In a new report, Citi analyst Erik Bass looks at a potential crisis on the horizon for global pensions. An aging global population will be placing a huge strain on underfunded public and private pension systems in the next five to 10 years. Bass believes that corporate pension funds will be committing a lot of effort to de-risking in coming years, a trend that could prove very beneficial to insurance companies.

“We see pension closeouts as an opportunity for insurers to deploy meaningful capital at attractive returns (12-14% ROEs in the US, double-digit IRRs in Europe),” Bass explains. Citi projects that pension risk transfer will represent a $750 billion opportunity worldwide.

Bass sees insurers as uniquely-positioned to provide individuals with products that will produce guaranteed income for life.

Aegion Corp AEGN 0.34%, a leading pension provider in the U.S., U.K. and Netherlands, is one of Citi’s top pension stock picks. The stock currently trades…

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