25% growth in market over 2008, say new figures

The market for pension risk transfer solutions will be more than £10bn in 2009, according to new figures.

Most of this will be driven by the trustees and sponsors of defined benefit pension schemes, said Pension Corporation, who released the figures.

This leap represents a 25% growth in the market since 2008, which saw just over £8bn of pension insurance transacted.

Volatility in the stock market and increasing liabilities, due to an ageing population, are encouraging trustees to look at steps to reduce their pension burden.

Longevity risk transfer—whereby trustees pass on the excess payout levels that result from people living longer than expected or what the fund has in it—will, according to the figures, account for more than 60% of the market by year end,

Edmund Truell at Pension Corporation, commented: ‘We are a little over half way through the year and we have seen around GBP4bn of new business written. With several large schemes looking at transacting over the next few months we could well see the market for pension risk transfer exceed GBP10billion. However, the market will look substantially different from last year with pension schemes looking in particular at removing longevity risk.’