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Investing March 19, 2019
Number of Pension Buy-Out Deals Growing Each Year
“A big driver of the 2018 buy-out sales was a combination of mid- to large-PRT deals,” says Eugene Noble, research analyst, LIMRA Secure Retirement Institute. “We also saw two new insurance companies enter the PRT market this year.”
Reported by Rebecca Moore
U.S. single premium pension buy-out product sales exceeded $10.4 billion in the fourth quarter of 2018, nearly level with fourth quarter 2017 results.
This is only the third time fourth quarter sales have surpassed $10 billion, according to LIMRA Secure Retirement Institute’s quarterly U.S. Group Annuity Risk Transfer Survey.
In 2018, single premium buy-out product sales peaked at $26 billion, more than 14% higher than 2017. Total single premium product sales (including buy-ins) exceeded $11.3 billion in the fourth quarter 2018. For the year, total single premium product sales were $27.3 billion.
“A big driver of the 2018 buy-out sales was a combination of mid- to large-PRT [pension risk transfer] deals,” says Eugene Noble, research analyst, LIMRA Secure Retirement Institute. “We also saw two new insurance companies enter the PRT market this year.”
Total assets of buy-out products were $135.5 billion in 2018, more than 18% higher than the prior year. Survey participants reported 29,632 contracts sold as of December 31, 2018.
Seventeen companies participated in this survey. A breakout of pension buy-out sales by quarter since 2012 is available in the LIMRA Data Bank.« Everyone Is Paying More Attention to Bond Funds These Days