Sun Life's appetite for the longevity risk transfer market for pension plans is well known.
Even so, financial analysts quizzed Sun Life to state its intentions in this particular segment of the life and health insurance market. When the insurer released its first quarter 2021 results, Jacques Goulet, president of Sun Life Canada, answered their questions.
Goulet said Sun Life sees the defined benefit market as one of its growth engines in Canada. “We think this is a very healthy market. There are two other similar markets in the world, the U.S. and the U.K., and they're much more mature and developed. So we think that's a market that has a lot of runway ahead of it," he said.
Sun Life has been the leader in this segment for eight or nine years, he points out. “We basically look at pretty well every deal that comes to market, and it allows us to be selective on which ones we're more interested in and which ones we might be less,” Goulet said.
He predicts the market is going to keep growing. “Many defined benefit plans are a de-risking glide-path. The last step, as you know, on a path like this, is to do an amortization. So we think we're very well-positioned, and that's a very healthy market for us,” he continues.
Would Sun Life have been willing to take on all of the longevity risk underwritten by General Motors (GM) instead of splitting it with a few other insurers? Goulet confirmed during the conference call that the insurer has this capacity.
“We go through a whole process and analyze how we want to approach it. In some cases, we might be happy not to take the whole deal. We have the ability to be selective on these deals, which is nice. We'll continue to exercise that,” he explains.
