For individual critical illness insurance, it’s been crisis, what crisis? Since the economic downturn began, product sales have been chugging along. “Companies focused on CI products in the past few years and they received more push from the industry. This market is definitely growing,” Karen Terry, manager, product research at LIMRA told The Insurance and Investment Journal in an interview.
Annualized new premium sales rose by 6% in 2011 compared with 2010, to reach $103.8 million. The industry sold 7% more policies during this period. Insurers sold 100,775 individual CI policies in Canada in 2011, the LIMRA report notes.
In terms of policy sales in 2011 versus 2010, the renewable term CI product is losing steam (see table). Limited pay and permanent products are performing robustly.
Same scenario for premiums during this period, but limited and permanent products are growing at a less vigorous pace than the number of policies.
For now, the limited period product is capturing the lion’s share of total premiums (44%) and policies (42%) in 2011. Independent advisors reign supreme in sales, but captive agents boast faster growing individual CI business.
“Limited period product has fuelled career agent’s growth. Permanent product has supported growth [of the brokerage channel], as independents are more focused on the affluent market,” Ms.Terry explains.
Once an emerging market, today critical illness accounts for over $500 million in premiums and nearly 550,000 policies in force. The market still has strong potential because in force is growing steadily. Premiums in force climbed by 11% in 2011 compared with 2010. The number of policies rose by 10% during this period.
By comparison, premiums in force of disability insurance flirted with $1 billion, with more than 775,000 policies. This market is considered mature. Premiums in force edged up by 2% between 2010 and 2011 and policies in force inched ahead by 1%.