If we were to build the ideal risk transfer process for pension schemes now, without any baggage, what would it look like?

Perhaps it’s a standardised process across insurers and advisers where contracts, data and assets were ready and agreed, a transaction was completed, the conversion to buyout didn’t require data cleanse and true up, and the member experience from buy-in to buyout and beyond was exceptional.

Sounds good, doesn’t it? But while full standardisation may seem appealing, it means different things to different people and risks undermining the dynamics that make the market effective: competition, flexibility and innovation.

Don’t we have streamlined processes already?

Many companies in different parts of the market have ‘streamlined’ risk transfer offerings that improve efficiency in one area, but potentially at the expense of another.

“An ideal process should reduce time and costs for all, increasing resource capacity, process efficiency and creating better outcomes for members.”

For insurers, a streamlined process can mean following a template that typically requires trustees, sponsors, and advisers to adapt their data and benefit details to meet each insurer’s specific requirements.

For trustees and scheme sponsors, a more streamlined and efficient process might involve a less stringent formatting of data and less need to simplify benefits when dealing with the insurer initially.