UK Bulk Annuity Market Sees Record Deal Volumes as Competition Intensifies, Says Aon

Key Takeaways

• 367 deals set new UK bulk annuity record.
• 83% of deals under £100m ($125m) in 2025.
• Total volume fell to £38.2bn ($47.8bn).
• Ten insurers quoted sub‑£50m deals, up from eight.
• Longevity swaps hit $23.5bn, biggest ever.

Summary

UK bulk annuity market recorded its busiest year by deal count in 2025, with 367 transactions surpassing the 293 deals in 2024. Although the number of deals rose, total written premium fell to £38.2 billion (≈$47.8 billion), down from £49.1 billion the year before. The market shifted toward smaller deals – 83% were under £100 million (≈$125 million) and transactions under £10 million more than doubled. Aon expects volumes to climb above £40 billion (≈$50 billion) in 2026 as competition intensifies across both small and large segments.

Pulse Analysis

The 2025 bulk annuity surge reflects a broader transformation in the UK pension‑risk market. While the total premium written slipped to roughly $48 billion, the number of transactions jumped to a record 367, driven by insurers chasing smaller, more frequent deals. This shift lowers the average deal size by more than half and opens the market to a wider range of providers, from legacy carriers to newer entrants like Royal London and M&G, intensifying price competition and expanding choice for scheme trustees.

Smaller transactions are reshaping underwriting dynamics. With 83% of deals under $125 million and a near‑doubling of sub‑$12.5 million contracts, insurers are deploying more granular pricing models and leveraging data analytics to assess risk on a finer scale. Ten insurers now quote on sub‑$62.5 million deals, up from eight a year earlier, while eight major players still write over $1.25 billion each, preserving capacity for large‑scale risk transfers. This dual‑track environment encourages innovation in product design, such as hybrid bulk annuities and longevity swaps, which saw $23.5 billion of activity, including a $7.5 billion BBC Pension Scheme swap.

Looking ahead, Aon projects bulk annuity volumes to exceed $50 billion in 2026, underscoring sustained appetite despite recent volume dips. Schemes that prepare quickly and engage multiple insurers are likely to secure better pricing, while the continued growth of longevity swaps and superfund consolidation offers additional hedging avenues. For investors and service providers, the evolving landscape signals robust opportunities in advisory, data‑driven underwriting, and capital provision as the market balances scale with increasing fragmentation.