Consultancy LCP has completed a £19m full buy-in between Artemis Pension Plan and Just Group – the latest transaction bringing LCP’s value of small scheme buy-ins and buy-outs to a total of £2bn (€2.4bn).
Insurers are increasingly focused on larger transactions, with the number of sub- £100m transactions falling by 30% in the past five years, according to LCP.
Because of this trend, the firm is seeing an increase in demand for smaller schemes to operate via a streamlined service.
The benefit of using a streamlined service is that smaller transactions can achieve competitive pricing and terms through pre-negotiated contracts and are able to transact within three months of deciding to go to market, it said.
LCP expects that it will be increasingly the norm for sub-£100m transactions to operate through a streamlined process, with some insurers already asking for the streamlined approach to be adopted for transactions as large as £200m.
On the transaction with the Artemis scheme, a key factor to its success was the plan’s governance – the scheme had a sole trustee that worked closely with the sponsor throughout the transaction – and the scheme’s data and benefit documentation were ‘transaction ready’.
Mark Fletcher, trustee of the Artemis scheme and client director at PSGS, said: “Through the preparation of the plan and the use of the streamlined service we were able to react quickly to favourable market conditions and achieve attractive pricing.”
Catherine Hopper, partner at LCP who led the transaction, added: “We are delighted to see, even in the current very busy bulk annuity market, schemes that present well-prepared data and benefits, have good governance in place and come to market using our streamlined service continue to get insurer engagement and attractive pricing, despite the market being dominated by the larger transactions.”
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