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Bulk Annuities and Longevity Swaps event report

On 28 March 2017, over 100 members of the Institute and Faculty of Actuaries' (IFoA’s) Member Interest Group (MIG) for bulk annuities and longevity swaps packed into Evershed Sutherland’s conference facilities for the MIG’s first ever event.

The MIG brings together actuaries with an interest in the de-risking market – whether as experts keen to share experience or novices looking to learn – to network; share ideas and best practice; and obtain CPD. With over 230 members representing 60 different organisations (including consultancies, insurers, reinsurers, schemes, asset mgt.) the MIG offers a great forum for the profession.

The theme for 28 March was the "The Past, the present and the future" of the pension de-risking market:

  • John Baines from Aon Hewitt kicked off the event examining the bulk annuity market’s recent past. He discussed themes on new entrants and those that have exited the market, before examining market volumes through the lens of a testing credit spread environment. John ended by explaining some select trends and how we might expect them to play out moving forward. Particularly insightful was analysis John had undertaken on annual bulk annuity volumes which showed a very clear steep and linear increasing trend of mid-size pension plans de-risking. Finally, he put a question to the audience on whether tranching of bulk annuity transactions adds any value.
  • Hugo Laing and Hugh Gittins from Evershed Sutherland covered the present, by taking the audience through a range of topics including the role that lawyers played in de-risking transactions. The legal role was well positioned as helping parties identify and understand risks, allocating those risks to the parties and then mitigating those risks. They focused on real life examples: valuable insight for the predominantly adviser and (re)insurer based audience. They also touched on whether future market standardisation of legal contracts for bulk annuity is likely. Hugo and Hugh rounded off their presentation with a rather tongue in cheek question on whether lawyers help or hinder the de-risking process.
  • To round off the presentations David Collinson of Pension Insurance Corporation stepped up to address the future. David took us through what he viewed as the four main ingredients vital to both sustained growth in the bulk annuity market, namely willing buyers, willing sellers, a market price and an affordable price. He then moved onto highlighting some future based themes covering aspects such as whether the drive to de-risk is now irreversible and whether supply and pricing will adjust to meet demand whatever that demand might be. At the end of his slot David asked if superfunds, a topic of current debate within the industry, could offer anything that the bulk annuity insurers don’t already.

Following the presentations attendees enjoyed a Q&A and debate which was in great swing by the time networking drinks were called at 7pm. Topics debated ranged from the value that superfunds could add to the DB landscape to what place longevity insurance held in the current market. We also touched upon collateral, political involvement, litigation and data quality to name a few.

If you would like to join the MIG and/or receive a copy of the slides from the 28 March 2017 event please contact

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