Author: Greg Winterton

The results of a recent survey of 152 defined benefit pension schemes in the UK by professional services firm Aon indicates that a majority of schemes now have a professional trustee on their board.   In the survey, Aon found that 57 per cent of respondents reported that they had appointed a professional trustee already. Aon expects this proportion will continue to rise in the future.  “A professional trustee won’t be appropriate for all schemes – many of which will already have highly experienced trustees on the board – but with the increased focus from employers on endgame planning, we expect…

The life settlement industry enjoyed its third consecutive year of growth in the number of transactions completed in the secondary market, according to new data from trade publication The Life Settlement Report, part of The Deal. The data collected by The Life Settlements Report comes mainly from state insurance departments through public records requests. For the calendar year 2023, the total face value of all transactions was $4.72bn, which is the highest recorded level since 2009. Furthermore, 3,181 deals were completed in the industry, the third consecutive year of growth and the second highest in the past five years (3,241…

The Bank of England’s Prudential Regulation Authority (PRA) has finalised its changes to the Solvency II regulation.  Policy Statement 10/24, issued yesterday, revolves around the changes to the matching adjustment (MA) component of the regulation; these changes broaden the assets that qualify for inclusion in MA portfolios.   The UK government is looking to direct capital into productive assets, and it will hope that the new regulations encourage insurers to invest accordingly. It’s unlikely that this will be a quick win, however.  “Today’s announcement has confirmed that there will be increased flexibility in the type of assets that insurers can invest…

Total US pension risk transfer (PRT) premium was $14.6bn in the first quarter 2024, 130% higher than first quarter 2023, according to LIMRA’s U.S. Group Annuity Risk Transfer Sales Survey.    There were 146 contracts sold in the first quarter, 26% higher than the prior year. These contracts cover almost 200,000 pension participants. Since January 2020, US PRT deals have covered more than 2.5 million participants.  “Demand for PRT solutions continues as favorable economic conditions spur plan sponsors to de-risk their pension obligations,” said Keith Golembiewski, assistant vice president, head of LIMRA Annuity Research.  “While there were a few jumbo deals…

A new article from S&P Global suggests that insurance companies that participate in the UK’s bulk purchase annuity market could benefit from increased oversight from both the British and Bermudian regulators. Credit FAQ: Funded Reinsurance Deserves The Heightened Regulatory Scrutiny takes a deep dive into the inner workings of the funded re market, covering areas such as the recent growth of the market, the risk mitigations that insurers in the space employ, advantages of funded re when compared to longevity risk transfer, the key regulatory developments, and S&P’s view of the key risks in the market. “Although it is still far more…

Reverse mortgage-backed security issuance improved last month when compared to April, according to New View Advisors’ latest commentary article. The firm says that HMBS issuance was $526m in May versus $503m in April, an uptick of $23m. The number of pools issued was down slightly, however, from 89 in April to 86 in May. The 86 pools issued in May consisted of 22 first-participation or original pools, 63 tail pools, and one pool which included both new production and tails. Original pools are those HMBS pools backed by first participations in previously uncertificated HECM loans. “Notable in the May HMBS issuance data are…

PIC has concluded a £204m full buy-in of the Arqiva Defined Benefit Pension Plan.  The transaction secures the pensions of both deferred and pensioner members of the plan, which is sponsored by Arqiva Limited, a British telecommunications company; it comprises 589 current pensioners and dependents and 215 deferred members. “I’m delighted that we have successfully completed this buy-in, which insures the benefits of all our Plan members,” said Tom O’Connor, Chair of the Board of Trustees of the plan.  “I am grateful for PIC’s work in achieving this outcome. I want to thank my fellow Trustee Directors, including Dan Gilmour and Akash Rooprai…

Post-pandemic, people across the world live eight months less and spend seven fewer months in good health, according to new findings by the International Longevity Centre UK (ILC). The organisation published the second wave of its Healthy Ageing and Prevention Index, which measures how well 153 countries across the world are ageing, looking at life span, health span, work span, income, environmental performance, and happiness. Comparing the latest 2022 data with 2019 data, ILC’s analysis across 153 countries finds that, on average, humans are living eight months less (life expectancy fell by 0.64 years from 73.1 years in 2019, to 72.5 years…

Aviva has announced the completion of a £130m bulk purchase annuity full scheme buy-in with the Trustee of the Telereal Pension Plan1, which is sponsored by Telereal Services Limited. Aviva will insure the defined benefit liabilities for around 500 members. “We’re delighted the trustee selected Aviva to secure member benefits, and we’ll continue to work closely with them to ensure a smooth transition.  The process was well managed and completed quickly, thanks to all parties collaborating to reach a successful outcome.  We look forward to welcoming Telereal members as Aviva customers in due course,” said Sean Rooney, BPA Senior Deal Manager…

Legal & General has completed a pension risk transfer buy-out with the Nortel Networks UK Pension Plan.  This deal is the third transaction between the two parties and insures the final tranche of Nortel’s plan members’ benefits. It consisted of a £14m initial premium and was followed by a £6m top-up on buy-out. Legal & General has now insured £2.5bn of the plan’s liabilities. The plan’s sponsor went into administration in 2009 and entered a Pension Protection Fund (PPF) assessment. While in assessment the plan was able to secure material additional funds from the Nortel insolvency process to improve member benefits. The…