After a strong upswing in recent quarters, universal life insurance was outshone by whole life insurance, whose sales were buoyed by the popularity of participating products.

The LIMRA report on life insurance results in Canada in second quarter 2016 shows a 9% rise in annualized new premium sales compared with the second quarter of 2015. The number of policies sold slipped 2% during the period.

Sales in Q2 2016, again in terms of new annualized premiums, totalled $380.4 million. The number of policies sold during the period reached 187,102 and the face amount was $66.5 billion. Universal life (UL) insurance saw the strongest growth in average premium per policy and average face amount per policy.

Results also point to a zeal for whole life (WL), which continues to be a growth engine, thanks to participating products. “WL growth was reported by eleven of nineteen WL sellers through the second quarter,” explains Matthew Rubino, associate analyst at LIMRA.

Strong first half

This dynamic quarter powered the industry to a strong first half of the year, with premium growth of 8% and policies up 2% compared with Q1 2015. “Growth was present across all three product lines. Half of carriers report overall premium growth for the first half of the year,” Rubino points out.

Whole life, the top seller, propelled premiums by 13% and policies by 7% in the first half of the year, compared with the same six-month period last year.

Universal life insurance staged a fine comeback since the price hikes that had repelled many potential customers in the early 2010s. This is the seventh consecutive quarter of growth in annual premiums. However, the advances fell short of those of whole life in the first half of 2016: premiums rose by 6% YTD compared with the same quarter in 2015. The number of universal life policies sold dipped by 1% during this comparison period.

Although more modest, the premium sales for term gained 2% in the first half of 2016 compared with the same period of 2015. The number of term policies edged 1% higher during this comparison period.

Career and independents

Sales of affiliated (career) agents dominated those of MGAs in terms of new annualized premiums. MGAs delivered sales growth of 11% in the first six months of 2016 compared with the same period of 2015.

Overall, the independent network generated an 11% increase in new premium sales in the first half of 2016 compared with the same period of 2015. MGAs fell just short of the affiliated agents’ mark, with sales up 10% during this comparison period. Independent advisors not attached to a managing general agent saw their results slide 4% in the same period. Sales of national accounts of securities brokers, also considered part of the independent distribution network, rose by 6% YTD versus the first half of 2015.

Whole life insurance was once again the star product for both affiliated agents and the independent network. “New premium sales for WL were higher for the quarter and the first half of 2016 for both affiliated and independent agents,” Rubino explains.

For the two periods measured, independents saw higher growth in UL insurance premiums, he adds. In contrast, career agents sustained a slight decline in premiums for both the first quarter and first half, compared with the same periods in 2015.

After slumping in 2013, new annualized critical illness premiums are maintaining the growth trend that began in 2014.

Sales of critical illness insurance premiums climbed 9% in the first half of 2016, compared with the same period in 2015, says the latest LIMRA report on CI insurance sales results in Canada. During this period, the product’s sales expanded 10% in terms of number of policies.

Regarding premiums, “Nine of fifteen carriers are reporting sales increases over YTD 2015,” Matthew Rubino, associate analyst at LIMRA points out. He adds that 11 of the 15 insurers saw growth in the policy count during this period. 

New annualized premiums sold in Canada totalled $61.4 million, and 58,515 critical illness policies were sold in the first half of 2016.

The permanent product racked up the highest premium sales. Premiums advanced 11% YTD 2016, compared with the same period of 2015.

The strongest growth in the number of policies sold was seen in limited period level products. Between the first half of 2015 and 2016, they reached 12%. In Q2 2016, this product captured the largest portion of premiums sold, at 48%. The renewable product racked up the highest policy count in Q2, at 44% of the total.