Macroeconomic conditions still driving pension risk transfer

Pension risk transfers see prime conditions still as the market grows and grows, particularly in response to the volatile economic situation.

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Pension Risk Transfers continues to hot up - especially in the US - but what will changing lanes mean for insurers?

US plan sponsors are moving "decisively" to reduce pension risk amid ongoing market conditions and economic uncertainty, according to MetLife’s 2025 Pension Risk Transfer Poll.

“Over the past decade, the US pension risk transfer (PRT) market has undergone a significant transformation, driven by economic shifts, regulatory changes and evolving plan sponsor strategies,” it said.

In the report, MetLife said the market has grown from one that is relatively niche and dominated by large transactions and a handful of insurers a decade ago to a landscape that has expanded rapidly and greatly. Annual transaction volumes have grown from under $14 billion in 2015 to nearly $52 billion by 2024.

PRT is key to insurers for many reasons, including managing or eliminating pension risk, reducing financial statement volatility, a strategic desire to focus on their core business rather than managing legacy benefit obligations, and favourable market conditions, among other considerations.

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