Royal London has cemented its entry into the bulk purchase annuity (BPA) market by establishing a team of 40 experts led by director of BPA solutions Paul Bowker, to focus on working with trustees and advisers on transactions of up to £500m (€599m).
The team will offer trustees access to a “diverse” range of skills and expertise, with Royal London saying the team has been involved in “hundreds” of buy-ins and buyouts from small to multi-billion-pound deals, and has experience across a range of bulk annuity providers and consultancies.
This is the latest stage in the development of Royal London’s BPA proposition, which has included transacting a £250m full scheme buy-in with the trustee of the Royal Liver UK pension scheme in November 2023, and a further £350m buy-in in January 2024 to insure a subset of members in the Royal London Pension Scheme.
In July, Royal London successfully transacted with its first external pension scheme, securing a £30m full scheme buy-in, followed by a further £100m transaction with another external pension scheme in September.
The bulk annuity market currently consists of 11 participants, with Brookfield reportedly awaiting approval from the Prudential Regulation Authority to set up a new insurer.
It is expected that this year the market will close at £40-50bn, making it the second-busiest year ever, after 2023 closed just shy of £50bn. But with new entrants to the market, consultants expect it “won’t be long before we see 300 buy-in [deals] in a single calendar year” as new entrants “shake up” the market.
Barry O’Dwyer, group chief executive officer at Royal London, said that with an increasing number of pension schemes looking to meet their de-risking objectives, it is an “important time to be providing a mutual choice”.
He said: “Royal London is the only mutual in the BPA market, and we believe that will be a very attractive proposition for many trustees. We’re off to a strong start as we continue to focus on establishing a reputation as an insurer of choice for trustees and their advisers.”
Bowker added that the insurer has invested “significantly” to build a compelling bulk-annuity offering for trustees and their members.
“We will be building on our strong customer service credentials and delivering our BPA administration in-house to ensure we deliver the highest standards of service,” he said.
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