Pension risk transfer markets in the U.S. and U.K. are on track to reach record levels in 2023 as funding ratios improve, according to Legal & General Group's latest Global PRT Monitor.
In the U.K., the report cited "unprecedented acceleration in demand" that has pushed the pension risk transfer market there to a record high in the first half of the year, with more than £20 billion ($25.4 billion) of transactions that have been made public.
"Market movements in the past year coupled with structurally higher interest rates have significantly improved pension scheme funding levels and taken five years off the average scheme's projection to its full funding date," the report said.
In the U.S., the PRT market "appears poised to set another record" with an estimated $22 billion in total transaction volume through June, the report said. That is 31% higher and $4 billion more than a previous record set in the first half of 2022, and well above the $8.7 billion in transactions in the first half of 2021, the report said.