Browsing: Longevity and Mortality Risk Transfer

Growth in the purchase of bulk annuity contracts by small defined benefit (DB) pension schemes over the past couple of years has been accompanied by the emergence of templated transfer processes that speed the closure of deals, enabling insurers to execute more of them.

The increasing role – and influence – of ‘private equity’ firms in the US pension risk transfer (PRT) market in recent years has caught the attention of the media, regulators, and litigators.

The ‘buyer’ of a bulk annuity contact is the scheme’s trustees, who are required to take formal advice as part of the process. However, the views of the sponsor are important for any bulk annuity purchase, and they should be involved from the outset, particularly if additional funds need to be paid into the scheme.

Mark Sharkey, BPA Origination Lead, Royal London shares his views on the state of the market and its outlook for 2025.

The £120m agreement insures Lufthansa Group’s three UK defined benefit pension schemes in one integrated transaction.

The transaction secures the benefits of all 154 members, comprising 37 pensioners and 117 deferred members.

Taking place on Tuesday, 20th May, 2025 in London’s Canary Wharf district, the Life ILS Conference 2025 will be the event’s sixth edition.

The insurance market has responded to meet the growing demand for de-risking solutions for defined benefit pension funds with both innovation and new participants – and further developments are anticipated.

The UK defined benefit pensions de-risking market is likely to see £50bn in bulk annuity transactions and £20bn in longevity swaps in 2025, according to WTW’s annual De-risking Report.

£53m deal is Royal London’s latest since entering BPA market last year.