Whole life sales drive growth as life insurance in Canada has bumper quarter
LIMRA has released results for individual life insurance sales among Canada’s major insurers for the first quarter of 2017 and growth is impressively strong.
Compared to the same quarter in 2016, annualized premiums in Q1 increased by 77 %. Such growth is in large part credited to the new legislation for tax exemption on life insurance policies that came into effect on January 1, 2017.
Policies sold before the effective date were grandfathered under the old, higher tax limits. This meant that first quarter growth spiked as carriers finalized applications started in the prior year.
According to LIMRA’s report, growth in premiums was driven by universal life and whole life sales in particular.
For whole life products, results were impressive for premiums, policies and the face amount. The majority of the increase was from participating whole life products.
For universal life products, growth was strong for both annualized premiums and face amount, but was highest for level and limited pay products. These products were heavily impacted by the changes in tax regulation enacted at the start of the year, but momentum has been strong for years, with premiums increasing for ten consecutive quarters.
While life and health insurers have struggled faced with the ultra-low interest rate environment since the financial crisis, it now appears many of the larger providers have turned a corner. Of the 20 companies surveyed by the association, 13 reported premium growth for the first quarter of 2017.
LIMRA’s study also looked at individual fixed, segregated fund-based, and combination annuity sales activity in Q1 2017. Results were mixed, with fixed annuity sales decreasing 9%, segregated fund-based annuity sales increasing by 8% and combination annuity sales up by 11%.
For fixed annuity sales, premiums amounted to $528 million, $2.9 billion for segregated and $884 million for combination annuities; this represented growth year-over-year of -9%, 8% and 11% respectively.
Related stories:
Confused millennials are foregoing life insurance, shows new LIMRA study
Demographic shift will drag on life insurers’ profits: says new report
Compared to the same quarter in 2016, annualized premiums in Q1 increased by 77 %. Such growth is in large part credited to the new legislation for tax exemption on life insurance policies that came into effect on January 1, 2017.
Policies sold before the effective date were grandfathered under the old, higher tax limits. This meant that first quarter growth spiked as carriers finalized applications started in the prior year.
According to LIMRA’s report, growth in premiums was driven by universal life and whole life sales in particular.
For whole life products, results were impressive for premiums, policies and the face amount. The majority of the increase was from participating whole life products.
For universal life products, growth was strong for both annualized premiums and face amount, but was highest for level and limited pay products. These products were heavily impacted by the changes in tax regulation enacted at the start of the year, but momentum has been strong for years, with premiums increasing for ten consecutive quarters.
While life and health insurers have struggled faced with the ultra-low interest rate environment since the financial crisis, it now appears many of the larger providers have turned a corner. Of the 20 companies surveyed by the association, 13 reported premium growth for the first quarter of 2017.
LIMRA’s study also looked at individual fixed, segregated fund-based, and combination annuity sales activity in Q1 2017. Results were mixed, with fixed annuity sales decreasing 9%, segregated fund-based annuity sales increasing by 8% and combination annuity sales up by 11%.
For fixed annuity sales, premiums amounted to $528 million, $2.9 billion for segregated and $884 million for combination annuities; this represented growth year-over-year of -9%, 8% and 11% respectively.
Related stories:
Confused millennials are foregoing life insurance, shows new LIMRA study
Demographic shift will drag on life insurers’ profits: says new report
