British Steel Pension Scheme’s (BSPS) fourth buy-in with Legal & General at £2.7 billion, which saw BSPS become the largest pension scheme in the UK to have secured full insurance.
The Monitor reported the pipeline for 2023 and beyond is the largest the industry has seen and anticipates record market volumes for the full year. The complete Legal & General PRT Monitor UK and US PRT Market Overview can be found here.