Three insurers corner two-thirds of the Canadian market for over a decade

By Alain Thériault | December 15 2016 07:00AM

2015 group insurance revenue compiled by the Fraser Group confirms the unrelenting domination of three lifecos.

Sun Life Financial, Manulife and Great-West Life prevailed over 65.3% of the Canadian group insurance market last year. In 2006, they controlled 66.7%.

The Group Universe Report by Fraser Group breaks down the market share of the 10 largest group insurance carriers in Canada. It shows that this elite club controlled 96.2% of the Canadian market in 2015 in terms of life and health group insurance revenue. Total revenue produced is estimated at $38.6 billion in 2015.

“The market in 2015 grew 4.3% over the year 2014,” says the consultant’s report on group insurance, written by founder Ken Fraser. Fraser Group demonstrates that the Top 10’s revenue has climbed steadily during the last decade. It was $25.5 billion in 2006, amounting to 52% growth between 2006 and 2015.

While the dominant trio tightened its hold (65.3% in 2015 versus 63.5% in 2014), the Top 5 also include Blue Cross (aggregate of all Blue Cross plans in Canada) and Desjardins Insurance. These juggernauts controlled 82.1% of the market in 2015, versus 80.2% in 2014. They single-handedly reported $31.7 billion in revenue in 2015.

The three largest group insurers have reigned for at least a decade, according to retrospective data ranging from 2006 to 2015, which the Fraser Group compiled for The Insurance and Investment Journal. In 10 years, the smallest market share this trio garnered is 64.3%. That was in 2013. The top 5 has featured the same players since 2006, when their market share was 81.6%.

Consolidation reshuffles rankings

Manulife ousted Great-West from second place in 2015 following its acquisition of Standard Life (which reported group insurance revenue of $743.5 million in 2014). With revenue of $7.9 billion, Manulife nipped at the heels of Sun Life (revenue of $8.9 billion), which has surrendered its leading position only twice in 10 years (to Great West Life in 2006 and 2008). With Standard Life no longer in the rankings in 2015, Empire Life filled the gap in the Top 10, with a market share of 1%.

Drug insurance draws nearly half of revenues

Canadian insurers garnered 46% of their group insurance revenues from drug insurance benefits, at $17.9 billion, on total revenue of $38.6 billion reported in Canada in 2015.

These figures come from the Group Universe Report by Fraser Group. Dental insurance is the second strongest driver of group insurance revenue for the 10 largest group insurance carriers in Canada, with a 22% share of total revenues, at $8.5 billion.

The third top-selling benefit, long-term disability, represented revenue of $6.9 billion in 2015, equal to an 18% share of total industry revenue. Compiled together in the report, the life and accidental death and dismemberment benefit represents 9% of revenue generated by group insurance in Canada for the same period, or $3.4 billion. The short-term disability guarantee accounted for revenue of $1.8 billion, equal to 5% of total revenue in 2015. 

Ontario produces half of revenue

Fraser Group also compared total revenue by province and major region of Canada. Ontario garnered 52% of group insurance revenues in 2015. Quebec’s share was 17%, with British Columbia trailing at 10%. Ranked under the Prairies category, the rest of Western Canada made up 17%, and the Atlantic provinces 5%. Labelled territories and Misc., the last category accounts for under 1% of total revenues.