Facts, Facts and More Facts: Segregated Funds – Net Flows vs. Gross Sales – Blog

Considered in isolation, segregated fund net flows (gross sales minus redemption plus net transfers) can paint a misleading picture of the aggregate sales activity or individual company sales results. This has been the case in recent years when outflows out of older maturing policies—those sold during the segregated funds’ first heyday period in the late 1990s/early 2000s—swelled the redemption volumes for the segment. In particular, older policies have affected net flow results of several larger segregated fund providers. Collectively, the four largest segregated fund sponsors (Manulife, Great-West Life, Sun Life and Industrial Alliance) wrapped up 2011 with $1.5 billion in net flows, down 21% from previous year. Meanwhile, the gross sales or new business premium metric furnished a different perspective, suggesting the segment’s largest players continued to generate solid new sales momentum despite tepid investment fund sales environment.  The four insurers generated an aggregate $9.1 billion gross sales in 2011, 4% below 2010′s intake. For more information on segregated fund sales trends, please see the Insurance Advisory Service: Segregated Fund Monthly Statistical Report http://investoreconomics.com/issue/insurance-advisory-service. Posted by Karol Kalejta Karol@iei.ca.