What to expect in 2022?

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Paige W: Welcome back both.  Before we delve straight in, please can you tell our listeners a bit about how your roles fit together, as I know you’ve been working closely together over the past year or so.

Sheena McE: Yes, absolutely, Paige.  We found that there are many multinational corporates who consider pensions risk at a global level, and what sets Legal & General apart is that we are the only insurer who can write direct PRT business in both the US and the UK.  As a result, John and I have been working closely together to ensure our businesses are aligned and that we can provide joined-up solutions to sponsors.

We’ve worked with sponsors to transfer liabilities in both the US and the UK, with the benefit of economies of scale.  And in 2020, we announced our first global transaction with IHS Markit, and then last year, we announced our second global transaction with Evonik.  We really pride ourselves on our ability to partner with sponsors, and together with our market leading asset management firm – which also has a presence in the US and the UK – as a global group, we’ve been able to create innovative and collaborative solutions through working together closely.

Paige W: Just shows how the use of modern technology allows two teams across two different continents to work closely together, especially through a time when travel was very much restricted.  So before we delve into the trends and what we expect for 2022, can you both provide an overview of how the UK and US de-risking markets performed last year, in 2021?

Sheena McE:  Yes, I’ll go first.  So the big story in the US market is that we had a record-breaking year last year with estimated 38 to 40 billion in total market volume.  That beats the previous record of 36 billion from 2012 and it also represents an over 10 billion increase from last year.  We saw some very large jumbo transactions, which contributed to this.   There were 10 transactions that were close to or larger than 1 billion last year, which, in total, added up to around 22 billion in premiums.  And prior to last year, the most jumbo transactions in a year was 5, so that’s really quite a significant change.  

We did see less smaller transactions with total premiums for less than $500 million deals, decreasing by around 20% from 2020 to 2021.  Which is interesting, and I will have a keen eye on how the 2022 market plays out to see if this trend is a one-off or not.  I’ll end this question with some highlights from last year for our US retirement business.  We surpassed the milestone of servicing 100,000 annuitants and our largest transaction, in terms of number of lives, are just under 18,000.

These are really important achievements for us, because excellent customer service is really at the core of what we do.  Transacting with an insurer is the beginning of a multi-decade relationship between the insurer and the plan’s participants.  So being a knowledgeable and responsible insurer with a client-focused approach is something that we really pride ourselves on.  And we’re excited to have been able to prove that through our 81 NPS score and 4.96 out of 5 average call centre rating.

Looking ahead to 2021

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Paige W: Hello and welcome back to Series 2 of L&G Retirement’s podcast ‘Institutional Insights’, where experts across our business talk all things PRT, from market trends, innovation, around de-risking solutions through to ESG, and how that shaping our investment decisions.  I’m Paige Wilson and today I’m joined by Dom Moret and Sheena McEwen, who are going to provide a global roundup of LGRI in 2020,  reflect on the market trends from the year and look forward to what we can expect in 2021.  So let’s start with some intros.  Dom, could you tell our audience just a little bit about your role and what that entails in the UK?

Dom M: Sure Paige.  Hi. I’m Dom Moret, I lead the UK Pension Risk Transfer Transactions team, so my team lead and execute the transactions that we’ll be talking about today.  And I’m responsible for managing external client relationships and developing the pipeline of new business opportunities that support our growth ambitions.

Paige W:  Thanks, Dom.  And Sheena, what does your role on the other side of the pond consist of? expect in 2021.  So let’s start with some intros.  Dom, could you tell our audience just a little bit about your role and what that entails in the UK?

Sheena McE: Thanks, Paige.  Yes, I’m Sheena McEwen and I head up the equivalent team to Dom’s in our US PRT business, which, in the US, we call our ‘distribution team’.  We launched our US PRT business in 2015 and I’m very excited to be here today, reflecting upon our success at the five-year mark in 2020 and our aspirations for continued future success.

L&G’s global PRT business – Reflecting on the year so far

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Paige: Hello and welcome to Legal & General’s podcast, ‘Institutional Insights’ on ‘L&G’s global PRT business – reflecting on the year so far.’ I’m your host, Paige Wilson, New Business Manager and today I’m joined with Chris DeMarco, Managing Director of UK PRT and George Palms, President, Legal & General Retirement America, who will be reflecting on the year so far for the pension risk transfer market for the UK and US, including the impacts of COVID-19, current trends and what we can expect later in the year.

Paige: Hi Chris, Hi George, thanks for taking the time to talk to us today.

Chris: Thanks for inviting us Paige.

George: Great to be with you Paige.