As a result of a greater number of full scheme transactions involving deferred members, member experience has increasingly become a key focus for bulk annuity transactions. This has been put further in the spotlight thanks to great strides taken by many pension schemes who have significantly improved member support, particularly flexibility for deferred members in planning retirement. With insurers at different stages in service development, this drive for improvement has made member experience a central consideration in insurer selection.
The concept itself of selecting an insurer based on their administrative capabilities is not new, and indeed Aon have been continually reviewing the development of services since 2006, when we launched our insurer administration due diligence service area. Initially, the focus was on service levels and communications, for example.
However, client needs have developed significantly in recent years – for example, in 2019, Aon negotiated the first Pension Increase Exchange Exercise (PIE) at retirement as part of a transaction – and the breadth of insurer assessment has widened accordingly.
What's Changed for Members?
Historically, relatively few pension schemes offered extra support or flexible options after buyout, and this was mirrored by insurers. Members typically had standard retirement choices, with limited help to understand or reshape their benefits. As some Trustees introduced greater flexibility and wanted to retain member optionality, they often had to run special exercises before the transaction, such as bulk transfer or pension increase exercises.
For example, from 2018 onwards, Aon carried out some such bulk exercises concurrently with the broking exercise, with an insurer underwriting take-up on one project (and so no balancing premium), and the other projects carrying out a true up immediately post transaction to reflect the changes in the form of benefits for members taking up the relevant options.
However, the market has evolved rapidly in recent years. Insurers now recognise that member experience is a key differentiator. As part of Aon's 2025 Member Experience survey of insurers, results showed that insurers are increasingly willing to:
· Support options during buy-in: All insurers can facilitate member options during buy-in, provided administrators and insurers agree on efficient information sharing.
· Offer more choices after buyout: More insurers now provide transfer values and bridging pension options at retirement, giving members greater flexibility.
· Provide IFA support: Some insurers are prepared to offer access to independent financial advice at reduced rates, and more are developing these services.
· Use member portals: Most insurers have been developing online portals where members can access instant quotes and information.
Aon has played a key role in driving these changes, with our recent negotiations with insurers often focussed heavily on better member experience outcomes to achieve the optimal result for members and drive market change.
Practical Guidance for Trustees
As member options and support continue to expand, Trustees need to pay close attention when planning a transaction. Here are some practical steps to consider:
1. Understand what matters most to your members
Engage with your scheme members to find out which options and support they value most. This could include cultural fit, flexibility at retirement, access to advice, or online tools.
2. Engage with insurers early
When planning a transaction, speak to your advisers about what insurers can offer after buyout – consider running a focussed training session on this aspect. Make member experience a key part of your selection criteria, not just price and financial strength.
3. Communicate clearly with members
If there will be changes to member options or support after buyout, make sure members are informed well in advance. Clear communication helps manage expectations and builds trust.
4. Leverage expert guidance
Work with experienced advisers like Aon, who can help you navigate the evolving market and ensure your scheme secures the best possible outcome for members.
Looking Ahead: Innovation and Technology
We expect to see continued innovation from insurers to meet the evolving member demographics and stakeholder demand. Improved use of technology will be key in meeting this demand, and we expect the use of AI to feature heavily in insurers differentiating themselves against their peers.
For the average pension scheme member, engaging with your pension and understanding the options available can seem daunting, particularly for vulnerable members. A welcomed innovation in recent years is the improved online member portals and automated quote systems making it easier for members to access information and make decisions, and we expect trustees to continue to drive progress for the benefit of their members.
As the range of member options and support continue to expand alongside insurer appetite for these propositions, trustees will need to give these elements more weight when planning for a transaction. Trustees who keep pace with these developments and leverage expert guidance will be best placed to secure a transaction that not only meets financial objectives but also delivers real value to their scheme members.
