Kunal Sood, Managing Director of Defined Benefit Solutions and Reinsurance at Standard Life, part of Phoenix Group, comments on Phoenix Group’s Half Year 2023 Results and the key achievements for Standard Life’s Defined Benefit Solutions business

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• Record H1 2023 performance, with £3.2 billion of bulk purchase annuity premiums written
• £195 million of capital invested across 10 external transactions
• Total BPA market expected to reach more than £40 billion in 2023

“The BPA market is seeing record levels of demand, due to higher interest rates narrowing the funding gap of many defined benefit pension schemes, and therefore making buy-ins and buy-outs more affordable for trustees. This market is large and growing, and all signs are pointing to 2023 being a record-breaking year, with the total BPA market expected to reach more than £40 billion in 2023, as schemes look to capitalise on their improved funding levels through insurance de-risking.

“It has been an exceptional period for Standard Life’s Defined Benefit Solutions business. We have continued to invest heavily in the business, and this has resulted in us writing £3.2 billion of BPA premiums during the first half of 2023, compared to £1.6bn in the first half of last year. Through the deals we have invested £195 million of capital across 10 external transactions. This has driven strong year on year growth which forms a key part of the growth of Phoenix Group’s Open business. Notable deals during this period include a £1.2 billion buy-in with Mitchells & Butlers Pension Plan, a £1 billion buy-in transaction with Chubb Pension Plan and Chubb Security Pension Fund, and a £80m buy-in with the MGM Assurance Staff Pension Plan.

“With the predicted surge in bulk annuity demand now materialising, this is a market that continues to grow, and Standard Life is well positioned to support in meeting this demand and ensure more members’ benefits are secured. Our participation within this market is consciously disciplined to ensure that our risks are well managed. We therefore continue to take a selective approach to deals, focused on delivering the right solutions for our clients.

“The outlook for the second half of the year looks positive, with a strong pipeline of activity as the funding levels for many schemes allow them to position themselves for de-risking activity much earlier than anticipated. With no end in sight, and as the industry starts looking ahead to 2024, for Trustees and Sponsors looking to de-risk, the priorities should remain on solid preparation, and flexibility, to ensure they are effectively navigating a constantly evolving market.”

ENDS

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About Standard Life

Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years
Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
The value of investments can go down as well as up and may be worth less than originally invested.We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.