The total premium of U.S. pension risk transfer sales reached US$12.7 billion in the fourth quarter of 2023, a 53 per cent increase from the same period in 2022, according to a report by LIMRA.
It found that pension risk transfer sales totalled $45.8 billion in 2023, down 13 per cent from 2022. There were 296 pension risk transfer contracts sold in Q4 2023, up 26 per cent on a year-over-year basis. Overall, there were 850 contracts completed in 2023, a 25 per cent jump from 2022.
Read: U.S. pension risk transfer sales increased 39% in Q3 2023: report
Single premium buyout sales were $12.5 billion in Q4 2023, which was 73 per cent higher than the same period in 2022. However, overall buyout sales in 2023 were $41.3 billion, a 14 per cent decline from 2022. There were 280 buyout contracts in the quarter, up 40 per cent from Q4 2022. In total, there were 763 buyout contracts completed in 2023, 36 per cent higher than the number of buyout contracts sold in all of 2022. Indeed, single premium buyout assets reached $263.4 billion in 2023, up 12 per cent from the prior year.
Notably, there were no buy-in contracts reported in the last quarter of the year. At year-end 2023, there were a total of eight buy-in contracts worth $3.9 billion. Single premium buy-in assets reached $6.9 billion in 2023, two per cent higher than in 2022. Combined, single premium assets were $268.5 billion in 2023, an 11 per cent increase from in 2022.
“Strong economic conditions have encouraged more plan sponsors to think about derisking their pension liability,” said Keith Golembiewski, LIMRA’s senior director of strategic initiatives, in a press release. “We continue to see a record-level number of deals, suggesting broader awareness and interest in these contracts. LIMRA expects this trajectory to continue with 2024 [pension risk transfer] sales results similar to the results seen 2022 and 2023.”
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