Irish DB de-risking deal volumes are predicted to exceed €1bn in 2024, breaking previous record levels.

LCP Ireland, which has made several predictions for the Irish de-risking market this year, said many Irish DB schemes have very strong funding positions as a result of favourable market conditions from 2022 onwards.

Therefore, it believes that bulk annuities in the form of buy-ins or buy-outs are an attractive investment and risk management option given DB surplus positions and the compelling pricing available.

It predicts that the pace of DB scheme wind-ups will accelerate due to a combination of factors, such as strong funding levels, the IORP II cost burden and deferred annuity contracts, among others.

Furthermore, LCP Ireland thinks 2024 will see the first deferred member buy-in/buy-out making full scheme settlements possible for the first time.

Given the increasing demand, it also predicts that new insurer entrants will win business and grow market share, stoking further competition among Irish insurers.

During 2023 there was a decline in transaction volumes relative to 2022. However, given the significant levels of quotation activity in 2023 and the developments around deferred annuities, LCP Ireland expects 2024 volumes to be the highest yet.

Commenting, LCP Ireland partner, John Lynch, said: “At LCP, we believe that 2024 will see a fundamental shift in Irish pension scheme de-risking, with increasing choice and competition in the buy-in/buy-out market delivering enhanced value for schemes.”

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