UK pension risk transfer to re/insurers to reach £700 billion by 2032
Demand for bulk annuity buy-ins is expected to quadruple over the next 15 years as £700 billion worth of defined benefit pension scheme liabilities are expected to be passed to insurers by 2032, according to a Hymans Robertson report.
Around one-third of current defined benefit (DB) pension risk schemes are expected to reach self-sufficiency over the next 15 years as UK firms increasingly look to offload this risk, the report found.
James Mullins, Head of risk transfer buy-out solutions at Hymans Robertson, said that challenges surrounding DB schemes’ long-term affordability and sustainability have been driving the push to offload risk.
“If demand for buy-ins quadruples, as we predict, this is a phenomenal increase. Pension schemes should be proactive and gradually chip away at the problem through a series of well-timed buy-ins, to take advantage of the high insurer appetite and optimal pricing we’re seeing in the market today,” he said.
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