What are the administration challenges in the Pension Risk Transfer market?
April 2024
The Pension Risk Transfer market is at an incredibly exciting stage, characterised by an evolving landscape, tremendous opportunities, complex challenges and innovative solutions. Large £billion+ transactions are expected to be a key feature of 2024 and beyond.
However, rapid growth in the market has exacerbated already stretched administrative capabilities.
We recently attended the two-day Bulk Annuities Conference in London, where people from across the pension risk transfer, insurance and reinsurance market came together for compelling and insightful seminars and sessions to exchange views and discuss sector challenges.
A highlight was a collective discussion on challenges in administrator and member satisfaction at the end of the Buy-in / Buy-out transition journey.
The challenges in admin handover
The need for seamless data migration and cleansing is a given.
But, in what’s often a protracted journey, are we seeing a lack of momentum and resource when the process enters the admin handover?
It’s clearly evident that there’s a demand for forward-looking technology and software that can ensure satisfaction for members and administrators alike. Are insurers delivering though?
🙋♀️ Katie Walker, Consultant at Lane Clark & Peacock believes that member experience should get the focus it deserves, and suggested the need for better technology as the pool of qualified DB administrators shrinks.
Members see administrative dealings through frustrated eyes, an observation Katie backed up by real member reviews listed on Google about their, quite frankly, shocking experiences with various insurers.
🙋♀️ Shona Davies of Rothesay identified that everyone has a role to play to ease the burden of administration: Trustees, Sponsors, Brokers, Consultants, Legal Advisors, and Insurers.
Ensure early involvement, leverage existing processes, build a member comms strategy – just a few components to admin success.
Making the step-change to member-centric administration
📈 From our own experience working in the occupational pensions sector and delivering forward-thinking PenTech, we’re on a fast upward trajectory in delighting members with self-service and fully online retirement solutions.
Could the PRT sector be struggling with the step-change to member-centric administration?
Herein lies the admin logjam.
– Lack of admin resource
– Lack of viable technology
– Lack of automation
– Lack of cohesive long-term strategies
– Lack of end-to-end processes
– Lack of self-service
✅ Members expect a fast and efficient service, and to be treated fairly.
✅ They don’t want to be treated as policyholders.
✅ They demand instant self-service.
✅ Consumer-like online experiences should be a standard.
❌ If already bitten by a shoddy insurance service (be-it car, house or life) you’re starting the relationship with your members on a negative footing, making the demand for administrative excellence even more paramount.
Where will the PRT market be in 5-10 years?
In a post-event survey from the 2023 event, when delegates were asked what topics they’d like to see on the next agenda, organisers Westminster and City Programmes found that administration was of particular interest.
It’s clear that the noise around this subject, and the need for advanced administration technology and software solutions, is only going to get louder over the next 5-10 years.
And we’re armed and ready with a megaphone! 📢
#PensionsSoftware #PensionAdministration #PensionRiskTransfer #PRT # IntelliPen