Canadian life insurance hits record $1.86n in sales in 2023

LIMRA reports a 4% increase in life insurance premiums, marking the highest sales since 1993

Canadian life insurance hits record $1.86n in sales in 2023

In 2023, the Canadian life insurance industry marked a record year, with new annualized premiums rising to $1.86bn, a 4 percent increase from the previous year.

This peak in sales is unprecedented since the establishment of LIMRA’s Canadian Individual Life Insurance Sales Survey in 1993, signaling the highest sales in the Canadian market’s history.

LIMRA, a global research body, associates this landmark achievement with the industry’s robust recovery and steady growth post-pandemic as the market stabilizes from previous volatility.

Nancy Moussa, associate research director for LIMRA Insurance Product Research, commented, “The record sales represent a continued steady growth post-pandemic as the market returns to a less tumultuous environment.”

Moussa expressed optimism for the sales momentum, projecting continued growth into 2024.

A closer look at the fourth quarter of 2023 reveals a 5 percent year-over-year increase in total life insurance new annualized premiums in Canada, reaching $516m. This figure is the highest premium collected in the fourth quarter since 2016.

Additionally, the policy count in this period saw a 1 percent increase compared to the year before.

The standout performer for 2023 was the whole life insurance segment, which witnessed the most substantial quarterly and annual growth. In the fourth quarter, whole life’s new annualized premiums were up 10 percent from the previous year, totaling $365m, with a 4 percent increase in policy count from the fourth quarter of 2022.

Over the entire year, whole life insurance’s new annualized premiums jumped 10 percent to a record $1.27bn, with the policy count increasing 4 percent over 2022 levels. Whole life premiums represented 68 percent of the Canadian life insurance market share.

Moussa pointed out that whole life sales in Canada are predominantly driven by participating whole life products, which constitute 88 percent of the whole life market. In 2023, these products saw a 12 percent increase in premiums, significantly contributing to the sector’s growth.

“Participating whole life products generally attract more sales since they offer dividends for policyholders, which can be used for additional coverage or cash value growth,” Moussa explained.

Term life insurance also recorded growth in the fourth quarter, with new annualized premiums increasing 3 percent year-over-year to $88m and policy count rising by 3 percent.

Throughout 2023, term life new premium totaled $345m, up 1 percent over 2022, despite a 2 percent decline in the number of policies sold. Term life products held a 19 percent market share of the total Canadian new annualized premium, illustrating their consistent presence in the life insurance landscape.