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Life Insurance - Canada - July 2017

“The life insurance industry is embracing FinTech at a slower pace relative to banking but the shift towards increasing digitisation is spawning innovation and changing business processes.”

- Sanjay Sharma, Senior Financial Services Analyst

This report will cover the following areas:

  • Around three in five Canadians have life insurance
  • No dependents and cost are the top reasons for not having life insurance

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Table of contents

  1. Overview

      • Regional classifications
        • Income
          • Glossary
            • Annuities
              • Decumulation
                • Segregated Funds (Seg. Funds)
                  • Tax-Free Savings Account (TFSA)
                    • Term life insurance
                      • Universal life insurance
                        • Whole life insurance/Permanent life insurance
                        • Executive Summary

                            • The issues
                              • Around three in five Canadians have life insurance
                                • Figure 1: Ownership of life insurance, May 2017
                              • No dependents and cost are the top reasons for not having life insurance
                                • Figure 2: Reasons for not having life insurance, May 2017
                              • Sun Life and Manulife are the leading providers of individual life insurance
                                • Figure 3: Choice of provider for individual life insurance, May 2017
                              • Younger consumers more likely to prefer buying from bank insurance subsidiaries and credit unions
                                • Figure 4: Attitudes related to company preferences, May 2017
                              • Most consumers are not currently interested in digital purchase of life insurance
                                • Figure 5: Attitudes related to channel preference, May 2017
                              • The opportunities
                                • Increasing ownership among under-penetrated segments
                                  • Asian Canadians more likely to need guidance on life insurance
                                    • Figure 6: Reasons for not having life insurance (select), Asian Canadians vs overall population, May 2017
                                  • Older consumers favour well-known and specialty life insurance brands
                                    • Life insurance companies can leverage their estate planning expertise
                                      • Figure 7: Importance of factors motivating life insurance purchase, by income, May 2017
                                    • What it means
                                    • Market Factors – What You Need to Know

                                      • Canada’s population is ageing
                                        • Increased diversity means greater considerations for life/health insurance companies
                                          • Adapting to the new solvency standard
                                            • Impact of new tax legislation in effect in 2017
                                              • FinTech and life insurance (InsurTech)
                                              • Market Factors

                                                • Canada’s population is ageing
                                                  • Figure 8: Population aged 0-14 and 65+, as of July 1, 1995-2035*
                                                  • Figure 9: Canadian population, by age, 2016
                                                • Opportunities and challenges come with an ageing population
                                                  • Increased diversity means greater considerations for life/health insurance companies
                                                    • Regulation: adapting to the new solvency standard
                                                      • Impact of new tax legislation in effect in 2017
                                                        • FinTech and life insurance (InsurTech)
                                                        • Key Players – What You Need to Know

                                                          • Cookhouse lab launches in Toronto
                                                            • Manulife launches new Lab of Forward Thinking location in Singapore
                                                              • New venture launchpad Diagram announces close of $25 million fund
                                                                • Desjardins sells insurance brokerage unit
                                                                  • Micro-Duration Life Insurance
                                                                    • Singapore-based FitSense takes knowing your customer to a new level
                                                                    • Industry Developments and Innovations

                                                                      • Cookhouse Lab launches in Toronto
                                                                        • Manulife launches new Lab of Forward Thinking location in Singapore
                                                                          • New venture launchpad Diagram announces close of $25 million fund
                                                                            • Micro-duration life insurance
                                                                              • Singapore-based FitSense takes knowing your customer to a new level
                                                                                • Ladder launches in California
                                                                                  • Humania Assurance launches HuGO
                                                                                    • eSignLive and APEXA offer digital onboarding and e-contracting solution
                                                                                      • Desjardins sells insurance brokerage unit
                                                                                        • Sun Life makes changes to streamline life insurance application process
                                                                                          • Canadian robo-advisor launches digital life insurance service
                                                                                            • Manulife drops nicotine testing in bid to speed up insurance application process
                                                                                              • Manulife and Sun Life to insure those who are HIV-positive
                                                                                                • Canadian life insurance industry commits to limits on use of genetic test results
                                                                                                • Key Players – Marketing Campaigns

                                                                                                  • Select campaigns from Mintel Comperemedia
                                                                                                    • Scotia Life’s Term 20 invites consumers to take a second look at a simple product
                                                                                                      • Figure 10: Scotia term life insurance direct mail campaign, April 2017
                                                                                                    • CIBC offers older Canadians a low-coverage, guaranteed-acceptance product
                                                                                                      • Figure 11: CIBC guaranteed acceptance life insurance mail campaign, May 2017
                                                                                                    • Manulife targets Ontario engineers with a special member rate
                                                                                                      • Figure 12: Manulife engineers Canada sponsored term life direct mail campaign, April 2017
                                                                                                    • Other marketing campaigns
                                                                                                      • The Co-operators launches new marketing campaign in Quebec
                                                                                                        • Manulife Vitality asks Canadians "#WhatDoYouLiveFor?"
                                                                                                        • The Consumer – What You Need to Know

                                                                                                          • Around three in five Canadians have life insurance
                                                                                                            • Multiple benefits drive life insurance ownership
                                                                                                              • Sun Life and Manulife are the leading providers of individual/group life insurance
                                                                                                                • Younger consumers more likely to buy from bank insurance subsidiaries and credit unions
                                                                                                                  • Most consumers are not interested in digital purchase of life insurance
                                                                                                                  • Ownership

                                                                                                                    • Around three in five Canadians have life insurance
                                                                                                                      • Figure 13: Ownership of life insurance, May 2017
                                                                                                                    • Quebecers own more life insurance compared to other Canadians
                                                                                                                      • Insurance ownership trends significantly higher with income and age
                                                                                                                        • Figure 14: Differences in ownership of life insurance, by income, May 2017
                                                                                                                        • Figure 15: Differences in ownership of life insurance, by age, May 2017
                                                                                                                      • Increasing ownership among under-penetrated segments
                                                                                                                        • Canadians buy more individual insurance compared to group
                                                                                                                          • Figure 16: Individual and group life insurance purchase, May 2017
                                                                                                                        • Whole and universal life more likely to be purchased directly
                                                                                                                          • Figure 17: Type of insurance owned, by group and direct purchase, May 2017
                                                                                                                      • Reasons for Having Life Insurance

                                                                                                                        • Multiple benefits drive life insurance ownership
                                                                                                                          • Figure 18: Importance of factors motivating life insurance purchase, May 2017
                                                                                                                        • Younger consumers cite more reasons for buying life insurance
                                                                                                                          • Figure 19: Importance of factors motivating life insurance purchase, by age, May 2017
                                                                                                                        • Higher income earners more likely to list estate planning as a purchase reason
                                                                                                                          • Figure 20: Importance of factors motivating life insurance purchase, by income, May 2017
                                                                                                                        • Life insurance companies can leverage their estate planning expertise
                                                                                                                        • Reasons for not Having Life Insurance

                                                                                                                          • No dependents and cost are the top reasons for not having life insurance
                                                                                                                            • Figure 21: Reasons for not having life insurance, May 2017
                                                                                                                          • Asian Canadians more likely to need guidance on life insurance
                                                                                                                            • Figure 22: Reasons for not having life insurance (select), Asian Canadians vs overall population, May 2017
                                                                                                                          • Older Canadians more likely to state financial comfort as a reason for not buying
                                                                                                                            • Figure 23: Reasons for not having life insurance (select), over-55s vs overall population, May 2017
                                                                                                                        • Choice of Provider

                                                                                                                          • Sun Life and Manulife are the leading providers of individual life insurance
                                                                                                                            • Figure 24: Choice of provider for individual life insurance, May 2017
                                                                                                                          • TD Insurance performs significantly better among younger customers
                                                                                                                            • Figure 25: Choice of life insurance provider (select), by age, May 2017
                                                                                                                          • Younger consumers more likely to prefer buying from bank insurance subsidiaries and credit unions
                                                                                                                            • Figure 26: Attitudes related to company preferences (% agree), May 2017
                                                                                                                            • Figure 27: Agreement with statements on choice of provider (% agree), by age, May 2017
                                                                                                                          • Older consumers favour well-known and specialty life insurance brands
                                                                                                                            • Enhancing trust to increase ownership
                                                                                                                              • Sun Life, Manulife and Great-West Life dominate the group life insurance market
                                                                                                                                • Figure 28: Choice of provider for group life insurance, May 2017
                                                                                                                              • Sun Life does significantly better among older employees
                                                                                                                                • Figure 29: Choice of provider for group life insurance (select), by age, May 2017
                                                                                                                            • Purchase Preferences

                                                                                                                              • Most consumers are not currently interested in digital purchase of life insurance
                                                                                                                                • Figure 30: Attitudes related to channel preference, May 2017
                                                                                                                              • Around one in four 18-34s research life insurance online before purchase
                                                                                                                                • Figure 31: Attitudes related to the insurance purchase decision, May 2017
                                                                                                                              • Younger consumers more unsure about life insurance
                                                                                                                                • Figure 32: General attitudes about life insurance (% agree), by age, May 2017
                                                                                                                              • Most consumers are not apprehensive about medical questions
                                                                                                                                • Figure 33: Attitudes related to medical testing during the application process, May 2017
                                                                                                                            • Appendix – Data Sources and Abbreviations

                                                                                                                              • Data sources
                                                                                                                                • Consumer survey data
                                                                                                                                  • Consumer qualitative research
                                                                                                                                    • Abbreviations and terms

                                                                                                                                    Companies Covered

                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                    Life Insurance - Canada - July 2017

                                                                                                                                    US $3,995.00 (Excl.Tax)