Bank of England warns against reliance on reinsurers for corporate pension deals
The Bank of England on Thursday warned insurance groups that relying on reinsurers to help meet a surge in demand for corporate pension deals risked creating a “systemic vulnerability” for the sector and restraining domestic investment.
Rising interest rates have lit a fire under the so-called bulk annuity market, where companies offload their pension liabilities, and the assets backing them, to insurers. The UK’s biggest transaction of this kind was announced in February and analysts expect as much as £60bn of benefits will be transferred to insurers this year, which would mark a new record.
This story originally appeared on: Financial Times - Author:Ian Smith
