Ensuring success in a busy market: 2024 De-risking opportunities
2023 has been unprecedented in the risk transfer market. At the time of writing this, our market intel predicts that, once you take into account the change in market conditions, 2023 will have doubled the previous record for volume of bulk annuity transactions.
Evidentially, the de-risking market is thriving and is well set to continue to do so, as schemes continue to progress towards their chosen end-state. In 2023 we led 25 bulk annuity, superfund or longevity swap transactions ranging in size from £2 million to £5 billion. And with more schemes than ever planning to approach the market in 2024, our team is expecting to be very busy helping clients to achieve the right transaction for them.
Our team is proud to be at the heart of this market and has continued to provide innovative solutions tailored to achieve each of our clients’ goals. In 2023, we supported trustees and corporates across all scheme sizes in navigating the market from advising on the UK’s largest ever bulk annuity transaction to the UK’s first ever pensions superfund transfer.
We hope you find this an interesting insight into this growing market and would welcome the chance to discuss further with you how your scheme can maximise its opportunities to manage risks in the current environment.
01
Sarah Collison looks back at this record-breaking year in the risk transfer market. At the time of writing, the final bulk annuity volumes for 2023 are not yet known, but our market intel suggests that the record of c£45bn in 2019 is likely to be broken, with an expected total of c£50bn.
02
There is unprecedented demand for bulk annuities, reflecting improved funding levels and attractive pricing. The market is more dynamic and competitive than ever before. Greg Robertson reflects on the latest trends and explains how pension schemes are adapting to best position themselves in a busy market.
03
Many pension schemes can now afford buyout earlier due to the LDI crisis. However, some trustees may face difficulties in realising illiquid assets quickly. Gemma Millington provides a 3-step guide for trustees to establish an optimal strategy for their scheme.
04
Suzanne Vaughan shares some of her key takeaways from her experience of leading a scheme through the first-ever superfund transaction.
05
2023 has been a record-breaking year for the bulk annuity market and reinsurers have been busy providing longevity reinsurance to back these bulk annuities, as well as writing longevity swaps with pension schemes. Matt Wiberg and Rhys Mellens share views on current trends in the longevity swap market and pricing developments.
06
The bulk annuity market has seen an increase in full scheme buy-ins, which is a significant milestone for any pension scheme. However, there are still lots to do before the buy-in is converted to a buyout and the pension scheme can be wound up. Katherine Russell, Melissa Wong (Head of WTW’s Pensions Project Management team) and Alice Fletcher (from WTW’s Pension Data Solutions team) highlight the key steps and considerations following a full scheme buy-in.
07
A buyout with an insurance company remains the destination of choice for many trustees and sponsors of DB pension schemes, and the appetite to complete full buy-ins continues to grow. Sadie Scaife explores how trustees and companies can manage the risks which will remain following the buyout.
08
Jenny Neale shares her predictions on what we might expect from the de-risking market over the next year.
