Smaller schemes still being successful in a busy buy-in market: LCP completes nearly £1bn of transactions for smaller schemes over 2023

According to LCP, with the right approach, smaller schemes can still access competitive pricing from multiple insurers. Over 2023 LCP completed 17 transactions totalling £0.95bn through their streamlined approach for smaller schemes. In December alone, LCP completed five transactions with four different insurers for schemes under £100m. All these transactions obtained pricing from multiple insurers before deciding who to transact with, even the smallest (at c.£10m). In fact, every smaller scheme LCP took to market in 2023 was successfully transacted. Since 2010, over 80 transactions – totalling c.£3.5bn – have been successfully executed under their streamlined buy-in service.

Imogen Cothay, Partner at LCP, commented: “Against the backdrop of an exceptionally busy market and the challenges faced by many smaller schemes to engage insurers, we are extremely proud to have helped so many smaller schemes stand out from the crowd, obtain competitive pricing from multiple insurers, and successfully transact.

“Insurers are increasingly selective about which advisers they work with, and confidence in that adviser and their transaction process is a key factor when insurers are deciding whether to participate. This is particularly true at the smaller end of the market, which saw the number of schemes seeking pricing double in the first half of this year alone.”

For smaller schemes, LCP believe that to attract insurer attention, good preparation and a streamlined process with a proven track record are essential. There is a wide range of pricing between different insurers for any given process, often more than 5% between the highest and lowest prices.

The savings from the right competitive process – i.e. one with multiple engaged insurers quoting – can be significant and, even for very small cases, can add up to hundreds of thousands of pounds. Trying to cut corners with the process will often be a false economy, as the savings from approaching the market in an optimal way with multiple insurers far outweigh the additional costs involved.

As well as thorough preparation, LCP recommends smaller schemes take four key steps when seeking pricing to put them in the best position to attract insurer attention:

• Engage early and be flexible;
• Leverage your risk transfer adviser’s reputation;
• Be focussed on your key asks and
• Do not feel you need to rush to market.

You can read more about it in Sam Jenkins’ blog, which sets out further detail on these key areas.