The Trustees of the British Arab Commercial Bank (BACB) Pension Scheme have completed a medically underwritten buy-in contract for £12m with Partnership.

The contract, which covers all non-insured pensioners in the £60m pension scheme, was awarded to Partnership following a competitive tender process, and is the UK's first tendered underwritten buy-in transaction.

A third party, MorganAsh, collected medical information on behalf of the trustees through a short medical questionnaire to make the deal possible.

The questionnaire results were then passed on to all insurers with identical medical information to enable them to price the buy-in.

Traditionally, a buy-in using medical underwriting is completed with one insurer selected upfront.

Graham Wardle, BACB chairman, said: "We were able to achieve a competitive price by selecting Partnership Assurance and we are pleased with how streamlined the process was.

"The continual de-risking of our pension scheme is an important goal and ensures the long-term security for our members."

JLT Employee Benefits developed the process for BACB by working with MorganAsh and the insurers.

David Barratt, JLT Employee Benefits buyout consultant, said: "This new process for completing underwritten buy-in transactions is an important step for schemes looking to de-risk in the most cost effective way.

"We are continually looking to improve efficiencies for our clients and are delighted to have brought this new process to the market, which we feel will revolutionise the medically underwritten buy-in market."

Will Hales, Partnership Assurance director of corporate partnerships, said that BACB's transaction represents a "key landmark" in the development of the underwritten bulk annuity market.

He said: "A common approach to the collection of health and lifestyle information from members will ensure that schemes wishing to de-risk through an underwritten exercise will now have a choice of insurers and can be confident of attaining a competitive price."

First published 15.01.2014

monique_simpson@wilmington.co.uk