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WINDSOR, Conn., Aug. 31, 2022 —In the second quarter 2022, U.S. single premium buy-out sales totaled $12.3 billion, up 148% from prior year results and setting a second quarter sales record, according to LIMRA’s U.S. Group Annuity Risk Transfer Sales Survey.  

“While the U.S. pension risk transfer market record-setting results were propelled by several jumbo deals (over $1 billion) in the second quarter, growth was widespread with almost two-thirds of the companies reporting sales increases and the overall number of transactions climbing 63%,”said Mark Paracer, assistant research director, LIMRA annuity research.

There were no buy-in contracts sold in the second quarter. Through June 30, 2022, there were four buy-in contracts sold for $2.7 billion.

In the first half of 2022, buy-out and buy-in sales were $17.6 billion, which is 101% higher than prior year. This surpasses the sales record of $9.7 billion set in the first half of 2018. In the first six months of 2022, there were 221 contracts sold, a 69% increase from the first half of 2021.

Single premium buy-out assets reached $202.5 billion in the second quarter, up 20% from prior year. Single premium buy-in assets were $6.65 billion, 12% higher than prior year. Combined, single premium assets were $209.2 billion in the second quarter, an increase of 19% from second quarter 2021 results. 

“The pension risk transfer market is experiencing several tailwinds that are driving the record growth we are witnessing,” noted Paracer. “Increased market volatility, rising interest rates and escalating costs to maintain plans are all presenting challenges to plan sponsors. Our research shows there is growing plan sponsor interest in de-risking their pension liabilities. LIMRA expects 2022 to be another strong year for pension risk transfer sales.”

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.

This survey represents 100% of the U.S. Pension Risk Transfer market. Breakouts of pension buy-out sales by quarter and pension buy-in sales by quarter since 2016 are available in the LIMRA Fact Tank.

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