Pension Risk Transfer Volume Falls

By Allison Bell

News December 11, 2018 at 05:31 PM

Share & Print

U.S. life insurers reported a small drop in pension plan buyout annuity sales in the third quarter.

Pension risk transfer sales fell to $6.3 billion, down from $6.4 billion in the third quarter of 2017, according to survey data from the LIMRA Secure Retirement Institute.

(Related: Employers Hand More Pension Risk to Insurers)

The institute bases the survey results on data from 16 companies that share information about their sales of large, single-premium group annuity contracts.

Pension risk transfer volume reached a six-year high of about $35 billion in the fourth quarter of 2012.

Since then, volume has been under $1 billion in many quarters, and over $5 billion in many quarters.

Volume reached a five-year high of $11 billion in the fourth quarter of 2017.

Wayne Daniel, an executive at MetLife, predicted in June that employers would transfer a total of about $20 billion in pension risk this year.

Employers have reported about $16 billion in pension risk transfer transactions so far this year, according to the new survey data.

Eugene Noble, an analyst at the retirement institute, said in a statement about the results that year-to-date sales are up 33% from what they were for the first three quarters of 2017.

"We expect sales to exceed $23 billion for this year," Noble said.

— Read Investors Helping Life Insurers Shift to Pension Transfer Market: Analyst, on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.