Hannah Brinton, Partner, Aon
The UK bulk annuity market continues to evolve rapidly, with large scheme transactions playing a pivotal role in shaping insurer appetite, pricing dynamics, and innovation. Exploring some recent deals, we share insights on how large transactions achieve their objectives by working with insurers to seek bespoke solutions in line with specific requirements, paving the way for greater innovation on deals of all sizes.
Full scheme transactions continue to be prevalent in the larger end of the market, however, we are also seeing a trend towards more phased buy-ins for large pension schemes that are not in a position to fully insure or are seeking to balance risk reduction with other objectives, which is driving innovation in the market.
Insurer Appetite: Selective but Strong
Insurers remain highly engaged on large transactions with the significant capital available and business targets driving considerable appetite, with several £Billion+ transactions already completed or in progress over 2025.
Aon have been the lead adviser on the majority of large scheme transactions this year, including the largest deal of 2025 – the £4.6 Billion transaction for Ford securing the liabilities for over 35,000 members with L&G. Through this, we have seen increasing competition from a wider pool of insurers to consider larger transactions as they seek to expand offerings and write business in this sector of the market. This has led to more innovation and scope to drive additional value with insurers on behalf of members in three key areas: member experience, bespoke terms and pricing of demographic risk.
Member Experience as a Priority
Member experience has become an increasing priority in trustee decision-making when selecting an insurer. This covers a broad range of considerations, from insurer administration offerings through to comprehensive at-retirement support for members.
In recent months, we have seen considerable innovation from insurers in a number of key areas around member support, with more insurers currently offering, or expecting to offer in the near-term, greater online functionality, modellers and at retirement support for members. Recent transactions have also revealed that a greater volume of insurers are willing to offer IFA support for members.
In this rapidly evolving area of the market, schemes considering a bulk annuity purchase need to bring clear expectations on priorities around member experience, alongside other selection criteria in order to drive the best outcome for members.
Bespoke Terms: Negotiating for Strategic Value
Large deals often have more complex requirements to consider, however, given the buying power of these transaction, there is significant leverage to negotiate terms that go beyond standard market offerings to meet specific requirements. Across recent transactions, we have seen a range of bespoke terms to cater for specific requirements, for example, to meet specific needs around achieving more certainty in relation to insuring future liabilities and residual risks.
Insurers have demonstrated a willingness and scope to negotiate, however, it is vital to work with an experienced adviser who has strong understanding of insurer and regulatory requirements and able to position appropriately key bespoke requirements to ensure that insurers are fully engaged in these requests.
Demographic Risk: Driving Value in Pricing
Understanding scheme-specific demographics, particularly life expectancy and marital status, is a critical factor in driving value in large transactions. Demographic risk is typically passed to global longevity reinsurers as part of a transaction and reinsurers will pay close attention to any data provided, and their view on this data will play a key part in how pricing is determined for your scheme.
Spending time to improve key areas of data can have a significant impact on pricing benefit for schemes seeking to insure, this includes both considering the quality of data as well as taking the time to address gaps and/or carry out additional tracing.
Preparing for this and understanding the risks in your scheme before approaching the market will maximise insurer engagement and ultimately drive better pricing.
Conclusion
2025 is expected to deliver more than 300 transactions in a single year for the first time, however, large deals (in excess of £1 Billion) remain an important part of insurer strategy, with our 2025 Insurer Survey indicating that 9 insurers were actively participating in this segment of the market over the year. In 2026, we expect to see further innovation and increased flexibility to meet the needs of the next wave of schemes insuring £1Billion+ of liabilities.
