A stark warning has been issued by a senior actuary in the UK insurance sector that companies cannot rely on their insurance coverage to deal with pensions problems.

Speaking in an interview with Reuters, Clive Fortes, partner and head of actuarial practice at consultancy Hymans Robertson, believes that the UK insurance industry does not have the capacity to deal with the pensions shortfalls at the nation’s leading companies.

Insurers could not take on companies’ entire pension liabilities because they do not have enough high-grade assets to underwrite such a burden, Mr Fortes was reported as saying.

The negative warning adds to an increasingly bleak picture of the UK company pensions sector and follows hot on the heels of suggestions that the real pensions ‘black hole’ is more likely three times government figures at GBP150 billion.

Meanwhile, Mr Fortes believes the cost of insuring unfunded pension obligations – known as ‘buyouts’ – at the top 100 UK companies could in itself be GBP150 billion.