Life firms split on what risk margin means for bulk annuities
L&G predicts record volumes, but Aegon and UK's Prudential say risk-margin costs too high
You could be forgiven for being confused about the prospects of the bulk annuities market in the UK. Optimism and pessimism are being dished out in near-equal measure. Where some insurers only see increased capacity, thanks to the collapse of the individual annuities market and deep demand from corporate pension schemes wanting to de-risk, others look at the cost of holding longevity risk under Solvency II – or the cost of reinsuring it – and decide this market is no longer for them.
Among the
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