An increase in the number of schemes completing de-risking deals is expected in 2020, after 2019 saw the market dominated by a small number of "mega deals", according to Willis Towers Watson.

Its annual de-risking report found that 2019 was a "landmark year" in de-risking, with a record £41bn of bulk annuities completed as well as £12bn of longevity swaps, despite “unprecedented political instability” resulting in delays to key pension policy and regulation.

The £41bn worth of deals completed in 2019 was made up of around 100 deals, a third less than the 162 deals which took place in 2018.

The largest of these multi-billion pound transactions was £4.7bn in the GEC 1972 Plan, with a total of nine deals completed over £1bn.

The report forecast a total volume of bulk annuity business in 2020 at £30bn, attributing the slight dip to the anticipated decrease in "mega deals".

However, the group also predicted that an increase in the number of smaller deals would continue to keep the market “very busy”.

Commenting on the trends, Willis Towers Watson senior director, Shelly Beard, said “The number of mega deals completed through 2019 shouldn’t be repeated in 2020, but there is certainly a lot of demand for deals across the market.

“The changes in pricing over the past few years do show that the importance of choosing the right time to complete a transaction rather than simply leaving it to chance. Knowing your target price, retaining price discipline and flexibility are all key to achieving the best deal possible in this new market environment.”

This follows recent predictions by Lane Clark Peacock that £800bn of liabilities could be expected to line-up for transfer to the insurance market over the next 15 years, as well as continued momentum in the longevity swap market.

Willis Towers Watson has also predicted that 2020 will bring record high levels of activity in the longevity swap market, estimating that this could exceed volumes of £25bn.

It is also expected that these transactions will be heavily weighted towards white collar schemes, with opportunities for blue collar schemes arising later in the year.

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