Universal life growth outpaces whole life growth

Responsible for the report LIMRA on individual life insurance in Canada, Matthew Rubino reveals that its sales in terms of premiums are up 25% in 2021 compared to 2020. According to data from LIMRA, life insurance premiums reached $1.8 billion (B$) in 2021.

Rubino points out that only 1 of 17 insurers participating in LIMRA’s survey saw a decline in individual life insurance sales in terms of premiums in 2021, compared to 2020.

He adds that premiums increased by 17% in the fourth quarter of 2021, compared to the fourth quarter of 2020. Premiums for the fourth quarter of 2021 were $512 million, making it the quarter who totaled the most in 2021.

Universal life catches up with whole life

In terms of growth, universal life insurance premiums outpaced whole life insurance premiums in the fourth quarter of 2021, compared to the corresponding period of 2020. Such a situation had not occurred since the second quarter of 2015, reveals an analysis of past LIMRA reports.

Sales results for whole life, however, outperformed those for universal life insurance for the whole of 2021, compared to 2020. For their part, sales of term life insurance were mixed.

Whole life premium sales growth slowed in the fourth quarter of 2021, to 21% from the fourth quarter of 2020. Whole life sales growth had reached 34% in the third quarter of 2021 , compared to the third quarter of 2020.

According to Matthew Rubino, fewer insurers have experienced growth in whole life. He reported that 12 of 17 participants in his survey reported seeing such growth, up from 14 of 17 in the third quarter of 2021.

Whole life dominates premiums

Whole life insurance remains dominant, however, with total premiums of $1,149 billion in 2021. In comparison, sales of term life insurance represented total premiums of $391.3 million and those of universal life $257. $7 million, still in 2021.

The total number of individual life insurance policies sold in Canada in 2021 reached 691,689, according to LIMRA. Term insurance led the way with 393,345 policies, followed by whole life with 187,612 policies, and universal life with 110,732 policies.

National accounts on fire

The year 2021 will have been one of strong growth for the network of distributors affiliated with securities brokers (national accounts). This channel outperformed the general agent channel in terms of annualized bonuses, compared to 2020. At the other end of the spectrum, the exclusive agent channel (career channel) fares poorly in comparison.

The distribution channel that includes independent advisors, general agents and national accounts saw its sales in terms of premiums grow by 32% in 2021, compared to 2020. Based on the same comparison period, the channel that includes agents exclusive products and the multi-channel approach achieved growth of 3%.

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