The UK bulk purchase annuity market has been booming in the last few years, supported by high gilt yields that flatter pension schemes’ funding positions, transforming buyout from a distant aspiration into achievable reality.
It was only natural that we saw new entrants drawn to this market with Royal London and Utmost entering in 2024 and Blumont in 2025. Blumont was unique, however, in that it was a true start-up – launching from scratch, with no back-book and limited brand awareness in the UK. Royal London and Utmost both had existing businesses – Royal London provided investment contracts, with a smattering of individual annuities, whereas Utmost was a consolidator of life businesses such as Equitable Life. Both Royal London and Utmost could leverage existing systems and brand awareness to build their new bulk annuity businesses.
Blumont had none of this. Instead, it relied on the (albeit considerable) combined experience of its management team and an owner with very deep pockets, in the form of Canadian investor Brookfield, to go to market and successfully take on new business.
First steps
It wasn’t easy though, and one might imagine that it was harder and more gradual than its eager owners had anticipated. As a result Brookfield subsequently used its deep pockets to acquire an existing player, Just Retirement, which completed in April this year.
Argyll provided due diligence on very first transaction with Blumont (as well as subsequent deals). This was no small feat given there was no financial information to go on meaning that none of the standard metrics and capital ratios could be applied. Through understanding management’s plans, we saw in Blumont an opportunity for transferring schemes, not only in the keen pricing offered but also in the wealth of management experience and the systems in place, all supported by the ability of its parent to provide capital.
Progress was made and transactions taken on, but enormous resource and the attractiveness of the market also created enormous impatience. An alternative, faster strategy was hatched using Just Retirement to gain a much larger footprint in the market.
Blumont has since become a subsidiary of Just and the business taken on by Blumont is still held in that entity for now. Blumont and Just could continue to operate as two insurers but it seems unlikely. The smart money must surely be on Blumont’s contracts being transferred to Just over time, leaving Brookfield with an interesting dilemma of what to do with an existing, fully authorised UK insurer.
What does that mean for future new entrant potential?
The experience with Blumont has shown, perhaps unsurprisingly, that building an insurance brand from scratch can take time. The rewards are evidently there and with a degree of patience it might be possible for another completely new entrant to emerge. However, we think this is unlikely.
There is clearly big money interested in the UK BPA market – in July 2025 Athora Group announced the acquisition of PIC and in December Utmost Group announced the sale of Utmost Life and Pensions Ltd (its BPA arm) to German investor JAB Holdings, despite having only recently entered the BPA market in late 2024. There have even been recent mutterings around potential acquisition interest in major player L&G, although this is nothing new and there have previously been rumours around a potential offer for Aviva (though none materialised). The takeaway from this would seem to be that those with significant resource are more likely to take a fast-track approach and acquire an existing player rather than the slower route of building Blumont 2.0 from scratch.
Conclusion
That makes it unlikely in our view that we’ll see another new entrant like Blumont at the current time. If we do see a new entrant it is more likely to be a vehicle looking to leverage an existing brand (similar to Royal London or Utmost) or perhaps something quite different such as a profit-share arrangement, going to market with the backing of an incumbent.
Hopefully we’re wrong – it would be wonderful to see a business start from scratch again and grow. It keeps life interesting and adds to innovation in what has been a very fast-moving marketplace in the last few years. What is true is that we’re sure we haven’t seen the last shake-up in the industry and we look forward to advising on whatever innovation the industry serves up.
For further information, contact:
Richard Hall
rhall@argyllcovenant.com
+44 (0)118 334 5801
+44 (0)7718 543168
