United Kingdom

Aon says 2020 risk settlement market to hit £50 billion

LONDON, 05 October 2020 – Aon plc (NYSE:AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has said that it expects, in spite of all the difficulties of this year, that the risk settlement market, including both bulk annuities and longevity swaps, could still reach £50 billion by the end of 2020 – while final volumes could yet make it a record year.

While Aon’s risk settlement team has seen fluctuating levels of market activity during the last nine months, it expects to see a late surge in deal activity as the year draws to a close.

Mike Edwards, partner at Aon, said:
“Over £25 billion of transactions took place in the first half of this year, across both the bulk annuity and longevity swap markets. That's clear evidence of the resilience of this market, of pension schemes’ need for these solutions and of the way that the market has developed in recent years.

“However, Q3 was busy for the market and we also know that significant insurer and reinsurer appetite remains for closing further transactions before the end of the year. Market timing has been a key theme throughout 2020 with very attractive pricing available to those schemes that have been ready to act. But some of the inevitable market uncertainty driven by the US election and Brexit negotiations will mean that schemes will need to take a robust approach to get transactions over the line.”

Stephen Purves, partner at Aon, said:
“The risk settlement market has never had challenges like it’s had in 2020. However, the resilience of the industry and its ability to quickly adapt to the challenges faced this year has meant that the momentum of transferring risk to insurers and reinsurers has continued at pace.

“It also shows that these kinds of insurance-based risk reduction exercises are no longer seen as special projects for pension schemes but something which they view both as achievable and as a priority. Schemes of all sizes are able to capture some fantastic pricing opportunities along the way."

About Aon

Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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Media Contacts

Colin Mayes
Aon
Phone: +44 (0)7801 748138
Email: [email protected]

Anelia Fikiina
Kekst CNC
Phone: +44 (0)7970 952774
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