The total volume of defined benefit (DB) pension scheme buy-ins and buyouts hit an all-time high in 2023, with both the number and value of transactions secured the highest ever recorded, Hymans Robertson has revealed.

According to the consultancy’s analysis of the 2023 results published by the majority of active bulk annuity market insurers, the total value of buy-in and buyout deals reached £50bn last year.

Hymans Robertson predicted that £50bn a year will be “the new normal” for buy-in volumes, with the market expected to be at least at this level every year for the rest of the decade.

There were a total of 254 buy-in and buyout transactions in 2023, with an average deal size of approximately £190m.

More than half (158) of the transactions took place in the second half of the year, while more than 150 were valued at less than £100m.

Commenting on the findings, head of risk transfer at Hymans Robertson, James Mullins, described 2023 as an “incredibly busy year” for the risk transfer market, as many DB schemes used their improved funding levels to target whole-scheme buy-ins.

"It’s clear that large transactions are likely to continue to drive market volumes in 2024 and beyond," Mullins continued.

"However, we also continue to see a healthy and competitive market for smaller schemes that want to transfer risk. For instance, all our buy-ins transactions under £30m received quotations from multiple insurers in 2023."

He noted that 2024 looks set to be another "bumper year" for the buy-in market, given the record transaction pipelines and activity.

"There are two key examples of this," Mullins said. "Firstly, there are over 15 buy-in transactions due to come to market over the next few months that are each between £1bn and £2bn.

"This group of large transactions alone add up to around £30bn and that’s before we take into account the material flow of buy-ins that are less than £1bn, along with mega transactions that are several billion [pounds] in size.

"Secondly, there has been a high volume of transactions at the start of 2024, despite January and February tending to be quieter months for the buy-in market.

"For example, the risk transfer team at Hymans Robertson has already led on over £3bn of completed transactions in the first two months of the year."

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