Aon, the global professional services firm, has published its latest assessment of the UK bulk annuity market, covering activity during the first half of 2026, reporting that the market remained active, with strong competition between providers and continued demand from pension schemes.
According to Aon, UK bulk annuity transactions reached £10.2 billion in the first six months of 2026. This was higher than the £9.7 billion recorded during the first half of 2025. The £10.2 billion was spread across 138 transactions, compared with 160 deals during the corresponding period last year.
Aon notes that the first half of the year does not generally account for the largest share of annual market volumes. The firm says a number of larger transactions are expected to complete during the second half of the year, with several deals already disclosed.
The latest figures also mean that more than 1,000 bulk annuity transactions have been completed in the UK since the beginning of 2023. For smaller transactions, Aon reports that insurers have continued to develop streamlined solutions aimed at schemes seeking transactions below £100 million. Competition has remained particularly strong among schemes with between £20 million and £100 million of liabilities, where Aon has observed a higher number of insurers participating in auction processes.
The firm also reports that schemes and insurers are increasingly considering factors other than price when assessing potential transactions. Aon identifies member experience, operational capability and additional support for scheme activities among the areas contributing to differentiation between providers.
Aon says insurers entered the second half of 2026 with substantial pipelines. On that basis, the firm expects annual bulk annuity volumes to pass £30 billion for the fourth consecutive year.
The composition of transactions during H1 2026 continued to be weighted towards smaller deals. Aon reports that 82% of the 138 transactions were below £100 million, while 50% of those transactions were below £10 million. Only one transaction worth more than £1 billion was completed during the first six months.
Aon says the sustained level of transaction activity is creating additional operational requirements for insurers, particularly across implementation and administration functions. Some providers are responding by using panels of third-party administrators to assist with implementation and ongoing servicing.
Against this backdrop, Aon says trustees should assess an insurer’s ability to deliver the transaction and support members alongside its pricing. Operational delivery, member servicing and implementation experience are among the areas identified by the firm’s Insurer Due Diligence team.
Aon adds that its Insurer Due Diligence team has been monitoring these issues for more than 20 years and has advised on risk settlement projects totalling more than £100 billion. According to the firm, operational delivery has remained a recurring consideration for trustees and sponsors participating in recent auctions.
The market has also continued to attract investment from international institutional investors. Aon reports that Athora completed its acquisition of PIC during 2026, while Brookfield completed its acquisition of Just Group after receiving regulatory approval. The proposed acquisition of Utmost by JAB Insurance was also expected to progress later in the year, subject to approval.
Aon notes that these transactions had not resulted in significant changes to insurer strategies at the time of its assessment. However, the firm considers them evidence of continued interest in the UK pension risk transfer market among global investors.
The firm also points to Standard Life’s newly announced pension risk transfer partnership. Aon adds that the investment activity, together with the partnership, indicates continued investor interest in the longer-term development of the UK market. Aon expects the additional capital entering the sector to support further product development, insurer capacity and competition.
Provider activity varied across the market during H1 2026. Aon reports that Rothesay completed the largest volume of transactions by value, writing £2.8 billion across 14 deals. Just Group, meanwhile, completed the highest number of individual transactions, with 46 deals.
Aviva and Just Group continued to account for the majority of transactions below £10 million, representing 86% of deals in that segment, according to Aon. However, the firm says competition has increased for transactions between £10 million and £100 million, with business in this range becoming more widely distributed among insurers.
Rothesay and Royal London each introduced dedicated streamlined propositions for smaller transactions during the first half of the year. Aon says this brought the number of insurers with such propositions to five.
Looking towards the remainder of 2026, Aon says insurers had announced approximately £8 billion of transactions that had either completed or entered exclusivity since the end of June. Based on this pipeline, the firm expects total annual market volumes to exceed £30 billion.
Aon states that insurers continue to show appetite across different transaction sizes, while several providers are seeking to increase the amount of business they write during 2026. The firm also reports that trustees are placing increasing emphasis on factors beyond the headline premium when selecting a provider.
The longevity risk transfer market has also remained active. Aon highlights transactions announced by Dutch insurer Achmea in March 2026, involving the reinsurance of €8 billion of pensioner and non-pensioner longevity risk. The firm says these transactions demonstrate the availability of capacity for pension schemes seeking to manage longevity exposure.
Aon identifies pricing and accessibility as two themes within the longevity swap market. The firm reports that pricing has remained competitive and that transactions are becoming accessible to schemes across a broader range of sizes.The future direction of longevity pricing remains dependent on several factors, Aon says. Among the most significant are the amount of reinsurance capacity available and assumptions concerning future life expectancy.
Aon expects the supply of reinsurance capacity to remain strong for the foreseeable future, which it says should continue to support competition. However, changes in mortality experience could affect future assumptions and pricing.
The firm reports that national mortality experience during 2024, 2025 and 2026 year-to-date has remained relatively light. If this pattern continues for the rest of 2026, Aon says the next industry-standard mortality projections, expected in March 2027, could lead to a further increase in longevity assumptions and pension liability valuations.
Aon says such a development could increase both pension scheme liabilities and insurance pricing. The firm also notes that the longer-term direction of UK life expectancy remains uncertain, with a range of factors capable of affecting future mortality.
Aon therefore identifies longevity risk as an ongoing financial uncertainty for pension schemes. The firm says trustees and sponsors considering a run-on strategy or a future bulk annuity transaction may wish to consider how and when longevity risk should be managed.
According to Aon, Clara remains the only transacting superfund. Two further schemes transferred to Clara’s arrangement during 2026, bringing its total number of transactions to six. The two latest transactions were completed through Clara’s ‘Small Scheme Offering,’ which pools smaller schemes to share running costs.
Tncreased interest in alternative endgame solutions has also encouraged further development within the market. Two prospective superfund providers seeking to establish ‘run-on’ solutions are currently progressing through The Pensions Regulator’s assessment process, while other potential entrants are considering opportunities in the sector.
The firm also reports growing interest in other forms of consolidation. Following Aberdeen’s transaction with the Stagecoach Pension Scheme in 2025, Aon says other asset managers have shown increased interest in structures involving changes to scheme sponsorship. Aon further highlights the James Neill Pension Plan transaction as another example of capital-backed consolidation. In that case, Portunes Pension Capital provided financing to support the pension scheme.
The post Aon reports strong activity in UK bulk annuity market during H1’26 appeared first on ReinsuranceNe.ws.