Despite the fact that prices for several permanent critical illness insurance products increased in 2012 due to pressure from low interest rates, new critical illness insurance premiums grew by 16% compared to 2011.
According to the latest survey conducted by industry research firm LIMRA, 2012 critical illness insurance (CI) sales in Canada came to $120.6 million, an increase of 16% over 2011. “All three products posted gains,” say researchers Karen Terry and Rob Kanehl. The limited period level product saw sales increase by 20% in 2012 compared to 2011. Permanent product sales grew by 17% during the same period while those of renewable term products went up by 5%.
As for the number of CI policies sold in Canada in 2012, it increased by 11% over the comparative period, to a total of 111,770. The number of permanent policies issued increased by 15% during the period, while the number of limited period policies rose by 10%, and the number of term policies grew by 9%.
“Renewable results in the fourth quarter were the highest they have been in the past two years,” noted the researchers.
However, sales of permanent products and limited period products have slowed since the third quarter of 2012. “This may continue as the effects of the pricing changes sink in,” reads the report.
The career sales channel accounted for 55% of new premiums, while the remaining share of the market was split between independent distributors. The career network saw its sales grow by 19% in 2012 while the independent channel experienced a 14% increase in sales during this period.
In total, the Canadian CI market consists of $643.1 million of in-force premiums and nearly 600,000 policies.