Total new annualized premium for Canadian life insurance increased 4% to $478 mn in Q3 2024, according to LIMRA’s Retail Canadian Life Insurance Sales Survey. Despite the rise in premium, the policy count dropped 17%, primarily due to a decline in term life sales.
John Carroll, Senior Vice President and Head of Life & Annuities at LIMRA and LOMA, stated, “
Strong economic conditions have propelled permanent life insurance sales in the third quarter.
“Both participating whole life and universal life recorded substantive gains as consumers look to protect investment growth. LIMRA is projecting this trend to continue through 2025.”
Canadian life insurance market new annualized premium grew 10% to C$522 mn ($387 mn) in Q2 2024 compared to the same period last year. Policy count also increased 4%.
IFRS 17 was implemented the first full year of financial reporting that we saw was for year end 2023. It was a big task for insurers to implement that.
It took a lot of resources and time to get around those changes, according to IFRS 17’s Impact on Canada’s Life & Annuity Insurers report. The good thing is Canadian insurers did have plenty of time. There were many years of preparation leading up to it. The reason for IFRS 17 was to create global consistency between the Canadian insurers and all other non-U.S. insurers.
Canadian insurers invested significant time and resources in the transition, and due to years of preparation, the shift’s financial impact was mostly minimal (see TOP 50 Insurance companies in the US & Canada: Assets & Revenue).
Whole Life Performance
Whole life new annualized premium climbed 9% to $324 mn in Q3 2024, despite a 1% drop in policy count. This growth reflects continued consumer interest in long-term protection and cash value accumulation.
Year-to-date (YTD), whole life new premium reached $984 mn, a 9% increase from 2023, with policy count remaining stable. Whole life premiums accounted for 68% of total Canadian life insurance premiums YTD.
Matthew Rubino, Senior Research Analyst at LIMRA Insurance Product Research, highlighted that participating whole life product sales remain dominant. He noted, “Participating whole life product sales continue to dominate the market, representing 9 in 10 dollars spent. Nearly 70% of carriers selling these products reported double-digit growth this quarter.”
Universal Life Growth
Universal life (UL) new premium increased 7% to $63 mn in Q3 2024, marking the second consecutive quarter of growth. The boost was driven by non-level cost of insurance (COI) product sales, with policy count also rising 2% in Q3. YTD, UL new premium totaled $189 mn, up 1% from 2023.
Term Life Decline
In contrast, term life new premium fell 11% to $91 mn in Q3 2024, with a 27% drop in policy count. For the YTD period, term new premium reached $278 mn, reflecting a 3% decline from 2023.
In 2023, term sales spiked due to new product introductions and relationships among a few companies. In 2024, term sales have returned to normal levels.
While new policy count fell 27% year over year, it was more than 3% higher than third quarter 2022 results.
Year-to-Date Overview
Total Canadian life insurance new annualized premium reached $1.5 bn YTD, a 5% increase from 2023. Over the first nine months of 2024, policy count declined 5% compared to the same period in 2023.
The market’s strength was largely driven by growth in permanent life insurance, particularly whole life and universal life products.
AM Best is holding a stable outlook on Canada’s P&C insurance industry, despite notable challenges from catastrophic events in 2023 and 2024.
While catastrophe activity remained manageable in the first half of 2024, Canada’s P&C insurers faced four significant events in the third quarter, potentially marking another record year for losses.
Catastrophe losses in 2023 reached an estimated CAD 3.1 bn, ranking among the five worst catastrophe years on record, trailing only inflation-adjusted losses in 2013 and 2016.
Canada’s P&C industry saw net income rise by 77.5%, from CAD 4 bn in 2022 to CAD 7.1 bn in 2023. Growth in underwriting income and a rebound in investment income fueled profitability, though rising expenses partially offset these gains.
FAQ
The total new annualized premium for Canadian life insurance increased 4% to $478 mn in Q3 2024, according to LIMRA’s Retail Canadian Life Insurance Sales Survey.
Growth was driven by whole life and universal life (UL) products. Whole life new premium rose 9% to $324 mn, while UL new premium increased 7% to $63 mn. These gains were fueled by consumer demand for investment protection and non-level cost of insurance (COI) products.
Term life insurance saw an 11% decline in new premium, totaling $91 mn for Q3 2024. The number of policies sold also dropped 27% compared to the previous year. LIMRA attributed this decline to the return of term sales to normal levels after a surge in 2023.
YTD, total new annualized premium reached $1.5 bn, up 5% from 2023. Whole life premiums accounted for 68% of the total market, with YTD whole life premium rising 9% to $984 mn. Universal life premiums totaled $189 mn (up 1%), while term life premiums reached $278 mn (down 3%).
LIMRA projects continued growth in permanent life insurance sales, driven by demand for whole life and universal life products. Strong economic conditions and consumer interest in protecting investment growth are expected to support this trend.
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AUTHOR: John Carroll – Senior Vice President and Head of Life & Annuities at LIMRA and LOMA
