First half of 2024 sees record number of buy-in transactions for a six-month period

With 134 buy-ins, the first half of 2024 has seen the largest ever number of buy-in transactions for a six-month period, compared to the 96 buy-ins that were completed during the same period in 2023, a recent analysis by Hymans Robertson has revealed.

According to data, the 134 buy-ins completed in H1 2024 covered £15.3 billion of pension scheme liabilities.

This period saw the completion of the £600 million Debenhams Pension Scheme and Clara-Pensions, on the largest superfund transaction where Hymans was the adviser.

Other material risk transfer transactions during this period include a £700 million captive insurance transaction, where Hymans served as adviser, and Rothesay’s acquisition of the c£6 billion Scottish Widows buy-in portfolio.

Looking ahead to the rest of 2024, the firm projects more than 250 buy-ins. This would be a record number in a single calendar year since the market began in 2006.

Analysts also expect that these buy-ins will cover approximately £40 billion in pension scheme liabilities throughout 2024.

Commenting on the figures, James Mullins, Partner and Head of Risk Transfer at Hymans Robertson, said: “Building on the £49.1 billion record set in 2023, 2024 has been a fascinating year for the risk transfer market. The insurers have demonstrated that they can handle record buy-in transaction numbers.

“Helped by the new entrants, I expect it won’t be long before we see 300 buy-ins in a single calendar year. The vast majority of these transactions are ‘whole-scheme buy-ins’, many of which will subsequently be looking to move to buy-out.

“That could create an administration bottleneck and so trustees need to carefully test their chosen insurance company’s capacity for ongoing administration and the transition to buy-out.”

Mullins also noted that the superfund and captive insurance transactions that Hymans completed this year “show that there is now a wider range of transaction types than ever before.”

“ Pension scheme trustees and sponsoring employers need to understand the pros and cons of the different options to work out which risk transfer transaction best meets their objectives,” he concluded.

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