UK - The value of DIY buy-in and longevity hedge deals struck during 2009 was almost double that of traditional buy-out / buy-in deals during the same period, latest research reveals.
Hymans Robertson said the value of traditional buy-out / buy-in deals struck during Q2 2009 fell to £600m (US$1bn) - giving a total of £1.5bn for the first half of 2009 and an average deal size of less than £20m.
But it said the DIY buy-in and longevity hedge market had seen two massive deals struck during 2009, covering £2.7bn of pensioner liabilities.
Senior liability management specialist James Mullins said: "Hymans Robertson expects that all forms of pension scheme de-risking will continue to increase in the medium term because the recent volatility means that companies and trustees have an even greater appetite to reduce risks."
Hymans Robertson pension scheme settlement solutions specialist Richard Shackleton added: "In the short term however, significantly increased pension scheme deficits and corporate cash constraints mean that the total value of buy-in and buy-out deals in 2009 is likely to be significantly lower than 2008.
Despite this, Pension Corporation claimed the pension insurance market would total over £10bn in 2009 - a increase of 25% over 2008, which saw just over £8bn of insurance deals transacted.
According to the company's pension risk transfer index - launched today - longevity risk transactions will account for up to 60% of the market by year end.
The insurer also found the cost of insuring pensioners had decreased sharply - hitting a low in February 2009 due to historically low future expectations of inflation.
It said because most benefits are inflation-linked, securing this risk became much cheaper.
And it added the widening yield spreads available on high-quality corporate debt held by some insurers had also helped bring these prices down.
Pension Corporation chief executive Edmund Truell said: "The affordability of pension buyouts and pensions buy-ins is better than it has been in the last three years."
He added: "Many pension funds can actually get insurance for much of their liabilities without requiring any further funding by their sponsor or any dipping into surplus."
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