Strength and Support
Mar 7, 2025
Transferring Risk; Securing Retirement
Feb 4, 2025
Life insurers are the experts at managing long-term risk, and corporations are increasingly turning to life insurers to lessen the risks on their own balance sheet.
It’s no surprise. The U.S. life insurance industry has been managing long-term risk for more than 175 years, through all types of economic conditions including wars, recessions and pandemics. After COVID, life insurers paid out more than $370 billion in death benefits between 2020-23.
Moreover, life insurance companies are stringently regulated. State insurance commissioners actively review insurers’ financial condition to make certain they will be able to fulfill their long-term promises to their customers.
The current system of pension risk transfers to insurers has worked flawlessly due to the long-term stability and soundness of America’s life insurers.
It is no wonder that there were more than 300 pension risk transfers in the first half of 2024, a record high.
When companies move their pensions to insurers, they are ensuring that their employees will receive the pension income for life they have been promised. These transfers remove a significant financial and administrative burden from the corporations, allowing them to deploy more of their resources toward their regular business operations. Unburdened by their pension obligations, companies are in a much better financial position to innovate, grow and create new jobs.
Pension risk transfers bolster the competitiveness and strength of U.S. corporations and secure the financial futures for millions of Americans saving for retirement. They’re a win-win for America.
David Chavern
David Chavern is President and CEO of the American Council of Life Insurers (ACLI) whose mission is to provide financial certainty to Americans regardless of where and how they work, their life stage, or the economic status of their household. ACLI’s 275 member companies represent 93 percent of industry assets and provide financial security products and services to 90 million families.
