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The permanent life insurance makes a comeback

by

Alain Thériault

4 February 2019 13:30

Photo : Freepik

After several quarters of decline, sales of individual life insurance carried out in Canada have made a leap of 21 % in the third quarter of 2018, compared to the third quarter of 2017, says the quarterly report from LIMRA.

The industry can finally stop to compare its results to the sales unusually high the last two quarters of 2016 and the first quarter of 2017. Sales hâtées by the advisers, in anticipation of the tax changes entered into force on 1 January 2017.

Sales have reached a peak

The summit was reached in the fourth quarter of 2016, while sales of individual life insurance totaled $ 753 million ($M), by new annualized premium. More than double that of the results recorded in the fourth quarter of 2015. Of this total,$ 489 Million belong to the whole life insurance, and$ 168 Million, universal life insurance, two products affected by the new tax rules.

Insurance whole life and universal has given the tone to the solid growth in the third quarter of 2018. The entire life has been the main driver, with a growth of 39 % in the third quarter of 2018, compared to the third quarter of 2017. During the same period, sales of universal life insurance grew by 13 %.

The year 2018 has, however, been poorly started and the results from 1 January to 30 September 2018 remain negative, despite the surge in the third quarter. Sales of individual life insurance declined by 17 % compared to the same period of 2017.

Whole life insurance has posted a decline of 22 % during this comparison period, and the universal life a decline of 17 %. On the product side, temporary, sales decreased 1% during the same period of comparison.

Independent benefit

The recent return to growth in premiums of individual life insurance has been conducted by the network of independent advisors and securities brokers (national accounts).

These two networks have seen their sales grow respectively 51 % and 46 % in terms of premiums, in the third quarter of 2018, compared to the third quarter of 2017. The general agents have seen their sales grow 21 % at the end of this period of comparison.

The results are however disappointing in the networks of the captives, who have seen the volume of their sales of annualized premium to fall by 3 % in the third quarter of 2018, compared to the third quarter of 2017.

In terms of premiums, the independent network has cornered a share of 79 % of sales in the third quarter of 2018, compared to 21% for the network as a captive.

The size of the in force critical illness insurance is on the point of crossing of new brands. In the third quarter of 2018, the in-force premiums have reached 989,4 million dollars ($M), and the number of policies in force 920 587.

Tomorrow, read the report of the report on the sales of insurance products serious diseases on the website of the Journal of insurance.

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