Industrial Alliance has recently closed sales for its guaranteed withdrawal benefit product Ecoflextra. The insurer cited the continuing low interest rate environment as the reason behind this move.“In mid March, the Bank of Canada’s benchmark 10-year bond rate was 2.25%. In mid July, it had fallen to 1.65 %, a decrease of 60 basis points (0.60%),” Marc Saint-Jacques, director of savings and retirement products at Industrial Alliance, explained to The Insurance and Investment Journal. “The long-term rate (30 years and longer) has also decreased to a similar degree,” he added.
Back in April, Industrial Alliance had limited its Ecoflextra series to five income funds due to pressures from capital requirements, interest rates and stock market volatility. A few weeks ago, the ratings agencies DBRS and Standard & Poor’s underlined the insurer’s relatively large exposure in Canada to long duration individual life products.

“Our new decision (to withdraw Ecoflextra) is in no way linked to these reports. It has everything to do with the Bank of Canada’s benchmark rate,” stated Mr. Saint-Jacques. It is difficult to say if this decision is definitive because clients’ needs for this type of product are not disappearing. We will focus our efforts to create a new product in this niche. We would also like to remind our advisors that single premium annuities still exist and meet the same need as guaranteed withdrawal benefit products.”