Constellation Institutional Markets Re-enters U.S. Pension Risk Transfer Market

Constellation Institutional Markets has re-entered the U.S. pension risk transfer (PRT) market, delivering group annuity solutions to sponsors of defined benefit plans. This move aims to reduce liabilities and enhance balance sheet stability, marking Constellation's return after a previous exit following four decades in the PRT space.

Affiliated with Constellation Insurance, the division will manage new group annuity business alongside existing institutional offerings. This re-engagement comes during a transitional period in the U.S. PRT market. According to LIMRA's U.S. Group Annuity Risk Transfer Survey, 2025 sales reached $49 billion, reflecting a 6% drop due to increased litigation uncertainty and broader economic challenges.

Despite the annual decline, the fourth quarter of 2025 saw a recovery, with single-premium PRT products increasing 132% year-over-year to $28 billion, largely driven by buy-in structures. These accounted for $17.5 billion, a 372% increase from the previous year. Approximately two-thirds of 2025 transactions involved contracts under $1 billion, indicating wider adoption beyond large deals.

Brij Grewal, President of Constellation Institutional Markets, underscored the company's extensive experience in managing long-duration liabilities as pivotal in re-entering the PRT market. He stated, "Re-entering the PRT market is a natural extension of our institutional strategy," highlighting a strategic approach prioritizing participant security.

In October 2025, Constellation issued its first $350 million funding agreement backed note (FABN), emphasizing their strategic expansion into long-duration institutional business. This development reflects broader industry trends, as noted by RGA, with U.S. insurers ceding more general account reserves amid intensified regulatory oversight of asset governance.

By the end of 2025, there was a notable increase in U.S. carriers offering group annuity contracts, more than doubling from a decade ago. Annuity purchase rates have risen into 2026, with a duration 15 rate of 5.26% in June, according to October Three. Constellation benefits from the backing of major investors, La Caisse and Ontario Teachers', managing over CA$740 billion in assets.