Canadian Life & Health
Insurance Facts
2019 Edition
Ca n a d ian Life and H eal t h Ins u ranc e Fac t s , 2 01 9 Edit ion pres ent s aut hori ta ti ve ,
factu a l i nformat ion about l ife and healt h ins uranc e in C anada.
It is p u bli s hed by t he C anadi an Life and H ealt h Ins uranc e As s oc iat ion (C L HI A).
Th e CL HI A is a vol unt ar y as s oc iat ion w hos e m em ber c om panies ac c ount f o r 99%
o f Ca n ada’s l ife and healt h i ns uranc e bus ines s . T he indus t r y provides a wi d e
r an g e of financial s ecurit y produc t s s uc h as life ins uranc e, annuit ies (incl u d i n g
RRSP s, RRIFs and pens ions ) and s upplem ent ar y healt h ins uranc e to alm o st
2 9 m illion C anadians . It al s o holds over $ 8 5 0 billion of as s et s in C anada a n d
e m p loys over 156,000 C anadi ans .
Th is e di t ion includes informat ion about t he life, healt h and annuit y bus in e ss
o f all federall y regis t ered and provinc ially inc orporat ed ins uranc e provide r s
in Can ada (includi ng t he heal t h bus ines s of proper t y and c as ualt y ins urer s),
u n less s t at ed ot her wi s e. The s ourc es of m at erial for t his public at ion inc l u d e
in fo r m at i on from t hes e i ns ura nc e providers as w ell as relevant dat a from
g ove r n ment agencies , regul ator y bodies , and ot her as s oc iat ions . T heir assi sta n c e
is ack n owl edged wi t h t hanks .
Wh e rever pos s i bl e, figures pres ent ed here relat e to t he C anadian life and h e a l th
in su r ance bus i nes s of companies of all nat ional origins . H ow ever, w here re l eva n t,
th e n u mbers rel at e only to t he w orldw ide bus ines s of C anadian c om panie s.
Toronto
79 Wellington St. W.
Suite 2300
P.O. Box 99, TD South Tower
Toronto, Ontario M5K 1G8
416-777-2221
Ottawa
World Exchange Plaza
100 Queen Street, Suite 750
Ottawa, Ontario K1P 1J9
613-230-0031
Montréal
1001 de Maisonneuve Blvd. W.
Suite 630
Montréal, Québec H3A 3C8
514-845-9004
$
In order to simplify the text, we use the letters K, M, B, and T to refer to thousands,
millions, billions and trillions, respectively.
Provincial and historical data are available in the appendices.
2
www. clhia. ca
t w it t er.c om /c lhia
fac ebook.c o m / c l h i a
President’s message
C a n a d a’s life and healt h i ns urers provide c overage
to m ake life m ore affordabl e.
T h rou g h w o r k pl ace and indi vidual pl ans , our
me m b e r c o m p anies make a wide- ran ge of healt h
c are ser vice s affordabl e to t hos e wh o need t hem .
Li fe in su r an ce pol ici es free mi ll ions of fam ilies
f rom w o r r y. And wealt h management produc t s help
pe o p le p la n c onfident l y for ret irement .
Wh en Ca n a d ians buy t hes e product s, t hey aren’t
j ust tak in g o u t a poli cy. They are i nves t ing in t heir
ow n, o r th eir employees ’ financial s ec urit y. T hey are
a c cep tin g th a t li fe has ri s ks . And t hey are c hoos ing
to an sw e r th at uncer t aint y by par t nering w it h s om e
of th e m o st rel iabl e and ex perienced financ ial
i n stitu tio n s in t he worl d.
C a n a d a’s life and healt h i ns urers are divers e, inc luding regional healt h ins urers ,
no n -p ro fits, co- operat ives and frat ernals , as w ell as large c om panies w it h
i n t er n a tio n a l reach. Toget her, i n 201 8 t hes e ins urers :
•
P rovid ed fi nanci al prot ect i on for 2 9 m illion C anadians , paying
o u t $ 9 8 b i l li on i n benefit s
•
Wo r ke d h ard to meet our promises of c lient s ’ s at is fac t ion, w it h
o n ly o n e in 100,000 cl ai ms res ult ing in a c om plaint
•
Co n tr ib u ted to C anada’s econom ic grow t h, m aking over $ 7 8 0
b illio n in long- t erm inves t ment s and providing over 1 5 6 , 000 j obs
•
E xp o r ted C anadian s t rengt h to the w orld, offering prot ec t ion to
6 0 m illio n peopl e i n 20 count ri es
•
We re a m o ng t he mos t s t abl e and s ec ure financ ial ins t it ut ions
in Can ad a, wi t h capit al res er ves 3 9 per c ent higher t han
wh at g overnment regulators ex pec t
C e l eb r atin g o ur 125t h year in 2019, the C LH I A is es pec ially proud of t he role
w e c o n tin u e to pl ay i n t he s ucces s of our indus t r y and t heir c lient s . We
s i n ce re ly h o p e t hi s dat a i mproves your unders t anding of our indus t r y and
i t s co n tr ib u tio ns to financial s ecurity in C anada and around t he globe.
S t e p h en Fr an k
P r esi d ent & C EO
1
2
What’s inside
Industry profile
06 In d u s tr y at a glance
08 Th e Canadian life & health
i n su rance marketplace
Lines of business
12 Li fe ins urance
14 Re ti rement s olutions
16 He al t h ins urance
Industry in detail
20 Ho w ins urers inves t
22 Th e i ndus tr y ’s tax contributions
23 In te r national operations
Appendices
00
00
00
00
00
(available on-line)
Prov incial data
Hi storical data
CLHI A member companies
Gl o ssar y of ins urance terms
Prev ious Factbook s
3
$
4
Industry profile
5
Industry at a glance
Canada’s life and health insurers …
Provide
financial
protection for
29 million
Canadians and pay
out $98 billion in
benefits
Focus
on consumer
satisfaction, with
only 1 in 100,000
claims resulting in
a complaint
Contribute
to economic
growth, making over
$780 billion in longterm investments in
Canada and providing
over 156,000 jobs
6
Are a source of
financial security and
stability with capital
reserves 39% higher
than governments
require
Bring Canadian
strength to the world,
offering protection to
60 million people in
20 countries
$
7
The Canadian life & health insurance marketplace
Canada’s life and health insurers provide
financial protection for 29 million Canadians
Insurers provide life insurance, extended
health coverage and retirement solutions
through group and individual plans. In 2018,
life and health insurers paid out $98 billion
in benefits while working to provide a high
degree of customer satisfaction.
Coverage
Benefits
There are more than
160 life and health
insurers operating in
Canada providing a
competitive Canadian
marketplace
Life
22 million
Canadians own
$4.8 trillion in life
insurance coverage
Health
13.2B
$
• $7.7 billion paid as death
benefits
• $5.5 billion paid to living
policyholders as disability
benefits, cash surrenders or
dividends
26 million
$
Canadians have
supplementary
health insurance
$11.7 billion for prescription
drugs, which accounts for
over 35% of Canada’s total
spending on prescription
drugs
Canadians’
retirement savings
are managed by
the industry
8
of benefit payments went to
living policyholders
36.1B
Retirement
8 million
Over 90%
48.7B
$
Annuity payments on
employer-sponsored and
individual products increased
by 76% over the past decade
Benefits paid
out have
increased
over 50%
from a
decade ago
Notes
Life and health insurers collected
$117 billion in premium revenues
Total premiums in Canada rose to $117 billion in 2018.*
Year-over-year growth was led by health insurance, up
7.8 per cent; followed by annuities (including segregated
funds), up 4 per cent; and life insurance, up 3.8 per cent.
* Including premium
revenues of $3.2 billion
from foreign branches
operating in Canada
Consumer complaints
Visit www.olhi.ca
Consumer protection
Visit www.assuris.ca
120B
$
100B
19%
$
18%
80B
$
19%
19%
Health
19%
18%
Annuities
60B
$
40B
$
40%
39%
39%
41%
43%
42%
41%
2012
2014
2016
2018
38%
39%
40%
43%
43%
2008
2010
Life
Segregated
funds
20B
$
Insurers are
focused on
customer
satisfaction
Insurers process
hundreds of millions
of claims annually, and
only about one in every
100,000 claims result in
a complaint.
9
$
10
Lines of business
11
Life insurance
Life insurance provides families with
financial security
Canadians buy life insurance primarily to provide financial
protection for their families in the event of death. Benefits
from a life insurance policy are used to replace income for
families, pay a mortgage or other debts of the deceased, or
contribute to an estate.
22 million
Canadians own
$
4.8 trillion
in life insurance coverage
The average life insurance
protection per household
in Canada is
$
423,000
5x
That’s up from $417,000
in 2017, approximating
five times household
income.
Protection & age
breakdown
Life insurance coverage closely
reflects age, income levels, marital
status, desired level of income to
support dependents, outstanding
mortgages, etc.
BC
$
12
447
42
AB
$
$
542
37
SK
$
457
37
$
MB
$
441
37
ON
$
440
41
QC
$
Average protection per
insured household
($ thousands)
NL
346
47
Median age
347
43
$
NB PE
354
46
$
386
44
$
NS
335
45
Notes
Eighty per cent of life insurance
premiums are paid to purchase
individual policies
Term insurance
Most life insurance policies are
purchased by individuals through
an agent or advisor. A relatively
smaller amount is purchased as
part of a group policy through an
employer or as members of an
association.
How Canadians purchase
life insurance polices
22.2B
$
2018 life
insurance
premiums
Group: 20%
Individual life insurance
in-force has grown faster than
group in the past decade,
accounting for 62% of the total,
up from 55% in 2008. This is
mostly driven by growth in
individual term life insurance.
Whole life insurance
is the traditional form of
permanent insurance where
the insurer takes on both the
risk related to death and the
underlying investment risk.
Universal life insurance
5T
$
4T
14%
3T
$
2T
14%
12%
$
29%
11%
31%
14%
11%
33%
Permanent insurance
meets life-long protection
needs. In addition to death
protection, cash values are
accumulated and can be used
for financial emergencies,
or to supplement retirement
income. Premiums can be
paid over a set number of
years or for life.
Individual: 80%
$
provides cost-effective,
temporary coverage over
an insured’s younger years.
Premiums typically increase
over time in 5, 10 or 20 year
“steps”. Term insurance
usually provides a right
to convert to permanent
insurance with the same
insurer without further
underwriting, providing
consumers with the ability to
adjust coverage features to
address long-term needs.
13%
11%
35%
13%
11%
36%
13%
11%
is a flexible form of
permanent life insurance
where consumers
select investment
options and the
insurer assumes
the risk related
to death.
38%
Individual universal life
1T
$
Individual whole life
45%
44%
42%
41%
40%
38%
2008
2010
2012
2014
2016
2018
Individual term
Group term
13
Retirement solutions
Life and health insurers manage retirement
savings for over 8 million Canadians
Over 85 per cent of small businesses that provide
pensions, RRSPs, TFSAs, RRIFs to employees
offer these through life and health insurers.
Sources of annuity
contributions
Benefits of owning annuities
Annuities aren’t like other retirement
income products. Here’s what they offer
that’s different:
48B
$
2018 annuity
contributions
$
Lifetime income
benefits
Maturity
guarantees
Solutions for
pension plan
de-risking
Pension plans
RRSPs & TFSAs
RRIFs
Non-registered savings
Growing assets to support retirees
Growth in retirement assets held by insurers over the past decade has been driven mostly
by accumulation annuities - up an average of 7 per cent annually since 2008.
450B
$
400B
$
13%
350B
$
14%
300B
$
250B
16%
$
200B
$
150B
$
18%
8%
32%
7%
33%
16%
7%
13%
8%
7%
28%
7%
24%
31%
Individual payout
100B
50B
14
of assets are in the
accumulation stage
– up from 74% a
decade ago
29%
$
$
79%
Group payout
42%
44%
46%
50%
52%
55%
2008
2010
2012
2014
2016
2018
Individual accumulation
Group accumulation
Notes
Insurers paid out $48.7 billion in
retirement benefits in 2018
Since 2008,
benefits have increased
at an average rate of
Lifetime income
benefits
A feature of annuities that
manages the risk of outliving
savings.
Maturity guarantees
6%
50B
An annuity feature to manage
risk of volatile investment
returns.
40B
Pension plan de-risking
$
per year
$
30B
$
$
20B
$
10B
$
Employers may transfer
the investment and survival
risks associated with defined
benefit plan members to
insurers who specialize in
managing these risks.
Accumulation annuities
A flexible and secure
investment vehicle for pension
plans, RRSPs, TFSAs and nonregistered funds during the
savings stage.
Pay-out annuities
2008
2010
2012
2014
2016
2018
Insurers manage $321 billion of
Canada’s pension funds
Canada’s total pension assets reached $3.8 trillion at the end of
2017. This includes $694 billion in assets held by about 15,400 private
employer-based plans which provide retirement protection for about
3 million Canadians.*
694B
$
Private
(employerbased)
$172 billion is
managed by life
insurers
1,233B
$
Personal (RRSPs,
TFSAs, etc)
$149 billion is
managed by life
insurers
This type of annuity can
provide guaranteed income
for life, just like a DB pension.
Only life insurers can
guarantee income for life.
*According to Statistics
Canada Pension Satellite
Account, 2017. Data excludes
unfunded liabilities for public
Old Age Security of about
$1.6 trillion.
1,912B
$
Public pensions
(CPP/QPP + government
employees)
15
Health insurance
Insurers protect nearly 70 per cent of Canadians
against the costs of extended health care
In 2018, insurers covered $26.9 billion
in extended health care costs, including
the costs of prescription drugs, dental
procedures and added hospital costs.
Canada’s life and health insurers also
covered costs of disability claims and other
insurable services. These benefits cover
expenses beyond those covered by public
health plans.
Extended health
26M
$
26.9B
Canadians
covered
in benefits
Benefits by coverage type
$
Disability
12M
$
7.8B
36.1B
2018 health
benefits
Accident & other
20M
$
1.4B
Canadians
covered
in benefits
Canadians
covered
in benefits
Extended health breakdown
11.7B
$
Drugs
8.5B
$
Dental
$
In 2018, specialty drugs, such as drugs for
rare diseases, accounted for 2 per cent of the
total number of prescription drug claims, but
made up 33 per cent of the costs - this cost is
anticipated to reach 40 per cent by 2023.**
16
$
$
Travel
Hospital
Paramedical*
& vision
Specialty drugs
0.9B
1.9B
3.9B
$
24%
2013
33
%
2018
40%
2023
Notes
Ninety per cent of premiums are
paid to purchase group plans
How health insurance
is purchased
$
46.3B
Canadians access health insurance
in two ways, through group plans
provided by employers, unions or
professional associations, and
individual plans that are purchased by
individual consumers.
2018 health
premiums
Individual: 10%
Group: 90%
Extended health
Reimburses a variety
of expenses, such as
prescription drugs, dental,
hospital and medical
expenses, not covered by
provincial government plans.
Disability
Helps replace lost income
due to disability (frequently
integrated with Public
Pension Plans, Workers’
Compensation and
Employment Insurance),
usually paying around twothirds of earnings.
Accident & other
Includes coverage for
accidental death and
dismemberment, long-term
care and critical illness.
80%
* Paramedical
of working Canadians and
their families are protected
by private health insurance
plans, up from 73 per cent
a decade ago.
Refers to services and
professions, such as
physiotherapy, that
supplement and support
medical treatment
** Source
Cost-effective health protection
Drug Trend Report, Express
Scripts Canada
Insurers put almost 90 per cent of health premiums to
work, providing benefits to policy holders.
(5-year average)
7%
operating
costs
87%
3%
paid out to
policy holders as
benefits
taxes
3%
profits
17
$
18
Industry in detail
19
How insurers invest
Insurers are a significant source
of long-term investments
780B
$
90%
of stable industry
investment is driving
economic growth and
innovation across
Canada. What the
industry earns from
these investments
helps reduce the
cost of insurance for
Canadians.
of insurers’ assets are held
in long-term investments
The long-term nature
of insurers’ liabilities is
especially well suited to
financing infrastructure
investments
insurance
cost
Insurers’ investments support the
economy and governments
46B
$
Infrastructure
investments
20
110B
$
Provincial & municipal
government bonds
26B
$
Federal government
bonds
Notes
Segregated fund
investments
How insurers invest to cover future
claims and contribute to Canada’s
economic growth
Segregated funds have
grown at an annual
average rate of 8.7 per
cent - its share of total
assets has increased
from 31 per cent to 38
per cent over the past
decade
300B
$
primarily support annuity
contracts, where the
investment risk is retained by
policyholders.
General funds
have grown at
5.5 per cent
annually since
2008
250B
Segregated fund
200B
include amounts for other
policyholder benefits
(expected future contractual
claims), other liabilities and
required capital.
* Measured as available
capital as a per cent of
regulatory capital required
to cover risks. In 2018, OSFI
and Quebec’s AMF changed
how they calculate capital
ratios resulting in a one-time
reduction of the ratio.
$
$
General fund
investments
General fund
150B
$
100B
$
50B
$
Bonds
Stocks
Mutual
funds
Mortgage
loans
Real
estate
Cash
& other
investments
Other
Insurers are strong and stable
2018
Capital ratio*
139%
Regulatory requirement
100%
Life and health insurers maintain very
strong capital reserves, enough to cover
potential claims from policyholders, and
to meet the rigorous expectations of
government regulators.
Capital adequacy levels are maintained
by retaining profits and by issuing equity
and debt in capital markets.
21
Industry’s tax contributions
Canadian life and health insurers contributed
over $8 billion in taxes
In 2018, insurance companies’ contributions to Canada’s tax base included
$2.6 billion and $5.4 billion paid to the federal and provincial governments
respectively. Of this $4.3 billion was borne directly by insurers. A further
$3.7 billion was collected and paid as provincial sales taxes on life and
health insurance and as employees’ share of payroll taxes.
The industry’s 2018 total tax contribution to all levels of government
in Canada was nearly twice its share of Canada’s GDP.
6B
$
Federal
Provincial
4.5B
$
3B
$
1.5B
$
Total tax
contribution
8B
$
Taxes borne
$
tax contribution
$
1.6B
1.5B
corporate
income and
capital taxes
22
Over half
of total tax
contributions
are premiumbased taxes*
insurance
premium
taxes
industry’s total
$
Taxes collected
1.2B
payroll and
other taxes
$
3.7B
retail sales tax
on premiums
and payroll taxes
collected
International operations
Notes
Canadian life and health insurers are
trusted at home and around the globe
Canada’s insurers provide coverage and services to 60 million people
in 20 jurisdictions. In fact, three of Canada’s life and health insurers
rank among the top 15 largest in the world.
* the industry’s contribution
is especially high for health
insurance, accounting for over
50% of value-add generated.
See Piling On - How Provincial
Taxation of Insurance Premiums
Costs Consumers, CD Howe
Institute.
169,000
20
people employed
outside of Canada
60M
countries &
territories
people protected
outside of Canada
Canadian insurers’ foreign
assets continue to grow
Assets held by Canadian life and health insurers on behalf of
policyholders outside of Canada amounted to $898 billion at
the end of 2018, up 37 per cent from five years ago.
** Includes the Caribbean
and Latin American
countries
Source of premiums
12.2% 11.1% 9%
57.2%
Canada
USA
Asia
10.5%
Europe Other**
Revenue from premiums outside of North
America have more than doubled since 2013
60B
$
30B
$
2013
2014
2015
2016
2017
2018
23
Notes
24
25
Toronto
79 Wellington St. W.
Suite 2300
P.O. Box 99, TD South Tower
Toronto, Ontario M5K 1G8
416-777-2221
Ottawa
World Exchange Plaza
100 Queen Street, Suite 750
Ottawa, Ontario K1P 1J9
613-230-0031
Montréal
1001 de Maisonneuve Blvd. W.
Suite 630
Montréal, Québec H3A 3C8
514-845-9004
w ww.c lhi a. ca
t w it t er.c om /c lhia
fac ebook.c om / c l h i a
26