The “big three” Canadian life insurers kept a tight grip on the majority of business in 2011 with a collective market share of more than 58%. Within the top three rankings, however, there was a notable change. Sun Life Financial jumped ahead of Manulife Financial for the first time since 2004.

According to data collected by MSA Research and compiled by The Insurance and Investment Journal, Sun Life’s Canadian market share of 17.68% surpassed Manulife’s 16.88% share, while the Great-West Life Group held a comfortable lead with 23.75% of the market.

In terms of premiums, Sun Life saw growth of 7.28% in 2011 over the previous year, whereas Manulife saw a decline of 2.75% and Great-West saw an increase of 0.89%.

Neck and neck, Industrial Alliance and Desjardins Financial Security ranked fourth and fifth respectively with 7.04% of market share. In terms of premiums, IA was slightly ahead of Desjardins.

In total, life insurers’ premiums totalled $48.2 billion in Canada for premium growth of 1.84% over 2010 (see table pages 34 & 35). Of this total, the top 10 life insurers accounted for $41.2 billion of the industry’s premiums (see table below).

Among the top 10 insurers, Standard Life’s premiums plummeted by -25.8%. The company announced in late 2011 that it had decided to stop selling individual life insurance products and focus on its group and retail investment businesses.

Meanwhile, SSQ Life moved up a rank to the sixth position due to a 35% increase in premiums. Its market share for 2011 stood at 3.6% up from 2.7% a year earlier. In 2011, SSQ acquired AXA Life Assurance.

Combination of strategies

Back in 2005, Manulife’s integration of Maritime Life enabled it to overtake Sun Life and gain second position in terms of market share. It maintained this position until 2011 when Sun Life took back the spot. In an interview with The Insurance and Investment Journal, Kevin Dougherty, president of Sun Life Canada says his company’s market share improvement is due to a combination of strategies.

Part of this improvement can be accounted for by an increasing number of advisors in Sun Life’s career agency channel, as well as growth within third-party channels, such as MGAs and IIROC broker-dealers.

In tumultuous times, Mr. Dougherty also believes clients and advisors are looking for a trusted brand like Sun Life’s. “I think it’s a touchstone recognized for financial strength and longevity, so that has been a great asset.”

An expanding product shelf is also a factor, he adds. “We’ve built out our product line considerably over the last several years, so that’s getting more and more traction. A couple of years ago we reintroduced a par product to the market that has been extremely well perceived and so that’s been an important part of the story.”

Like a number of carriers, though, Sun Life has put the brakes on sales of its guaranteed withdrawal product. Its SunWise Essential Series was closed to new contracts sold by third-party independent advisors last May. The insurer still offers a GLWB solution for its career force through its SunWise Essential Series 2 product launched at the end of August.

Mr. Dougherty says the company is looking at introducing other retirement income solutions for both its career sales force and for third party channels. “Ultimately we think that these other solutions will be much better alternatives than GMWB products. If you look at the GMWB products today, they are less compelling for customers than they used to be. The payout levels are much lower, the features are much more modest and the fees inside the product are much higher than they used to be. So, we see the need to continue to innovate in this space, we’re excited to do that.”

He declined to say when such a product might be launched, but added, “I could tell you that we’re very focused on that.”

Lead generation

Another strategy driving increased growth is the company’s lead generation program. This involves referring leads to Sun Life advisors generated through conversations with members of its employee benefits plans. This program identified 35,000 leads last year of group clients looking to talk with an advisor about their individual financial needs. The program has been underway for a few years. “One of the company goals we’ve set for 2015 would be to get that up to 70,000 leads a year as a run rate,” says Mr. Dougherty.