Buy-ins & buy-outs hit a record £50bn in 2023: Hymans Robertson

Hymans Robertson has revealed that total pension scheme buy-in and buy-out volumes for 2023 reached an all-time high figure of £50 billion, with both the number and value of transactions secured the highest ever recorded.

The 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.

From what we understand, a record of over 254 transactions took place across 2023, with an average transaction size of around £190 million, with over 158 transactions transacting in the second half of 2023.

In addition, £50 billion a year looks to 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, Hymans Robertson noted.

Moreover, 2024 is also anticipated to be another bumper year, following an incredibly busy 2023.

James Mullins, Head of Risk Transfer at Hymans Robertson, commented: “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.”

Adding: “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.”

He concluded: “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.”

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