The Canadian life insurance industry experienced a slight increase in new annualized premium sales in 2022, according to the Retail Canadian Life Insurance Sales Survey by LIMRA.
The survey found that total new annualized premiums rose by 1% in 2022, as inflation and challenging economic conditions impacted growth.
Matthew Rubino, a research analyst with LIMRA Insurance Research, stated that while the 1% increase marks a slowdown from the 25% growth seen in 2021, sales still exceeded pre-pandemic levels.
New annualized premium in 2022 was 23% higher than in 2019, Rubino said, indicating that sales are gradually returning to more predictable patterns as pandemic disruptions ease.
According to the LIMRA survey, the fourth quarter of 2022 saw a 2% decline in new annualized premiums compared to the same period in 2021. Year-over-year policy count also dropped by 8% for both the quarter and the year.
Whole life new annualized premium sales grew by 1% in the fourth quarter, with over half of carriers reporting positive sales growth. In 2022, whole life premium increased by 2% compared to the previous year.
Universal life (UL) new premium sales, which had been growing steadily for three consecutive quarters, decreased by 7% in the fourth quarter of 2022, compared to a 45% growth rate in the same period in 2021. Despite this, UL new premium remained 9% higher than in 2021, driven by non-level cost of insurance product sales.
Term sales, on the other hand, fell for the fifth consecutive quarter. Term new annualized were down 10% in the fourth quarter, according to the LIMRA survey, resulting in an 8% decline for the year. Term premium held 20% market share in 2022.
“Term sales were elevated in 2020 and 2021 because they were easier to sell when pandemic restrictions were in place, making face-to-face selling nearly impossible,” Rubino said. “Sales of these products normalized in 2022 and are in line with results experienced in 2019.”
In 2022, whole life premium represented 65% of the total Canadian life insurance market. Meanwhile, UL premium held a 15% share of the market and term premium had 20%.
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