Annuity Buy-Out and Buy-In
The bulk annuity insurers have continued to win business in the recent past, mostly through smaller deals but with the occasional large transaction. While the funding levels of schemes have been volatile, insurers calculate their pricing according to financial market conditions which have been volatile as well. This means that opportunities to transact can suddenly arise.
Insurers have a good awareness of when they will be competitive and they have also expanded their range of solutions. As a result, it is now less likely that a scheme will be able to obtain a wide variety of quotes but most insurers will be able to tailor their products to a scheme’s requirements.
The annuity market continues to develop with the introduction of sovereign annuities. Tailored products are being developed by insurers for schemes not yet in a position to buy-out the liabilities in full but who want to put in a plan to systematically reduce risk and secure the liabilities over a specific period. When considering a buy-out or buy-in of a scheme's liabilities, it is important that all options are considered. The objectives need to be clear and any risks retained by the scheme need to be managed and more importantly clearly understood.
Our experienced team can negotiate with insurers for you as obtaining the best deal is critical.
Issues to consider include:
- The timing of premium payments
- The transfer of investments
- Legal agreements
- The mechanism for ensuring that a deal is concluded on time
If you would like to discuss how we can help, please contact Joe Byrne.
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