PIC bulk annuity deals increase 81% to £6bn

Pension Insurance Corporation (PIC) has completed £6bn worth of bulk annuity deals across nine DB pension schemes in the first half of 2019, its half year results have revealed.

This represents an 81 per cent increase from the first half of 2018, when PIC concluded £3.3bn worth of business.

The company’s largest transaction was a £3.4bn buy-in of the British American Tobacco pension fund, while the number of pension scheme members insured by the firm increased by nearly 26,000 to 218,000 in the first six months of 2019.

The increase in business reflects the overall growth in the pension risk transfer market, with more than £17bn worth transactions being completed in H1 2019. This is expected to grow by another £40bn by the end of the year.

Commenting in the report, PIC chief executive officer, Tracy Blackwell, stated: “A key factor for insurers, as we manage the increasing demand for pension risk transfer, has been the opening up of the reinsurance market for non-pensioner lives.

“Reinsuring non-pensioner lives is an effective risk mitigant for the business and reduces the amount of capital held by insurers.”

In the first half of 2019. PIC reinsured £7.1bn worth of longevity risk exposure, including the reinsurance of £1.5bn of non-pensioner lives.

As of 30 June, PIC had reinsured 81 per cent of its total longevity exposure.

Blackwell concluded: “We have had an excellent first half of the year.

“Our valued staff have worked hard to support the business and our policyholders, and we look forward to a continued positive market environment.”

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