Insurance Report April 2023—Segregated Funds Enter a New Economic Cycle

After riding the wave of high demand for market exposure during the pandemic, segregated funds entered net redemption territory in the second quarter of 2022, along with the broader investment funds industry. Higher interest rates, falling equity and fixed income valuations and rising inflationary pressures combined to make 2022 a  challenging year for investment funds. Headwinds have not yet eased, and insurers are awaiting the result of regulatory changes that will have a critical impact on the future of the segregated fund segment.

The research feature of the Insurance Report examines the segregated fund business from multiple vantage points, including asset growth and sales patterns by guarantee level, product type and distribution channel. The outlook for coming years is examined at the light of an evolving competitive landscape, demographic, and regulatory change.