Beth Brown comments on the continued growth of the pension annuities market
Following market movements, the bulk pension annuities market has be going from from strength to strength, with current estimates from RBC Capital Markets predicting a record year for transactions, at £50 billion.
Partner Beth Brown contended that schemes are utilising the current window of opportunity to de-risk at a good price, stating: “Many schemes are keen to act quickly for fear of missing out and waiting too long so that the markets move again and the now possible will become seemingly impossible again.”
She further discussed whether plan holders should be wary of insurance firms taking on large segments of DB schemes, commenting that “rapid growth always brings challenges”, and noting that “it will be really important for insurers to make sure that the member experiences do not deteriorate as more and more deals are done.”
Beth went on to acknowledge that trustees are becoming more meticulous when selecting buy-out partners. “While it is generally understood that insurance companies, through buy-outs, provide a certain level of protection to members and are well versed in looking after members, trustees are increasingly also finding out more about the insurer’s personality and corporate culture, how they treat policyholders and who they work with before proceeding with a buy-out.“Trustees want to be sure that not only is buy-out right for their scheme at this point in time but that they have selected the right insurer.”
Read Beth’s comments in Proactive, here.
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