Buy-ins and buy-outs hit a record £50 billion in 2023

• 2024 expected to be another bumper year

• £50bn a year will be the new normal for buy-in volumes, with the market expected to be at least that level every year for the remainder of the decade

Total pension scheme buy-in and buy-out volumes for 2023 reached an all-time high with both the number and value of transactions secured the highest ever recorded, says Hymans Robertson. The leading pensions and financial services consultancy has analysed the 2023 results which have now been published by the majority of insurers currently active in the market, along with publicly announced buy-in transactions.

In total, a record of over 254 transactions took place during 2023 with an average transaction size of around £190m, with over 158 transactions transacting in the second half of 2023. Over 150 transactions were valued at under £100m.

Commenting on the findings, James Mullins, Head of Risk Transfer at Hymans Robertson, comments:

“2023 was an incredibly busy year for the risk transfer market as many defined benefit pension schemes used their improved funding levels to target whole-scheme buy-in transactions. It’s clear that large transactions are likely to continue to drive market volumes in 2024 and beyond. However, we also continue to see a healthy and competitive market for smaller schemes that want to transfer risk. For instance, all our buy-ins transactions under £30m received quotations from multiple insurers in 2023.

“2024 looks set to be another bumper year for the buy-in market, given record transaction pipelines and activity. There are two key examples of this. Firstly, there are over 15 buy-in transactions due to come to market over the next few months that are each between £1bn and £2bn. This group of large transactions alone add up to around £30bn and that’s before we take into account the material flow of buy-ins that are less than £1bn, along with mega transactions that are several £billion in size. Secondly, there has been a high volume of transactions at the start of 2024, despite January and February tending to be quieter months for the buy-in market. For example, the risk transfer team at Hymans Robertson has already led on over £3bn of completed transactions in the first two months of the year.”

A copy of Hymans Robertson’s latest Risk Transfer Report 2024 can be accessed here for more detail about developments in the bulk annuity market.