The growth in the bulk annuity market comes as companies look to insulate themselves from exposure to pension schemes by getting insurers to take on the risk of part, or all, of their defined benefit or final salary schemes.

"The growth potential is massive," said James Mullins, partner and head of risk transfer solutions at Hymans Robertson.

Many pension schemes face shortfalls as the yield on their investments has fallen due to prolonged low interest rates. Companies such as Tata Steel UK have also found their huge pension liabilities have hampered merger plans.

Legal & General's (>> Legal & General) new business in bulk annuities more than doubled in the first half, it said on Wednesday.

Scottish Widows, part of Lloyds Banking Group (>> Lloyds Banking Group), and Canada Life have increased their bulk annuity business, and UK specialist insurer Phoenix (>> Phoenix Group Holdings) is entering the market, Hymans Robertson said in its annual risk transfer report.

Insurer U.S. Massachusetts Mutual was also one of three investors to take a larger stake in Rothesay Life, a British insurance company specialising in pensions risk, in a deal announced on Wednesday.

More entrants are expected, consultants said.

"We're certainly aware of two or three insurers who are seriously putting together propositions to enter the bulk annuity market," said Martin Bird, senior partner and head of risk settlement at Aon Hewitt.

(Additional reporting by Noor Zainab Hussain in Bengaluru, editing by David Clarke)

By Carolyn Cohn