New estimates about the pension risk transfer market in the second quarter of 2024 are available from TELUS Health, showing $1.1-billion transacted in the first quarter of 2024, followed by an estimated $2.5-billion in the second quarter.
“This sustained market activity was chiefly driven by an uptick in quotes and the presence of substantial jumbo quotes. The heightened competitiveness in the market is advantageous for plan sponsors poised for transactions,” they write, adding that insurers also continue to be selective.
The report, Pension risk transfer: 2024 Q2 review further states that the summer season may experience a relative slowdown, followed by a higher burst of activity between September and November. “Many expect that the volumes achieved in recent years will be significantly surpassed, especially given the substantial head start in the first half of 2024.”
As of June 30, they say both the annual accounting and annuity purchase rates remained stable at 4.9 per cent. “Despite some moderate fluctuations during the period, the relatively high rates and the narrow spread between accounting and annuity purchase rates continue to create an opportunistic environment for risk transfer from an accounting perspective, as has been the case in recent quarters,” they conclude.
