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Canadian Insurance Companies - October 2010

The Canadian insurance industry has been buffeted by recent economic challenges, but is now on the road to recovery. Although the industry weathered the economic storm better than most, both in terms of financial stability and customer perception, the volatility has brought about some changes in the industry, including increasing consolidation and a consumer-driven emphasis on safer and more conservative products.

Not only is the industry strong financially, it is also reaping the benefits of positive customer perceptions. Unlike banks and brokerage firms, whose reputations suffered dramatically over the course of the recession, insurance companies escaped fairly unscathed. Customers overwhelmingly perceive insurance companies as professional, safe and trustworthy and almost all are satisfied with both the company they use and the products in their portfolio.

These themes are reflected in this report and include:

  • Trends in the Canadian economy that have affected and are affecting the Canadian insurance industry
  • Preferences exhibited by consumers in the way they wish to learn about and purchase insurance
  • How demographic changes in the Canadian population have and will continue to change insurance companies’ product mix
  • How changes made by various Canadian regulatory agencies are affecting varying segments of the insurance industry

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Abbreviations and terms
            • Abbreviations
              • Companies mentioned in this report
              • Executive Summary

                • Industry overview
                  • Canadian insurance industry continues its strength
                    • The economy has changed the life insurance product mix
                      • Recent regulations hinder the banks and help the insurance companies
                        • The life insurance industry is extremely consolidated, but offers opportunity for smaller firms
                          • Growth has and will continue to come primarily through acquisitions
                          • Insights and Opportunities

                            • Key points
                              • More comprehensive insurance education could help build business
                                • Social networks warrant attention
                                  • Figure 1: Canadian Facebook users, by age, May 2009-September 2010
                                • Long-term care insurance is undersold
                                • Inspire Insights

                                    • Insuring Every Demographic
                                      • Empowered women don’t die; they prepare
                                        • Trust in me
                                        • Market Size

                                          • Key points
                                            • Insurance companies’ total domestic assets
                                              • Figure 2: Domestic assets of financial services industry, by segment, 2003
                                            • Industry assets marginally affected by economic turmoil
                                            • Competitive Context

                                              • Key point
                                                • Banks’ ability to sell insurance has been curtailed
                                                • Segment Performance

                                                  • Key points
                                                    • Property and casualty
                                                      • Figure 3: Top 10 P&C companies, by premiums, year-end 2007
                                                    • Auto insurance has the most sales volume
                                                      • Figure 4: Insurance premiums paid, by line of business, 2007
                                                    • Life Insurance segment
                                                        • Figure 5: Top 10 life insurance companies, by assets, year-end 2006
                                                      • Health Insurance
                                                        • Critical Illness (CI)
                                                        • Market Drivers

                                                          • Key points
                                                            • Climate change may impact the future of the industry
                                                              • Health care reform
                                                                • Longer life expectancies and aging population will stress resources
                                                                  • Figure 6: Life expectancy of Canadians, 1960-2008
                                                                  • Figure 7: Canada’s projected population growth 2010-36, (in thousands)
                                                                  • Figure 8: Percentage of Canadian population over the age of 65, 1900-2030
                                                                • Economic recovery
                                                                  • Figure 9: Canadian GDP growth, March 2008-June 2010
                                                              • Leading Companies

                                                                • Key points
                                                                  • Manulife
                                                                    • Great-West Life Co
                                                                      • Sun Life Financial Services of Canada Inc.
                                                                        • Intact Insurance Co.
                                                                          • Aviva
                                                                            • The Co-operators
                                                                            • Innovation and Innovators

                                                                              • Key points
                                                                                • Axa
                                                                                  • Sun Life recognized for creative marketing approaches
                                                                                    • Healthquotes.ca
                                                                                    • Marketing Strategies

                                                                                      • Key points
                                                                                        • Overview
                                                                                          • Top mailers
                                                                                            • Figure 10: Top 10 mailers, Q3 2008-Q2 2010
                                                                                          • Mailings in the provinces
                                                                                              • Figure 11: Q2 2010 estimated mail volume, by province
                                                                                            • Print advertising
                                                                                              • Figure 12: Print ad, RBC 2010
                                                                                              • Figure 13: Print ad, TD insurance, October 2010
                                                                                              • Figure 14: Print ad, Intact insurance
                                                                                              • Figure 15: Print ad, RBC, August, September 2010
                                                                                              • Figure 16: Print ad, Intact Insurance, July 2010
                                                                                              • Figure 17: Print ad, CAA, June 2010
                                                                                            • Direct mail advertising
                                                                                              • Figure 18: Direct mail, Certas Direct Insurance Company, February 2010
                                                                                              • Figure 19: Direct mail, Aviva, July 2010
                                                                                              • Figure 20: Direct mail, TD Insurance, July 2010
                                                                                              • Figure 21: Direct mail, RBC, August 2010
                                                                                              • Figure 22: Direct mail, Sun Life, August 2010
                                                                                            • Online and email advertising
                                                                                              • Figure 23: Online advertisement, Aviva, September 2010
                                                                                              • Figure 24: Online advertisement, RBC, September 2010
                                                                                              • Figure 25: Online advertisement, Desjardins, September 2010
                                                                                          • The Consumer

                                                                                            • Key points
                                                                                              • Familiarity with life insurance companies
                                                                                                • Figure 26: Familiarity with insurance company names, all respondents, August 2010
                                                                                              • Perceptions of life insurance companies
                                                                                                • Figure 27: Perceptions of insurance companies, all respondents, August 2010
                                                                                              • Exposure to life insurance advertising
                                                                                                  • Figure 28: Observed life insurance magazine advertising in past month, by age, August 2010
                                                                                                  • Figure 29: Observed life insurance newspaper advertising in past month, by age, August 2010
                                                                                                  • Figure 30: Observed life insurance television advertising in past month, by age, August 2010
                                                                                                  • Figure 31: Observed life insurance radio advertising in past month, by age, August 2010
                                                                                                  • Figure 32: Observed life insurance billboard advertising in past month, by age, August 2010
                                                                                                  • Figure 33: Observed life insurance online advertising in past month, by age, August 2010
                                                                                                  • Figure 34: Observed life insurance email advertising in past month, by age, August 2010
                                                                                                  • Figure 35: Observed life insurance postal mail advertising in past month, by age, August 2010
                                                                                                • Familiarity with home/auto insurance companies
                                                                                                  • Figure 36: Familiarity with home/auto insurance companies, all respondents, September 2010
                                                                                                • Perceptions of home/auto insurance companies
                                                                                                  • Figure 37: Perceptions of brand attributes for life insurance companies, all respondents, September 2010
                                                                                                • Exposure to home and auto insurance advertising
                                                                                                  • Figure 38: Observed home/auto insurance magazine advertising in past month, by age, September 2010
                                                                                                  • Figure 39: Observed home/auto insurance newspaper advertising in past month, by age, September 2010
                                                                                                  • Figure 40: Observed home/auto insurance television advertising in past month, by age, September 2010
                                                                                                  • Figure 41: Observed home/auto insurance radio advertising in past month, by age, September 2010
                                                                                                  • Figure 42: Observed home/auto insurance billboard advertising in past month, by age, September 2010
                                                                                                  • Figure 43: Observed home/auto insurance online advertising in past month, by age, September 2010
                                                                                                  • Figure 44: Observed home/auto insurance email advertising in past month, by age, September 2010
                                                                                                  • Figure 45: Observed home/auto insurance postal mail advertising in past month, by age, September 2010
                                                                                                • Satisfaction with auto insurance products
                                                                                                  • Figure 46: Opinions about satisfaction with auto insurance company, all respondents with auto insurance, September 2010
                                                                                                • Quality of experience with auto insurance companies
                                                                                                  • Figure 47: Quality of experience with auto insurance company, all respondents with auto insurance, September 2010
                                                                                                • Source of information about home and auto insurance
                                                                                                  • Figure 48: Source of information about auto insurance, by age, September 2010
                                                                                                • Familiarity with insurance products
                                                                                                  • Figure 49: Familiarity with insurance products, all respondents, August 2010
                                                                                                • Satisfaction with life insurance provider
                                                                                                  • Figure 50: Level of satisfaction with insurance company, all respondents, August 2010
                                                                                                • Quality of experience with life insurance provider
                                                                                                  • Figure 51: Opinions concerning experience with insurance company, all respondents, August 2010
                                                                                                • Source of information about life insurance
                                                                                                  • Figure 52: Source of information about life insurance, by age, August 2010
                                                                                                  • Figure 53: Source of information about life insurance, by household income, August 2010
                                                                                                • Length of relationship with insurance company
                                                                                                    • Figure 54: Length of time with current insurance company, by gender, May 2010
                                                                                                    • Figure 55: Length of time with current insurance company, by marital status, May 2010
                                                                                                  • Purchasing/renewing policies
                                                                                                      • Figure 56: Have purchased or renewed policy within past five years, by age, May 2010
                                                                                                      • Figure 57: Have purchased or renewed policy within past five years, by marital status, May 2010
                                                                                                      • Figure 58: Have purchased or renewed policy within past five years, by region, May 2010
                                                                                                    • Plans to purchase or renew insurance
                                                                                                      • Figure 59: Plans to purchase or renew insurance in next year, by age, May 2010
                                                                                                      • Figure 60: Plans to purchase or renew insurance in next year, by marital status and presence of children under 18, May 2010
                                                                                                    • Level of satisfaction with insurance
                                                                                                        • Figure 61: Satisfaction with insurance, by insurance type and age, (net satisfied, summary of top two boxes) May 2010
                                                                                                        • Figure 62: Satisfaction with insurance, by insurance type and age, (net dissatisfied, summary of bottom two boxes), May 2010
                                                                                                      • Why insurance companies are chosen
                                                                                                          • Figure 63: Reasons people chose their insurance company, by age, May 2010
                                                                                                          • Figure 64: Reasons people chose their insurance company, by gender and presence of children, May 2010
                                                                                                        • Purchasing insurance online
                                                                                                          • Figure 65: Purchased insurance online, by age, May 2010
                                                                                                          • Figure 66: Purchased insurance online, by household income , May 2010
                                                                                                        • Purchasing auto insurance
                                                                                                          • Figure 67: Likely channel for purchasing auto insurance in the future, by gender, May 2010
                                                                                                          • Figure 68: Likely channel for purchasing auto insurance in the future, by age, May 2010
                                                                                                        • Purchasing homeowners/renters insurance
                                                                                                          • Figure 69: Likely channel for purchasing homeowners/renters insurance in the future, by gender, May 2010
                                                                                                          • Figure 70: Likely channel for purchasing homeowners/renters insurance in the future, by marital status, May 2010
                                                                                                        • Purchasing life insurance
                                                                                                          • Figure 71: Likely channel for purchasing life insurance in the future, by age, May 2010
                                                                                                          • Figure 72: Likely channel for purchasing life insurance in the future, by marital status, May 2010
                                                                                                        • Purchasing supplemental health insurance
                                                                                                          • Figure 73: Likely channel for purchasing supplemental health insurance in future, by age, May 2010
                                                                                                          • Figure 74: Likely channel for purchasing supplemental health insurance in future, by marital status, May 2010
                                                                                                        • Purchasing income replacement insurance
                                                                                                          • Figure 75: Likely channel for purchasing income replacement insurance in future, by age, May 2010
                                                                                                          • Figure 76: Likely channel for purchasing income replacement insurance in future, by gender and age, May 2010
                                                                                                        • Potential for future online purchasing
                                                                                                          • Figure 77: Plan to purchase online in the future, by gender, May 2010
                                                                                                          • Figure 78: Plan to purchase online in the future, by age and insurance type, May 2010
                                                                                                          • Figure 79: Plan to purchase online in the future, by employment status and type of insurance, May 2010
                                                                                                        • Purchasing insurance through an agent
                                                                                                          • Figure 80: Plan to purchase through agent in future, by gender and insurance type, May 2010
                                                                                                          • Figure 81: Plan to purchase through agent in future, by age and type of insurance, May 2010
                                                                                                        • Researching policies online before purchasing through agent
                                                                                                          • Figure 82: Plan to do research online before purchasing through agent, by age and insurance type, May 2010
                                                                                                          • Figure 83: Plan to do research online before purchasing through agent, by province and insurance type, May 2010
                                                                                                        • Future need for insurance
                                                                                                          • Figure 84: Don’t anticipate buying in the future due to lack of need, by age, May 2010
                                                                                                          • Figure 85: Don’t anticipate buying in the future due to lack of need, by size of household, May 2010
                                                                                                        • Upcoming purchase/renewal behavior
                                                                                                          • Figure 86: Purchase/renewal plans for upcoming year, by gender, May 2010
                                                                                                          • Figure 87: Purchase/renewal plans for upcoming year, by gender and age, May 2010
                                                                                                        • Renewal plans for the next year
                                                                                                          • Figure 88: Plans for renewal or purchase in the upcoming year, by age, May 2010
                                                                                                        • Factors in purchasing decision
                                                                                                            • Figure 89: “Very” or “somewhat” important factors in purchasing next insurance policy, by age, May 2010
                                                                                                            • Figure 90: “Very” or “somewhat” important factors in purchasing next insurance policy, by gender and children in household, May 2010
                                                                                                          • Important features for auto policy purchase
                                                                                                              • Figure 91: Importance of features in purchase decision for auto policy, by age, May 2010
                                                                                                              • Figure 92: Importance of features in purchase decision for auto policy, by household income , May 2010
                                                                                                            • Preferences about insurance companies
                                                                                                                • Figure 93: Opinions about insurance and insurance companies, by gender, May 2010
                                                                                                                • Figure 94: Opinions about insurance and insurance companies, by age, May 2010
                                                                                                              • Trust in insurance companies
                                                                                                                  • Figure 95: Opinions about trust and current insurance company, by age, May 2010
                                                                                                                  • Figure 96: Opinions about trust in current insurance company, by province, May 2010
                                                                                                              • Cluster Analysis

                                                                                                                  • Confidents
                                                                                                                    • Demographics
                                                                                                                      • Characteristics
                                                                                                                        • Opportunity
                                                                                                                          • Traditionalists
                                                                                                                            • Demographics
                                                                                                                              • Characteristics
                                                                                                                                • Opportunity
                                                                                                                                  • Skeptics
                                                                                                                                    • Demographics
                                                                                                                                      • Characteristics
                                                                                                                                        • Opportunity
                                                                                                                                          • Cluster characteristics
                                                                                                                                            • Figure 97: Canadian insurance clusters, May 2010
                                                                                                                                            • Figure 98: Reasons people chose their insurance company, by Canadian insurance clusters, May 2010
                                                                                                                                            • Figure 99: Opinions about insurance companies, by Canadian insurance clusters, May 2010
                                                                                                                                            • Figure 100: Importance of factors in purchasing next insurance policy, by Canadian insurance clusters, May 2010
                                                                                                                                            • Figure 101: Opinions about trust and current insurance companies, by Canadian insurance clusters, May 2010
                                                                                                                                          • Cluster demographics
                                                                                                                                            • Figure 102: Canadian insurance clusters, by gender, May 2010
                                                                                                                                            • Figure 103: Canadian insurance clusters, by age group, May 2010
                                                                                                                                            • Figure 104: Canadian insurance clusters, by household income group, May 2010
                                                                                                                                            • Figure 105: Canadian insurance clusters, by race, May 2010
                                                                                                                                          • Cluster methodology
                                                                                                                                          • Key Driver Analysis

                                                                                                                                              • Key drivers
                                                                                                                                                • Discussion
                                                                                                                                                  • Market Landscape
                                                                                                                                                    • Figure 106: Key drivers by purchase channels, May 2010
                                                                                                                                                  • Key driver methodology
                                                                                                                                                    • Figure 107: Key driver analysis, May 2010
                                                                                                                                                • Appendix: Trade Associations

                                                                                                                                                  Companies Covered

                                                                                                                                                  • AIG Group (American International Group Inc)
                                                                                                                                                  • AXA (USA)
                                                                                                                                                  • Bank of Montreal
                                                                                                                                                  • Blue Cross and Blue Shield Association
                                                                                                                                                  • Canada Life Limited
                                                                                                                                                  • Canadian Imperial Bank of Commerce
                                                                                                                                                  • Century Life Assurance Company
                                                                                                                                                  • Chubb Group of Insurance Companies
                                                                                                                                                  • CIBC World Markets Inc.
                                                                                                                                                  • Economist Group Limited (The)
                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                  • Foresters
                                                                                                                                                  • Great-West Life & Annuity Insurance Company
                                                                                                                                                  • Great-West Lifeco Inc
                                                                                                                                                  • ING Bank, fsb
                                                                                                                                                  • Insurance Bureau of Canada (IBC)
                                                                                                                                                  • Insurance Institute of Canada (IIC)
                                                                                                                                                  • International Monetary Fund
                                                                                                                                                  • J.D. Power and Associates
                                                                                                                                                  • John Hancock Financial Services, Inc
                                                                                                                                                  • LIMRA International
                                                                                                                                                  • Manulife Financial Corporation
                                                                                                                                                  • MetLife, Inc. (Metropolitan Life Insurance Company)
                                                                                                                                                  • Mouvement des caisses Desjardins
                                                                                                                                                  • Putnam, LLC
                                                                                                                                                  • Reader's Digest Association, Inc. (The)
                                                                                                                                                  • Royal Bank of Canada
                                                                                                                                                  • Standard Life Assurance Company
                                                                                                                                                  • State Farm Insurance Companies
                                                                                                                                                  • Statistics Canada
                                                                                                                                                  • Sun Life Financial Inc.
                                                                                                                                                  • Toronto-Dominion Bank
                                                                                                                                                  • Transamerica Corporation
                                                                                                                                                  • Twitter, Inc.
                                                                                                                                                  • U.S. Bureau of Labor Statistics
                                                                                                                                                  • Zurich Financial Services

                                                                                                                                                  Canadian Insurance Companies - October 2010

                                                                                                                                                  £3,174.67 (Excl.Tax)