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Individual life : 3rd decline in successive sales


Alain Thériault

May 4, 2018 07:00

Photo : Freepik

Sales of individual life insurance have declined for a third consecutive quarter, due to a return to normal after the frenzy of 2016. The whole of life has been particularly hard hit.

In terms of new annualized premium sales life insurance individual amounted to $ 1.514 billion ($Billion) in 2017, compared to 1,852 G$ in 2016. This is a decrease of 18 per cent, reveals the report from LIMRA on sales of 2017 and the fourth quarter, including the Journal of insurance has received a copy.

Sales for the fourth quarter of 2017 to have reached $ 351 million ($M), compared with 753 Million during the fourth quarter of 2016, down from 53 %. This is the third consecutive quarter of decline for the sales of individual life insurance.

«The canadian market of individual life insurance has experienced difficulties at the end of 2017. In comparison, the new tax policies had sowed the frenzy at the end of 2016, » says the report’s author, Matthew Rubino.

The new provisions of the federal law on the tax hit hard the whole life insurance products and universal life insurance, which usually rely for the bulk of sales in terms of annualized premium. The announcement of a reduction of their tax benefit from 1 January 2017 has resulted in a sale of fire which peaked in the fourth quarter of 2016. It continued to a lesser extent in the first quarter of 2017, due to a grace period granted to insurers to issue policies related to the files submitted later by advisors.

Decline of 61 % for the whole of life…

The whole of life has produced sales of$ 489 Million in the fourth quarter of 2016, compared to only$ 190 Million in the fourth quarter of 2017, representing a decline of 61 %. Universal life insurance has experienced a similar fate, with only$ 68 Million of sales in the fourth quarter of 2017, compared to$ 168 Million in the fourth quarter of 2016, a decline of 59 %. The products have not been affected by the new tax rules. Their sales have grown from$ 96 Million to$ 93 Million between the fourth quarters of 2016 and 2017, a decline of 4 %.

By 2017, sales in terms of annualized premium have increased by 2 % for the term insurance compared to 2016. They were down 30 % for the universal life insurance and 20% for the whole life insurance.

… which retains the lion’s share

Despite the decline in sales in 2017 in respect of 2016, the whole life insurance continues to claim the lion’s share in terms of volume. Thus, sales of whole life insurance have ended in 2017 with a sales volume of 859,3 M$, that is, 57 % of the total volume of sales of individual life insurance. The sales volume of term life insurance amounted to $ 369 M$ in 2017, representing 24% of the total. Sales of universal life insurance come back of the pack. To 286,4 Million, respectively, of its premiums account for a share of 19 % of total sales of individual life insurance carried out in 2017.

Term insurance has claimed the largest number of policies sold (2017), 415 011 for a share of 58 % of the total volume. The whole life insurance ranks second with 195 114 fonts, a share of 27 %. The universal life insurance, farm walking, with 108 306 fonts, or 15 % of all policies sold in 2017.

The network of exclusive agents, has suffered the most after the frenzy of 2016. Its sales in terms of premiums were down 27 % in 2017, while the decline is limited to 15 % for the independent advisors network.

The sales network exclusive retreat for all products. Between 2016 and 2017, its sales were down 44 % in universal life insurance, 31 % in whole life insurance and 5 % in term life insurance.

Sales in the independent network declined from 27% in universal life and 15% in a whole life between 2016 and 2017. This network, however, has achieved a growth of 5 % in temporary life during this period.

General agents limited case

The different channels of the network independent have experienced mixed fortunes in 2017. The national accounts have seen their sales in terms of premiums back more than the others in relation to 2016, or 32 %. Among independent advisors, sales have declined by 19 % between 2016 and 2017. The channel of the general agents has limited its decline to 8 %.

These three channels by the independent network have been more struck in the last quarter of 2017, compared to the same quarter of 2016. The sales of the national accounts in terms of premiums dropped to 68 %, and that of independent consultants 60 % and that of the general agents of 45 %. The network of exclusive agents decreased 59 % during this comparison period.

The independent network keeps stronghold on the bulk of annual sales. It has 72 % of the total premiums of 2017.

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