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Canadian insurers issued record quantities of debt in 2020, and analysts are looking for more of the same this year.

In a new report, DBRS Morningstar noted that insurance companies raised almost $13 billion in debentures and preferred shares in 2020, compared with less than $2 billion the previous year.

“Despite the initial volatility of debt capital markets following the start of the Covid-19 pandemic, Canadian insurance companies issued debt and preferred shares in record numbers during 2020,” the report said.

Already in 2021, insurers have issued another $2.3 billion in long-term debt, DBRS reported, adding that it “expects further traction in the insurance debt market in 2021,” given the low-rate environment.

The rating agency said that companies were able to raise debt with maturities of up to 40 years in 2020, although most companies issued in the 10-to-15-year range.

Canadian companies are also to tap international markets, such as the U.S. and Taiwan, DBRS noted.

“The increasing tenor of Canadian insurance debt in 2020 and 2021 and continued access to international debt markets support DBRS Morningstar’s view that the Canadian insurance industry has strong financial flexibility despite the multiple headwinds generated by the global pandemic,” the rating agency said.

Indeed, the report noted that the insurers entered the pandemic from a position of strength, with moderate leverage and strong capital positions.

“This position has been further strengthened by the resilient performance of the Canadian insurance industry’s earnings in 2020,” the report said.

DBRS added that it views moderate bond issuances “as an important tool to improve liquidity, support merger and acquisition activity, and lower the funding cost of insurance companies.”