17 November 2019

U.S. Single Premium Pension Buy-Out

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U.S single premium pension buy-out product sales surpassed $10.4 billion in the fourth quarter of 2018, nearly equalling Q417, according to a quarterly survey by the LIMRA Secure Retirement Institute (LIMRA).

This is only the third time Q4 sales have surpassed $10 billion, LIMRA says.

“Sales tend to be larger in the end of the year. We’ve seen buy-out sales over $5 billion in the fourth quarter going back to 2014,” said Eugene Noble, research analyst, LIMRA SRI.

“This also marks our fifteenth consecutive quarter with over $1 billion in sales.”

In 2018, single premium buy-out product sales peaked at $26 billion, over 14% higher than 2017.

Total single premium product sales (including buy-ins) exceeded $11.3 billion in Q418. For the year, total single premium product sales were $27.3 billion.

“A big driver of the 2018 buy-out sales was a combination of mid-to-large PRT deals,” said Noble. “We also saw two new insurance companies enter the PRT market this year.”

LIRMA says total assets of buy-out products were $135.5 billion in 2018, more than 18% higher than prior year.

Survey participants reported 29,632 contracts sold as of 31 December 2018.

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