The Legal & General Group’s Global Pension Risk Transfer (PRT) businesses – Legal & General Retirement Institutional (LGRI) – today released the latest edition of the Global PRT Monitor, which analyses industry trends and market outlooks in the UK and US.
In the UK, the Monitor reported that more than £25 billion of retirement income was secured with insurers in 2022. Around £12 billion was secured in H1 and a surge in transactions in the second half of the year translated to another strong performance. Five transactions of over £1 billion were announced publicly during the year. The Monitor observed that improved pension scheme funding levels have greatly accelerated the journey to buyout for many pensions schemes and noted that some market participants have projected that demand for buy-ins and buyouts could total £200 billion over the next few years.
The Monitor reported a historic year in the US PRT market with an estimated $53 billion in total market volume, significantly exceeding the 2021 record of $38 billion. The first three quarters of 2022 were all record-breaking quarters while estimates for Q4 2022 are around $9 billion – a decrease from the $12.8 billion recorded in Q4 2021.
The record-breaking growth in the US was driven by large transactions, with nine individual transactions near or over the $1 billion mark closing throughout the course of the year. The improved funded status for pension plans and recent market volatility also contributed to the surge in PRT activity.
There’s more background info on L&G’s pension investments here by the way.
John Towner, Head of UK Pension Risk Transfer, Legal & General Retirement Institutional
“Increasing numbers of UK pension schemes are looking to insurance to provide security to their members. Our market has continued to deliver for pension schemes in all varieties of environments. We are excited for what we expect will be a busy few years ahead.”
Sheena McEwen, VP Head of Distribution, Legal & General Retirement America
“We saw yet another record-breaking year in the US PRT market, signaling the growing strength and resiliency of the market. As the market has evolved, we’ve seen volumes continue to rise and more transactions being announced publicly – which is helping to broaden knowledge and understanding of PRT as a key risk mitigation strategy for US insurers. Momentum from 2022 has carried over into 2023 and we are anticipating another busy H1 with several transactions over $1 billion already in the pipeline.”
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