UK. The pension scheme de-risking market: how to find value
The dynamics of the pension de-risking market may be summarised as market conditions mixed with supply-and-demand forces, with an overlay of regulation.
This melting pot leads to a cyclical market with different structures, offering more value for money than others at a particular time. Since I started working in this market as an insurer about 20 years ago, I’ve observed many such cycles, and now as a de-risking adviser to pension schemes I help my clients seek the best available opportunities.
The longevity hedging market in late 2015-16 is a good example. More than £20bn of longevity risk associated with back books (insurers’ historic bulk and individual annuities) was passed to reinsurers over the period.
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