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| Bulk annuity business hits landmark £1bn deal |
| Prudential
has agreed an historic £1bn deal to insure members of the Cable
& Wireless Superannuation Fund. The milestone transaction, which will see Prudential meet the full cost of benefits due to retired members of the scheme, means that the bulk annuity sector has seen £7.5bn worth of business in the UK in less than a year. “This is a landmark deal which delivers significant risk reduction for both fund members and Cable & Wireless plc,” commented Steven Dicker, a senior consultant at Watson Wyatt, who helped advise on the deal. Dicker said it was likely that this would not be the only large buy-in the market sees this year. “Looking ahead, we expect more transactions on this scale – though some funds will start with do-it-yourself approaches to reducing risk before turning to the  insurance
market in many years’ time.” John Broome Saunders, actuarial director at BDO Stoy Hayward Investment Management added: “This is the coming-of-age of the buy-out industry. Suddenly it looks as if big schemes are taking buy-out seriously. Although it is ironic that, in a marketplace that has been stoked up by a clutch of new kids on the block, the biggest deal to date has been done by one of the oldest players in the market." - Pensions Age September 2008 |