Critical illness insurance sales see weak growthpar The IJ Staff | November 08 2017 07:00AM
In the second quarter of 2017, critical illness insurance sales were up three per cent over the same quarter of 2016 with $33.8 million in premiums, according to LIMRA’s Canadian Critical Illness Sales and In Force – 2Q 2017 report. For the first half of the year, growth stagnated at one per cent, with premiums of $62.1 million compared with the same period one year earlier.
The number of policies were up 2 per cent during the first six months of 2017.
“Critical illness premiums are flat halfway through 2017, with policies rising slightly above 2016’s figures,” LIMRA survey author Matthew Rubino says.
Slightly less than half of insurers reported sales growth in CI insurance premiums and policies year to date 2017, Rubino says. “Limited Period Level products were the only source of premium growth in the first half of 2017,” he adds. Product sales climbed 5 per cent, in both Q2 2017 and the first half of 2017.
Annual premiums of the renewable product gained two per cent in the second quarter of 2017 but lost one per cent in the first half of 2017. Premiums of the permanent product dipped in both the second quarter and the first half, by one per cent and four per cent respectively.
The level product has been dominating sales in terms of premiums, capturing 49 per cent in the first half of the year, versus 30 per cent for the permanent product and 21 per cent for the term product.
Regarding number of policies sold, (renewable) term CI insurance was the top seller in the first half of 2017, with a 42 per cent share versus 40 per cent for the level product and 18 per cent for the permanent product.
In terms of new premiums, sales of the affiliated agent network slipped 5 per cent in the first half of 2017 compared with the same period in 2016.
By comparison, independent advisors saw a rise in new annual premiums of CI insurance of 5 per cent in this network.
LIMRA’s report suggests that the CI insurance market is reaching maturity. In force premiums have grown to $901.4 million since critical illness insurance debuted in the mid-1990s. Policies to date total 839,055.
Regarding sales, the market rebounded well after the price hikes to CI insurance products in 2013. Annual growth in 2015 and 2016 averaged 8.5 per cent.