Home News Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

UK Insurance Market Sectors Stabilizing - Aon
UK Insurance Market Sectors Stabilizing - Aon

Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

Insurance and reinsurance broker Aon recently described the prospects for sub-£100 million transactions within the industry in a UK risk settlement bulletin.

The advisory states that since focusing solely on larger transactions can result in a lumpier flow of revenue, insurers are more likely to achieve a continuous flow of business by participating in auction processes across a range of sizes.

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Since insurer competitiveness tends to be more deal-specific for smaller transactions (usually those under £100 million), according to Aon, maximizing insurer participation is essential for attaining the greatest results for schemes.

Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

Preparation is still essential for insurers given the variety of factors for smaller transactions in the current market, according to Aon, as the quality of the data affects both the work needed by the pricing teams of insurers upfront to provide a quotation and the time needed by their administration installation teams after the transaction.

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The bulletin advises concentrating on moving forward with data cleansing work up front whenever possible and making sure that critical data is presented optimally for consistent pricing and straightforward insurer validation checks.

According to Aon, more insurer examination of the broking process is necessary as a result of rising market demand. Insurers want as much assurance as feasible that a transaction would proceed if pricing is acceptable before agreeing to commit resources to offer a quotation.

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Aon Outlines Opportunities For Sub £100m Bulk Annuity Transactions

A streamlined broking process is now a requirement from insurers for an increasingly large proportion of transactions, specifically smaller ones. Aon expects this trend to persist into the future.

Whilst flexibility is important for all transaction sizes, Aon says it’s a particular advantage for smaller transactions, given their size means insurers can more readily utilise short-term capacity to price these deals, especially if they are being run via a streamlined broking process

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