Total pension scheme buy-in and buy-out volumes reached £15.8bn in the second half of 2022 states Hymans Robertson in its Half Year Risk Transfer Report for H2 2022. The analysis, from the leading pensions and financial services consultancy, found the unparalleled market volatility over that time resulted in an extremely busy second half of the year with the number of transactions at their highest volume for nearly 10 years.

In total £15.8bn of buy-ins and buy-outs took place across over 124 transactions during H2 2022 with an average transaction size of £127m. Approximately 80% of that volume was in relation to buy-ins and the remaining 20% related to buy-outs. In 2022, 202 transactions took place valued at around £27.7bn.

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

“As 2022 reached its halfway point, the risk transfer market remained resilient, despite concerns about rising inflation and economic uncertainty concluding with a turbulent political landscape in early Autumn. Large yield rises triggered a feedback loop of defined benefit pension schemes selling gilts to deleverage or potentially scale back hedging. As the dust settled after the market volatility, schemes reassessed their endgame journey plans.

“The risk transfer market remained strong at a time of unparalleled market volatility and challenges for pension scheme trustees. Market volatility led to widening of credit spreads, resulting in excellent pricing opportunities for some pension schemes already in the market during Q4 2022. The risk transfer market is expected to be extremely busy in 2023 and beyond. Insurers are looking for innovative ways to adapt to the growing demand, and some insurers have already put in place structures for smaller schemes who are prepared to work with that insurer on an exclusive basis.”

A copy of Hymans Robertson half yearly update (H2 2022) Risk Transfer report can be accessed here.