The value of bulk annuity transactions in the UK for 2019 is likely to be even higher than the record breaking total set this year, new research has found.
In a report published yesterday, Hymans Robertson said the transaction value for pension scheme buy-ins and buy-outs should exceed £20bn by the end of the year.
The consultancy also expects each of the eight insurers active in the bulk annuity market to have had a record 12 months for transaction volumes this year.
And these firms have good reason to expect similar activity in 2019 after a survey of independent trustees found that 100% believe next year will see even more bulk annuity volumes.
Competitive pricing from insurers and surging pension scheme demand, driven by improved funding levels and improved risk management, are thought to be behind the findings.
"Insurers now have the luxury to be more selective about which pension schemes they focus their efforts on," Hymans Robertson head of risk transfer, James Mullins, said.
"For the first time in the market's history, a queue for 2019 is already forming, and the onus is now with pension schemes to stand out from the crowd."
Mullins added that 2019 would see "the busiest start to a year for buy-ins and buy-outs" as pension schemes rush to complete transactions before the Brexit deadline in March.
Hymans Robertson said it is increasingly common for schemes to be able to afford to insure all of its pension promises, and fully pass the responsibility of paying members on to insurance firms.
The cost of insuring the benefits of younger members has also got much cheaper, with several insurers believing these transactions offer a good balance for investment strategies and risk appetite.
Looking ahead, Mullins said "excellent" buy-in pricing would continue in 2019, and that pension schemes would have to adopt more intelligent approaches when broking the market.
"It is now more important than ever for trustees to be well prepared and to have a clear understanding of insurance companies and how they prioritise their efforts," he continued.
"Timing the approach, to factor in the latest activity levels, and not trying to rush through a transaction, is also critical."