Global professional services firm Aon’s risk settlement team has reached £100 billion in total transactions across three areas of its business, including bulk annuity business placed, longevity reinsurance business placed and transactions where Aon has provided insurer due diligence advice.
According to Martin Bird, senior partner and UK head of risk settlement for Aon, the UK pension risk settlement market has experienced astonishing growth in the last 15 years.
While the market dates back three decades to a time when bulk annuities were strictly used for schemes with insolvent sponsors, it has evolved substantially since the mid-2000s.
The arrival of new insurance market participants allowed schemes to begin using bulk annuities as a core part of their risk management investment strategies, introducing the ability to “buy-in.”
Bird stated: “Aon’s team both developed with and anticipated the market, while our range of capabilities has meant that we have worked across all aspects of it – hence the treble of £100 billion. It isn’t just big schemes either, the risk settlement market for smaller-sized schemes is booming too, lifting the total number of bulk pension annuity deals completed in 2025 to 367.
“We continue to see constant change and innovation in the market and in all its facets. For example, recent times have seen a big swing to full scheme insurance transactions as a result of healthier funding positions and a transition to buyout.”
He continued: “For the insurers, there’s now a far greater focus on the member experience with more effective support at retirement, better communication and caring for vulnerable scheme members. Insurers are also taking more illiquid assets as well as developing ways for providing member profit sharing. These are major developments which have emerged as experience grows.”
Looking ahead, the market is poised for further evolution. John Baines, senior partner at Aon, pointed out that the longevity reinsurance market is continuing to develop new intermediaries and cost-effective solutions for pension schemes to access reinsurance capacity.
Furthermore, schemes that previously entered into longevity swaps are now transitioning toward bulk annuities.
He added: “For insurers there will be an inevitable focus on how to manage this huge pipeline of streamlined and small transactions, alongside the mega deals. At least five insurers actively participate in both spaces.
“On top of that, we are aware of insurers’ capability, appetite and governance to write the first-ever £10 billion-plus bulk annuity transaction. We know there is the appetite from some scheme stakeholders, but it remains to be seen who will be the first to transact.”
