CLHIA-ACCAP

26 mitigate risk and best serve policyholders. This ensures that investments of life and health insurers are more than sufficient to cover their obligations to policyholders, such as death claims, annuities, health care and disability income benefits. In 2014, Canada's life and health insurers held more than $630 billion or almost 90 per cent of their total domestic assets in long-term investments. The industry's investments often support longer-term capital investments, including infrastructure investments, which are critical to creating economic growth. The industry is one of the largest investors in a variety of key asset classes. Bonds and stocks are major components of the Canadian life and health insurance industry's total asset portfolio – 35.9 per cent and 15.1 per cent, respectively. Investments in Canadian corporations, through bonds and stocks, totalled $211.4 billion at the end of 2014. In addition, the industry continues to be a major source of financing for Canadian governments at all levels. Of the total assets, almost $121.6 billion (16.9 per cent) was held in government bonds: federal, 24.1 per cent; provincial, 66.5 per cent; and municipal or local, 9.4 per cent. The industry's investment in bonds accounts for 9.9 per cent of all government bonds and 11.8 per cent of all Canadian corporate bonds. Of the $43.6 billion invested in mortgages, 36 per cent was for residential and residential- related (such as apartment buildings) dwellings, and 64 per cent for non-residential structures (such as office buildings, shopping centres, manufacturing plants and warehouses). The industry holds about a third of all Canadian non-residential mortgages. During 2014, life and health insurers' substantial investments in the mutual fund market on behalf of segregated fund policyholders rose 11.5 per cent to $183.5 billion. Of that amount, $162.6 billion was in Canadian funds and the remainder in foreign funds. In total, the industry holds 16.1 per cent of all mutual funds. Investments by region Life and health insurance providers invest their assets in all regions of the country, wherever there are opportunities for capital investment. At the end of 2014, Canadian investments held by life and health insurance providers registered in Canada on behalf of all of their policyholders totalled $643 billion. Of this amount, $598 billion was held for Canadian policyholders. The additional $45 billion was invested in Canada on behalf of foreign policyholders by Canadian life and health insurance providers doing business outside of Canada and by American companies registered to do business in Canada. (Note that the word investment is being used in Sources: OSFI, CLHIA Assets in Canada (per cent share of total) 5 10 15 20 25 30 35 40 45 Mortgage loans Stocks Bonds Real estate Mutual funds 2004 2006 2008 2010 2012 2014

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