Just Retirement has launched a medically underwritten buy-in service aimed at small and medium-sized defined benefit schemes.
The service, which is aimed at schemes with up to 300 pensioner members, focuses on underwriting small numbers of members who represent a disproportionately large amount of the scheme's liabilities.
Once identified, these members undergo a detailed interview over the phone to establish whether they qualify for enhanced annuities and to price the cost of a buy-in more accurately.
Just Retirement, which previously specialised in individual annuities, has recruited a ten-strong team to set up its bulk annuity offering (PP Online, 29 November).
Director of DB solutions Tim Coulson said: "Smaller schemes face exactly the same problems as bigger ones but are not well served by the current providers for whom bigger deals are more lucrative. However, our underwritten solution can generate larger cost savings for more focused memberships compared to larger schemes where life expectancy will typically be closer to average."
He said that the company had accumulated detailed knowledge of how health and lifestyle issues impact on life expectancy from providing enhanced annuities in the retail market.
Director of external affairs Steve Lowe (pictired) said the depth of medical information gained from speaking to members on the phone means Just Retirement can price buy-ins more accurately than if they rely on questionnaires.
He added: "In many schemes of this size, trustees will know and be in contact with a lot of those members who represent the biggest liabilities. So they might know if the former chief executive is a heavy smoker or has a heart condition, in which case the scheme could benefit from this."
Lowe said the enhanced market had the potential to grow at the same rate as it had for individual annuities, where more than half of retirees using the open market option now qualified for an enhancement.
Just Retirement has joined Partnership and Legal & General in the underwritten bulk annuity market, although no completed deals have been announced yet (PP Online, 19 June).
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