Royal London has completed a £10m buy-in with a scheme sponsored by HSBC, as the market for small scheme insurance transactions remains strong. The deal insures the Credit Commercial de France – London Branch Pension and Life Assurance Scheme, sponsored by HSBC Bank. Royal London’s bulk annuity deal is one of several recent small scheme transactions.
Isio was lead adviser and transaction manager, and supported the trustees in a detailed data rectification exercise prior to the deal proceeding. Osborne Clarke provided legal advice to the trustees. The deal’s success can be attributed to the collaborative approach taken by all parties involved.
Allan Marchant, a trustee representative, said: “This buy-in is an important step in securing the future sustainable payment of members’ benefits. The trustees were particularly pleased with the collaborative and well-coordinated approach taken throughout the transaction, including the work undertaken to improve and prepare the scheme’s data ahead of the insurer process.”
Tom Hill, bulk annuity origination manager at Royal London, added: “Partnering closely with the trustees, HSBC Bank and their advisers Isio meant that we could deliver an accelerated process whilst still tailoring the transaction around the needs of the trustee and sponsor. They take pride in bringing a flexible and client-led approach to all their trustee clients, and this £10m transaction demonstrates that in action.
Earlier this month, Aviva and Just Group also announced small bulk annuity transactions. Aviva’s £24m buy-in deal was with an unnamed pension scheme and covered 240 members. The insurance company was able to incorporate GMP equalisation into its quote, according to a press release. This deal shows that insurers are willing to adapt to meet the needs of scheme sponsors and trustees.
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Gallagher was the risk transfer broker while Pinsent Masons provided legal advice for Aviva’s deal. Just Group, meanwhile, announced a £4m buy-in with Combat Stress’s legacy DB scheme. The deal completed in May and covered 39 members of the pension scheme. Combat Stress is a charity providing mental health support to ex-military staff.
Barnett Waddingham was the risk transfer adviser, and legal advice was provided by Burges Salmon for Just Group’s deal. The recent activity in the small scheme market suggests that insurers are willing to take on smaller deals, which could be beneficial for schemes looking to secure their members’ benefits. It will be beneficial for scheme members.
The market continues to evolve.
The fact that Royal London, Aviva, and Just Group are all active in this space suggests that there is still appetite for these types of deals. The pension industry is complex, and these transactions can provide a level of security for scheme members. They are complex.
The details of these transactions show the hard work and dedication of the parties involved. The use of data rectification exercises and collaborative approaches has helped to facilitate these deals. As the market for small scheme insurance transactions continues to grow, insurers and advisers will adapt to meet the needs of scheme sponsors and trustees.
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