8 September 2017, 07:00
Photo : Freepik
The total income of group insurance have reached $ 40 billion (G$) in Canada in 2016, according to the Group Universe Report Group Fraser. Although modest, the revenue growth is largely due to the increase in the cost of the medication.
«This is a first «, revealed its president, Ken Fraser, to the place of total sales, during an exclusive interview granted to the Journal of the insurance.
According to the report of Mr. Fraser, the total revenue generated by the sector of group insurance in Canada in 2016 have risen by 4.7 % compared to 2015, when they had reached to 38.6 G$, for growth of 4.3 %, commented the president of the analysis firm. It is reported that the growth in 2016 is larger than the gross domestic product, real growth, without inflation, is set to 1.5 %.
Mr. Fraser points out that the drugs cost have been the driving force behind the growth of income of group insurance in Canada over the past two years. «The main driver of revenue growth of group insurance in Canada has been the guarantee of health insurance plans, including medications and other health care. The revenues of this guarantee have grown by 4.8 % in 2016. They had increased 5.5% in 2015 «.
It is observed that this increase has been fueled mainly by new drugs. «The higher figure in 2015, may be explained in part by the arrival of new treatments for hepatitis C at the end of 2014,» says Mr Fraser.
Alberta is suffering from the oil
According to the Group to Fraser, the growth of income of group insurance by province has been most marked in British Columbia. The growth is 7.9% in 2016 relative to 2015.
Group Fraser has recorded the lowest growth in Alberta, as Mr. Fraser puts it on the account of the fall in the price of oil, which slows down the economy of the province. «Alberta has had no growth in income from group insurance. It is related to the oil, so that prices fall and factories close, » he said.
It also notes that Ontario and Quebec have experienced a growth in revenues of group insurance slightly higher than the national average from 2015 to 2016. They are respectively of 5.4% and 5 %.
The concentration remains
No innovation or acquisition did not come to change the bore of the market share in group insurance canadian insurance companies. It is still concentrated in 2016.
«Sun Life financial has retained its position as the biggest provider of group insurance in Canada, followed by Manulife and Great-West Lifeco. This is the same order as in 2015. These three major providers have controlled 65 % of the market, or approximately the same direction in 2015 «, said Mr. Fraser.
Less concentrated in Quebec, the market, however, continues to align with the same five players that are dominant as in years past, he added. «In Quebec, Desjardins financial Security remains the provider number one, followed by SSQ financial Group and the three big players in canada. In total, these five suppliers control 75 % of the quebec market. «It is also a portrait similar to that of 2015, he said.
65 % of employees covered
For the next five years, Mr. Fraser expects a slow growth of income of group insurance that do not exceed not a lot the growth of the canadian economy. «The insurance market collective has been fairly stable compared to last year. To a large extent, this sector of activities is arrived at maturity. Other than very small groups, or new employers, most employers have a group insurance plan. «
Ken Fraser reported data from Statistics Canada, according to which about 65 % of employees benefit from a group insurance plan. Taking into account a waiting period for new employees, who may choose in some cases not to join the plan or to withdraw from, a, Group, Fraser estimated that 80% of employees work for an employer that offers a plan. «Some employees may not be covered, but the employer has a plan. «
Serious diseases featured
Fact discovered by Group Fraser in this low revenue growth in group insurance : employees adhere more to the group benefits critical illness insurance. «While the premiums of the warranty group insurance in Canada still account for less than 1 % of the total premiums of the group insurance plans, their annual growth has exceeded 10 %. The average growth rate of this guarantee has been of 14 %, » revealed Mr Fraser.
The premiums related to the collective guarantee for dental care grew by 3.6% in 2016 relative to 2015. According to Mr. Fraser, this growth is explained by the growth of the population, and the increase in dental expenses.
The growth of the warranties, life and disability plans has been less than 3 %, also reveals Mr. Fraser. He explains it by higher wages and employment growth.