The market volume of annuity purchases by Canadian defined benefit pension plan sponsors reached an estimated $2.1 billion in the third quarter of 2024, a small decline from $2.5 billion in the previous quarter, according to a new report by Telus Health.
It noted some insurers are showing a show a strong appetite and offer competitive pricing on a broad spectrum of deals, while others that are nearing their capacity limits are adopting a more selective approach in allocating their efforts.
During the first three quarters, the Canadian annuity purchase market has totalled roughly $5.8 billion setting up the final quarter as another robust year-end finish, said the report.
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A separate report by LIMRA found pension risk transfer sales in the U.S. reached US$114.6 billion in Q3, a year-over-year increase of 29 per cent. The total figure for the quarter was just short of the record set in Q4 2023, the report noted.
Sales for fixed indexed annuity and registered index-linked annuities saw record quarterly sales, totalling $34.9 billion and $17.3 billion, respectively.
Total fixed-rate deferred annuity sales reached $40.7 billion, while traditional variable annuities sales were $14.9 billion. Single premium immediate annuity sales totalled $3.4 billion and deferred income annuity increased to $1.3 billion.
In a press release, Bryan Hodgens, senior vice president and head of LIMRA research, said he expects fixed annuity products to outperform prior sales results, driving overall sales to new records in 2024. “Favourable economic conditions and growing need for guaranteed retirement income continue to propel strong annuity sales results this year.”
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