Life and health insurers paid $103 billion in benefits last year

The Canadian Life and Health Insurance Association (CLHIA) has released its 2020 Canadian Life and Health Insurance Facts report, which includes a statistical snapshot of the Canadian industry from last year as well as selected trends covering the previous decade.

According to the CLHIA report, the country’s life and health insurers provide financial protection for over 29 million Canadians, paying out $103 billion in benefits last year.

“Over 90% of benefit payments went to living policyholders,” the report said. “Total benefits paid out have increased over 60% from a decade ago.”

With respect to life insurance, last year saw a total of $5 trillion in coverage encompassing 22 million Canadians. Consumers received $12.1 billion in life insurance benefits paid last year, including $7.7 billion issued as death benefits and $4.4 billion paid to living policy holders through disability benefits, cash surrenders, or dividends.

The CLHIA reported that four fifths (81%) of life insurance in Canada is purchased through agents or advisors in the form of individual policies, and one fifth (19%) is sold through group plans. Individual life insurance coverage has been on the rise for at least the past decade – driven primarily by term life policies – with individual life insurance as a share of total in-force life policies growing from 55% in 2009 to 63% in 2019.

From a health-insurance standpoint, the report said 26 million Canadians were covered with supplementary health insurance, 12 million with disability insurance, and 21 million with accident and other insurance as of last year.

A total of $38.1 billion in health insurance benefits were paid in 2019; that included $12.5 billion for prescription drugs, which makes up 35% of Canada’s total spending on prescription drugs. Disability benefit payouts amounted to $8 billion, and $1.4 billion went to accident and other claims.

Individual health insurance was a small slice of Canada’s health-insurance pie, accounting for just 10% of the $48.3 billion in health premiums. The rest went to group plans, which include coverage provided by employers, unions, and professional associations.

The CLHIA report also delved into the role of life and health insurance providers in providing retirement solutions. As of last year, 8 million Canadians have their retirement savings managed by the industry. A total of $53.5 billion in retirement benefits were reportedly paid in 2019, with annuity payments on employer-sponsored and individual products doubling over the past decade.

With respect to premiums, the report said life and health insurers took in $122 billion in revenue last year. Life insurance accounted for one fifth (19%) of that total; health insurance premiums made up two fifths (40%), and the rest (41%) went to annuity premiums.

According to the report, premiums in Canada have followed a trend of growth at least since 2009. Annuities – which included segregated funds – showed the biggest year-over-year growth of 5.2%; followed by 5.2% in life insurance, and 4.1% in health insurance.

Read the original article at https://www.lifehealthpro.ca/rss/