UK - Pension risk transfers are set to more than double at FTSE 100 companies by 2012, following a third quarter that was the quietest period since the market's inception.
According to consultancy Hymans Robertson, by the end of September, nine FTSE 100 companies had already completed such deals, with total transfers valued at £6.5bn.
The latest deal - a £124m (€145m) buy-in with Aviva conducted by clothes store Next - makes up the lion's share of the £500m spent between July and September, with Hymans Robertson predicting the figure would double in the three months to December.
Additionally, while the consultancy only expects 10% of FTSE 100 companies to have completed a scheme risk transfer by the end of the year, it estimates that one in four companies will have undergone some risk transfer in the next two years.
James Mullins, senior liability management specialist at the consultancy, said the third quarter was the "calm before the storm" for the market, with the next three months likely to see deals worth £1bn.
Mullins added that several multi-billion pension longevity swaps were in the process of being tendered, with completion on these deals expected for 2011.
"Indeed, many of the banks and insurance companies acknowledge they are currently devoting serious resources to around 20 large pension scheme risk transfer projects," he said.
He argued that this was down to several factors: "One is that market conditions have improved over the last year, which, coupled with the change to the consumer price index (CPI) inflation measure, means risk transfer deals are more affordable for many UK pension schemes."
Mercer, which published its own research specifically targeting the buy-in market, agreed the switch to the CPI would eventually have a positive effect on buy-ins, but said the benefits would not be enjoyed until the UK had developed a liquid market for CPI-linked assets.
Stuart Faloon, UK head of bulk annuity broking at Mercer, added: "In the meantime, some insurers are offering the potential for rebates on buy-in policies if the cost of providing these benefits reduces in the future."
The consultancy also said the large majority of buy-ins continued to be small in scale, with 26 of the 33 buy-ins conducted in the three months to September valued at less than £10m.
A further six were valued between £10m and £100m, with only the Aviva's deal with Next exceeding £100m.