LIMRA Secure Retirement Institute

U.S. Single Premium Pension Buy-out Sales Has Record First Quarter — Exceeding $4.7 Billion

Highest Q1 total in 30 Years

New data from LIMRA Secure Retirement Institute 

WINDSOR, Conn., May 22, 2019 – U.S. single premium pension buy-out product sales surpassed $4.7 billion in the first quarter 2019, an increase of 240%, compared with first quarter 2018 results. This is the highest first-quarter sales total in over 30 years, according to the LIMRA Secure Retirement Institute (LIMRA SRI) quarterly U.S. Group Annuity Risk Transfer Survey.

“Buy-out products had a very strong start to the year with $4.7 billion in sales. Previous first quarter sales had never exceeded $1.5 billion.” said Mark Paracer, assistant research director, LIMRA Secure Retirement Institute. “The increase in sales was not limited to just one company. Two-thirds of companies reported higher first quarter sales compared to the previous year.”

Total assets of buy-out products increased 15%, compared with first quarter 2018, reaching $139 billion. Survey participants reported 29,417 contracts sold as of March 31, 2019.

Strong small & mid-sized deals and one large deal

“The spike in sales in the first quarter was driven by strong small and mid-sized deals and one large deal. Typically large buy-out deals have occurred during the third and fourth quarters,” noted Paracer.

Total group annuity risk transfer sales in the first quarter of 2019 reached at $4.9 billion. This is a 213% increase from the same quarter last year. A group annuity risk transfer product, such as a pension buy-out product, allows an employer to transfer all or a portion of its pension liability to an insurer. In doing so, an employer can remove the liability from its balance sheet and reduce the volatility of the funded status.

Seventeen companies participated in this survey, representing 100% of the U.S. PRT market. A breakout of pension buy-out sales by quarter since 2012 is available in the LIMRA Fact Tank.



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