Kunal Sood, Standard Life Managing Director of Defined Benefit Solutions at UK insurer Standard Life, expects that more than £40bn worth of bulk purchase annuity deals will be completed before the end of 2024, according to a press release issued by the firm.
“While the market has been a little quieter so far in 2024, a strong pipeline heading into the rest of the year should mean a strong finish. In light of strong funding levels and attractive insurance pricing, DB pension schemes are increasingly looking for ways to de-risk their liabilities and secure their members’ benefits, with BPA remaining the chosen method for many schemes,” he said.
Sood’s observations on the market include the continuation of innovation as insurers build their teams and invest in technology; he says that illiquid assets continue to represent a significant consideration for many schemes looking to de-risk; larger transactions are commonplace; and the expectation of a continuing reform agenda when it comes to the pensions system.
“All signs point to this year being another very busy year for the DB de-risking market, with many trustees and sponsors continuing to use insurance to secure member benefits. Against this backdrop, diligent preparation and early insurer engagement remain vital components in order to successfully navigate this busy market,” said Sood.