The firm’s latest research into the bulk annuity market shows 2013 was dominated by three big players, with one insurer writing half of the total premiums.
Tower Watson’s Settlement in Focus showed that in 2013 eight insurers wrote 186 bulk annuity deals worth more than £7.2 billion ($12.17 billion). £3.7 billion ($6.25 billion) was written by one insurer, with two other insurers writing £1.4 billion ($2.37 billion) and £1.3 billion ($2.20 billion) respectively.
Towers Watson advised on over half the £7.2 billion total, having advised on deals ranging from £5 million ($8.45 million) to £1.5 billion ($2.54 billion). The research also shows that bulk annuity deals worth less than £10 million ($16.90 million) outnumbered those over £10 million, indicating that insurers who focus on medical underwriting have the opportunity to significantly increase their share of the total number of deals written, according to the firm.
“The last year has shown a move towards an even greater domination of the market by a few insurers. Rothesay Life’s recent announcement of its planned acquisition of MetLife appears to compound this effect further. Counteracting this, Just Retirement’s and Partnership’s share of the market may increase as medical underwriting takes off, perhaps becoming the norm for smaller schemes,” said Sadie Hayes, transaction specialist at Towers Watson.