January 26, 2016 / 3:42 PM / 3 years ago

Canada's Sun Life signs C$530 million annuity deal

The logo of Sun Life Financial is seen in Toronto May 6, 2015. Canadian insurer Sun Life Financial Inc reported a higher quarterly profit on Tuesday, driven by strength in its asset management business and healthy growth in Asia. REUTERS/Fred Thornhill

TORONTO (Reuters) - Canadian insurer Sun Life Financial Inc (SLF.TO) signed a C$530 million ($375.59 million) annuity deal on Tuesday with two Canadian companies looking to reduce the risk on their pension plans.

Toronto-based Sun Life, which declined to disclose the names of those companies, said it was the biggest transaction of its kind in Canada.

The insurer, which sold its first annuity in 1880, is seeing more such deals. The Canadian market for cutting the risk on pension plans tripled to C$7.5 billion in 2015 from the previous year, Sun Life says.

“We see a lot of runway in this market,” said Brent Simmons, senior managing director of defined benefit solutions at Sun Life.

“More and more plan sponsors are looking to insurance companies such as Sun Life to transfer that pension risk from their balance sheet over to the insurance company’s balance sheet,” he said in an interview.

The so-called de-risking of pension plans is a global trend that has been gaining momentum in recent years.

Sun Life’s stock was up nearly 1 percent, at C$38.57, in line with broader market gains.

Reporting by John Tilak; Editing by Matthew Lewis

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