In 2024, we anticipated a record number of deals being completed, reflecting a significant shift in insurers’ willingness and capability to transact with smaller schemes – and we were right! However, as in previous years, the total transaction volumes in monetary terms will be heavily influenced by a small number of exceptionally large deals.

Below, we highlight some of the notable £1bn+ deals that were announced this year:

1.          NatWest Group: Reports following publication of the bank’s Q3 financial results indicate a deal to insure around one-third of the liabilities (approximately £11bn) of its main pension fund. Rothesay is reported to be the provider. While not clear if this was a single transaction, it would represent the largest volume of liabilities insured by any UK scheme to date.

2.          Rothesay confirmed a £3.6bn buy-in with an unnamed scheme in May.

3.          G4S Pension Scheme: In August, Just concluded a £1.8bn full buy-in, its first-ever £1bn+ deal. This transaction marks a pivotal shift for Just, signalling its entry into larger transactions. Interestingly, Just reinsured 60% of this deal through a funded reinsurance arrangement with a subsidiary of Brookfield Wealth Solutions.

4.          National Grid Electricity Group (Electricity Supply Pension Scheme): In November, Aviva completed a £1.7bn pensioner-only buy-in. This deal included transitioning an existing longevity swap with Zurich Assurance Ltd to Aviva.

5.          Aviva finalised full buy-ins with the Michelin Pension Life and Assurance Plan (£1.5bn in September) and the RAC (2003) Pension Scheme (£1.3bn in August).

6.          Pension Insurance Corporation (PIC) executed buy-ins with the Coats UK Pension Scheme and the TotalEnergies UK Pension Plan worth £1.3bn and £1.2bn respectively. Both transactions followed prior partial buy-ins completed by these schemes.

7.          Legal & General announced two £1.1bn buy-ins — one with the SCA UK Pension Plan (sponsored by an Essity group company) and another with the DB (UK) Pension Scheme (sponsored by a subsidiary of Deutsche Bank). Notably, the latter represents the fourth and final buy-in for the scheme.

The £1bn+ transactions underscore a continuing evolution in the BPA market. While these mega-deals are attention-grabbing, it’s essential to acknowledge that £1bn is an arbitrary threshold and therefore excludes the substantial activity occurring just below this range. The interest rate environment, particularly since the latter half of 2022, has also shifted considerably, meaning that a £1bn transaction today likely represents a significantly larger scheme than it would have a few years ago.

The substantial pace of the BPA market in 2024 reflects insurer adaptability, the entrance of a number of new players into this space (Utmost and Royal London both announced their first transactions this year) and the growing demand for de-risking solutions. While smaller schemes are finding more opportunities to transact, the headline-grabbing mega-deals continue to drive total market volumes. With insurers expanding their capabilities, and more insurers expected to enter the bulk annuity market in 2025, the stage is set for continued growth and innovation in this space.

We look forward to seeing which large deals take place in 2025.

Andrea Mendham – Partner, K3 Advisory