deferred pension scheme members : the younger, not yet retired individuals. they bring several additional risks for insurers including much greater uncertainty in the longevity risk, as assumptions have to be made over a much longer period of time, together with risks stemming from policyholder options, such as cash commutation, flexibility on retirement age and transfers outs [ 6 ]. this appetite is supported by reinsurers, who provide both pricing expertise and capital. secondly, the disruption in the uk gilt market last autumn resulted in some pension schemes being overweight in illiquid assets [ 7 ] as gilt values fell significantly, and schemes sought to reduce their leverage under liability driven investment strategies [ 8 ]. we see insurers increasingly developing solutions to accept illiquid assets as part of the bpa premium, as pension schemes may be reluctant to dispose of these assets in the open market, potentially at a large discount. this requires significant due diligence, and we are seeing insurers seeking more advice from third party specialists such as property valuation experts both for illiquid asset valuation and to calibrate adequate market value haircuts. alternatively, we have seen deferrals of premiums incorporated in deals giving pension schemes time to dispose of such assets in an orderly fashion [ 9 ]. these premium arrangements can be complex and potentially capital intensive due to the increased uncertainty they can create. the pra welcomes innovations in this market as insurers seek to better support their clients. at the same time, we want insurers to understand the additional risks and uncertainties when accepting premium that includes such assets. even if firms use external expertise to price or manage these deals, boards remain accountable for the decisions taken. they need to understand the basis for advice from third parties and to challenge the advice robustly. straightforward questions need good answers : are these risks within appetite? have the bespoke features of the deal been considered over the full lifetime? how has the inherent uncertainty present been captured within the decision - making process? as noted in our 2023 supervision priorities letter [ 10 ], we are carrying out a thematic review to assess whether bpa writers ’ risk management processes are keeping pace with their growth ambitions and expanding risk appetites. a reliance on third - party capacity the second area is the use of third - party capital and asset origination capacity, known as funded reinsurance, to support these large new business transactions that are both capital - intensive and put

additional supervisory measures announced in the solvency uk package. the combination of existing and new tools will bolster the role of boards and firms ’ senior managers owning their decisions. and, through improved disclosure, we will support market discipline to empower broader stakeholders. should those prove insufficient, we will not shy away from highlighting areas of market - wide concern or taking the necessary supervisory actions. my resolve is strong : a healthy and sustainable life insurance market is a long - term value creator for the whole economy. it is in everybody ’ s interests to work together to ensure a dynamic vibrant industry for years to come. one that serves the needs of, and provides protection for, customers, and makes the strongest contribution it possibly can to investment in the wider uk economy. i would like to thank alwin luchmaya, sejal haria, alan sheppard, stephen walton, igor brkic, jemima ayton and tapasya bhandari, for their assistance in preparing these remarks. thank you. 1. four rs : creating the conditions for long - term sustainable growth in the life annuity sector – speech by charlotte gerken | bank of england 2. ppf7800 index march 2023 update 3. risk transfer report 2023 - hymans robertson 4. pension trustees : the planning puzzle | charles stanley ( charles - stanley. co. uk ) 5. defined benefit bulk annuity market favours full scheme transactions as funding levels improve ( xpsgroup. com ) 6. report of the member options working party - actuarial profession 7. illiquid assets throw uk pensions off balance - risk. net 8. asset managers cut debt in pension scheme investing strategies | financial times ( ft. com ) 9. shifting up a gear – wtw 10. insurance supervision : 2023 priorities ( bankofengland. co. uk ) 11. who ’ s concentrating? trends in the life insurance sector and the need for strong reinsurance and investment risk management − speech by charlotte gerken | bank of england 12. why private equity sees life and annuities as an enticing form of permanent capital | mckinsey 13. uk pensions implosion could end with a deals boom | financial times ( ft. com ) 14. buy - in and buy - out volumes £10 - £12bn in the first half of 2022 - hymans robertson 15. bulk annuity provider esg index - wtw ( wtwc