Pension Insurance

Monitoring pricing conditions

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Insurance pricing barometer

The chart and barometer below show how the attractiveness of pensioner buy-in pricing varies over time for a sample scheme:

EY - Insurance pricing barometer

Strong investment performance over recent months combined with favourable pricing conditions means that appetite for insurance solutions amongst companies and trustees looks set to remain strong, so that the size of the market in 2014 could well increase.


Barometer actions

The following actions are purely for illustration based on the notional scheme shown in the chart above:

Green

  • Buy-in currently looks very attractive for certain types of liabilities.
  • Insurers should be contacted immediately to avoid missing out.

Amber

  • Buy-in could be attractive for certain categories of members, for example pensioners.
  • The position should continue to be monitored for other categories, e.g., deferred pensioners.
  • Trustees and sponsors should ensure their data is clean and in a good state for insurers.

Red

  • Buy-in currently looks less attractive. The position should be monitored over time.