Pension Insurance Corporation (PIC) has so far racked up £5.8bn of buyouts and buy-ins with defined benefit schemes this year, while reinsuring £7bn of longevity risk, it has revealed.
In its half-year update - published today (24 June) - the specialist insurer said it had completed £3.3bn of new business with unnamed pension schemes, alongside £2.5bn of announced buy-in deals since the start of the year.
Deals the insurer has announced this year include a £1.2bn buy-in with Dresdner Kleinwort Pension Plan, a £425m buy-in with the Co-Operative Group's Somerfield Pension Scheme, and a £900m buy-in with Marks and Spencer Pension Scheme.
Across all deals completed so far this year, PIC said the number of its transactions is evenly split with 50% buy-ins and 50% buyout.
The £7bn reinsurance of longevity risk covers those associated with pension schemes PIC has insured so far this year and includes reinsurance of nearly £1.5bn of deferred members, signalling increased capacity for this type of risk within the reinsurance market.
The liabilities PIC has insured is more weighted to the buyout deals. For comparison, in 2018 PIC completed £5.6bn of longevity reinsurance.
Chief origination officer Jay Shah said the volume of new business and longevity reinsurance in the first half were both records for the insurer.
He added: "On the longevity reinsurance we are especially pleased to have insured such a large amount of deferred lives.
"This is a significant development for the reinsurance market, where we are now starting to see the standardisation of these types of deals, which we have had for several years for pensioner deals."
PP analysis shows that around £12.9bn of bulk annuities have been announced by insurers so far this year, with PIC completing around 45% of the business. Insurers anticipate total volumes of £30bn deals, much of which will be completed in the second half of the year, surpassing last year's £24.2bn record.
The Smiths Industries Pension Scheme has secured a £146m buy-in with Canada Life in its fourth bulk annuity and its sponsor’s tenth overall.
The Prudential Staff Pension Scheme has entered into a £3.7bn longevity swap with Pacific Life Re, insuring the longevity risk of over 20,000 pensioners.
The Baker Hughes (UK) Pension Plan has secured approximately £100m of liabilities through a buy-in with Just Group.
There have now been a total of 30 longevity swaps over £1bn publicly announced. The full list, provided by Willis Towers Watson and through PP research, is as follows...
The Reckitt Benckiser Pension Fund has secured a £415m buy-in with Scottish Widows, insuring the benefits of around half of pensioners.