The stellar growth of the UK's bulk purchase annuity (BPA) market has encouraged strong competition among insurers, and has put asset liability management (ALM) into the spotlight.

With improvements in scheme funding thanks to higher interest rates, some £150bn ($189bn) of liabilities have been transferred from pension schemes to insurers over the last five years. Projections suggest further transfers of over £500bn over the next decade.

abrdn is crowned ALM team of the year because of its techniques and asset management capabilities for supporting BPA deals.

The judging panel commended abrdn's understanding of the need to widen the range of asset classes invested in to back pension liabilities, as well as offering a spectrum of risk-return profiles in a competitive market.

The judges also liked abrdn's holistic approach and portfolio construction techniques that enable its insurance and pension clients to accurately match their liability cash flows within their risk appetite and other specific tolerances.

Whilst demand for BPAs is strong and getting stronger, a spokesperson for abrdn says the supply side of the equation faces its own challenges.

The spokesperson says: "Increased competition across insurers, new entrants attracted by the market opportunity, capital constraints and expensive credit valuation are leading insurers to be more efficient when constructing optimal cash flow matched portfolios whilst widening the scope of asset classes to continue to offer attractive solutions within a competitive market.

"As such, in addition to sterling investment grade fixed income securities, best-in-class cash flow matching solutions can include overseas debt, such as USD corporate bonds, paired together with cross-currency swaps or repackaged into special purpose vehicles.

"abrdn's ability to analyse and model private placements, commercial real estate loans, and infrastructure bonds is crucial to supporting competitive pricing of BPA deals and efficient management of cash flow matching mandates."