Hymans Robertson head of risk transfer James Mullins
Total pension scheme buy-in and buyout volumes reached £12bn in the first half of 2022, latest research from Hymans Robertson shows.
The consultancy's half year risk transfer report found demand for transactions was steady at the start of the year and gathered pace from the second quarter onwards.
It said a total of £12bn of buy-ins and buyouts took place across over 78 transactions during the first half, with an average transaction size of £153m. Hymans Robertson said approximately 75% of that volume was in relation to buy-ins and the remaining 25% related to buyouts.
Hymans Robertson head of risk transfer James Mullins added: "Widening credit spreads and insurers competing to meet new business targets led to highly attractive buy-in and buy-out pricing for defined benefit pension schemes who approached the market during 2022.
"Over the last 15 years, around 80% of the market has been pensioner buy-ins and 20% has been buy-outs. Going forward, I expect that trend to reverse, with whole-scheme buy-ins and buyouts dominating the market from now on."
He added: "The rapid growth in demand for pension schemes to insure their risks, along with improved pension scheme funding levels, attractive insurer pricing and new alternative risk transfer options, means that we expect over £50bn a year of buy-ins and buy-outs on average over the next 10 years. That means that, by the end of 2031, £1trn of pension scheme liabilities will have been insured, covering five million members' benefits."
