S&P Eyes Pension Risk Transfer Business

Corporate sponsors want relief

Deep Banerjee of S&P touched on the pension risk transfer boom Wednesday at his company's annual insurance conference. (Photo: Allison Bell/TA) Deep Banerjee of S&P touched on the pension risk transfer boom Wednesday at his company's annual insurance conference. (Photo: Allison Bell/TA)

Many sponsors of defined benefit pension plans are looking for someone to take responsibility for the plans off their hands, and many life insurers want to oblige.

Deep Banerjee, an insurance sector rating specialist at S&P Global Ratings, said Thursday that S&P wants to see insurers take a safe approach to absorbing all of that extra pension risk.

"That effectively is a demand-driven product," Banerjee said, in New York, at an S&P Global Ratings insurance conference session.

(Related: Debt Market Lures Billions as Verizon, GM Pursue Pension Trade)

MetLife Inc. recently announced a big pension risk transfer deal with Sears.

Prudential Financial Inc. has announced a series of big pension risk transfer deals and made a major push to publicize the unit that makes the deals.

S&P is happy to see the growth in the pension risk transfer market, but it also wants to see insurers balancing the new pension business with adequate additions to capital, Banerjee said.

Failures to balance pension risk transfer growth and capital could hurt an insurer's finances, Banerjee said.

--- Read Waldeck to Lead Prudential Retirement on ThinkAdvisor.

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