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Amid a shift to digital services due to the Covid-19 outbreak, Great-West Lifeco’s acquisition of hybrid digital/human wealth management platform Personal Capital is a positive, says Moody’s Investors Service.

In a new report, the rating agency said that Great-West’s deal for Personal Capital will provide the company with a new distribution channel, enabling possible growth in assets under management (AUM) and fee income.

The deal is expected to close in the second half, subject to regulatory approval.

Moody’s noted that, given the economic damage inflicted by the pandemic, adding assets and generating new fee income is “likely to be challenging this year, if not longer.”

Additionally, the sector is already highly competitive, it said.

“But, digitally driven insurance distribution platforms have gained traction, even before the pandemic hit,” Moody’s said.

“Given stay-at-home decrees driven by the pandemic, both individuals and insurers have been forced to embrace technology more extensively in their daily activities, and at a faster pace,” it said. “This bodes well for distribution models such as Personal Capital after the pandemic subsides.”