UK – AIG and Aegon have both signalled separate decisions to enter the UK’s bulk annuities market – in moves which will challenge existing suppliers Prudential and Legal & General.

US insurer AIG said it would enter the market aided by Higham Group and Pensions Management Ltd. And Dutch insurance group Aegon’s UK chief executive Otto Thoresen told the Financial Times the firm planned to enter the market in the final quarter of this year, in a bid to raise its share of the UK life and pensions market to at least 10%.

“AIG has a wealth of experience in bulk annuity provision in a number of markets worldwide, and we are now extending our leading service offering to the UK,” said Nigel Burton, director of pensions at AIG Life UK.

“We recognise that UK trustees and their members are looking at security and at the quality of the underlying operations as well, of course, at a competitive price.”

Higham would provide “behind-the-scenes” technical support while Pensions Management – run by NAPF Benefits Council chairman Michael Goy – would ensure “smooth and efficient long-term administration of AIG Life’s immediate and deferred bulk annuities”.

“We appointed Higham Group because of their expertise and knowledge of the pensions wind-up market,” Burton said. “They are recognised as a leading player in this specialist field and it is clear they have the intellectual and operational capability to handle such a major assignment.”

Meanwhile the FT quoted Thoresen as saying Aegon planned to initially target deals "in the tens of millions” of pounds range.

“We want to walk here before we run, but it is already a huge market in the UK and it is a market that will get bigger," he told the paper.

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