London, 7 October, 2013 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that announcements made over the past weekend are a clear indicator that the bulk annuity market is poised for growth as more pension schemes look to de-risk. The news that Pension Insurance Corporation (PIC) is discussing a potential initial public offering (IPO) with its investors is the latest in a series of signals of the upward direction of the bulk annuity market.

Dominic Grimley, principal consultant in Aon Hewitt's Risk Settlement Group, said:
"Bulk annuity providers are preparing for significant further placements in 2014 and beyond. PIC had already obtained significant new capital from a new investor (the Reinet fund) at the end of 2012, but has grown so quickly in the last three quarters - taking on nearly £3 billion of annuity placements this year - that it is thinking further ahead.

"Rothesay Life which is currently a subsidiary of Goldman Sachs, is also in discussion with potential investors to diversify its ownership. Legal & General, the other organisation dominating recent bulk annuity volumes, is of course a major listed group, but has also been taking action to target larger deals which have included additions to its sales team, and an increase in the extent to which it reinsures longevity risk following a series of jumbo transactions over 2011 to 2013 – reducing the strain on its capital."

Aon Hewitt believes that these changes could be important for schemes seeking capacity in the market and sustained competition for annuities in 2014. If schemes' funding positions keep improving, as seen so far this year, these changes will be vital in allowing scheme sponsors to reduce their risk exposure to pensions.

Dominic Grimley continued:
"The bulk annuity market has seen substantial activity throughout 2013 – and the schemes that have transacted recently have benefitted from pricing supported by new investment opportunities for the key participants.

"With Partnership successfully undertaking an IPO, and Just Retirement reported to be considering this option, this is an important period for establishing who will be providing the backing for tomorrow's annuities – and therefore the solutions that pension schemes are seeking."

Media Contacts:    
Colin Mayes                                         Giles Abbott
 Aon Hewitt                                           Capital MSL
 01372 733689                                      020 7307 5340
colin.mayes@aonhewitt.com                  giles.abbott@capitalmsl.com
 

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About Aon Hewitt
Aon Hewitt empowers organisations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organisational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness.  Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.