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...Fast-growing private capital managers such as Apollo have in recent years pushed aggressively to create higher earning assets for insurance companies....
...Their demands are intended to protect retirees, widows and orphans relying on annuities and other products from the insurers....
...Many UK businesses with large pension schemes have offloaded them to life insurance companies....
...Bulk annuity sales, as these deals are known, should pick up from around £28bn in 2022 to £80bn by 2027 say pension consultants LCP — good news, you’d think, for insurance companies that specialise in annuities...
...“It’s a way for conservative investors, or those nearing or in retirement, to stay invested in stocks and get some decent upside,” Chaussée said....
...“The annuity is an insurance policy against outliving one’s assets,” said Brendan Curran, SSGA’s US head of defined contribution....
...of retirement remaining....
...and workplace insurance products such as pensions....
...Private capital investors have acquired more than $900bn in life and annuity assets in western Europe and North America, according to McKinsey & Company....
...But debt markets present a bigger opportunity than equity markets and insurance has proved to be a reliable source of fee-paying permanent capital....
...Both are alumni of consultancy McKinsey and came to insurance as outsiders — Wilson’s first job in insurance was at L&G, joining from events company UBM....
...company....
...Annuities work well where a reliable income is needed, and higher rates are available (as in late retirement). But their inflexibility and complex pension rules means they must be treated with care....
...“Standard Life’s re-entry provides a welcome boost to the annuity market and gives further choice to those in need of a guaranteed income in retirement,” said Helen Morrissey, head of retirement analysis...
...Savers have also been drawn to the security of an annuity income at a time when investments in stocks and bonds, the mainstays of most retirement portfolios, have been battered by concerns about high inflation...
...And at retirement a single large pot will attract better annuity rates and access to a wider range of post-retirement options....
...Experts predict hundreds of billions of pounds of liabilities will transfer from company balance sheets to insurance companies as part of a multiyear shift that will redraw the UK’s retirement landscape....
...This means that offloading liabilities, and the assets backing them, to insurance companies is becoming a viable option for more businesses....
...As you say, though, the annuity market has improved recently and so it is sensible for anyone approaching retirement, or even those who have started to draw benefits, to give the purchase of an annuity full...
...Zurich, one of Europe’s biggest insurers, struck a deal to sell its German legacy life insurance back book — including annuity and endowment products — to Viridium in 2022....
...Annuity-holder runs against PE firms’ insurance subsidiaries could lead to sudden and heavy withdrawals from banks....
...PIC’s £39bn in insurance obligations and £44bn investment portfolio is a meaty opportunity for Apollo’s “retirement services” business, which specialises in annuities....
...High inflation has provided a boost to the UK’s retirement sector, as rising pay awards increase the amount that people are putting into their pension, according to FTSE 100 life insurance group Phoenix....
...The reinsurer was at the heart of 777’s “insurance funding model”, according to 2021 pitch documents that said 777 Re sat between third party insurers and 777 portfolio companies....
...So it’s perhaps no surprise that insurance companies are reporting much bigger sales of annuities....
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