LIMRA, a global research and consulting organisation for the insurance and financial services industry, reports that the total US single-premium pension risk transfer (PRT) premium reached $14.2 billion in the third quarter.
This represents a 36% increase compared to the same period last year.
Year-to-date (YTD), the total single-premium PRT premium has risen by 21%, totalling $39.9 billion, according to LIMRA’s US Group Annuity Risk Transfer Sales Survey.
“While new premium growth rebounded in the third quarter, the growth can be attributed to larger deal activity,” added Keith Golembiewski, Assistant Vice President, Head of LIMRA Annuity Research.
“The bigger story continues to be the expansion of the PRT market. Carriers reported the largest number of contracts ever sold in the first nine months of the year. Higher interest rates are driving companies to de-risk their pension liabilities to annuity providers. LIMRA expects this trend to continue through the rest of the year.”
In the third quarter, single-premium buy-out premiums totalled $13.1 billion, reflecting a 62% increase compared to the same period last year.
A total of 203 contracts were finalised, consistent with the previous year’s numbers. Year-to-date (YTD), buy-out premiums grew by 26%, reaching $36.5 billion. By the end of September 2024, 530 buy-out contracts were completed, marking a 10% rise from the prior year and setting a new record for buy-out contracts sold.
For single-premium buy-in premiums, $1.02 billion was recorded in the third quarter, down 56% from the same quarter in 2023. Four contracts were sold, matching last year’s figures. YTD, buy-in premiums totalled $3.3 billion, a 15% decline from the previous year. So far in 2024, nine buy-in contracts have been sold, a 13% increase from the same period in 2023.
By the third quarter, single-premium buy-out assets reached $288.8 billion, up 13% from the previous year. Single-premium buy-in assets totalled $9.1 billion YTD, an 11% increase year-over-year. Combined, single-premium assets amounted to $298 billion, a 15% rise from 2023.
A pension risk transfer product, such as a buy-out, allows employers to transfer all or part of their pension liabilities to an insurer. This transaction helps employers remove the liability from their balance sheets and reduce the volatility of their funded status.
This survey represents the entire US Pension Risk Transfer market. Detailed quarterly data on pension buy-out and buy-in sales since 2019 can be found in the LIMRA Fact Tank.
With more than 100 years of expertise, LIMRA conducts over 80 benchmark studies and publishes nearly 500 reports annually, providing trusted insights into market trends, behaviours, and dynamics.
