How can we reverse the decline in life insurance sales in Canada that has been underway since 2010? There are some avenues to explore, but much remains to be done. 

This was one of the conclusions drawn by the 30 industry leaders who gathered at the invitation of Insurance Journal Publishing Group for a working session held on September 5, 2024, in Quebec City. 

Since the meeting, leaders have shared their insights with the Insurance Portal on a confidential basis, as they were not authorized to take a public position or wished to avoid organizational conflicts. 

According to participants, the exchanges were very revelatory. They found it beneficial to meet and discuss openly and transparently. The group included executives from insurers, as well as managing general agents (MGAs), agency representatives, advisors, and independent experts.

It was an unprecedented meeting, as some of the participants pointed out. And if the session attracted the interest of 30 influential leaders in the industry, one source noted, it’s because no one has a solution to the threats facing distribution, namely the decline in sales and the departure of advisors, four out of five of whom leave the profession before their fifth year. “Everyone is looking for answers, but nobody is finding them.” 

While potential solutions exist, said one leader, we must be cautious about engaging in magical thinking regarding their feasibility. 

To recover the approximately 100,000 policies lost by the industry between 2010 and 2023, a significant number of new advisors will need to be recruited. 

Assuming a typical advisor sells 30 policies per year, one participant suggested, we would need to recruit 3,500 advisors. And selling 30 policies annually is a modest goal, they added. 

Beyond the recruitment numbers – which are a challenge in themselves – there is an even bigger challenge, namely training them. 

Both challenges are daunting: where to find new advisors and how to train them? 

A leader from a training company pointed out that there is currently a lack of interest in training and coaching within the life insurance sector. Investment firms, they noted, are more inclined to cover part of the training costs when an advisor joins a program than insurance companies are. 

Roots of the weaknesses 

“When we look at the evolution of distribution in the industry, we see processes that have now become fundamental weaknesses in the advisor networks,” said some participants. 

“MGAs hardly provide training anymore, with a few rare exceptions, and only two insurers still do so through career networks. The rest simply do not.” 

“Advisors have told me they regret spending so much time building a life insurance portfolio that, in the end, has little value when sold,” reported one participant. 

Of course, there are exceptions: targeting niche clients such as doctors, wealthy individuals, and business owners. But the consumer market generates little revenue. In fact, a number of participants noted that many insurance companies have abandoned the family market, and MGAs and advisors have followed suit. 

“Where’s the money that insurers used to invest in training and career networks three decades ago?” some participants wondered. “It’s now in commissions. We should reconsider how we channel our funds: shouldn’t we reinvest in training to give ourselves a chance to retain advisors?” 

One participant argued that nothing is more valuable than coaching advisors so as to keep them in the network. 

Another expressed concern that the commission scales paid by insurers are detrimental to the health of small and mid-sized MGAs. “Commissions to MGAs already reach peaks of 180% to over 200%,” he said. “Moreover, some insurers now offer additional bonuses directly to advisors, on top of the commission to the MGA. A small firm finds it extremely difficult to maintain acceptable profit margins because it also needs to invest in compliance, technology, after-sales service, and more. All this is most unfortunate.” 

Another participant suggested that it’s time for industry leaders to come together and talk. 

Tongue in cheek, one participant noted that people already know they need to talk, but no one wants to make the first move. 

Serge Therrien  
President and Publisher  
The Insurance Journal Publishing Group