UK Risk Settlement Quarterly newsletter – September 2014 Pricing remains competitive, and has been surprisingly resilient, as providers have looked to diversify their asset portfolios further in response to the limited spreads available in the corporate bond market.

Market update The business placed in the first half of 2014 looked more like full year statistics, with nearly £7bn of bulk annuities and nearly £22bn of longevity swaps placed. Although these figures were heavily influenced by some record-breaking transactions that reached fruition in this period, we believe this is an indicator of a general increased desire for Pensions Stability – to manage or eventually transfer pension risks. The market should continue to grow, subject as ever to market conditions.

Bulk annuity 2014 providers Rank (2013 year (H1) ranking in brackets)

The previous record years were 2008 for bulk annuities (£8.1bn) and 2013 for longevity swaps (£8.8bn). We expect 2014 bulk annuities to comfortably pass £10bn. Total bulk annuity business placed, in the first half of 2014 and in 2013 as a whole, are shown below. The figures exclude Rothesay Life’s acquisition of MetLife Assurance, which held a backbook of £3bn of bulk annuities, in Q2. Also at the time of publication Just Retirement was not able to disclose their Q2 results, and so our figures understate the total market.

Half year 2014 Cases written

Value (£m)

25

3136

1

Legal & General (3)

2

PIC (1)

9

3

Prudential (5)

4

4

Rothesay Life (3)

5

5

Aviva (4)

6

Just Retirement (8)*

7 8

Full year 2013

Market Cases share written

Value (£m)

Market share

46%

93

1314

17%

1807

26%

35

3745

48%

1034

15%

3

245

3%

559

8%

6

1950

25%

30

263

4%

60

379

5%

3

37

1%

2

9