UK Life Insurance "To BPA or not to BPA" Ahmed

Research evidence excerpt

UK Life Insurance "To BPA or not to BPA" Ahmed

Global Research

26 May 2026ab

UK Life Insurance Equities

Europe including UKTo BPA or not to BPA

Insurance, Life

Nasib Ahmed, FIA

A competitive BPA market with a fully priced L&G valuation Analyst

The debate on the BPA (Bulk Annuity) market has intensified recently, mainly driven by nasib-za.ahmed@ubs.com

recent transactions and further M&A-related newsflow - see here. In this note, we assess +44-20-7568 8231

the state of the market including competitive dynamics and the returns on offer for Will Hardcastle, CFA

insurers operating in the space. Finally, we compare recent transactions (e.g. Just and Analyst

PIC) to L&G's valuation. In conclusion, we do not see significant upside to L&G's current will.hardcastle@ubs.com

valuation (c.270p our SOTP cross check at 280p). +44-20-7567 9763

Qian Lu

High-single-digit to low-double-digit returns on offer in UK BPA Analyst

We estimate BPAs offer high-single-digit to low-double-digit returns relative to Solvency qian-za.lu@ubs.com

+44-20-7567 4657

II own funds. These returns are based on our estimated underlying surplus generation

(excluding management actions and new business strain) as a proportion of Solvency II Chloe Ryan

Own funds (excluding debt). We also analyse cash/remittance returns, returns including Associate Analyst

management actions , and returns after adjusting for new business strain. However, chloe.ryan@ubs.com

+44-20-7567 3505

these other metrics can be influenced by management decisions, therefore, we believe

underlying surplus generation is the best metric to compare BPA profitability.

L&G's BPA business does not screen different to others

Based on our analysis, L&G's BPA business does not screen as generating differentiated

returns relative to peers.