The buyout transaction between the Vickers Group Pension Scheme and Legal & General was the largest of its kind in 2016.

The pension buyout market, or pension de-risking market, has existed for much longer than the 21st century. Since the mid-2000s, however, the market has started to take off, with volumes steadily increasing from a few billion pounds per year in 2007 to over ￡10 billion from 2014 onwards, peaking in 2019 with ￡43 billion of pension liabilities being transferred to insurance companies (see Figure 9.1). The pension buyout market is a ‘runoff’ market, which is a secondary insurance market in which insurers trade closed books of liabilities that they want to get rid of to free up capital for new lines of business. It is a market in ‘legacy liabilities’ or ‘the bad bets on old insurance policies that tie up the insurer's capital’ (Baker, 2021, p 78).

In many ways, the buyout market is exemplary for changes in the life insurance industry more generally. The insurers competing in the buyout market seek to profit from legacy pension liabilities by finding profitable investments for the funds that accompany them. In so doing, the buyout market exemplifies a more general trend in life insurers’ business models: they increasingly focus on their role as investment intermediaries and less so as the ‘makers’ of insurance risk. Life insurers, in other words, are increasingly in the business of taking risk rather than making risk. Of course, it has always been true that insurance is not just about the management of uncertainty by risk-spreading. Insurers have always been taking risk (Baker and Simon, 2002; Ericson and Doyle, 2004).