The second half of 2025 is expected to remain "very busy" for the bulk purchase annuity (BPA) market, with analysis from Aon revealing that, despite lower overall volumes, the number of BPA deals remained strong in H1.

Aon's latest bulk annuity market update suggested that, although overall volumes across the first half of 2025 were lower, the UK bulk annuity market remained buoyant with a high number of transactions completed and strong insurer capacity.

Indeed, whilst the volume of deals in the first half of the year had dipped from £15.1m in H1 2024 to an estimated £10m in H1 2025, there was a regular flow of sub-£100 million transactions, with a higher number of deals sustaining the market.

And Aon clarified that whilst the market may not quite reach the record high of 167 deals secured in the second half of 2024, 2025 overall is likely to see a similar total of deals to the record 293 transactions completed in 2024, with 137 deals completed in H1 (up from 133 in 2024).

These deals have been dominated by smaller transactions (typically considered £100 million or below of liabilities), continuing the 2024 trend, when 78 per cent of all transactions written were sub-£100m in size.

This has prompted market changes, as Aon pointed out that whilst in the past a smaller transaction may have expected a small number of bidders, or even insurers to require exclusivity up front, there is a growing appetite across the market to participate in competitive auctions for smaller schemes.

According to Aon, this has been partly driven by new entrants, but is also a result of other insurers looking to claim market share where there are fewer £billion+ opportunities.

Despite this greater choice, Aon found that Aviva and Just have remained as the dominant players in this segment of the market, writing 37 and 57 transactions respectively in the sub-£100m range during first half of 2025.

Combined, these deals comfortably represent over 70 per cent of deals under £100m
announced for the first half of 2025.

But the focus for the second half of the year could shift, as Aon suggested that the remainder of 2025 will remain "very busy", with a number of multi-billion-pound transactions capturing the headlines.

The group also suggested that the BPA market is still on track for total volumes of £40m for the year, suggesting that volumes of £30m could be written in H2.

And capacity could also be growing, as Aon suggested that both the expected acquisition of Pension Insurance Corporation (PIC) by Athora and Brookfield’s proposed purchase of Just Group are expected to increase future appetite for UK bulk annuity liabilities through potential access to greater capital from their wider insurance group and possible support in sourcing illiquid assets to back new business.

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