After a record-setting 2024, the Canadian group annuity purchase market experienced a moderate slowdown in 2025, according to a new report by Normandin Beaudry.
It found transaction volume reached nearly $6.9 billion, a decline of nearly 40 per cent compared with the $11 billion recorded last year and roughly 10 per cent below the average of the previous three years.
The report attributed the slowdown to economic uncertainty and market volatility, which prompted many organizations to prioritize their internal operations.
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Derisking activity in 2025 unfolded in two distinct phases, the report said. “Early in the year, few transactions were completed, allowing insurers to dedicate more time to each transaction and offer particularly competitive quotes to plan sponsors ready to act quickly. The competitiveness observed in the market likely contributed to many organizations choosing to move forward later in the year, resulting in a surge of transactions in the second half of the year.”
It also noted some insurers showed increased interest in inflation‑indexed annuity transactions, which certainly heightened competition and made it possible to obtain attractive pricing conditions.
In 2025, the implicit annuity purchase rates observed for certain transactions exceeded five per cent, enabling plan sponsors to secure a high guaranteed return while transferring to insurers the risks related to investment performance and member longevity, said the report.
“From an accounting perspective, annuity purchase rates generally remained aligned with the discount rates used for accounting valuations, which facilitated the execution of transactions without creating significant impacts on the financial statements of many plan sponsors.”
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