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Life Insurance - Canada - September 2014

“Greater clarity in their policies, an easy application process, hassle-free payouts to beneficiaries and more disclosure around the compensation model of insurance agents are all steps that the industry could work on to increase trust levels.”
- Sanjay Sharma, Senior Financial Services Analyst
This report looks at the following issues:

  • Using life insurance for tax and estate planning
  • Enhancing consumer trust levels with life insurance providers
  • Simplifying and streamlining the application process
  • Engaging the Sceptics by promoting the value of life insurance

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
          • Glossary
          • Executive Summary

              • The market
                • Figure 1: Forecast of values of premiums in the Canadian life insurance market, 2009-19
              • Market factors
                • IMF expects the Canadian economy to pick up speed, but many risks remain
                  • Interest rates, inflation and market volatility
                    • Canada’s population is expected to age in the coming years
                      • Companies, brands and innovation
                        • The consumer
                          • Whole/Permanent Life and Term Life are the most widely owned types of life insurance
                            • Figure 2: Ownership of life insurance, June 2014
                          • Manulife and Sun Life dominate the life insurance market
                            • Figure 3: Choice of provider of life insurance, June 2014
                          • A lifestage change is the most common purchase trigger
                            • Low/affordable premiums and a trusted company are the most important factors
                              • Figure 4: Factors considered when buying life insurance, June 2014
                            • 46% of Canadians think that it is important for everyone to have life insurance
                              • Figure 5: Attitudes towards life insurance, June 2014
                            • What we think
                            • Issues and Insights

                                • Using life insurance for tax and estate planning
                                  • The facts
                                    • The implications
                                      • Enhancing consumer trust levels with life insurance providers
                                        • The facts
                                          • The implications
                                            • Simplifying and streamlining the application process
                                              • The facts
                                                • The implications
                                                  • Engaging the Sceptics by promoting the value of life insurance
                                                    • The facts
                                                      • The implications
                                                      • Trend Application

                                                          • Trend: Prove it
                                                            • Trend: Giving Back
                                                              • Trend: Let’s Make a Deal
                                                              • Market Drivers

                                                                • Key points
                                                                  • Economic overview
                                                                    • IMF expects the Canadian economy to pick up speed, but many risks remain
                                                                      • Figure 6: Canada’s GDP, by quarter, Q1 2008-Q1 2014
                                                                      • Figure 7: Household disposable incomes and savings in Canada, Q1 2008-Q1 2014
                                                                      • Figure 8: Canada’s unemployment rate, by gender, 2008-14
                                                                    • Interest rates, inflation and market volatility
                                                                      • Figure 9: Inflation rates in Canada, 2004-14
                                                                    • Outlook on the real estate and housing market
                                                                      • British Columbia has the highest net worth
                                                                        • Figure 10: Canada median net worth, by province, 2012
                                                                      • Demographic overview
                                                                        • Population count and growth in Canada
                                                                          • Figure 11: Share of population of Canada, by territory/province, 2014
                                                                        • Canada’s population is expected to age in the coming years
                                                                          • Figure 12: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                                                                          • Figure 13: Projected trends in the age structure of the Canada population, 2014-19
                                                                        • Living longer but not necessarily healthier
                                                                          • Figure 14: Average life expectancy* and health-adjusted life expectancy (HALE)**, by disease status and gender, 2013
                                                                        • Regulation and the impact of ongoing regulatory Initiatives
                                                                        • Strengths and Weaknesses

                                                                          • Strengths
                                                                            • Weaknesses
                                                                            • Who’s Innovating?

                                                                              • Key point
                                                                                • Manulife UL
                                                                                  • Desjardins launches Life LTC Advance
                                                                                    • Compassion insurance from SSQ Financial Group
                                                                                      • Industrial Alliance’s Child & Health Duo
                                                                                      • Market Size and Forecast

                                                                                        • Key points
                                                                                          • Canada’s life insurance market continues to grow steadily
                                                                                            • Figure 15: Value of life insurance premiums, 2009-19
                                                                                          • Forecast
                                                                                            • Figure 16: Forecast of values of premiums in the Canadian life insurance market, 2009-19
                                                                                          • Forecast methodology
                                                                                          • Companies and Products

                                                                                              • Manulife
                                                                                                • Overview and company information
                                                                                                  • Recent activity and innovation
                                                                                                    • Sun Life
                                                                                                      • Overview and company information
                                                                                                        • Recent activity and innovation
                                                                                                          • Great-West Life
                                                                                                            • Overview and company information
                                                                                                              • Recent activity and innovation
                                                                                                                • Industrial Alliance
                                                                                                                  • Overview and company information
                                                                                                                    • Recent activity and innovation
                                                                                                                      • RBC Insurance
                                                                                                                        • Overview and company information
                                                                                                                          • Recent activity
                                                                                                                            • Empire Life
                                                                                                                              • Overview and company information
                                                                                                                                • Recent activity and innovation
                                                                                                                                • Brand Communication and Promotion

                                                                                                                                  • Key points
                                                                                                                                    • BMO Insurance emerges as the most prevalent direct mailer
                                                                                                                                      • Figure 17: Life insurance direct mail acquisition volume, September 2013-August 2014
                                                                                                                                    • Featured campaigns from Mintel Comperemedia
                                                                                                                                      • Empire Life
                                                                                                                                        • RBC Simplified Life Insurance
                                                                                                                                          • Guaranteed Life Insurance from Manulife
                                                                                                                                          • The Consumer – Ownership of Life Insurance

                                                                                                                                            • Key points
                                                                                                                                              • Whole/Permanent Life and Term Life are the most widely owned types of life insurance
                                                                                                                                                • Figure 18: Ownership of life insurance policies, June 2014
                                                                                                                                              • CHAID analysis
                                                                                                                                                • Methodology
                                                                                                                                                  • Fathers with household incomes greater than $75,000 over-index on term life ownership by 16%
                                                                                                                                                    • Figure 19: Ownership of term life insurance policies – CHAID – Tree output, June 2014
                                                                                                                                                  • Key driver analysis
                                                                                                                                                    • Methodology
                                                                                                                                                      • Indicators: Reasons for purchase and important factors when purchasing life insurance
                                                                                                                                                        • Estate planning, tax management and buying a property are strong positive drivers to purchase term life insurance
                                                                                                                                                          • Figure 20: Key drivers of ownership of life insurance, August 2014
                                                                                                                                                        • Universal and Whole life insurance policies more likely to be purchased directly (non-employer purchase) by consumers
                                                                                                                                                          • Figure 21: Methods for purchasing life insurance policies, June 2014
                                                                                                                                                      • The Consumer – Choice of Provider of Life Insurance

                                                                                                                                                        • Key points
                                                                                                                                                          • Manulife and Sun Life dominate the life insurance market
                                                                                                                                                            • Figure 22: Choice of provider of life insurance, June 2014
                                                                                                                                                          • Regionality brings out some discrepancies
                                                                                                                                                            • Manulife is the clear market leader among high-income Canadians
                                                                                                                                                              • Figure 23: Top five providers of life insurance, by household income, June 2014
                                                                                                                                                            • Most life insurance owners have one provider
                                                                                                                                                              • Figure 24: Repertoire of choice of provider of life insurance, June 2014
                                                                                                                                                          • The Consumer – Purchase Triggers for Life Insurance

                                                                                                                                                            • Key points
                                                                                                                                                              • A lifestage change is the most common purchase trigger
                                                                                                                                                                • Figure 25: Triggers for purchasing life insurance, June 2014
                                                                                                                                                              • Estate planning is a significant purchase trigger for older Canadians
                                                                                                                                                                • Figure 26: Tax and estate planning as triggers for purchasing life insurance, by age, June 2014
                                                                                                                                                            • The Consumer – Factors Considered When Buying Life Insurance

                                                                                                                                                              • Key points
                                                                                                                                                                • Low premiums and a trusted company are the most important factors
                                                                                                                                                                  • Figure 27: Factors considered when buying life insurance, June 2014
                                                                                                                                                                • Significant gender differences emerge for several factors
                                                                                                                                                                  • Figure 28: Factors considered when buying life insurance, by gender, June 2014
                                                                                                                                                              • The Consumer – Attitudes towards Life Insurance

                                                                                                                                                                • Key points
                                                                                                                                                                  • Summary of attitudes towards life insurance
                                                                                                                                                                    • Figure 29: Attitudes towards life insurance, June 2014
                                                                                                                                                                  • Trust levels are an issue for life insurance companies
                                                                                                                                                                    • Figure 30: Attitudes regarding trust and fairness of life insurance companies, June 2014
                                                                                                                                                                  • A third of Canadians feel that life insurance is less relevant for single people
                                                                                                                                                                    • Figure 31: Attitudes regarding the relevance and importance of life insurance, June 2014
                                                                                                                                                                  • More than a third of Canadians prefer to invest in a savings vehicle rather than buy life insurance
                                                                                                                                                                    • Figure 32: Attitudes regarding affordability and premiums paid, June 2014
                                                                                                                                                                  • More than one in four Canadians feel uneasy about the application process
                                                                                                                                                                    • Figure 33: Attitudes towards the application process and understanding of life insurance products, June 2014
                                                                                                                                                                • The Consumer – Life Insurance and Chinese Canadians

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Higher rate of Universal life insurance ownership among Chinese Canadians
                                                                                                                                                                      • Figure 34: Ownership of life insurance: Chinese Canadians against Whites/Caucasians, June 2014
                                                                                                                                                                    • Chinese Canadians more likely to choose well-known brands
                                                                                                                                                                      • Figure 35: Choice of life insurance provider: Chinese Canadians against Whites/Caucasians, June 2014
                                                                                                                                                                    • Buying a property and tax management are relatively stronger purchase triggers for Chinese Canadians
                                                                                                                                                                      • Figure 36: Triggers for purchasing life insurance: Chinese Canadians against Whites/Caucasians, June 2014
                                                                                                                                                                    • Chinese Canadians much more likely to believe that life insurance is important for those with children
                                                                                                                                                                      • Figure 37: Attitudes towards life insurance: Chinese Canadians against Whites/Caucasians, June 2014
                                                                                                                                                                  • The Consumer – Target Groups

                                                                                                                                                                      • Three target groups
                                                                                                                                                                        • Figure 38: Target groups for life insurance, June 2014
                                                                                                                                                                      • Sceptics (19%)
                                                                                                                                                                        • Cautious (24%)
                                                                                                                                                                          • Value perceivers (57%)
                                                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                                                              • Figure 39: Best- and worst-case forecasts for the Canada life insurance market, by value, 2014-19
                                                                                                                                                                          • Appendix – The Consumer – Ownership of Life Insurance

                                                                                                                                                                              • Figure 40: Ownership of life insurance policies, June 2014
                                                                                                                                                                              • Figure 41: Ownership of life insurance policies, by demographics, June 2014
                                                                                                                                                                              • Figure 42: Ownership of life insurance policies, by types of retirement accounts, June 2014
                                                                                                                                                                              • Figure 43: Ownership of life insurance policies, by value of retirement assets, June 2014
                                                                                                                                                                              • Figure 44: Methods for purchasing life insurance policies, June 2014
                                                                                                                                                                              • Figure 45: Methods for purchasing term life insurance, by demographics, June 2014
                                                                                                                                                                              • Figure 46: Methods for purchasing whole/permanent life insurance, by demographics, June 2014
                                                                                                                                                                              • Figure 47: Methods for purchasing life insurance – I have life insurance but not sure what type it is, by demographics, June 2014
                                                                                                                                                                            • CHAID analysis
                                                                                                                                                                              • Figure 48: Ownership of term life insurance policies – CHAID, June 2014
                                                                                                                                                                            • Key driver analysis
                                                                                                                                                                                • Figure 49: Ownership of term life insurance – key driver output, August 2014
                                                                                                                                                                                • Figure 50: Ownership of whole life/permanent life insurance – key driver output, August 2014
                                                                                                                                                                                • Figure 51: Ownership of universal life insurance – key driver output, August 2014
                                                                                                                                                                            • Appendix – The Consumer – Choice of Provider of Life Insurance

                                                                                                                                                                                • Figure 52: Choice of provider of life insurance, June 2014
                                                                                                                                                                                • Figure 53: Choice of provider of life insurance, by demographics, June 2014
                                                                                                                                                                                • Figure 54: Repertoire of choice of provider of life insurance, June 2014
                                                                                                                                                                                • Figure 55: Repertoire of choice of provider of life insurance, by demographics, June 2014
                                                                                                                                                                            • Appendix – The Consumer – Purchase Triggers for Life Insurance

                                                                                                                                                                                • Figure 56: Triggers for purchasing life insurance, June 2014
                                                                                                                                                                                • Figure 57: Main triggers for purchasing life insurance, by demographics, June 2014
                                                                                                                                                                                • Figure 58: Other triggers for purchasing life insurance, by demographics, June 2014
                                                                                                                                                                            • Appendix – The Consumer – Factors Considered when Buying Life Insurance

                                                                                                                                                                                • Figure 59: Factors considered when buying life insurance, June 2014
                                                                                                                                                                                • Figure 60: Main factors considered when buying life insurance, by demographics, June 2014
                                                                                                                                                                                • Figure 61: Other factors considered when buying life insurance, by demographics, June 2014
                                                                                                                                                                            • Appendix – The Consumer – Attitudes towards Life Insurance

                                                                                                                                                                                • Figure 62: Attitudes towards life insurance, June 2014
                                                                                                                                                                                • Figure 63: Agreement with the statements ‘I think it is important for everyone to have life insurance’ and ‘I do not trust insurance companies to make paying out a policy easy for beneficiaries’, by demographics, June 2014
                                                                                                                                                                                • Figure 64: Agreement with the statements ‘I do not understand/know enough about life insurance products’ and ‘It's better to put money away (eg in savings accounts, RRSPs, etc.) than to pay life insurance premiums’, by demographics, June 2014
                                                                                                                                                                                • Figure 65: Agreement with the statements ‘Life insurance is less important for single people’ and ‘I find it difficult to afford the life insurance coverage I need’, by demographics, June 2014
                                                                                                                                                                                • Figure 66: Agreement with the statements ‘I think that most insurance companies treat their customers fairly’ and ‘It is important to have life insurance only if someone has children’, by demographics, June 2014
                                                                                                                                                                                • Figure 67: Agreement with the statements ‘I think insurance companies are as trustworthy as banks’ and ‘I feel uncomfortable and/or apprehensive about the application process’, by demographics, June 2014
                                                                                                                                                                                • Figure 68: Agreement with the statements ‘I would trust an insurance agent/broker more than an insurance company’ and ‘I think that paying for life insurance is a waste of money’, by demographics, June 2014
                                                                                                                                                                            • Appendix – The Consumer – Life Insurance and Chinese Canadians

                                                                                                                                                                                • Figure 69: Selected demographics by total population against Chinese Canadians, June 2014
                                                                                                                                                                            • Appendix – The Consumer – Target Groups

                                                                                                                                                                                • Figure 70: Target groups, June 2014
                                                                                                                                                                                • Figure 71: Target groups, by demographics, June 2014
                                                                                                                                                                                • Figure 72: Ownership of life insurance policies, by target groups, June 2014
                                                                                                                                                                                • Figure 73: Purchase triggers for life insurance, by target groups, June 2014
                                                                                                                                                                                • Figure 74: Choice factors when buying life insurance, by target groups, June 2014
                                                                                                                                                                                • Figure 75: Attitudes towards life insurance, by target groups, June 2014

                                                                                                                                                                            Companies Covered

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

                                                                                                                                                                            Life Insurance - Canada - September 2014

                                                                                                                                                                            US $3,995.00 (Excl.Tax)