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The Insurance Purchase Decision - Canada - April 2018

“As insurance distribution channels evolve, direct digital sales are bound to increase, resulting in more pressure on brokers to provide value-added advice and claims help.”

– Sanjay Sharma, Senior Financial Services Analyst

This report examines the following issues:

A number of emerging technologies and processes are having a massive impact on insurers: the refinement and availability of advanced analytics, artificial intelligence and machine learning, drones, telematics, usage-based insurance, autonomous driver-assisted vehicles reducing risk, etc. Along with these advancements, insurance companies are leveraging multiple distribution channels to suit customer preferences including traditional channels such as brokers and agents, through affinity programs with member associations, retail outlets, travel agencies, through employers for group sales, and direct digital sales.

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Auto, home and life insurance have the highest ownership rates
                • Figure 1: Insurance ownership, December 2017
              • Popularity of distribution channel is product dependent
                • Younger consumers and men are more likely to obtain quotes online
                  • Figure 2: Channel through which a quote was obtained, by age, December 2017
                • Actual digital purchase levels are low
                  • Figure 3: Purchase channels related to digital insurance, December 2017
                • Younger customers and men more open to using driving tracking devices
                  • Figure 4: Agreement with statements related to insurance purchase, December 2017
                • The opportunities
                  • Increasing life insurance ownership rates
                    • Non-Chinese Asian Canadians have a lower ownership of some products
                      • Figure 5: Insurance ownership (select), Asian Canadians vs overall, December 2017
                    • Bundling discounts are attractive, particularly to older customers
                      • Figure 6: Agreement with statements related to insurance purchase, December 2017
                    • Around four in ten over-55s prefer to buy through brokers
                      • What it means
                      • The Market – What You Need to Know

                        • Blockchain and insurance
                          • Impact of the sharing economy on insurance
                            • Auto insurance and driverless cars
                              • Smart homes and insurance
                                • The evolving world of telematics
                                • Market Factors

                                  • Canada’s population is aging
                                    • Figure 7: Population aged 0-14 and 65+, as of July 1, 1995-2035*
                                  • Opportunities and challenges come with an aging population
                                    • Figure 8: Canadian population, by age, 2016
                                  • Increased diversity means greater considerations for insurance companies
                                    • FinTech and life insurance (InsurTech)
                                    • Market Perspective

                                      • Blockchain and insurance
                                        • Impact of the sharing economy on insurance
                                        • What’s New?

                                          • Here's how insurers can prepare for driverless cars
                                            • The evolving world of telematics
                                              • Smart homes and insurance
                                              • Key Players – What You Need to Know

                                                • MasterCard taps Toronto start-up's technology to accelerate insurance-claim payments
                                                  • OneEleven launches InsurTech growth program with Aviva Canada
                                                    • Sun Life to add medical-marijuana coverage to group benefits plans
                                                      • AXA using Ethereum’s blockchain for a new flight insurance product
                                                        • AIG, IBM and Standard Chartered Bank pilot first multinational insurance policy powered by blockchain
                                                          • Aviva partners with Chicago-based virtual claims company
                                                            • Aha insurance launches
                                                            • Innovations & Industry Developments

                                                              • MasterCard taps Toronto start-up's technology to accelerate insurance-claim payments
                                                                • Two insurers collaborate with Amazon to bring the Alexa experience
                                                                  • Travel insurer for trip-disruption app
                                                                    • Canadian robo-advisor launches digital life insurance service
                                                                      • BMO Insurance rolls out first tech solution for its MGA channel
                                                                        • OneEleven launches InsurTech growth program with Aviva Canada
                                                                          • Sun Life to add medical-marijuana coverage to group benefits plans
                                                                            • AXA using Ethereum’s blockchain for a new flight insurance product
                                                                              • AIG, IBM and Standard Chartered Bank pilot first multinational insurance policy powered by blockchain
                                                                                • Aviva partners with Chicago-based virtual claims company
                                                                                  • Aviva Canada creates Google Home app
                                                                                    • Sun Life to offer virtual healthcare services
                                                                                      • Allstate Canada reveals new water protection solution
                                                                                      • Marketing Campaigns

                                                                                        • Welcome to Aha insurance
                                                                                          • Figure 9: Aha insurance – What we are all about, September 2017
                                                                                        • Sun Life’s lifestyle campaign
                                                                                          • Figure 10: Sun Life’s “Life’s brighter under the sun” campaign, October 2017
                                                                                        • Belairdirect hosts an ‘Insure-vention’
                                                                                          • CAA renews push around travel insurance
                                                                                            • Figure 11: CAA travel’s “Making Bad Days Good. And Good Days Better”, January 2018
                                                                                          • Selected campaigns from Mintel Comperemedia
                                                                                            • Desjardins bundling discount offer
                                                                                              • Figure 12: Desjardins insurance bundling savings direct mail, April 2017
                                                                                            • Life Insurance for healthy people
                                                                                              • Figure 13: Health IQ, online advertisement, February 2018
                                                                                          • The Consumer – What You Need to Know

                                                                                            • Auto, home and life insurance have the highest ownership rates
                                                                                              • Agents/brokers most popular channel for life insurance
                                                                                                • One in five have obtained a quote through a company website
                                                                                                  • Limited interest in buying from robo-insurance agents
                                                                                                    • Actual digital purchase levels are low
                                                                                                      • Bank insurance subsidiaries appeal to Asian Canadians and younger consumers
                                                                                                        • Younger customers and men more open to using driving tracking devices
                                                                                                        • Insurance Ownership

                                                                                                          • Auto, home and life insurance have the highest ownership rates
                                                                                                            • Figure 14: Insurance ownership, December 2017
                                                                                                          • Around nine in ten over-45s have auto insurance
                                                                                                            • Figure 15: Insurance ownership (select), by age, December 2017
                                                                                                          • Home insurance is very age and income dependent
                                                                                                            • Quebecers have a higher ownership of life and renters insurance
                                                                                                              • Figure 16: Insurance ownership, Quebec vs overall, December 2017
                                                                                                            • Increasing life insurance ownership rates
                                                                                                              • Around half of over-65s have health insurance
                                                                                                                • Selling travel insurance to younger consumers is an opportunity
                                                                                                                  • Mortgage insurance peaks among 35-44s and Atlantic Canadians
                                                                                                                    • Increasing pet insurance ownership
                                                                                                                      • Non-Chinese Asian Canadians have a lower ownership of some products
                                                                                                                        • Figure 17: Insurance ownership (select), Asian Canadians vs overall, December 2017
                                                                                                                    • Insurance Distribution Channels

                                                                                                                      • Popularity of distribution channel is product dependent
                                                                                                                        • Agents/brokers most popular channel for life insurance
                                                                                                                          • Figure 18: Channels used for life insurance purchase, December 2017
                                                                                                                        • Group sales through employers is the dominant channel for health insurance
                                                                                                                          • Figure 19: Channels used for health insurance purchase, December 2017
                                                                                                                        • Quebecers more likely to buy auto and home insurance directly
                                                                                                                          • Figure 20: Channels used for auto and home/condo insurance purchase, December 2017
                                                                                                                        • Travel insurance sales is more multi-channel
                                                                                                                          • Figure 21: Channels used for travel insurance purchase, December 2017
                                                                                                                      • Digital Research & Purchase

                                                                                                                        • One in five have obtained a quote through a company website
                                                                                                                          • Figure 22: Channel through which a quote was obtained, December 2017
                                                                                                                        • Almost half have obtained a quote online
                                                                                                                          • Figure 23: TURF analysis – Digital research and purchase, January 2018
                                                                                                                        • TURF analysis for digital research
                                                                                                                          • Younger consumers and men are more likely to obtain quotes online
                                                                                                                            • Figure 24: Channel through which a quote was obtained, by age, December 2017
                                                                                                                          • Limited interest in buying from robo-insurance agents
                                                                                                                            • Figure 25: Agreement with statements related to digital insurance purchase, December 2017
                                                                                                                          • Actual digital purchase levels are low
                                                                                                                            • Figure 26: Purchase channels related to digital insurance, December 2017
                                                                                                                          • Men show relatively more interest in purchasing insurance using a mobile app
                                                                                                                          • Purchase Considerations

                                                                                                                            • Older consumers have more favourable views on brokers
                                                                                                                              • Figure 27: Agreement with statements related to insurance purchase, December 2017
                                                                                                                            • Around one in five customers find switching companies too much work
                                                                                                                              • Younger customers, higher income earners and men more open to using driving tracking devices
                                                                                                                                • Bank insurance subsidiaries appeal to younger consumers
                                                                                                                                  • Figure 28: Agreement with statement related to bank insurance subsidiaries, Asian Canadians vs overall, December 2017
                                                                                                                              • Purchase Attitudes

                                                                                                                                • Bundling discounts are attractive, particularly to older customers
                                                                                                                                  • Figure 29: Agreement with statements related to insurance purchase, December 2017
                                                                                                                                • Older consumers less interested and Quebecers more interested in shopping around
                                                                                                                                  • Figure 30: Importance of shopping around for quotes, Quebec vs overall, December 2017
                                                                                                                                • Men are keener on using websites for price quotes
                                                                                                                                  • Around four in ten over-55s prefer to buy through brokers
                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                    • Data sources
                                                                                                                                      • Consumer survey data
                                                                                                                                        • Abbreviations and terms

                                                                                                                                        The Insurance Purchase Decision - Canada - April 2018

                                                                                                                                        US $4,395.00 (Excl.Tax)