ION Insurance Corporation (PIC) yesterday agreed to insure £1.6bn of pension obligations for the UK arm of oil company Total – the second largest deal of its type ever completed in the UK.
The deal, which covers two-thirds of Total’s £2.6bn pensioner liabilities, is the second largest bulk annuity deal to date after ICI Pension Fund’s £3.6bn transaction with Legal & General and Prudential in March.
Total, the fifth largest listed oil company in the world, has about 7,000 defined benefit pensioners in the UK scheme.
Pension Insurance Corporation co-head of business origination David Collinson said: “This is a landmark transaction for PIC and is significant for the bulk annuity sector, pushing pension liabilities insured already this year past £5bn.”
A batch of jumbo-sized buy-in, buy-out and longevity swap deals this year have put 2014 on track to be a record year for the pension scheme insurance market.
Figures from Towers Watson show the market on track to breach £10bn of total deals this year, with longevity swaps and bulk annuity deals split half and half.
Last year saw just over £16bn of deal signed by pension insurers and pension trustees.