Increase in M&A Activity Anticipated in UK Pension and Risk Transfer Market

Consolidation through mergers and acquisitions is expected to continue among bulk annuity insurers in the coming years, as highlighted by LCP following a series of significant acquisitions in 2025.

Three major buyouts were announced last year, marking a trend in pension risk transfer (PRT) activities within the UK’s bulk annuity market. In July, Athora acquired Pension Insurance Corporation (PIC) in a deal worth £5.7 billion, while Brookfield Wealth Solutions purchased Just Group for £2.4 billion. Prior to the year’s end, Utmost’s life and pensions arm was bought by US-based JAB Insurance, encompassing over £5 billion in assets and 175 employees. The completion of all acquisitions is anticipated by mid-2026.

Beyond outright acquisitions, some insurers have opted for strategic partnerships to enhance their offerings. In July, Legal & General (L&G) and Blackstone joined forces to leverage L&G’s PRT and asset management prowess, combining a £92 billion annuity book and £1.1 trillion in assets under management with Blackstone’s $465 billion credit platform. Similarly, Phoenix engaged in discussions with private capital firms in October to explore partnership opportunities aimed at propelling the growth of their UK PRT business.

The UK bulk annuity market shows no signs of slowing down, with buy-in volumes predicted to hit a record £55 billion in 2026. This robust market activity is attracting attention from overseas investors, drawn by the market’s scale, maturity, and substantial asset influx. LCP foresees a continued appetite for acquisitions among foreign investors eyeing the UK bulk annuity market.

Charlie Finch, a partner at LCP, underscored the strength and resilience of the UK buy-in market, emphasizing the diverse range of available endgame options. Projections of £40-55 billion in buy-ins for 2026 reflect healthy funding levels and a strong deal pipeline, supported by competitive insurer pricing. The strategic acquisitions witnessed last year are expected to instill confidence in schemes regarding the market’s investor support, fostering competition and steering ongoing innovation in the sector.