UK bulk purchase annuity market deal counts hit an all-time record in 2025, yet average ticket sizes fell sharply as competition spread into the sub-£100m segment once dominated by a handful of large insurers. An energy-market pension scheme’s £55m buy-in completed with Canada Life on 18 June 2026 — covering 250 pensioners and 450 deferred members, with Aon as lead broker and adviser — is emblematic of that structural shift: mid-market and smaller schemes are now transacting at scale, drawing more capital, more insurers and, inevitably, more regulatory attention.
Record Deal Count, Shrinking Average Ticket: The Market Resets
367 bulk annuity transactions were completed in 2025 — a record, surpassing the previous high of 293 in 2024 — yet total premium volume of £38.2 billion fell below the £49.1 billion written in 2023 and £47.7 billion in 2024. The headline gap between deal count and volume is the story: the market is growing wider, not just deeper.
The composition of that record count is striking. Fully 83% of transactions completed in 2025 were below £100 million, and deals under £10 million surged to 119 — more than double the 58 recorded in 2023. That is not a cyclical blip. It reflects a deliberate strategic move by multiple insurers to build flow through smaller scheme transactions: standardised documentation, leaner diligence processes and technology-assisted pricing have compressed execution timelines that previously made sub-£50m tickets economically unattractive for most providers.
Canada Life is one of the clearest examples of that trajectory. The insurer wrote £1.3 billion of bulk purchase annuities in 2024, more than doubling from £600 million in 2023. CEO Lindsey Rix-Broom attributed the momentum to “continued investment in our core capabilities and offering to employers, trustees and scheme members.” The June 2026 energy-sector transaction, modest by headline standards, fits the pattern of a provider deliberately cultivating smaller-scheme relationships to build recurring pipeline rather than competing solely on jumbo deals. Full details of Canada Life’s bulk annuity proposition are set out on the Canada Life bulk annuities page.
Ten Insurers Below £50m: Competition Reaches the Smaller End
The broadening of the market is not solely a function of demand from maturing defined-benefit schemes. Supply has expanded materially. Ten insurers completed transactions under £50 million in 2025, up from eight in 2024, and the trend is accelerating. Royal London and Utmost entered the BPA market in 2024, and Blumont Annuity joined in 2025, bringing fresh capacity and, critically, an appetite for the smaller ticket sizes that established players have historically deprioritised.
At the larger end, the market is also deepening. Eight insurers each wrote more than £1 billion of bulk annuity business in 2025, demonstrating that scale and breadth are advancing simultaneously. For trustees, the practical implication is access: increased competition among insurers produced attractive pricing in the smaller scheme segment in H1 2025, with sub-£100m schemes gaining access to a wider range of quotations than in prior cycles.
80% of market participants surveyed described their 2025 experience as “busy” or “very busy”, with unanimous agreement that the year represented a sellers’ market — meaning conditions that favoured trustees. Aon’s bulk annuity market data underpins the forward view: volumes are expected to exceed £40 billion in 2026, supported by a strong pipeline and continued insurer appetite.
Funded Reinsurance as Capital Lever — and Regulatory Pressure Point
Behind the transaction activity, a quieter but consequential structural debate is playing out: how much of the BPA market’s capital efficiency depends on funded reinsurance, and what happens when regulators constrain it.
Funded reinsurance — arrangements in which a cedant transfers both liability and a block of assets to a reinsurer, often domiciled offshore — has become a meaningful lever for UK life insurers seeking to optimise Solvency II capital treatment on bulk annuity books. The scale is visible in individual firm disclosures. Legal & General’s funded reinsurance activity in bulk annuities rose to £2.2 billion in premiums in 2025, up sharply from £0.6 billion in 2024. That near-fourfold increase in a single year signals how rapidly market practice has evolved since the PRA began engaging formally on the topic.
The PRA’s posture has shifted from observation to intervention. The regulator issued PS13/24 in July 2024, tightening risk management expectations for funded reinsurance arrangements and requiring firms to demonstrate robust governance via responses to its Dear CRO letter. That was not the end of the inquiry. Following its September 2025 Funded Re Roundtable, the PRA is actively considering unbundling funded reinsurance components and the introduction of explicit regulatory restrictions or limits on their structure and scale.
Fitch’s reading of the regulatory direction is that the ceiling is visible. The rating agency does not expect funded reinsurance to exceed 30% of bulk annuity premiums, and does not anticipate a significant shift in insurers’ investment risk appetite given PRA contingency planning requirements. The combination of a disclosed ceiling and active PRA deliberation on structural limits is likely to restrain growth in funded reinsurance as a share of BPA volume even as absolute deal counts climb. For insurers scaling into the sub-£100m segment — where capital efficiency on smaller tickets is more sensitive — that ceiling matters operationally.
Longevity Reinsurers: Swiss Re and the Cross-Border Pipeline
The longevity reinsurance layer that sits beneath most large bulk annuity transactions is itself expanding, and the competitive dynamics there are evolving in parallel. As noted in our coverage of Swiss Re naming Dean Galligan to lead L&H Transactions as longevity pipeline builds, the reinsurer has been investing in dedicated senior resource to capture the structural opportunity created by UK and international BPA growth.
Longevity business represented 17% of Swiss Re’s insurance revenue in 2025, making it the second-largest segment within its Life & Health Reinsurance operation. The firm has completed more than 30 longevity reinsurance transactions across the UK, Netherlands, Singapore and Australia, covering over USD 50 billion of pension benefits and more than one million retirees. That footprint positions Swiss Re as a critical counterparty to the very UK insurer growth that the BPA deal count data reflects. Full details are published on the Swiss Re corporate site.
The interdependency cuts both ways. Rising BPA volumes create longevity reinsurance demand that is supportive of Swiss Re’s segment. But it also means that concentration in longevity reinsurance counterparties becomes a supervisory concern for cedant insurers — and that concern is being tracked at European level, not just by the PRA.
EIOPA’s Private Credit Watch: Systemic Risk at the Asset Side
The regulatory overlay on the BPA market is not limited to the UK. EIOPA’s surveillance of European insurers’ asset-side exposures has surfaced a risk factor that is directly relevant to funded reinsurance structures and to the investment strategies underpinning bulk annuity pricing.
European insurers held €514 billion in private credit at end-2024, equivalent to 5.1% of total assets, while occupational pension funds held a further €128 billion, representing 4.4% of assets, according to EIOPA’s December 2025 Financial Stability Report. EIOPA flagged that private credit is characterised by higher credit and liquidity risk, valuation uncertainty and hidden leverage. Those three attributes — particularly valuation uncertainty and hidden leverage — map directly onto the concerns the PRA has expressed about funded reinsurance structures, where the asset collateral posted to offshore reinsurers is frequently composed of illiquid private credit instruments.
Solvency ratios remain robust at the aggregate level: median SCR coverage for life insurers stood at 235% per EIOPA’s December 2025 Financial Stability Report. But EIOPA’s concern is less about current solvency buffers than about the propagation channels that concentrated private credit exposure creates in a stress scenario. The full analysis is available in EIOPA’s Financial Stability Reports, and the supervisory guidelines that follow are examined in our coverage of EIOPA locking in Solvency II supervisory guidelines for January 2027 implementation.
For bulk annuity insurers, the convergence of PRA and EIOPA signals on private credit and funded reinsurance concentration is not abstract regulatory risk. It is a practical constraint on the asset-liability matching strategies that make competitive BPA pricing possible — particularly on the smaller tickets where margin is thinner and capital efficiency more sensitive to regulatory change.
