AM Best has maintained its stable outlook on the United Kingdom’s life insurance segment, reflecting in part the continued strength of the U.K. pension risk transfer market, with small to medium-sized deals being the backbone of the industry, as well as solid interest rates that support investment income.
In its new Best’s Market Segment Report, “Market Segment Outlook: United Kingdom Life Insurance”, AM Best notes that the Pension Schemes Act, which received Royal Assent in April 2026, may facilitate market consolidation as a minimum threshold of GBP 25 billion assets under management has been set as a default option.
Stanislav Stoev, senior financial analyst at AM Best and one of the outlook’s authors, said, “The growing use of funded reinsurance remains a specific area of concern for the U.K. regulator, as it considers the current treatment of counterparty risk in the solvency capital requirement does not appropriately reflect the underlying risks. However, when new proposals are introduced, AM Best does not expect to see a material reduction in the use of funded reinsurance, though it should lead to better protection of policyholders’ interests.”
To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365087.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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