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

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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.

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