A few more insurance product manufacturers have weighed in with their intentions to offer segregated funds with guaranteed minimum withdrawal benefits.

Not surprisingly, Montreal-based AXA Canada Inc., a subsidiary of French holding company AXA SA, and Toronto-based Foresters, the fraternal benefits society, have different approaches to marketing and selling the product.

“The market is certainly going in that direction and we’re working on it,” says AXA Canada president and CEO Jean-Francois Blais. “People want more and more security because the market is so volatile and they’re looking for protection.”

GMWB products offer the usual capital guarantees and similar resets that segregated funds provide, along with guaranteed annual income that lasts for the policyholder’s life in some versions of the product. They have proven popular with pre-retirees and retirees who want some exposure to the markets without the risks.

As a preliminary step to guaranteed income products that could come within the year, AXA launched a family of 12 segregated funds in the summer. In addition to AXA Rosenberg Investment Management LLC, it has signed several compnies — including New York-based AllianceBernstein LP and Franklin Templeton Investments Inc.of Toronto — to provide some third-party funds across global and domestic, equity and fixed-income fund sectors.

“You have to do your regulatory approvals and you have to design the product, so it’s an on-going process for us,” says Blais. “We’ll rely on AXA group expertise because, globally, we’re a leader in the withdrawal benefit product and we don’t know what the final outcome will be.”

Some products in the U.S. market, for example, offer annual and even daily resets for the policyholder’s capital base, the sum of which becomes available for the annual withdrawal benefit.

George Mohacsi, president and CEO of Foresters, says the company has a lineup of segregated funds through its acquisition of Unity Life Canada, but it hasn’t highlighted or updated the lineup lately. Any changes to its segregated fund offering will be done in conjunction with Anthony Poole, president and CEO of Unity Life, and so far, segregated funds aren’t a priority at least until 2010.

“We haven’t really highlighted or promoted our segregated funds. Perhaps the design is a little dated,” Mohacsi says. “People are looking for accumulation and payout products, so clearly there’s a huge opportunity.”

Foresters, the trademark of The Independent Order of the Foresters, is member-owned and relatively small, with assets of $5.4 billion. It reported $144 million in income in the year ended Jan. 31, 2007, but Mohacsi noted in a presentation at a recent insurance conference in Toronto that the firm is well-capitalized, with more than $1.4 billion in surplus, capital it could put to use for product design and manufacturing.

“We still think there’s lots of opportunity in traditional life and universal life,” he says. “The focus is to make Unity Life distribution aware of that product for 2008 and 2009.”

Foresters also carved out a niche in group disability and life insurance through companies that lease heavy equipment of recreation vehicles and on mortgage sales through Home Trust Co., a subsidiary of Home Trust Capital Group Inc., which trades on the Toronto Stock Exchange.

Meanwhile, Empire Life In-surance Co., based in Kingston, Ont., is set to make a GMWB product launch later this autumn. The insurer was not prepared to discuss the various options and guarantees it will offer. Assuming no other manufacturer beats it to the announcement, Empire will become the fifth firm to offer the product.

Manulife Financial Corp. of Toronto introduced the first GMWB product in Canada — the Manulife Income Plus GIF — in 2006; since then, Canadians have invested more than $5 billion in GMWBs, chiefly into the Manulife product. Toronto-based Sun Life Financial Inc. sells the SunWise Elite Plus and Industrial Alliance Insurance and Financial Services Inc., based in Quebec City, offers Ecoflextra. Desjardins Financial Securities Inc.’ s product is called Helios.

Investor Economics Inc., a Toronto-based consultancy to the Canada’s financial services industry, projects that Canadians will continue to pour their savings into these vehicles, which will accumulate between $28.5 billion and $53.6 billion in assets within the next three years.

Not all advisors are interested in the products. They cite their relative cost compared with annuities, for example. And some wonder whether a conservative, long-term mix of equities and fixed-income is not a better option in terms of value.

@page_break@Manulife recently sweetened its product by extending its 5% annual bonus to life, up from 15 years, and by lowering the minimum initial investment to $25,000 from $50,000. The extended bonus period applies to every year that the policyholder does not withdraw cash from the account. The changes make the product available to more Canadians, and encourage savings but it does not satisfy some shortfalls of the product type described by some analysts.

Jim Otar, a certified financial planner in Richmond Hill, Ont., who has analyzed the products on both sides of the border, says that although Canadian versions of the products can provide decent value for some investors today, he is awaiting a version that provides more certain inflation protection.

Otar has calculated that in only 20% of his investing scenarios do the resets maintain 70% of the investor’s original purchasing power throughout the ages of 70 to 90. IE