Pension Risk Transfer Digest
August 2024
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Business Stats
F&G's PRT business is growing significantly. See our sold premium, won deals and lives onboarded as of June 30, 2024.
Interest Rate Update
See how interest rates trended between April and June 2024, and what it means for PRT pricing.
Did You Know?
When it comes to PRT contract structure, there's a difference between general account and separate account. Do you know how they stack up?
Competitive pricing is a key component of product success. PRT pricing is correlated with changes in high-quality corporate bond yields (consistent with how pension plan liabilities are valued for funding, accounting, etc.) and changes daily based on yields available to the issuing PRT insurer. Rate increases and spread widening drive lower PRT cost — and vice versa.
Yields rose during this period, which translates to an approximately 1.5% lower PRT transaction price.
This chart covers April - June 2024 and shows how interest rates changed during that time period.
1 Information shown above is illustrative and not intended to represent F&G's actual PRT transaction pricing. Historical interest rates are not indicative of future rates.
2 Single effective rate based on U.S. Treasury yield curve and AA corporate bond spreads from sample PRT liability cash flows during the period of April 1, 2024 to June 30, 2024.
Defining Contract Structures
General Account (GA)
General account (GA) products are typically backed by the insurer's largest, most diversified pool of assets and contain a variety of product liabilities collectively backed by the GA.
Separate Account (SA)
Separate account (SA) products are managed separately from the insurer's general account. They are insulated from claims arising from the general account, and if assets become insufficient, they are ultimately backed by the general account.
SA products come in two types:
- Commingled SAs aggregate many different PRT contract holders into a collectively managed SA, and are generally offered on larger transactions.
- Dedicated SAs contain only a single PRT contract holder, and are generally offered on jumbo transactions.
Seeing the Difference
| Contract Structure | Target PRT Transaction Size | Product Diversification | Plan Diversification | Product Insulation |
| General Account | Smaller, <$100M | |||
| Commingled Separate Account | Larger, >$100M | |||
| Dedicated Separate Account | Jumbo, >$1B |
Describe your role in PRT:
I deal with everything data-related on our PRT block of business. Once a deal is signed, I begin working with the data to prepare for the onboarding of the block. I make sure all records are converted to the administration system accurately and on time. I monitor the block of business closely, creating reports and analytics, and partner with other areas to assure the data is documented and used correctly. I also perform studies on the data, making sure the block is as profitable as expected.
What brought you to F&G?
In 2020 I started working as a consultant for F&G, focusing on a conversion project. I collaborated with colleagues across the company and relished both the challenges of the job and the camaraderie among the team. At the end of the project, I moved to the IT department to work on data governance with a focus on PRT. I quickly realized I enjoyed the challenges of bringing on a new product line. I love working with data, solving problems and building things from scratch. It is a perfect fit for me and I love being part of F&G.
Favorite aspect of PRT?
I've worked with almost every product line, but I've especially enjoyed learning about the PRT product. As a data enthusiast, I find working with data fulfilling and enjoy using it to tell a story, assist others and proactively identify areas of improvement. I appreciate the people I work with and generally have a great time working.
How do you spend a typical Saturday?
I spend my time very differently depending on the time of year. In the spring and summer, I'll be on a lake with friends and family. In the fall I spend time watching college football, cheering for the Ohio State Buckeyes. In the winter I like to focus on friends and family and travel to warmer climates.
Favorite book, podcast or show?
Even though I can't sing, I enjoy watching American Idol and the Voice. I like learning about the contestants' backstories and following their progress throughout the season. My favorite part is watching these shows with family and talking about our favorite performances. I also love Yellowstone and I patiently wait for the new season.
We'd Love to Hear From You!
More About Our Team
F&G’s PRT team is a seasoned group of professionals who specialize in business development, pricing, investments, operations, legal, finance and reinsurance.
Our team collaborates with F&G corporate staff and external PRT consultants and their clients throughout the year as we work to manage new and in-force PRT business activities.
This material is intended for informational purposes only and is only intended for use by institutional plan sponsors and industry professionals.
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F&G is the marketing name for Fidelity & Guaranty Life Insurance Company issuing insurance in the United States outside of New York and, in New York only, Fidelity & Guaranty Life Insurance Company of New York. Each Fidelity & Guaranty Life company is solely responsible for its contractual commitments.
Guarantees are based on the claims paying ability of the issuing insurer, Fidelity & Guaranty Life Insurance Company, Des Moines, IA.
