The value of UK bulk annuity deals is set to quadruple in the 2020s when compared to this decade, Mercer has predicted.
With around £50bn of pension risk expected to be transferred this year, the consultancy estimated that the burgeoning market would continue, with £45bn on average transacted each year of the next decade....
Schemes are increasingly looking at longevity hedging as part of their de-risking process, according to a survey by Insight Investment.
Insurers are now able to accommodate up to £30bn of bulk annuity transactions every year with no impact on pricing, according to Lane Clark & Peacock (LCP).
Increasing demand for global longevity reinsurance could lead to higher bulk annuity prices but less exact matching for longevity hedging, says Mercer.
The Electricity North West Group of the Electricity Supply Pension Scheme (ESPS) has invested in an £805m pensioner buy-in with Scottish Widows.
Zurich has agreed to insure £800m of longevity risk for the pensioners of a FTSE 100-sponsored pension scheme.