Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2014
10

Pension buyouts set to double, PwC predicts

Open-access content Friday 17th October 2014 — updated 5.13pm, Wednesday 29th April 2020

The rate of defined benefit pension liabilities transferring to the insurance market is set to double, according to PwC.

The consultancy claims that its new valuations and analytics platform will help more potential deals complete by making it quicker and less expensive for pension scheme trustees and companies to de-risk.

Most of the insurers operating in the buyout market have agreed to use the Skyval Insure pensions valuations and analytics platform to provide initial prices for the cost of insuring defined benefit pension obligations, PwC says.

The new technology means that pricing for potential buyout/buy-in deals takes days rather than weeks.

This means more buyout requests are likely to convert into deals, as pension scheme trustees and companies will have better pricing visibility, PwC predicts. Insurers will also be able to focus resources on deals that are more likely to proceed.

Jerome Melcer, pensions buyout adviser at PwC and head of Skyval development, said that many viable deals never get to market as they are based overly prudent estimates of the buyout cost.

'In deals we have completed recently, we have struck pricing terms significantly lower than the cost trustees or sponsors were expecting from other sources,' he said.

Raj Mody, head of PwC pensions consulting team and Skyval, said that many trustees and sponsors of DB pension schemes wanted to create more certainty for pension members by transferring obligations to the insurance market, but that the process was often too expensive, slow and uncertain.

'Pricing visibility means that companies can allocate capital to de-risk with confidence, trustees can have much more clarity and control in that process, and members end up with a good outcome,' said Mody.

PwC says that the £50bn of DB pension liabilities insured by pension schemes since 2006, is only a fraction of the near £2 trillion worth of liabilities still on UK balance sheets.


This article appeared in our October 2014 issue of The Actuary.
Click here to view this issue
Filed in
10
Topics
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Catastrophe Modelling Analyst - London Market Broker

London, England
£40000 - £50000 per annum
Reference
145925

Senior Catastrophe Analyst

England, London
£65000 - £75000 per annum
Reference
145924

Life Actuary - Financial Reporting - Day Rate contract

Negotiable
Reference
145923
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ