IRELAND - MetLife Assurance has launched its bulk annuity business in Ireland to cater for a growing demand for buyout solutions in the republic.
The UK firm said the Irish buy-in and buyout market, although still in the early growth stages, will likely see an increasing number of solvent employers start to wind up their pension schemes following recent volatile financial conditions.
MetLife said research it has carried out in Ireland among finance directors (FDs) and trustees suggests there is a growing awareness of the importance of managing pension scheme liabilities in defined benefit schemes.
Three quarters (76%) of respondents stated that de-risking their company pension scheme was "important" to their overall business objectives, including 38% who stated it was "very important".
A third (34%) said they were most likely to consider asset allocation such as liability driven investment and asset diversification for achieving their de-risking goals.
The next most popular action for the combined respondents was risk mitigation (16%) such as longevity insurance, closely followed by liability reduction such as enhanced transfers and trivial commutations (15%).
Some 18% of respondents expect to be involved in a pension scheme buy-in over the next two years, with 10% likely to undertake a buyout within the same timeframe.
MetLife chief executive officer Dan DeKeizer said: "Despite continued uncertainty regarding the global economic recovery, pension liabilities are being seen as key financial components to businesses and their success.
"Encouragingly, it is generally recognised that the responsibility for driving pension scheme de-risking strategy is held jointly between employers and trustees and that a range of activities are being actively considered"
MetLife also expects the popularity of bulk annuities in Ireland to increase as multi-national companies investigate global pension risk transfer solutions to cover all, or part of, their accrued pension scheme liabilities as part of a general de-risking strategy.
DeKeizer added: "Our research shows an increased demand among both pension scheme trustees and company executives in Ireland for de-risking solutions such as buyouts and buy-ins. We have a compelling proposition to offer Irish companies and scheme trustees looking to better manage their liability issues and wanting a safe home for their pension schemes.
"We are a well-capitalised insurer with a thorough understanding of longevity and investment risks, underpinned by the considerable resources and heritage of our parent company. Indeed, since launching into the UK market in 2008, MetLife Assurance Limited has secured benefits for 24 pension schemes2 worth over €1 billion and we believe we can replicate similar success in Ireland given the exciting opportunities the market has to offer."
Met Life will target schemes with liabilities in excess of €2m ($2.7m).
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