Insurer Legal & General has published the latest edition of its Pension Risk Transfer (PRT) Monitor, which analyses industry trends and market outlooks in the UK and US.
Across 2024, the Monitor reports a significant increase in the number of large pension plans coming to market in both the UK and US, putting the sector on track for one of its largest years ever.
The UK PRT market has completed an estimated £20bn of buy-ins and buyouts in the year to date, and with over £20bn of active deals in the UK pipeline, most of which is expected to transact in 2024, that puts the UK on course to exceed £40bn this year.
The US market experienced a record breaking first half, estimated at $26bn – a 15% uplift from H1 2023. Q1 alone delivered an unprecedented $14.6bn of deals and Legal & General estimate that full year market volumes will exceed $50bn, surpassing 2023’s volume of $46bn and nearing the record-setting volume seen in 2022 of $51.9bn.
“We are continuing to see exceptionally strong demand in both the UK and US PRT markets, with more than £250 billion of combined UK and US volumes expected over the next three years. This forecast supports our strategic ambitions to grow our PRT footprint, generating permanent capital to catalyse growth in our Asset Management division. At L&G, strong synergies across our divisions enable us to build long-term relationships with clients and support them from investment strategy to transaction execution, as well as providing first rate customer care and administration expertise. We are confident that we will continue to deliver exceptional value to our members, clients, and shareholders,” said Andrew Kail, CEO, Legal & General, Institutional Retirement.
“The US PRT market experienced its strongest H1 on record this year, driven by pension funding ratios that soared to 109.5% in July. The average transaction premium rose by 20% when compared to H1 2023, reflecting the growing demand for buyouts and buy-ins from large US pension plans. With the year expected to rank among the largest ever for this market, we’re well-placed to serve plan sponsors seeking to insure their members’ benefits,” added George Palms, President, Legal & General Retirement America.
According to Legal and General’s analysis, in excess of £250bn of combined UK and US volumes are forecast to be secured by insurers in the next three years.
