Annual Bulk Annuity Update 2014

While 2013 was the most successful year for the bulk annuity market since 2008, the market continues to strengthen and 2014 is already well on course for a record breaking year.

The record for the largest bulk annuity transaction in the UK was broken in July 2013 when Pension Insurance Corporation completed a £1.5bn deal with the EMI Group Pension Fund.  However, this was recently surpassed in March this year by the £3bn pensioner buy-in agreed between Legal and General and the ICI Pension Fund.

As well as providing an update of the latest market activity in this report, we discuss the current market pricing and highlight some of the key issues that trustees and employers should consider when looking to carry out a bulk annuity transaction.  We also describe some of the innovations that the insurers have developed to help facilitate transactions.

In particular the report looks at:

  • Buy-outs and buy-ins market activity
  • Changing market conditions – potential opportunities
  • Medical underwriting
  • Assessing a transaction
  • Are insurers safe?
  • Preparing for the quotation process
  • Insurer flexibility - bulk annuity options