The platform era of UK life insurance

What’s happening

The UK life and annuity market has entered a phase of platform-driven competition, accelerated by major transactions:

• Athora acquiring Pension Insurance Corporation
• Brookfield Wealth Solutions acquiring Just Group
• JAB Holding acquiring Utmost Life & Pensions

These transactions share a common thesis: insurance as a long-duration capital platform, underpinned by asset origination, permanent capital and operating leverage.
 

Why it matters in 2026

For CEOs, this reframes the competitive question from “are we well capitalised?” to:

• Do we have robust asset sourcing at scale?
• Are we maximising the return on capital for investors?
• Are we operationally efficient and scalable?

Firms without scale or a clearly articulated niche face increasing strategic pressure.

Strong demand, tougher differentiation

What’s happening

In 2025, more moderate transaction volumes (c. £40bn) contrasted with a record number of transactions and increased bidding intensity, particularly in the small-to-mid market. Structural demand for pension risk transfer remains strong, but trustees and sponsors now have more credible alternatives, including run-on strategies, phased approaches and surplus management.

The Stagecoach transaction is a useful marker for 2026: the £1.2bn Stagecoach Group Pension Scheme agreed an innovative run-on and sponsor substitution structure under which Aberdeen Group became the sponsoring employer. This illustrates that well-funded schemes are increasingly selective about how and when they de-risk, and that insurers now compete with non-insurance endgame options.
 

Why it matters in 2026

The basis of competition has shifted:

• Execution certainty is increasingly as important as headline pricing
• Operational credibility (administration, transition, member experience) materially influences trustee decisions

Winning BPA business in 2026 is less about “price at any cost” and increasingly about innovation, certainty and operational scaling.

Innovation under scrutiny

What’s happening

The PRA has sharpened its focus on how insurers create capacity, not just how much they deploy. This includes heightened attention to:

• Basis risk and collateral mismatch
• Inherent risk and regulatory arbitrage in the use of FundedRe
• The growing role of alternative capital structure

At the same time the PRA has several initiatives targeted to support competition and growth including:

• Launch of the Matching Adjustment Investment Accelerator initiative
• Implemented reforms to the Insurance Special Purpose Vehicles regime to widen the types of insurance-linked securities structures available
• Consultation on the new UK captive regime aimed to launch in 2027
• Discussion on Alternative Life Capital options, with the intention to remove barriers to patient capital entering the sector
   

Why it matters in 2026

Capital structuring remains a legitimate strategic lever — but only where:

• Risk transfer is genuine and well understood
• Liquidity and collateral are robustly managed
• Boards can clearly articulate the trade-offs involved

CEOs should assume that opaque or weakly governed structures will face increasing supervisory friction

Simplification becomes unavoidable

What’s happening

As Consumer Duty changes begin to embed, we see an increasing focus on broader product rationalisation, with a focus on addressing legacy products. Successful programmes will require clear Board ownership, early agreement on risk appetite and focus on customer outcomes.

• Improve customer outcomes
• Reduce operating cost
• Address legacy products
   

Why it matters in 2026

Product rationalisation is emerging as one of the highest-impact CEO levers:

• Fewer product variants reduce cost and error
• Simpler propositions are easier for consumers to understand
• Legacy clean-up directly supports operational resilience

2026 is where firms move from analysis to decisive simplification.

Operational resilience

What’s happening

With rising geopolitical tensions and pressures on sovereign debt markets, the PRA expects continued focus on the operational resilience of firms.

Liquidity reporting

Implementation of PRA liquidity reporting (PS15/25) by 30 September 2026 forces
insurers to industrialise:

• Cashflow forecasting with no or 1 day lag
• Collateral mobilisation
• Data lineage and controls

This is a treasury, risk and technology challenge — not just a regulatory reporting exercise.

Solvent exit planning

By 30 June 2026, firms must meet PRA expectations on solvent exit planning (PS20/24).

Insurers should treat solvent exit planning as a strategic stress test of operability, covering:

• Operational dependencies and outsourcing concentration
• Mobilisation of liquidity resources
• The ability to execute a transfer or run-off without destabilising customers or counterparties
   

Why it matters in 2026

Taken together, these requirements and emerging analysis will test whether a firm can successfully execute its strategy under stressed conditions, not just on paper.

From oversight to enablement

What’s happening

AI is rapidly moving from pilot to embedded use across underwriting, servicing, analytics and decision support. At the same time, boards and regulators are increasingly focused on:

• Explainability and fairness
• Model risk beyond traditional actuarial models
• Data leakage and third-party concentration risk
   

Why it matters in 2026

Modern risk functions will be defined by:

• Speed: near-real-time insight and horizon scanning, not retrospective reporting
• Breadth: AI and data models fully integrated into model risk frameworks
• Control: clear ownership, human-in-the-loop governance and auditability

AI without governance creates conduct and operational risk. Governance without enablement creates competitive drag.