Pension funds in the US, UK and Canada have transferred nearly $400 billion in pension and longevity risk since 2007. While these countries are the focal point of the market today, the Netherlands has been a vibrant market, and Germany recently opened for pension risk transfer in 2018 with two notable transactions, together worth more than $5 billion. Several other countries will soon follow suit. In 2017, the US and UK set a combined record with nearly $50 billion in total activity3, and 2018 is shaping up to be another outstanding year on both sides of the pond.
Why is the market growing so quickly? Today, many pension funds in these countries are at or near full-funding. When combined with competitive pension risk transfer markets and liability pricing at its lowest in a decade, many leading companies are locking in their gains and de-risking with the knowledge that such favourable market conditions will not last forever.
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