UK - Pension Insurance Corporation (PIC) is estimated to have increased its share in the bulk pension insurance market to over 25%, having just completed a pension buyout with property company Liberty International.

Preliminary results for 2009 revealed PIC completed new business insurance business of £1.1bn (€1.3bn) over the year, comprised of eight transactions including Cadbury, Food from Britain and Leyland DAF. (See earlier IPE article: Cadbury completes £500m buy-in with PIC)

It noted the company's embedded value had increased by 50% to £618m, while the value of assets under management has reached £3.3bn and the number of pension scheme members insured by the firm totalled around 45,000.

Sir Mark Weinberg, group chairman, said: "Our ability to tailor transactions to meet trustee and corporate needs has enabled us to increase our market share to in excess of 25%. We expect to see the market continue to grow with up to £20bn of pension risk transferred during the current year."

This was demonstrated by its completion of the latest buyout with the UK Real Estate Investment Trust (REIT) Liberty International. Under the terms of the buyout, PIC will fully insure the liabilities of the scheme's 203 members in return for assets of £61m - comprising £46m from the scheme and an additional £15m from the company.

This is the second FTSE 100 transaction completed by PIC - alongside Cadbury's - with Mercer acting as lead adviser and broker for the transaction on behalf of the trustees.

Commenting on the latest deal, Charlie Finch, partner at Lane Clark & Peacock (LCP), said: "Liberty's pension buyout with PIC is a natural progression for a company with a small legacy pension scheme. We are seeing increasing interest in this route where it is affordable as well as continued interest in exploring the relative merits of the buy-in and longevity swap routes. This buyout is the sixth transaction by a FTSE 100 company in the past two years."

In its results statement, PIC suggested "there may also be opportunities [in 2010] for Pension Corporation's growth arising out of market consolidation or the sale of annuity books by other insurers".

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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