Critical insurance illness sales in Canada were down 2% in terms of premiums in the first half year compared with the same period in 2013, following a strong second quarter. The industry regained its footing after premiums plunged 9% in Q1 2014 compared with the same quarter in 2013.Critical illness insurance premiums were dragged by a disastrous quarter for permanent and limited period level products, according to the latest LIMRA survey on CI insurance sales in Canada in the first quarter.
“There is a glimmer of a potential turnaround as, after five straight quarters of declines, new permanent premiums posted a four percent increase in the second quarter. Limited period level (LPL) premiums increased in the second quarter as well,” LIMRA research director Rob Kanehl points out.
While premiums fell 2% in the first six months of 2014, the number of critical illness policies rose by 2% during this period, compared with the same period in 2013.
Renewable term sales were buoyed by price hikes that affected guaranteed products, Kanehl says. Clients shied away from permanent and level policies in favour of term policies, whose new premiums climbed 11% in the first half of 2014. The number of policies rose by 8%, versus the first six months of 2013.
Level product premiums hardly moved during this comparison period, while the number of policies edged up 1%. Permanent products were hardest hit: premiums slumped by 9% and the number of policies dropped 11% during the comparison period. “Positive results in the second quarter are a good sign that this product may stabilize,” he comments.
In the first half year, renewable critical illness insurance led sales of policies at 42% of the market, versus 41% for LPL and 17% for permanent. Regarding premiums, LPL saw the strongest sales during this period, at 47% of the market, compared with 32% for permanent and 21% for renewable term.
Today the market has in-force of $728.4 million in premiums and 663,153 policies. These two indicators are 8% higher in the first half of 2014 than in the same period in 2013.