In its December 2024 issue, Insurance Journal reported that Canadian life insurers increased their revenues by 8.3 per cent in 2023 compared to 2022, reaching $88.3 billion.
Manulife leads the market with a 27.1 per cent revenue share, followed by Sun Life (24.2 per cent), Canada Life (22.9 per cent), and iA Financial Group (6.1 per cent).
"The four largest Canadian life insurers are expected to finish 2024 on a strong note," Morningstar DBRS stated in a bulletin released on December 13.
According to the rating agency, the Big 4 – the largest Canadian life insurers –benefited from robust equity markets in 2024. They also capitalized on sustained demand for financial services across North America and Asia. “Going forward, we expect these favourable conditions to continue in our base-case scenario,” the agency noted.
Aging and the rising middle class
Morningstar DBRS identified two global trends driving growth for Canadian insurers: demographic aging worldwide and the expanding middle class in Asia. The agency suggested these trends could help fill funding gaps in public pension and healthcare systems.
Its bulletin predicted that Sun Life would continue expanding its U.S. health insurance operations, while Great-West Lifeco (Canada Life’s parent company) would focus on pension plan administration in the same region. Manulife is expected to further boost its revenues in Asia. Meanwhile, iA Financial Group may explore acquisitions, particularly in the U.S., thanks to its solid financial results and a lower debt ratio than its competitors.
Insurers are directly offering high-net-worth individuals traditional insurance products with banking services – McKinsey & Company
In its Global Insurance Report 2025: Growth and Relevance in Life and Beyond, McKinsey & Company suggested that insurers could also thrive in Europe. The consulting firm highlighted how European markets have successfully integrated insurance and banking services.
“In Europe, life products have long been integrated into wealth-focused distribution channels,” McKinsey’s report stated. It added that by integrating banking capabilities, they can offer personalized wealth management, investment opportunities, and bespoke financial solutions that cater to the complex needs of clients.
Geopolitical risks…
Morningstar DBRS warned, however, that the elevated valuations of U.S. equities and ongoing geopolitical tensions would remain key downside risks in 2025.
Manulife and Sun Life could be negatively affected by the deterioration of trade relationships between China and the U.S. – Morningstar DBRS
The rating agency noted that Canadian life insurers operate globally, exposing them to significant markets in the U.S., Asia, and Europe. Manulife and Sun Life are particularly exposed to Asia, while Great-West Lifeco has a stronger presence in Europe.
“While there are no indications that tariffs or other barriers to international operations will be applied to financial institutions, Manulife and Sun Life operate through joint ventures in certain Asian markets, notably in mainland China, and could be negatively affected by the deterioration of trade relationships between China and the U.S.,” Morningstar DBRS explained.
Growing divergence between regions will likely be accentuated by the next US government’s policy direction – Swiss Re Institute
Swiss Re Institute’s sigma no. 5 2024 study echoed these concerns, observing that the distribution of risks is tilted to the downside, driven by geopolitics, the potential for disruptive policy changes, and financial market vulnerabilities.
“Growing divergence between regions will likely be accentuated by the next US government’s policy direction,” the report added.
… And regulatory risks
On the domestic front, regulatory risks will present additional headwinds in 2025, especially for the independent distribution network, which may face increased compliance requirements.
In June 2024, several Canadian insurance regulators attended the Canadian Association of Independent Life Brokerage Agencies (CAILBA) conference in Whistler, British Columbia, where they called for greater oversight of advisors by managing general agents (MGAs).
During a regulatory panel at the conference, representatives from the Alberta Insurance Council, the Insurance Councils of Saskatchewan, the Insurance Council of British Columbia, and New Brunswick’s Financial and Consumer Services Commission emphasized this need.
In Quebec, decisions by the Chambre de la sécurité financière (CSF) are frequently reported in Journal de l’assurance. Sister publication of Insurance Portal, Portail de l’assurance will continue monitoring developments related to the CSF’s disciplinary office.
Retention and recruitment issues at the Chambre, as well as the departure of syndic Claude Baril, made waves in early fall. Acting syndic Julie Dagenais has temporarily stepped into the role, but a permanent replacement has yet to be named. These challenges were highlighted in a previous inspection by Quebec’s insurance regulator, the Autorité des marchés financiers.
By Alain Thériault, with contributions from Alain Castonguay