Critical illness insurance sales continue to thrive. Premiums grew by 8 per cent in 2017 compared with 2016, and by 13 per cent in the fourth quarter of 2017 versus Q4 2016, according to LIMRA's 2017 Annual Canadian Critical Illness Sales and In Force report.

Critical illness insurance sales in terms of premiums totalled $142.2 million in 2017. After an anemic first half of the year, sales gained momentum in the second half of 2017. 

The limited level period CI insurance product amassed the most volume, with premiums of $68.4 million, representing 48 per cent of total sales in 2017. The permanent critical illness product drew $48.3 million in premiums, equal to 34 per cent of total sales. Renewable CI garnered $25.5 million in premiums, for an 18 per cent share of total sales in 2017.

The number of CI policies sold crept ahead by 3 per cent in 2017 compared with 2016, to reach 128,991. Of this total, 52, 490 are renewable CI policies, amounting to a 41 per cent share of sales. Limited period level boasted 51,179 policies, for a 40 per cent share. The permanent product accounted for 25,322 policies, representing a 19 per cent share.

Sales near $1-billion mark

From $86 million of premiums in force 15 years ago, this market was approaching $1 billion in late 2017: cumulative premiums stood at $945 million on Dec. 31, 2017 and 874,554 policies were in force on that date.

Limited period level retained most of the in force in late 2017, with premiums of $430.2 million and 395,749 policies. Premiums in force of the permanent product were $321.5 million and 182,849 policies were in force. Compared with the permanent product, renewable CI had fewer premiums in force but more policies. Renewable premiums rang in at $193 million, for a total of 295,956 policies.

The renewable CI product is losing popularity. In terms of premiums, it is the only one of three products whose sales slumped between 2016 and 2017.

“Premium increased for both limited period level and permanent products compared to 2016, but renewable products faltered, ending the year down seven percentage points,” says Matthew Rubino, author of the LIMRA report. For the fourth quarter alone, sales of this renewable product were down 20 per cent.

The sales decline for the renewable product apparently stems from the affiliated agent distribution network, where sales of this product plummeted by 20 per cent in 2017 compared with 2016. In the independent network, sales stagnated during this period.

The permanent critical illness product fared particularly well, as sales in terms of premiums advanced by 13 per cent in 2017 compared with 2016. For Q4 2017, sales grew by 33 per cent compared with the same quarter in 2016.

The independent distribution network saw solid results with the permanent product, whose sales in terms of premiums climbed 20 per cent in Q4 2017 versus the same quarter in 2016. By comparison, the affiliated network reported a four per cent rise in permanent product sales during this period. 

Limited period level CI insurance also prospered. In terms of premiums, sales rose by 11 per cent in 2017 versus 2016. For Q4 2017, growth in sales of this product reached 14 per cent compared with the fourth quarter of 2016.

The affiliated network boasted the strongest success with this product, whose sales expanded by 16 per cent from 2016 to 2017. The independent network boosted sales of this product by 7 per cent during the same period. 

Independents sell more

Between 2016 and 2017, the independent network saw sales growth of nine per cent in terms of premiums. By comparison, the affiliated agent network achieved five per cent sales growth during this period. 

For both networks combined, the CI insurance amount purchased was $76,230 in 2017. Insured procured more protection within the permanent product, with average coverage of $99,413. Average coverage for the limited period level product was $78,116, versus $63,208 for the renewable product.