PRT Perspectives - In conversation with Adrian Somerfield

As the UK bulk annuity market continues to operate at record levels, the focus is shifting beyond transaction execution to the longer-term delivery challenges that follow. For schemes moving from buy-in to buyout, questions around data quality, benefit complexity, member experience and operational capacity are defining how smoothly that journey plays out, and how confident trustees and their advisers can be in the outcomes.

In this edition of PRT Perspectives, Heywood's Kelvin Wilson (KW) speaks with Adrian Somerfield (AS), Origination and Execution Director at L&G. With nearly four decades at the forefront of the UK PRT market, L&G brings a distinctive perspective on what it takes to deliver at scale - from pricing discipline and regulatory engagement through to the technology and service investment that underpins long-term member outcomes.

KW: Legal & General (L&G) operates at a scale few others do in the BPA market. How does that influence your approach to practical considerations, such as delivering good member outcomes, staying ahead of the market, and managing risk over the long term?

AS: Thank you, we are proud to serve the whole market and offer solutions to clients of all sizes and requirements. Every pension scheme is unique, and we work collaboratively with our clients, harnessing the breadth and depth of knowledge across L&G to unlock tailored solutions. This includes our asset management business (who are the UK’s largest asset manager) which allows us to support pension schemes across the entirety of their lifecycle and offer solutions which others can’t.

Despite a focus on tailoring and innovation, I think you’re correct to highlight one constant which is a focus on member outcomes. With nearly 40 years at the forefront of the PRT market, paying pensions is a responsibility that drives everything we do, and we are investing millions of pounds into our member experience proposition and the technology that sits behind it.

In terms of what differentiates L&G in the market, I would draw out two main points. Firstly, clients take great comfort from our track record, financial strength and brand. Our unwavering commitment to the market shows that we’ve delivered through decades of change. We believe in long-term relationships, built on honesty, integrity and trust – clients know they can rely on us.

But linked to that track record is also our ambition for what’s next and our focus on innovation. We constantly monitor the market and actively seek to enhance our proposition and ensure we can stay ahead of our competitors.

To give a couple of examples, our price lock solution provides exceptional price certainty while terms are finalised, enabling even those schemes with L&G PMC unit funds or illiquid assets to transact across varying market environments.

For smaller schemes, L&G Flow brings the benefits of our scale into a streamlined, fully integrated solution that provides price certainty, tailored onboarding and a collaborative journey all the way through to buyout.

KW: Buy-in is often treated as a transaction milestone, but in reality, it is the start of a longer delivery journey. What are the biggest risks you see between buy-in and buyout, particularly where data quality or benefit complexity has not been fully resolved upfront?

AS: I’d completely agree, a buy-in is just the beginning of a scheme’s journey with us and from this point we very much see ourselves as a life-long partner. We ultimately share the same desire to enable the best member outcomes possible.

Between buy-in and buyout a scheme will conduct its data cleanse before paying a balancing premium to reflect any adjustments to benefits which are made. The biggest risk a scheme therefore faces is that this balancing premium is larger than expected due to poor data quality or historic errors being uncovered which need correcting.

The other key risk is operational. Addressing large gaps in data or unresolved benefit queries can cause delays that increase the operational burden and cost for schemes and trustees. In some cases, issues such as unresolved benefit ambiguities, missing members, or outstanding GMP work can extend timelines. Addressing these early helps ensure a smoother and more efficient path to buyout.

Also in this series: Alan Baker, Professional Trustee, on the governance decisions that shape transaction outcomes. 

KW: As more schemes progress through the journey to buyout, member experience is coming under greater scrutiny. How does L&G think about member outcomes, communicating member options and engagement, once risk has transferred, and delivering at scale?

AS: Member outcomes sit at the heart of our approach. We understand the weight of Trustees’ responsibilities and are proud of our multi‑award‑winning service team – the largest in‑house team at any UK PRT insurer. With UK‑based offices, direct‑dial phone numbers and regular customer events, we make it easy for members to speak to real people and receive clear, personal support.

An example of this is how we approach supporting vulnerable customers, recognising the diverse health, financial and life‑event challenges many face. Using the FCA’s four drivers of vulnerability, we proactively identify needs, record them through a “tell us once” process and tailor support across all touchpoints.

Our colleagues are equipped through tiered training, specialist partnerships with a range of charities including Age UK, Dementia Friends and Samaritans, and practical tools including an interactive vulnerable customer toolkit which is on the desktop of all our customer care consultants. We also have dedicated Vulnerable Customer Champions on hand to support more complex cases. With flexible communication channels, and adapted materials such as large print and braille, we work to improve accessibility - reinforcing a culture that empowers colleagues to ‘do the right thing’ for every individual.

On the client-side and returning to my earlier point that no two schemes are the same, we regularly develop bespoke approaches to meet the needs of individual transactions. In one transaction last year, we delivered a solution that allowed the scheme to continue using its own digital platform during buy‑in, helping to maintain a familiar and seamless member experience as responsibilities transferred. In another, we worked with a specialist data provider to design a customised data‑cleansing process that delivered a smoother, more efficient journey and strengthened data accuracy ahead of buyout.

KW: The Prudential Regulation Authority has recently raised concerns that ‘competitive pressures’ in the BPA market could create incentives to weaken pricing discipline or risk management standards. From your perspective, how does L&G balance competitiveness and use of funded reinsurance with robust risk management, particularly when data quality or scheme complexity introduces additional uncertainty?

AS: We value the PRA’s continued engagement with our market and have ongoing dialogue with them on market developments. We see a strong and engaged regulator as a highly positive thing and indicative of the security that the insurance regime brings to pension liabilities, safeguarding member outcomes further.

We therefore understand their concerns given the market is particularly competitive at the moment. However, from our perspective, this does not place any strain on our robust risk management frameworks or pricing discipline. Benefit security and doing what’s right for our customers and shareholders remains paramount. In reality, the increased competition is forcing insurers to innovate further, for example by exploring alternative assets classes to allow them to offer attractive pricing.

We approach funded reinsurance in a similar way. It is a useful risk management tool which can diversify our risk profile, optimise capital usage and reduce the burden on asset sourcing, thereby delivering better outcomes for trustees in some circumstances. Our funded reinsurance risk management policies are comprehensive, regularly monitored and fully aligned to the most recent PRA guidance.

KW: How does the quality of scheme data influence execution confidence and long-term delivery outcomes, particularly when insurers are taking on responsibility for large and complex member populations?

AS: Data quality is something that we will assess as part of our triage process when deciding whether to quote on a transaction. Schemes with high‑quality data are far better positioned to secure strong insurer engagement, as it demonstrates readiness both to execute the transaction smoothly and to complete the post‑transaction steps required to transition to buyout.

In general, a clean, clearly labelled data set accompanied by a legally reviewed benefit specification helps insurers understand the benefits that they are taking on and the risks they’re exposed to

With this said, there is a distinction to be made between good quality data and complex data. Indeed, we have built a huge amount of expertise over our 40 years in the industry in handling complex schemes. Our advice would be to engage early with insurers if the benefits or data are complex so you can agree how best to approach the market. For example, you may only wish to engage a subset of insurers with a strong track record of navigating complexity.

KW: Where are technology and data playing the biggest role today in helping insurers maintain consistency, control, and governance across both transactions and ongoing administration?

AS: The biggest areas of growth due to technology is probably in the member experience area. We’re proud of the excellent customer service reputation we’ve built, but we also recognise that member needs continue to evolve, and we’re committed to evolving with them. That’s why we have launched a multi-year, multi-million-pound programme focused on strengthening our digital offering for scheme members.

Over the next two years, we are significantly enhancing our online capabilities to create a more intuitive, supportive experience and to increase our capacity for the future. By the end of 2027, schemes that have completed their data cleanse will benefit from a new online portal offering illustrative member quotations, virtual chat support, educational resources, and secure self service functionality. We’ve already begun rolling this out to initial pilot schemes and will continue expanding through 2026 and beyond.

However, we would also emphasise the need for balance with these enhancements. Not all our customers are the same and many still prefer the ability to speak to real people. That is why we will continue to support direct line telephone numbers, written communications and training for our employees when dealing with vulnerable customers.

Technology and data are also having a large impact on the pre‑transaction phase of PRT, where fast, accurate interpretation of scheme information is essential. We have been investing internally to strengthen our pricing capabilities. Our AI powered tool, PRoboT, has the potential to speed up and enhance how we assess PRT opportunities by rapidly extracting key data from RFQs and benefit specifications. This will help us respond faster and focus actuarial expertise where it adds the most value. Recent enhancements have improved accuracy, reliability and automation, supporting more efficient pricing decisions and helping us respond effectively as we scale to meet growing market demand.

We are also seeing the development of AI tools to help with the due diligence processes linked to Residual Risks cover when large amounts of legal documents can need review.

Also in this series: Kelvin Wilson on how technology and data are supporting schemes from buy-in through to buyout.  

KW: Taking a two to three year view, how do you expect the BPA market to evolve, and what do you think will define success for insurers in the next phase of the market?

AS: Buy‑in pricing remains highly attractive, supported by strong insurer appetite and increasing market capacity. The market delivered a record number of transactions in 2025, and we expect continued high demand, with £40–50bn likely to transact in the year ahead. With pension scheme funding levels in such a strong position, there is clear potential for further records to be broken in the next few years.

In this environment, non‑pricing factors - particularly the quality of member experience - are becoming increasingly important in insurer selection. This shift is encouraging insurers to differentiate through enhanced service models that offer clearer communications, personalised support, improved digital tools and smoother transitions from scheme to insurer administration. These features help ensure members continue to feel informed and supported throughout their schemes’ journey to buyout.

Looking ahead, we see significant innovation by insurers to improve execution certainty and elevate the member experience, which is shaped by feedback from trustees and their advisers. From streamlined onboarding approaches to enhanced data and digital capabilities, insurer propositions will continue to evolve in partnership with the market to offer the best possible outcomes for pension schemes and their members.

With thanks to Adrian Somerfield and to Legal & General for joining us and sharing insights on the insurer's perspective in today's PRT market.