Constellation Institutional Markets has re-entered the US pension risk transfer (PRT) market. The unit will offer group annuity solutions to defined benefit plan sponsors seeking to reduce pension liabilities and improve balance sheet certainty. The announcement marks a return after the group previously exited the segment following four decades of PRT business.
The unit operates through Constellation Insurance's affiliated insurance companies and will accept new group annuity mandates alongside its existing institutional capabilities.
The re-entry comes as the US PRT market navigates a period of recalibration. Sales reached US$49 billion across approximately 700 transactions in 2025, a 6% decline from 2024 levels, per LIMRA's US Group Annuity Risk Transfer Survey. Elevated litigation uncertainty and macroeconomic headwinds weighed on jumbo-end activity.
That annual figure, however, obscures a sharp Q4 rebound. Single-premium PRT products surged 132% year on year in Q4 2025 to reach US$28 billion, per LIMRA. Buy-in structures drove much of that recovery and ended the full year at US$17.5 billion, a 372% jump from 2024. Nearly two-thirds of 2025 transactions involved contracts under US$1 billion, a sign that adoption is broadening beyond jumbo deal activity.
Brij Grewal, president of Constellation Institutional Markets, said the move reflects the group's experience with long-duration liabilities. "Re-entering the PRT market is a natural extension of our institutional strategy," he said. Grewal added that the business would take a disciplined, long-term approach with a focus on plan participant security.
Constellation made its inaugural US$350 million funding agreement backed note (FABN) issuance in October 2025. That move and the PRT return together signal a deliberate expansion into long-duration institutional business.
The liability management capabilities Constellation cites sit at the centre of a structural shift. RGA noted that general account reserves ceded by US composite insurers more than doubled between 2020 and 2025. Carriers have been moving long-duration investment and liability exposures to specialised partners. Regulatory scrutiny of asset governance has tightened. Plan sponsors now place greater weight on carrier ratings and governance quality when selecting an annuity provider.
At the end of 2025, 23 US carriers offered group annuity contracts, more than double the level of a decade earlier, per Nationwide. Annuity purchase rates have trended higher in 2026, with the duration 15 rate reaching 5.26% in June, per October Three. La Caisse and Ontario Teachers' are Constellation's investors and manage more than CA$740 billion in net assets as of December 2024.
