BuyOut Market Watch Newsletter for Q4 2017

In this end-of year Market Watch we take a look back on 2017 and look forward to what 2018 has in store. We provide details of the deals that have taken place in 2017 and explore some of the bigger transactions in more detail. We discuss how the PPF+ market is emerging along with developments in mortality and medical underwriting. We also take a look at the FTSE100 companies and see how their funding difficulties are easing only marginally.

Looking forward to 2018 we see a year when the style and feel of the bulk annuity market will change significantly (as well as the volume of money). As 2017 closes, it looks likely that we have £12.5bn in bulk annuity deals. Nearly 10 years have elapsed since the first bulk annuity “boom year” of 2008, when the £8bn barrier was broken for the first time. Looking ahead, with insurer back-book transactions, it feels that the £30bn line will be crossed in the next year. However, in 2017 schemes in the £1-600m range have driven the recent upsurge in activity in the market.

Further interest rate rises are being spoken about and uncertainty surrounding Brexit remains. History has shown us that the buyout market can absorb outside influences whilst providing competitive pricing for your schemes. Change can lead to opportunities and those schemes that have taken the steps to position themselves correctly can benefit from market openings.

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