Legal & General (L&G) successfully completed more than £6.6 billion of global bulk annuity transactions in the first-half of 2019, with UK pension risk transfer business accounting for £6.3 billion of this total.
The £6.6 billion figure is out of a publicly announced total market transaction level of £14 billion, which compares to a 2018 global total of £735 million for H1 2018, and £9.14 billion for the year.
As evidenced by L&G’s operations for the period, the global, and specifically UK bulk annuity market continues to expand, and the firm expects the volume of UK deals to exceed £30 billion for the first time. At the same time, L&G has said that it expects to see the dynamics of the marketplace change from pension scheme buy-ins to buyouts.
While L&G completed some large deals in H1 2019, including the largest UK bulk annuity transaction to date, a £4.6 billion partial buy-in to buyout bulk annuity transaction with the Rolls-Royce UK Pension Fund (RRPF), the firm also transacted numerous smaller deals in the period, completing 11 deals under £100 million.
Looking at the firm’s international pension risk transfer business in the first-half of the year, L&G’s entry into the Canadian marketplace was another milestone for the firm and the business is expected to expand on the back of growth opportunities in the region.
L&G’s U.S. business also continued to grow in the period, with the firm securing transactions worth more than $420 million in H1 2019, which is up by roughly 40% on the same period in 2018, and which also now includes transaction sizes of above $200 million.
“We’ve had an excellent first half of the year, both in the UK and globally. Our work so far this year clearly demonstrates our ability to deliver for both small and large schemes – and highlights the innovative solutions and quality customer service that we can offer our clients.
“The bulk annuity market continues to show promising growth and we look forward to further delivering for our customers in the second half of the year, helping trustees secure their members’ pensions and companies to reduce their pensions risk, whilst ensuring that the long-term benefits promised to pension scheme members are fulfilled,” said Laura Mason, Chief Executive Officer (CEO) of Legal & General Retirement Institutional.
Adding: “These transactions allow us to reinvest these pension funds into the UK economy in areas such as affordable housing, renewable energy and transport – benefitting our cities, future generations and the wider economy.”