The UK’s pension risk transfer (PRT) market is on track for one of its largest years ever, Legal & General (L&G) has said, after its analysis found that full-year volumes across the UK market are likely to exceed £40bn in 2024.

L&G’s global PRT monitor found that the UK and US have both seen a “significant” increase in the number of large pension plans seeking PRT, with in excess of £250bn of combined UK and US volumes forecast to be secured by insurers in the next three years.

According to the report, the UK PRT market has completed an estimated £20bn of buy-ins and buyouts in the year to date, including a number of large transactions, such as a £900m buy-in with the ICI Pension fund and a £1.1bn buy-in with the SCA UK Pension Plan.

However, L&G said that the market for smaller schemes has also continued to flourish with the number of transactions below £100m more than doubling from 2020 to 2023.

It also noted that several insurers have developed streamlined solutions for smaller schemes.

L&G estimated that there is also a further £20bn of active deals in the UK pipeline, most of which is expected to transact in 2024, highlighting this as demonstration of how the market has scaled up capacity.

And this demand is set to continue, as L&G said that the longer-term pipeline for the PRT market is "the largest it has ever seen", with PRT volumes set to remain elevated across the next decade.

This forecast is also in line with L&G's intention to grow PRT volumes and write £50-65bn of UK PRT over the next five years, with its 2024 half year report previously suggesting that the group was in exclusive negotiations on £5bn of transactions.

Commenting on the findings, L&G Institutional Retirement CEO, Andrew Kail, said: "We are continuing to see exceptionally strong demand in both the UK and US PRT markets, with more than £250bn of combined UK and US volumes expected over the next three years.

“This forecast supports our strategic ambitions to grow our PRT footprint, generating permanent capital to catalyse growth in our asset management division."

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