Pension Risk Transfer Contracts Hit Record Numbers in 3Q

Dollar volume lagged, but that may be a sign of smaller plans’ increased use of PRTs.


Pension risk transfers logged a record number of transactions in the year’s third quarter: 207, according to LIMRA, the insurance trade association. Although the quarter’s PRT premium income was far lower than the quarterly dollar record set in Q3 2022, LIMRA thinks it showed smaller plans were getting in on the PRT action.

In dollar terms, the September-ending quarter clocked $10.4 billion in premiums, down 60% from the record set in last year’s third quarter ($26.1 billion), which carried 2022 overall to a record. Nonetheless, the large number of transactions “signals broader interest with midsize and small plans,” said Keith Golembiewski, senior director of strategic initiatives at LIMRA, in a statement.

The year’s first two quarters were marked by several major deals, particularly the $8.1 billion PRT in May involving AT&T Inc. and two subsidiaries of Athene Holdings, while the third quarter did not have such monster transactions. One of its largest deals was the $1 billion in obligations transferred to Prudential Financial from PSEG, an energy provider.

If the burgeoning PRT trend continues on its current path, LIMRA predicted that this year will be the second largest in terms of premium volume, after last year’s blowout performance.

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As PRT provider Legal & General Retirement America analyzed in a statement last month, “the market continues to exhibit rapid growth, and total market volume is estimated to close at around $45 billion at the end of 2023—the second largest year to date following 2022’s total of $51.9 billion.”

Among the forces driving PRT deals lately are higher interest rates, which reduce plan liabilities, thus rendering transfers more appealing to the insurers who receive the plans, an Aon analysis found. Another factor: steadily rising premiums from the Pension Benefit Guaranty Corporation.

The steady demand in recent years for PRT is one of the factors attracting investors to the insurance industry. So far in the second half of 2023 alone, managers of both public and private assets have entered or expanded their exposure to the insurance and reinsurance business.

Related Stories:

PRT Sales Set New Q1 Mark at $6.3 Billion

Athene, Now Part of Apollo, Was the PRT Champ of 2021

A Look at PRT Solutions and Costs 

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Bob Doll’s 2023 Predictions Underperformed

The Wall Street heavyweight’s forecast did not live up to his three-decade record, as a widely predicted recession did not materialize.


Bob Doll, noted prognosticator and
CIO of Crossmark Global Investments, this week said five of his 10 annual investment predictions for 2023 came true amid what he called a challenging year for investors. 

His formula involves blending conventional wisdom, which often turns out to be correct, with some riskier bets. This year was different.


Doll said his calls for 2023 produced one of his “worst years,” below his average of 7.0 to 7.5 over 30 years of predictions. Most notably, he called for a recession that has not come. He did predict correctly predict the drop in inflation.


“Multiple expansion despite flattish earnings confounded most investors even as a much-anticipated recession did not materialize,” Doll wrote. “Investors enjoyed falling long-term interest rates in the back part of the year, even as the Fed raised rates multiple times reaching the 5 1/4% level.”

Half Wrong

The predictions Doll got wrong included:

  • A shallow recession in 2023, which ultimately did not occur. Stronger-than-expected consumer sentiment, driven by a robust, yet weakening labor market and leftover cash resources from the COVID-19 pandemic period allowed for sustained economic growth, according to Doll’s report. Yet cautionary signals from lead indicators of recession, such as the yield curve and money supply, persisted through the end of the year.
  • That a major asset class would not change up or down by a double-digit percentage. In reality, stocks catapulted higher than that marker. The surge was led by the “Magnificent 7” stocks from Apple, Microsoft, Google, Amazon, Nvidia, Meta and Tesla, he noted.
  • That the sectors of energy, consumer staples and financials would outperform utilities, technology and communication services, on the premise that value beats growth. But the prediction, he noted, was “way off the mark.” Instead, growth beat value, with technology and communication the year’s best-performing two sectors. Meanwhile, energy and consumer staples were down for the full year.
  • That the average active equity manager would outperform the index in 2023 was incorrect. The dominance of the “Magnificent 7,” coupled with underperformance by average stocks and a shift toward more equally weighted portfolios by active managers, disproved this prediction early in the year.
  • That international stocks would outperform those from the U.S. for the second year in a row fell short due to the notable outperformance of mega-cap growth stocks in the U.S., coupled with a dollar rally and economic challenges in various parts of the globe.

Half Right

Doll did get 50% of his predictions correct, which, though lower than his usual average, showed some strong prescience in areas where others got it wrong. Those included:

  • Inflation fell substantially, in part due to stronger interest rates, but remained above the Federal Reserve’s target of 2%;
  • The federal funds rate reached 5% and remained there for the balance of the year;
  • Earnings fell short of expectations due to cost pressures and revenue shortfalls;
  • India surpassed China as the world’s largest population and is the fastest-growing large economy; and
  • A double-digit number of candidates announced they would run for U.S. president.

Doll is scheduled to release his 2024 outlook on December 29, he wrote. One big question is whether the consensus view of the double-digit earnings growth, no recession and Fed rate cuts commencing early in the new year can all come together.

“We are dubious that all these good things can happen simultaneously,” Doll wrote.

Related Stories:

How Bob Doll Makes His Rather Prescient 10 Annual Predictions

Savant Bob Doll’s 10 Predictions for 2022

Stock Market Will Be Flat for a While, Says Bob Doll

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