The pension risk management market continues to attract attention from defined-benefit plan sponsors, insurers and asset managers, according to a new study.
The report by Hartford based Conning Inc., an investment management firm for the insurance industry, said plan sponsors have a continued interest in pension risk management, which stems from the ongoing funding volatility and resulting negative impact on balance sheets, long-term financial obligations and contributions.
“Plan sponsors’ chief financial officers face uncertainty in planning future funding obligations, and the underfunded defined-benefit liabilities are yet another form of long-term financial obligations. Significant funding status volatility can directly affect both credit ratings and the cost of capital,” said Scott Hawkins, director of insurance research at Conning.
The Conning study, “Pension Risk Management Market: Key Opportunities and Challenges” analyzes the pension risk transfer market in the U.S. and U.K., and provides details on the insurers in the U.S. market and the issues insurers face in this developing sector. The study also examines key liability-driven investment concepts.
