Management Consulting
Aon
Full Credential Description
Aon has reported that the recent volatility in financial markets has resulted in the widest range of pricing for pension scheme buy-ins and buy-outs in over a decade. This situation has prompted pension schemes of various sizes to seek ways to secure their members' benefits, leading to over £6 billion in bulk annuity transactions completed in 2020 alone. Aon acted as the lead adviser on approximately £3 billion of these transactions, which included significant deals for the Co-operative Pension Scheme and the Leonardo Electronics Pension Scheme. Mike Edwards, a partner in Aon's Risk Settlement team, highlighted that the volatility has led to pricing disparities exceeding 10% between the best and worst offers for individual transactions, a stark contrast to typical market conditions. Factors contributing to this pricing variability include the differing investment strategies of insurers, particularly their allocations to corporate bonds, and the challenges in sourcing these bonds amid reduced market liquidity. Despite the uncertainties, Aon has successfully completed around £1 billion in transactions during a particularly volatile month, suggesting that pension schemes may benefit from engaging with the market rather than waiting for conditions to stabilize. Aon's expertise in identifying the most relevant insurers for specific transactions has proven crucial in navigating this complex landscape, allowing clients to capitalize on attractive pricing opportunities that may be fleeting.