Issue link: http://clhia.uberflip.com/i/563156
12 Annuities include all types of registered (tax sheltered) and non-registered group annuities and retirement plans, and individual products administered by life insurers through their general fund and segregated fund operations. Annuity premiums During 2014, Canadians paid $42.5 billion in premiums for annuities in the accumulation stage and for payout annuities providing income benefits, up 13.9 per cent over the record levels of the previous year. Canadians continued to focus on wealth accumulation and retirement planning through market-value-based products offered through life insurers' segregated funds. These products generated premiums of $35.8 billion (up 13.6 per cent). At the same time, premiums for general fund (fixed-return) products repeated the double- digit growth of the previous year, rising 15.4 per cent to $6.7 billion. Segregated fund products continued to dominate the total annuity market with an 84 per cent share, almost unchanged from the previous year and up from the 76 per cent level of 10 years ago. Continuing the trend set in 2001, group annuities continued to predominate with about two-thirds of total annuity premiums for 2014. Individual annuities During 2014, premiums for individual annuities rebounded by 14.7 per cent to $14.6 billion, ending a decline that began in 2010. Contributions to segregated fund (market-value-based) products surged 19.2 per cent as Canadian investors' confidence in capital markets recovered. At the same time, premiums for general fund (fixed-return) products slipped 2.2%. Of the total individual premiums, more than 80 per cent was for annuities still in the accumulation stage (deferred or accumulation annuities), such as Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs) and similar arrangements on a non- registered basis. Strong premium growth for non- RRSP products led to other accumulation products replacing RRSPs with the highest market share (see chart below). The remainder was in the form of single premiums for annuities providing immediate income benefits (immediate or payout annuities), such as life annuities and Registered Retirement Income Funds (RRIFs). Assets held by life insurers for all individual annuity products rose 3.9 per cent to $148.2 billion by the end of 2014. Of this total, over two-thirds were held for deferred annuities and the remainder for immediate annuities. Annuities Source: CLHIA special survey (Annuity Business in Canada – 2014) Individual Annuity Premiums by Product Type – 2014 Other 8.6% Payout products 19.7% Accumulation products 80.3% RRIFs 11.1% Other 40.6% RRSPs 39.7%