Legal & General (LGEN) has completed its first Canadian pension risk transfer (PRT) deal as it seeks to capitalise on international pension schemes' desire to de-risk. The C$200m (£114m) buy-in deal was undertaken via its joint venture with Brookfield Annuity Company, under which the life insurer will provide quota-share reinsurance for Canadian PRT transfers.
The Canadian PRT market has more than doubled in size over the past five years to reach sales in 2018 of C$4.6bn. This latest deal takes the level of international de-risking business to £2.5bn since 2015. Most of these have been written by its US operation, which has historically been focused on transactions worth less than $100m, but will write deals worth more than $200m from this year.
Last year L&G wrote a record level of bulk annuity business, totalling £9.1bn across 40 deals – more than double the prior year. Financial consultancy Hymans Robertson estimated that pension buy-ins and buyouts were set to exceed £20bn during 2018 and would break that record this year, as pension scheme funding levels improve.
