In early March 2026, some of the leading participants in the UK life and annuities sector gathered in a London boardroom to discuss the generational shift in the market structure – that comprises four main trends.
First, a thriving business writing bulk annuities has led to rapid growth in insurer balance sheets. Billions in liabilities are transferring from defined-benefit pension schemes to insurers, and sales of individual annuities are also ramping up. The participants discussed prospects for further growth and how firms need to develop to satisfy demand.
Second, life insurers have become increasingly sophisticated investors, tapping into private markets to find assets with the appropriate risk vs return to provide attractive annuity pricing. The participants discussed this trend and the impact of changes to the strict regulatory requirements around assets used in matching adjustment portfolios.
Third, the nature of the investors providing capital to life insurers is also evolving. There has always been a mix of public (stock exchange listed), patient investors such as sovereign wealth funds, and private equity firms present. But the discussions highlighted the new momentum that is coming from alternative asset managers, and other changes that may bring capital to market in different ways.
Fourth, some firms are using funded reinsurance to help manage risk and capital, and tap into assets they might otherwise struggle to originate. However, regulators are casting a closer eye on this approach. At the time of writing, the direction of regulatory change was not clear, which limited the ability of participants to comment.