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- Global insurance M&A activity falls to lowest for a decade
- RT1 issuance to replace ‘grandfathered’ bonds will push up insurers’ debt costs
- US PRT volume estimated at $45bn for 2024
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- New standard continues to pressure South Korean insurers’ capital management
US PRT volume estimated at $45bn for 2024
Written by Adam Cadle
26/02/2024
Legal & General is estimating the full year US PRT total market volume to be around $45bn, the second largest on record behind the $51.9bn secured with insurers in 2022.
In the international edition of its Pension Risk Transfer (PRT) Monitor, L&G said large transactions should make it the largest first quarter ever at an estimated $15bn, easily surpassing the previous Q1 record of $6.3bn in 2023.
Volume in Q4 2023 is expected to reach over $12bn, which is higher than Q4 2022’s total of $8.1bn and is one of the larger fourth quarters we’ve seen to date.
According to LGIM’s America’s Pensions Solutions Monitor, as of December 2023, the average funding ratio for US corporate defined benefit pension plans increased to 104.1% compared to November at 103.4%.
“Should funding levels remain at or above 100%, we can expect more plan sponsors to view this as an opportunistic time to reduce risk and begin the pension risk transfer process,” it said.
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