Pension risk-transfer market sees $5.2BN in transactions in 2019: report
Sun Life and RBC Insurance maintained their spots as the top two companies by market share spots in 2019, but the competition is heating up, the report noted. Brookfield Annuity overtook the Bank of Montreal to claim third place, with 13 per cent of the market. And the total share of the top three insurers fell from 72 per cent in 2018 to 64 per cent in 2019. iA Financial Group, notably, went from five per cent to 12 per cent of the market in 2019, while Canada Life’s share dipped slightly, from 13 per cent to 11 per cent.
Looking ahead to the rest of 2020, the report noted it remains unclear how the coronavirus pandemic will impact the risk-transfer market. “For many plan sponsors, the impact of COVID-19 will be a significant adverse effect on plan funded ratios,” it said. “In fact, the Office of the Superintendent of Financial Institutions has issued a directive imposing a temporary hold on all commuted-value transfers and buyout annuity purchases without regulatory consent. Broadly speaking, annuity purchases may have been placed on hold due to deteriorated funded status, market uncertainty and volatility, and lack of market liquidity.”