Medium and Large Plans Drive Peak Pension Risk Transfer Sales in 2018

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.