The UK pension risk transfer market has rarely been busier, with strong demand, rising transaction volumes and increasing competition across insurers. Against that backdrop, recent regulatory commentary suggests the industry may be entering a period of greater scrutiny, where insurer due diligence is just as important, if not more, as speed of deal execution.
In its 2026 supervisory priorities letter to CEOs, the Prudential Regulation Authority (PRA) acknowledged that its concerns stem from the rapid growth and competitiveness of the bulk purchase annuity (BPA) market. As volumes increase and timelines compress, the regulator’s focus is on how firms respond to that pressure, particularly where pricing speed and deal momentum begin to test risk management discipline.
This reflects a broader reality many insurers and advisers recognise. As competition intensifies, deal timetables have compressed materially in recent years. Expectations around turnaround times have tightened, with faster quote delivery and quicker decision making (through better governance) now seen as table stakes! In that environment, the temptation to compress due diligence is real.
Whilst it’s important to acknowledge this is not universal, it is occurring frequently enough to merit the attention of the PRA and, therefore, closer scrutiny.
This pressure has been amplified by sustained transaction volumes. The UK PRT market recorded £47.8 billion in transactions in 2024, its second-largest year on record, with a record 299 transactions completed. While 2025 volumes are expected toward the lower end of the £40-50bn range, the year is projected to see a higher number of transactions compared to previous years, with increased streamlined processes being employed at the smaller and mid-sized end of the market. This concept of streamlining reinforces the focus on speed, intensifies competition and can lead to important due diligence, such as data/benefit audit and GMP equalisation, pushed and concentrated at the end of BPA transaction.
Competitive pressure rarely shows up as a single decision. It builds gradually, through a series of small trade-offs made in response to time, volume and pricing expectations, each seemingly reasonable in isolation but cumulatively material in their impact.
We are seeing transactions where data cleansing is deferred or limited ahead of pricing. Schemes progress with unresolved benefit complexity, often including outstanding GMP equalisation work, on the assumption that these issues can be addressed post-transaction. In practice, GMP equalisation is frequently deferred at buy-in, only to re-emerge as a source of friction, cost and delay when schemes move towards buyout. Residual risk structures are sometimes proposed without sufficient modelling of the long-term exposure or operational impact this creates.
In parallel, there is growing appetite across the market to structure transactions involving complex or illiquid assets on relatively modest deal sizes, partly to differentiate pricing or accelerate execution
Each decision may make sense in the moment but taken together they materially increase execution risk.
Many of the delays and cost overruns that later surface between buy-in and buyout can be traced back to this point. The same data issues, calculation gaps and benefit uncertainties resurface downstream, when fixing them is harder, more expensive and more visible.
This was explored in more detail in Why GMP equalisation and data challenges are delaying buyouts, where the focus shifts from individual issues to the cumulative impact of unresolved complexity carried forward through the transaction lifecycle.
The consequences extend beyond insurers. Trustees find themselves managing unexpected delays and cost overruns between buy-in and buyout, often years after the initial transaction. Scheme members, particularly those waiting for data remediation or benefit calculations to be finalised, face prolonged uncertainty about their pension outcomes. Advisers are increasingly caught between their duty to secure competitive pricing for their clients and the need to ensure transactions are built on solid foundations.
The underlying issue is less about appetite for risk and more about whether firms have built the infrastructure to support informed decision-making under pressure.
Traditional due diligence approaches struggle to keep pace with today's PRT volumes. Manual data reviews, spreadsheet-led benefit analysis and fragmented calculation tools all slow decision-making. Under pressure, that friction encourages simplification rather than deeper analysis.
Several of the pressure points highlighted by the regulator point to infrastructure gaps that firms should address as they scale. Improved data validation and cleansing earlier in the process allows insurers to form a clearer view of scheme quality before pricing, reducing uncertainty and limiting reliance on broad assumptions. Rules-based calculation engines enable more consistent modelling of complex benefits at scale, including GMP equalisation and legacy structures, supporting informed pricing decisions while maintaining analytical rigour.
Residual risk is often framed in contractual terms, but it ultimately represents an operational and financial exposure. Scenario modelling and stress testing help insurers quantify that exposure and evidence decisions more clearly. Stronger transition, data remediation and administration capabilities reduce the incentive to defer work that would otherwise resurface later in the transaction lifecycle, when fixing issues is harder, more expensive and more visible.
The question is not whether to use technology, but whether firms are investing in the right capabilities to compete sustainably.
These themes are closely linked to those touched upon in AI and technology impacting the pension risk transfer market, where the focus shifts from automation for efficiency to automation for control.
The regulator has been explicit that competition does not lower expectations around governance, controls or risk management. Its focus on funded reinsurance, liquidity risk and complex investment structures reinforces the same point. Innovation is welcome, but only when risks are understood and managed.
Firms that build the right infrastructure will be better placed to compete sustainably. They will move faster without compromising discipline, execute transactions with fewer surprises, and demonstrate the robustness regulators expect.
Those that rely on speed alone may find that advantage short-lived.
PRT has always been about transferring risk. The mistake is assuming that risk disappears if it is not fully examined.
The next phase of the market will favour insurers who can move quickly and explain their decisions with confidence. Being able to evidence how decisions were reached, through clear audit trails, documented assumptions and repeatable calculations, goes a long way to addressing risk concerns from regulators, trustees and internal governance teams alike. Technology is not the differentiator by itself. How it is used is.