Insights from Pacific Life on the Evolving PRT Market

Jessica Hurley: Hi, I'm Jessica Hurley from Majesco, and this is Future of Retirement. In this series, I sit down with leaders across retirement, pension, and pension risk transfer to talk about what's changing across technology, operations, and the way we serve our members. Because the reality is there's a lot going on in this space right now. At Imagesco, we spend a lot of time thinking about what's next while staying grounded in what organizations need to execute today. So stay with us. You might just find your next.

Jessica Hurley: Now, today I met with Mike Domingos, and he's the Senior Vice President of Institutional Retirement at Pacific Life. Mike oversees the company's pension risk transfer strategy and execution with a career spanning more than two decades in the retirement insurance sectors. Under his leadership, Pacific Life continues to expand its presence in the PRT space, emphasizing customization, service excellence, and financial strength as key differentiators. Thanks for joining me today, Mike.

Mike Domingos: It's a pleasure to be here with you, Jess. I appreciate the intro and actually truncating it to two decades versus the three because it makes me feel a little bit younger. So thank you.

Jessica Hurley: Thanks for joining. I appreciate it. So let's start with the big picture to kind of get us going, just to kind of get your sense of what the market forces are that are impacting your company and the business today. And how do you expect those things to evolve over, uh, the next three to five years?

Mike Domingos: Yeah. So maybe starting with sort of where we are today, Jess. And maybe I'd bucket it into a couple of different categories. And one are the things that I think are and have and will continue to play a role just in this space which is first is around interest rates. We've seen the environment be very favorable from an interest rate perspective. Now for a while. I think, you know, looking back at last year, which was just about a record year in terms of premium and volume, it was actually a record year for volume in the PRT space. It has continued into this year in terms of that being favorable. The other part that will always be there is just the market and how are markets performing? And as we've all experienced, early in this year, there was some volatility with some of what came out of Liberation Day. And we've now at this point, seen, uh, a lot of that rebounded, and the markets have responded well. So I would say when we look at things like interest rate and just the overall markets and market performance, those clearly will always be front and center and have been the other things that I would just say that do have an impact on the Market as we sit here today are litigation risk. 2024 was a. There was a number of cases, I think it was 12 or 13 cases that were filed in 2024 related to pension risk transfer transactions. And the good news is we haven't seen any new ones arise as I believe folks are probably waiting to see how those others pay pan out. That has had a bit of an impact, I'd say sort of in the larger end of the market. We continue to see volumes in our core space at levels that we had had experienced in the past. So not really there. I would say in the larger end of the market, we've seen a little bit of a slowdown there and we do feel like as those work their way through the system, we will continue to see things improve there as well as there's a bit of a bright spot with Daniel Aronowitz that confirmation, ultimately assuming that confirmation goes through, has definitely been a friend to ensuring that frivolous lawsuits are sort of kept in check, et cetera. So you know, we are anticipating, you know, those couple of things would, would sort of help loosen things back up in that larger end of the market. So that's sort of where we are today. Just before I go into the future piece of this sort of next three to five, anything there that you've either want me to expound on or that you would like to add?

Jessica Hurley: Well, I was just kind of curious. Is the tech something that's kind of holding you guys back? Things like AI and other things like that, which we'll get into a little bit more in another question. But what do you think is propelling you forward? Some folks talk about being able to handle complex deals as being really kind of important. Some folks talk about being able to cross sell as you bring in new customers through prt, being able to offer them other benefits that you as a life insurance company and other other services offer. Just kind of curious. Are uh, those are the things that you're looking at in terms of expanding your business and growing it.

Mike Domingos: There are definitely, uh, a couple things in there. So you definitely did get to the part where when we look out over the next three to five years, there's definitely in addition to the market where we're looking at opportunity for, for growth. And you know, one of those places is around what technology can afford in a couple of different ways. One is from just a pure efficiency and effectiveness play and creating more efficiency throughout the business system is one way. And involved in that is this conversation around artificial intelligence and how that will play a role throughout the business system, meaning everything from how we look at pricing opportunities to how we look to onboard the data, the opportunity, the annuitants, right through to how we actually service the end user, the annuitant or the participant, and how we can use M technology to make those experiences richer. And so we definitely see that as a place where there's an opportunity to grow. And, you know, you do bring up an interesting point, which is one of the things that we do believe makes us relatively unique is the fact that we are doing what we call building that bridge of, from the retirement of today to the retirement of tomorrow. Thinking of the retirement of today, as, you know, your traditional pension plans, I E. PRT to how do we make sure we're bringing this, the conversation and all these best practices into the defined contribution lifetime income space so that we can afford those individuals the same type of benefit when it comes to deriving an income for their retirement years and for their life and those who they care about. So those are definitely a couple of areas where we see opportunity stemming from this space.

Jessica Hurley: That's great. That's a really good segue into my other question, which is differentiating yourself from the other players in, in the market. One of the things I've learned is that this is a very large market, as you indicated, I think over 50 billion in transactions, 20, 24, and, and it's expected to maybe even double, you know, going forward. So it's, it's a growing market, but there are only, you know, a handful of key players in this market servicing this market. You know, I think there's under 30 carriers that are actually addressing the space. How, uh, do you differentiate yourself among, um, the myriad of competitors, myriad of very strong brands that you're kind of up against as well?

Mike Domingos: There's a couple things in there, Jess, where, you know, we have seen competition, the number of competitors increase pretty consistently. And actually we had another new entrant here in 2025. So I believe we're up to 23 insurers that are in this space up from, I think it was roughly 8 in 2012. So you can see that this is an attractive market. Along with that comes a, you know, an increase in competition, as you rightfully pointed out. So differentiation definitely comes into play here. And things I would say that we really lean into is, you know, experience and brand matter. But we've been doing this now, this pension risk transfer business for over 80 years at Pacific Life. And so that experience matters when it comes to, especially you alluded to the fact that you know, plans are continuing to increase in complexity. Somebody who has been there, done that and has the experience is valued and we definitely lean into that and that ties into our brand. We're very comfortable in the fact that, you know, at uh, by our given structure as a mutual, uh, we do act in the best interest of our policyholders and it affords us a lot of latitude when it comes to this space. So you know, we definitely lean into, to those things. The other place I would say is partnerships and you alluded to scale and that's uh, a, that's an important piece of this. So as we are looking at differentiation, it's, you know, how do we ensure that our operating model is such that it'll allow us to create the scale that clients are looking for in terms of then what that means in overall economics, pricing, et cetera. But then also how do you drive an elevated user experience or annuitant experience in this case. So you know, those are areas where we really feel as though just our DNA and sort of how we manage our business are places where we like to lean in and feel as though we can differentiate from others who either may be new entrants or even incumbent providers that we feel like we put that little additional layer of touch on, on this business. That's great.

Jessica Hurley: That actually kind of. I know we talked about AI a little bit, but you know, now that you've talked about differentiation, I'm curious now, how do you leverage AI in terms of doing more deals or doing the deals better or managing your, the annuitants situations better? Is it the backend data side? Is it the customer experience? How are you guys leveraging AI? An omission if I didn't mention AI in a conversation like this.

Mike Domingos: So yeah, you would definitely not win the buzzword bingo part if we didn't talk about it. But no kidding aside, it really is, it's topical and I'm also not going to say just that this is something that is completely ironed out. I think much like other businesses, we are looking at how we evolve into this and I'll sort of maybe start more macro and then sort of bring it down. Is even stepping back from AI itself one of the things that is very important to us. So within our group we actually have dedicated data scientists that are actually helping us think about and look at and drive different insights and from data. And they are using tools that AI, generative tools as well as other tools to sort of help drive some of those insights which then will play themselves into the assumptions and Some of the insights that we're leveraging when we're, we're looking at a, a new opportunity. So that's one piece of it. The other part is we're looking at it in the sales process and using technology and AI tools to help streamline even the, the sales process from. So how our contracts, uh, get generated and populated and sent out. Leveraging the data and information that we have from past experience all the way through then to the next place we're really putting a little bit more focus on right now is even on onboarding. So when you think about the massive amounts of data and information when we've secured a new relationship is how can we be leveraging tools that are both generative and other to make that process more effective, efficient, and really cut down on the time and the resource that it takes, especially as we've started to get more into the larger end of the market where those data sets get even larger and more complex. So we see we've already started to experience some benefit from that as well. And then the last part I would say is I was actually just with our call center last week down in South Carolina and we are already implementing a lot of use for artificial intelligence inside both the training of the individuals who are engaging on the phone. So prior to them even getting on the phones, using and getting a lot of the information from prior calls and sort of best practices trained much more quickly. And then once they are on the phones and engaging with clients, using the tool to actually bring information up to their fingertips and based on the topic of conversation that happens to be going on with that call, we were in the process of doing some piloting when we were with those folks just this past week. So again, I would go back to what I said at the top, which is we're looking for those opportunities and trying to be mindful of where we think we, they could have the biggest impact. But, uh, it's clearly a direction that is, is important to us.

Jessica Hurley: That's exciting. Uh, I know a software shop, we use a lot of the AI to help train and get our new people up and running and trained on using AI is kind of interesting. I hope our teachers don't alternate AI bots because I really liked my second grade teacher.

Mike Domingos: That's something we want to make sure we protect. You don't want to lose that. Exactly.

Jessica Hurley: Exactly. Yeah. So as we wrap up, we've just had a few questions here today, but as we wrap up, just kind of looking ahead strategically, what are you guys thinking from a Pacific Life perspective is your strategic direction in this space in prt?

Mike Domingos: Yeah, I mean, we've touched on it in sort of different forms throughout this conversation. Jessica, I think, you know, when we look at the market, we look at the fact that, and you alluded to this, this is what is going to be or continue to be a growing market. There was a study I think that just came out last week that put some really big numbers around where this could be in the next six to seven years. First and foremost, it's more a commitment and a sort of a proof statement that this is a market that is really important to us. And it's exciting to see that it has continued growth within that growth. I think we're also being mindful of the fact that it's going to take creativity and being able to navigate complexity. So as this market matures, we're seeing that the plan features are more complex and there is the need for more innovation and creativity. A good example of that is we've already seen, so last year I think there were 10 buy in contracts according to the Limber data. And we've already exceeded that year to date for this year in terms of what we've seen in market. So and those are structures that do require an additional level of expertise in sort of not only managing the buy in, but then many have the intention of actually converting those to a buyout. And so that's an example of when I say we look out at the market, we see there's going to be continued need for innovation and creativity around some of that complexity. So that's definitely a piece. And then the other thing that I would, uh, anchor on is from a strategic perspective is we are looking at that annuitant and the annuitant experience. Again, I think the pension risk transfer market has been wonderful. It has solved for a lot of needs for clients, for individuals providing the safety, the security. And uh, now I think it's time for us to ask ourselves what more could and should we be doing on behalf of the annuitant in enhancing that experience. You think about everywhere else in their life, how their experiences are being elevated. I feel as we look out into the future, we say, again, with the annuitant being sort of the, at the center of what we do, how can we enhance that experience for them? And in some cases we also talked about it, it could mean they may need some support with other areas where they need to generate additional income even in retirement. And so we're places where we can leverage our expertise to help fulfill that need. So we're really excited about the future, and this is a really important strategic business for us. And we appreciate the opportunity to spend some time with you talking about this today.

Jessica Hurley: I really appreciate you taking the time to talk with us about this. Uh, that's a really great kind of place for us to at least end this part of the conversation. I just want to thank you again, Mike, for your insights. It's been a terrific discussion.

Jessica Hurley: Thanks for joining me on Future of Retirement. If you found this conversation valuable, be sure to follow the series. And for more insights, join us@majesco.com from all of us here at Majesco, here's to shaping your next now.