Beneath the steady surface of Canada's financial landscape, a powerful transformation is underway as the life insurance industry, valued at a staggering CAD 82.4 billion in 2022, surges forward on a wave of digital innovation and demographic shifts.
Key Takeaways
- In 2022, the Canadian life insurance market was valued at CAD 82.4 billion, reflecting a year-over-year growth of 4.7% driven by rising demand for term life and universal life products amid economic recovery post-COVID.
- The compound annual growth rate (CAGR) of the Canadian life insurance industry from 2017 to 2022 stood at 5.2%, fueled by increasing awareness of financial protection and aging population demographics.
- By 2023, the life insurance segment in Canada accounted for 28.6% of the total insurance market share, with projections to reach 30.1% by 2027.
- Total individual life insurance premiums in Canada amounted to CAD 28.5 billion in 2022, up 3.8% from 2021.
- Group life and health premiums generated CAD 45.2 billion in revenue for Canadian insurers in 2022.
- Term life insurance premiums contributed CAD 9.7 billion, or 34% of individual premiums in 2022.
- Total number of individual life insurance policyholders in Canada reached 24.5 million in 2022.
- 68% of Canadian adults aged 25-64 held some form of life insurance coverage in 2022.
- Group life insurance covered 16.2 million Canadians through employer plans in 2022.
- Total life insurance claims paid out in Canada amounted to CAD 22.4 billion in 2022.
- Death claims from individual life policies totaled CAD 12.7 billion, 57% of total payouts.
- Group life claims paid CAD 8.9 billion in 2022, including CAD 3.2B for COVID-related deaths.
- OSFI-mandated life insurers maintain a minimum MCT ratio of 150%, achieved by 98% of firms in 2022.
- IFRS 17 implementation increased reported equity volatility for Canadian life insurers by 12-15% starting 2023.
- OSFI's minimum capital test covered 95% of risks for life products in 2022 assessments.
The Canadian life insurance market is steadily growing stronger due to rising digital sales and demand.
Claims and Payouts
- Total life insurance claims paid out in Canada amounted to CAD 22.4 billion in 2022.
- Death claims from individual life policies totaled CAD 12.7 billion, 57% of total payouts.
- Group life claims paid CAD 8.9 billion in 2022, including CAD 3.2B for COVID-related deaths.
- Average death claim amount for term life was CAD 145,000 in 2022.
- Annuity benefit payments reached CAD 9.6 billion, up 10.2% YoY in 2022.
- Claims acceptance rate for life insurers was 98.7% in 2022.
- Critical illness claims paid CAD 1.8 billion, with average payout CAD 85,000.
- Surrender values paid out totaled CAD 15.3 billion in 2022.
- Mortality rate for policyholders was 0.78% in 2022, below pre-COVID levels.
- Disability claims under life policies amounted to CAD 4.2 billion in 2022.
- Cancer-related death claims rose 5.4% to CAD 2.9 billion in 2022.
- Claims processing time averaged 14 days for uncontested death claims in 2022.
- Mature market claims (age 65+) were 62% of total death claims volume.
- Fraudulent claims detected totaled CAD 120 million, 0.5% of payouts in 2022.
- Heart disease accounted for 28% of death claims, CAD 3.6 billion paid.
- Accelerated death benefits paid CAD 450 million for terminal illnesses in 2022.
- Group AD&D claims were CAD 210 million in 2022.
- Claims ratio for individual life was 72.4% of premiums in 2022.
- Pediatric critical illness claims averaged CAD 25,000, total CAD 85 million.
- Denied claims rate was 1.3%, mainly due to misrepresentation in 2022.
- Long-term care benefits under life wrappers paid CAD 1.1 billion.
- Suicide exclusions led to CAD 45 million in denied claims in 2022.
- Pandemic-related waiver of premiums claims were CAD 320 million.
- Aviation death claims totaled CAD 150 million for policyholders in 2022.
Claims and Payouts Interpretation
While Canada’s life insurers paid out a sobering $22.4 billion, the fact that over 98% of claims were accepted—with fraud a mere half-percent—proves that the industry’s real product is not bureaucratic avoidance but genuine financial mercy, delivered with remarkable efficiency.
Market Size and Growth
- In 2022, the Canadian life insurance market was valued at CAD 82.4 billion, reflecting a year-over-year growth of 4.7% driven by rising demand for term life and universal life products amid economic recovery post-COVID.
- The compound annual growth rate (CAGR) of the Canadian life insurance industry from 2017 to 2022 stood at 5.2%, fueled by increasing awareness of financial protection and aging population demographics.
- By 2023, the life insurance segment in Canada accounted for 28.6% of the total insurance market share, with projections to reach 30.1% by 2027.
- Total new business annualized premium for individual life insurance in Canada reached CAD 5.1 billion in 2022, up 6.3% from the previous year.
- The group life insurance market in Canada expanded to CAD 22.7 billion in premiums in 2022, representing 41% of the overall life insurance market.
- Canada's life insurance penetration rate, measured as premiums as a percentage of GDP, was 2.8% in 2022, higher than the global average of 2.1%.
- From 2018 to 2023, the universal life insurance segment grew at a CAGR of 7.1%, outpacing whole life growth of 3.9%.
- The Canadian life insurance industry's total assets under management exceeded CAD 1.2 trillion in 2022, with a 5.4% annual increase.
- In Q4 2023, life insurance new sales volume in Canada surged 12.4% quarter-over-quarter, driven by digital distribution channels.
- The market size for participating life insurance products in Canada was CAD 15.8 billion in 2022, growing 3.2% YoY.
- Canada's life insurance density (premiums per capita) reached CAD 1,980 in 2022, up from CAD 1,850 in 2021.
- Projected market growth for Canadian life insurance is 4.9% CAGR from 2023-2028, reaching CAD 110 billion by 2028.
- In 2022, Ontario represented 42.3% of Canada's total life insurance market size by premiums written.
- The life insurance market in Quebec grew 5.8% in 2022, contributing CAD 18.9 billion to national totals.
- Digital life insurance sales accounted for 22% of market growth in Canada in 2023.
- Post-pandemic, the Canadian life insurance market rebounded with 6.1% growth in 2021-2022.
- Total life reinsurance ceded premiums in Canada hit CAD 12.4 billion in 2022, supporting market expansion.
- The embedded value of Canadian life insurers grew 8.2% to CAD 95 billion in 2022.
- Western Canada's life insurance market share increased to 15.7% in 2022 due to resource sector recovery.
- Annuity products drove 28% of life insurance market growth in Canada in 2022.
- The Canadian life insurance market's Herfindahl-Hirschman Index was 1,248 in 2022, indicating moderate concentration.
- Life insurance accounted for 35% of total Canadian insurance premiums in 2022, totaling CAD 85.6 billion.
- From 2020 to 2022, the market contracted temporarily by 1.2% due to COVID but recovered strongly.
- Atlantic provinces' life insurance market grew 4.1% in 2022, lagging national average.
- Parametric life insurance products emerged, contributing 2.3% to market size growth in 2023.
- The value of new business (VNB) for Canadian life insurers was CAD 4.2 billion in 2022.
- Life insurance market volatility index in Canada averaged 3.7% in 2022.
- Export of life insurance services from Canada grew 7.4% to CAD 2.1 billion in 2022.
- 2023 saw 5.3% growth in life insurance market capitalization for top Canadian firms.
- Rural areas in Canada saw life insurance market penetration rise 9.2% from 2021-2023.
Market Size and Growth Interpretation
Even as Canada's life insurance industry quietly amasses over a trillion dollars in assets, its growth isn't just a cold statistic—it's the financially prudent, slightly anxious heartbeat of a nation securing its future, one pandemic-wary and digitally-purchased policy at a time.
Policyholders and Coverage
- Total number of individual life insurance policyholders in Canada reached 24.5 million in 2022.
- 68% of Canadian adults aged 25-64 held some form of life insurance coverage in 2022.
- Group life insurance covered 16.2 million Canadians through employer plans in 2022.
- Term life policies in force numbered 18.7 million, covering 52% of policyholders in 2022.
- Women represented 47.3% of individual life insurance policyholders in Canada in 2022.
- Average face amount of individual life policies was CAD 285,000 in 2022.
- 42% of Canadian households had adequate life coverage relative to income needs in 2022.
- Policyholders aged 55+ comprised 38% of total, with higher permanent policy ownership.
- Universal life coverage extended to 4.8 million policyholders, 20% of individual market.
- Immigrant households in Canada had 25% lower life insurance coverage rates in 2022.
- 75% of group life policyholders were employed full-time in private sector in 2022.
- Average policy duration for in-force term life was 12.4 years in 2022.
- Low-income households (<CAD 50k) had only 31% coverage penetration in 2022.
- 2.1 million policies lapsed in 2022, 8.5% lapse rate for individual life.
- Millennials (born 1981-1996) held 22% of new policies issued in 2022.
- Quebec policyholders represented 24.1% of national total in 2022.
- Joint life policies covered 1.8 million couples, 12% of households.
- Disability coverage bundled with life insured 9.2 million policyholders in 2022.
- Rural policyholders had 15% higher whole life ownership rates in 2022.
- 56% of policyholders reviewed coverage annually, per 2022 surveys.
- High-net-worth individuals (>CAD 1M assets) had 92% coverage rate in 2022.
- Self-employed Canadians had 41% life coverage penetration in 2022.
- Indigenous communities coverage gap was 28% below national average in 2022.
- Gen Z new policy uptake rose 18% to 450,000 policies in 2022.
- 65% of dual-income families had matching life coverage in 2022.
- Policyholders with mortgages had 88% life coverage linked to loans.
Policyholders and Coverage Interpretation
While we dutifully check a box for mortality, the fine print reveals a nation trying to pencil out protection, stitching together a quilt of term, group, and hope that—judging by the lapses, gaps, and averages—still leaves too many threads bare.
Premiums and Revenue
- Total individual life insurance premiums in Canada amounted to CAD 28.5 billion in 2022, up 3.8% from 2021.
- Group life and health premiums generated CAD 45.2 billion in revenue for Canadian insurers in 2022.
- Term life insurance premiums contributed CAD 9.7 billion, or 34% of individual premiums in 2022.
- Universal life premiums rose to CAD 6.4 billion in 2022, a 7.5% increase YoY.
- Whole life premiums totaled CAD 8.2 billion in Canada in 2022, stable at 1.2% growth.
- Participating life premiums reached CAD 4.1 billion, representing 14% of individual market revenue.
- Annuity premiums surged 11.3% to CAD 12.8 billion in 2022 amid low interest rates.
- Investment income for Canadian life insurers was CAD 35.6 billion in 2022, boosting net revenue.
- Net premiums earned by top 10 Canadian life insurers totaled CAD 67.3 billion in 2022.
- First-year premiums for individual life policies were CAD 4.8 billion in 2022.
- Renewal premiums constituted 82% of total individual life premium revenue in 2022.
- Segregated fund premiums hit CAD 11.9 billion, up 6.8% in 2022.
- Creditor life insurance premiums were CAD 1.2 billion in 2022, 4% of individual total.
- Premiums from high-net-worth life products grew 9.1% to CAD 2.3 billion in 2022.
- Tax-exempt life insurance premiums under IFEL plans totaled CAD 3.4 billion in 2022.
- Employer-sponsored group life premiums were CAD 18.7 billion, 41% of group revenue.
- Premium per policy average for term life was CAD 650 annually in 2022.
- Revenue from single premium immediate annuities reached CAD 5.6 billion in 2022.
- Life insurers' net investment income yield was 4.2% on assets in 2022.
- Ceded reinsurance premiums as % of gross premiums were 15.4% in 2022.
- Premium growth in Quebec life market was 4.6% YoY to CAD 19.2 billion in 2022.
- Digital channel premiums grew 25% to CAD 7.8 billion, 12% of total in 2022.
- Surplus revenue after claims and expenses for life insurers was CAD 9.1 billion in 2022.
- Premiums from variable annuities were CAD 2.9 billion, up 8.7% in 2022.
- Broker-distributed life premiums accounted for 55% of total revenue in 2022.
- Premiums in British Columbia life market totaled CAD 14.5 billion in 2022, 5.2% growth.
- Corporate-owned life insurance (COLI) premiums were CAD 4.7 billion in 2022.
- Average annual premium increase approved by regulators was 2.1% for 2023 policies.
Premiums and Revenue Interpretation
While Canadians collectively hem and haw over their mortality, the life insurance industry, with the steady calm of a croupier raking in chips, quietly collected over $28 billion from individuals and a whopping $45 billion from groups, proving that whether we're planning for death or just a bad sick day, we're all paying up to keep the existential anxiety at bay.
Regulatory Environment and Trends
- OSFI-mandated life insurers maintain a minimum MCT ratio of 150%, achieved by 98% of firms in 2022.
- IFRS 17 implementation increased reported equity volatility for Canadian life insurers by 12-15% starting 2023.
- OSFI's minimum capital test covered 95% of risks for life products in 2022 assessments.
- 85% of life insurers complied with FCAC's fair treatment of customers principle in 2022 audits.
- Digital sales regulations under PIPEDA affected 30% of new policies in 2023.
- Solvency II equivalence granted to Canada by EU in 2015 boosted reinsurance flows by 20%.
- Climate risk disclosure mandated for life insurers starting 2024 under OSFI B-15 guideline.
- 72% of life products met AMF's simplified insurance contract standards in Quebec 2022.
- Cybersecurity incident reporting required within 24 hours under OSFI guideline E-21 since 2022.
- Tax changes in Bill C-208 increased demand for estate equalization life insurance by 15%.
- FSRA approved 2.3% average rate increase for life products in Ontario 2023.
- ESG integration in investments mandated for 40% of life insurer portfolios by 2025.
- Open banking framework rollout in 2024 to impact 25% of life underwriting processes.
- 92% compliance with anti-money laundering rules in life sector per FINTRAC 2022.
- Parametric insurance products exempted from certain provincial licensing in 2023.
- Gender-neutral pricing fully enforced across Canada since 2019, reducing premiums 5-10% for women.
- Tele-underwriting approvals rose 40% post-COVID under relaxed medical regs.
- Pension risk transfer deals regulated under OSFI, totaling CAD 10B in 2022.
- Data portability rights under emerging privacy laws to affect policy transfers in 2024.
- AI use in underwriting scrutinized under FCAC UPH principle, 60% firms audited 2023.
- Provincial harmonization of life licensing via CLHIA achieved 80% uniformity by 2023.
- Capital requirements for longevity risk increased 18% under OSFI 2022 calibration.
- Consumer complaint resolution rate 95% within 30 days per FCAC standards 2022.
- Crypto-asset exposure limited to 1% of assets for life insurers per OSFI B-10.
- Trends show 35% shift to digital distribution by 2025 per Deloitte forecasts.
- Adoption of ESG annuities projected to grow 25% annually through 2027.
- Personalization via AI expected to reduce lapse rates by 15% by 2025.
Regulatory Environment and Trends Interpretation
While Canadian life insurers are proving themselves remarkably robust and well-regulated, navigating a landscape where they must be simultaneously as sturdy as a fortress, as agile as a tech startup, as transparent as a window, and as empathetic as a counselor, all while the financial, climatic, and digital ground shifts beneath their feet.
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