Air Canada to start insurance company

Air Canada, one of the country’s largest airline companies is waiting for approval to form its own life insurance company, according to The Canadian Press.

The move is in order to shore up pension risks by buying annuities from Canadian insurers and reinsuring the fixed payment through an insurance subsidiary, a spokes person from the airline said. Air Canada is currently seeking finance minister approval for the move.

The airline is currently paying out around CAD725 million in annual pension payouts, with that number due to rise to around CAD900 million in the next 10 years. The plans cover around 53,000 employees, half of whom are retired.

The airline added that the Canadian national insurance market is too small to bear such big annuities purchases.