Buy-in and buy-out market volumes were expected to be between £10bn and £12bn in the first half of 2022, according to Hymans Robertson
According to the firm’s most recent survey of insurance providers that offer pension scheme buy-ins, these same insurers predicted that buy-in and buy-out volumes would be close to £25bn in the second half of 2022 when they were questioned by the top pensions and financial services consultant. This would bring the total for 2022 to somewhere over £35bn, which would represent an increase of more than 25 per cent over the £27.7bn in 2021 volumes.
Hymans Robertson led the advice on £2.5bn in pension plan risk transfer transactions during the same six-month period, according to the firm’s most recent survey of insurance providers that offer pension scheme buy-ins.
Hymans Robertson head of risk transfer James Mullins says: “The spread of activity in the buy-in market during 2022 is shaping up to be similar to 2021, with a relatively modest level of activity in the first half of the year and then a very busy second half of the year. The insurers are getting very busy, receiving a significant number of buy-in quotation requests over the summer, which we expect will mean that the second half of 2022 becomes the second busiest six-month period ever for the buy-in market. That would also mean that 2022 would become the second busiest year on record for buy-ins and buy-outs.
“The rapid growth in demand for pension schemes to insure their risks, along with improved pension scheme funding levels, attractive insurer pricing and new alternative risk transfer options, means that we expect a record breaking year for buy-ins and buy-outs in 2023. This is likely to exceed the £44bn that we saw in 2019. We also expect around £50bn a year of buy-ins and buy-outs on average over the next 10 years, in addition to longevity swaps. That means by the end of 2031, £1 trillion of pension scheme liabilities will have been insured, covering 5 million members’ benefits.”
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