Corporate pensions continued to offload liabilities to insurers in the third quarter as single-premium pension risk transfer (PRT) premiums hit $14.2B in the period, up 36% from the same period a year ago, according to newly published figures from the Life Insurance and Market Research Association (LIMRA).
Through the first three quarters, PRT premiums grew to $39.9B, a 21% increase over the first three quarters of 2023. Single-premium buyout premiums, payable as lump sums to pensions, accounted for the majority of the quarter’s activity, totaling $13.1B, a 62% increase from a year ago, on 203 contracts. The 530 buyout contracts sold year to date marks a record high, LIMRA said. By contrast, single-premium buy-in premiums, which pensions purchase as annuities, fell to $1.02B, a 56% drop from the third quarter a year ago.
LIMRA said the premium growth was mainly attributable to larger deal activity, but “the bigger story continues to be the expansion of the PRT market,” Keith Golembiewski, head of LIMRA Research, noted in a statement providing the quarterly update. “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.”
