PCS report analyses buyout market

A Jardine Lloyd Thompson Benefit Solutions product story

Edited by the Employeebenefitstalk editorial team Jan 13, 2010

The latest Market Watch report from Pension Capital Strategies (PCS) analyses developments in the market for 2009.

It is encouraging for sponsors and trustees that UK-based insurance companies have not required any support from the government, said PCS.

Regardless of this, as scheme funding levels have deteriorated and sponsors have been less able to fill the buyout gap, the market has contracted since 2008.

Analysis carried out by PCS shows that prices seem to have stabilised over the recent months.

However the final requirements of Solvency II may have a significant impact.

'We believe that insurers have already included a margin in their pricing basis to reflect the expected requirements of Solvency II,' said Tiziana Perrella, head of buyout services, PCS.

'Provided there is some recovery in the economy, we believe that the buyout market will continue to be healthy in 2010.

'In particular, it is now easier for smaller schemes to obtain competitive quotes and we can therefore expect increased activity in this segment of the market,' she added.