Record deal activity in 2024
According to Aon’s latest UK Risk Settlement Market Update, 293 deals were completed last year, up from 227 in 2023. In the second half alone, 160 transactions were recorded – more than one per working day – totalling £32.5bn, the highest six-month volume on record.
This rise was fuelled by continued interest in large transactions and a marked increase in activity among smaller schemes. Aon noted that a record number of buy-ins over £1bn were completed during the year, with 14 large transactions accounting for £26bn. Six different insurers wrote these deals, with Just Group responsible for over 40%, including a £1.8bn transaction. Aviva and others also posted record annual volumes.
Aon added that streamlined insurer offerings and rising competition in the sub-£100m segment contributed to the surge. Superfund solutions also gained traction, with Clara Pensions completing high-profile transactions such as the £600m Debenhams Retirement Scheme and £230mn Wates Pension Fund, the latter seen as a milestone in demonstrating that superfunds can be a viable option for schemes with active sponsors.
While the BPA market thrived, the longevity swap market saw more modest volumes in 2024, totalling £5.8bn. Aon expects activity to rebound in 2025, with swap volumes forecast to exceed £15bn and a growing focus on both pensioner and non-pensioner liabilities.
Intensifying insurer competition and innovation
LCP’s review of the 2024 BPA market highlighted the increased competition, with a record 10 insurers completing transactions. Six wrote over £5bn of business each, up from five the previous year. New entrants continued to build their presence: M&G, Royal London and Utmost collectively wrote £1.5bn of deals, while Brookfield’s new UK insurer, Blumont, has now entered the market following regulatory approval.
LCP’s figures showed total buy-in and buyout volumes reaching £47.8bn in 2024, making it the second strongest year on record after 2023’s £49.1bn. Large transactions remained a key driver. Fourteen deals over £1bn were recorded, surpassing the 12 seen in 2023. The largest of these was a £9.6bn deal for the NatWest Group Pension Fund, split across two transactions with Rothesay. Combined with a £0.6bn deal completed in 2023, NatWest has now insured over £10bn in total, more than any other UK scheme, edging ahead of the ICI Pension Fund.
Charlie Finch, Partner at LCP, said,
“The pension risk transfer market is firing on all cylinders, with record levels of competition and choice for schemes of all shapes and sizes.”
Smaller schemes take centre stage
While headline volumes were lifted by large deals, the most significant growth was seen among smaller schemes. LCP’s data showed that ‘micro’ schemes below £10m grew nearly 60% year-on-year, making up more than 30% of all transactions.
Schemes under £100m comprised almost 80% of the total, up from around 70% in 2023. Just Group and Aviva were the most active in this segment, completing 120 and 52 deals respectively. Nine out of ten insurers operated in this space, suggesting a sustained focus on expanding access to risk transfer for schemes of all sizes.
Outlook: active pipeline and regulatory change
Looking ahead, market activity is expected to remain brisk, however, with the potential for volatility due to continued high activity and geopolitical uncertainties. Luke Carter, Regulatory Consultant at Equiniti said,
“The sheer volume and variety of transactions in 2024 show just how far the BPA market has matured. The growing complexity of the market, from large-scale de-risking strategies to micro-scheme transactions, is leading to increased competition and innovation from insurers, meaning schemes of all sizes now have real options. It will be interesting to see how the market evolves, especially with the challenges presented from increasing run-off opportunities and surplus sharing”.
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