After several quarters of declines, individual life insurance sales in Canada rebounded by 21% in Q3 2018 compared with the same quarter in 2017, the LIMRA quarterly report confirms.

The industry can finally stop comparing its results with the abnormally high sales of the last two quarters of 2016 and first quarter of 2017, which were fuelled by the firesale that preceded tax changes which took effect on Jan. 1, 2017.

Sales peaked

The sales peaked in Q4 2016 when individual life insurance sales totalled $753 million in new annualized premiums. This was more than double the sales results reported in Q4 2015. Of this total, $489 million flowed to whole life insurance and $168 million to universal life insurance – the two products hit hard by the new tax rules.

Whole life and universal life insurance set the pace for the solid growth seen in Q3 2018. Whole life was the prime engine, climbing 39% in Q3 2018, compared with the same period in 2017. During this period, universal life insurance sales rose by 13%. 

However, 2018 got off to a dismal start, and the results of January 1 to September 30, 2018 were negative despite the momentum of the third quarter. Individual life insurance sales slipped by 17% compared with the same period in 2017.

Whole life insurance sales declined by 22% during this comparison period, while universal life decreased by 17%. Term product sales dipped by 1% during the same comparison period. 

Independents have the advantage

The recent sales growth in individual life insurance premiums was led by the independent advisor and securities broker (national accounts) networks.

Sales in these networks soared by 51% and 46% in terms of premiums in Q3 2018 compared with the same quarter in 2017. Sales in the MGA network were up 21% by the end of this comparison period.

In contrast, the career networks experienced disappointing results: sales volume in terms of annualized premiums slipped 3% in Q3 2018 compared with the same quarter in 2017.

Regarding premiums, the independent network cornered 79% of sales in Q3 2018 versus 21% for the career network.

The volume of CI in force is heading for new heights. In Q3 2018, premiums in force reached $989.4 million, for 920,587 policies in force.