With The Pensions Regulator’s increased focus on long term objectives, more and more pension schemes are looking to the insurance regime to help them manage risk. Buy-in and buy-out pricing has improved hugely over the past few years, largely due to insurers changing their investment strategies and moving away from traditional publicly traded corporate bonds to more illiquid assets. In this publication, we focus on what COVID-19 means for these assets, the challenges posed to insurers and how insurers might respond.

In particular, we look at:

• A brief history of bulk annuity investments
• Key risks for insurers - including default risk, downgrade risk and internal credit ratings
• Impact on new business
• Policyholder view - for pension schemes with buy-ins in place, and those considering investing in a buy-in

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