Table of Contents
Executive Summary
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- The issues
- Auto, life and home insurance have the highest ownership rates
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- Figure 1: Ownership of insurance products, July 2016
- Type of distribution channel used is product dependent
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- Figure 2: Distribution channel, by type of insurance, July 2016
- Around half of consumers are open to switching for a major price cut
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- Figure 3: Attitudes related to purchase preferences, July 2016
- Brokers are generally viewed favourably, but some trust issues persist
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- Figure 4: Attitudes about insurance brokers, July 2016
- Most insurance is sold through people
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- Figure 5: Methods used for insurance purchase, July 2016
- The opportunities
- Under-penetrated segments such as younger consumers and LGBTs
- Brokers face challenges as distribution channels evolve
- Younger consumers more willing to embrace digital channels
- Consumers are very hesitant about buying insurance from newer companies
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- Figure 6: Attitudes towards insurance purchase, July 2016
- What it means
The Market – What You Need to Know
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- Canada’s population is expected to age in the coming years
- The population is growing and becoming more ethnically diverse
- Women outnumber men in Canada and live longer
- Canadian economy endures a poor second quarter
Market Factors
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- Canada’s population is expected to age in the coming years
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- Figure 7: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
- Figure 8: Projected trends in the age structure of the Canada population, 2014-19
- The population is growing and becoming ethnically diverse
- Women outnumber men in Canada and live longer
- Women’s representation and participation in the labour force
- Wage gap declines but women still earn less than men
- Health overview and risk factors
- Obesity and sedentary lifestyles
- Alzheimer’s/dementia
- Smoking
- Stroke
- Canadian economy endures a poor second quarter
Key Players – What You Need to Know
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- Expansions seen in digital health
- Manulife to insure those who are HIV-positive
- Economical Insurance activates multi-channel distribution with launch of direct channel
- Intact Financial Corporation makes Strategic Investment in Metromile
- Ageas and Trov launch on-demand insurance apps
- Manulife’s Vitality Brand Campaign
- Desjardins Insurance engages key cultural communities
- Ontario approves insurance plan aimed at Uber
Industry Developments
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- Sun Life launches new business area to expand in digital health
- Digital health insurance start-up, League, raises $25 million from major Canadian investors
- Manulife to insure those who are HIV-positive
- Manulife to cut down on insurance application medical tests
- Economical Insurance activates multi-channel distribution with launch of direct channel
- Intact Financial Corporation makes strategic investment in Metromile
- GoodLife partners with Manulife Vitality
- Ontario approves insurance plan aimed at Uber
- Aviva Canada announces the acquisition of RBC General Insurance Company
- International market innovations
- Ageas and Trov launch on-demand insurance apps
- Lemonade and other companies bring the sharing economy to insurance
- Risk Unit Based Policies
- Sure’s on-demand ‘micro-duration’ insurance policies
Marketing Campaigns
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- Manulife’s Vitality Brand Campaign
- Desjardins Insurance engages key cultural communities
- Manulife keeps TV viewers on the edge of their seat with cliff-hanger ads
- TD’s insurance campaign around customer experience
The Consumer – What You Need to Know
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- Auto, life and home insurance have the highest ownership rates
- Type of distribution channel used is product dependent
- Most insurance is sold through people
- Around half of consumers are open to switching for a major price cut
- Brokers are generally viewed favourably, but some trust issues persist
- Younger consumers more willing to embrace digital channels
Insurance Ownership
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- Auto, life and home insurance have the highest ownership rates
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- Figure 9: Ownership of insurance products, July 2016
- Age and income are key determinants of insurance ownership
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- Figure 10: Ownership of insurance products, by age, July 2016
- LGBTs under-index on auto, life and home but have more pet insurance
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- Figure 11: Ownership of insurance products (Significant differences), LGBTs vs overall population, July 2016
- Around nine in ten over-45s have auto insurance
- Quebecers own more life insurance
- Home insurance is very age and income dependent
- Around half of over-65s have health insurance
- Selling travel insurance to Chinese Canadians is an opportunity
- Mortgage insurance peaks among 35-44s, while women 25-34 over-index on renters insurance
- Pet insurance over-indexes among those earning more than $150,000/year
- Regional differences present specific opportunities
Insurance Purchase Methods
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- Most insurance is sold through people
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- Figure 12: Methods used for insurance purchase, July 2016
- Quebecers more likely to use phone while Chinese Canadians over-index on online purchases
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- Figure 13: Purchase methods, significant differences among demographic groups, July 2016
- Younger consumers more willing to embrace digital channels
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- Figure 14: Attitudes related to technology and insurance purchase, July 2016
- Mobile has limited appeal at present
- Around half of consumers are open to buying insurance online
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- Figure 15: Attitudes related to online insurance purchase, July 2016
Insurance Distribution Channels
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- Popularity of distribution channel is product dependent
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- Figure 16: Distribution channel, by type of insurance, July 2016
- For auto insurance, older consumers more likely to use brokers
- Younger consumers more likely to use bank subsidiaries for home insurance
- Men have a higher direct purchase rate of life insurance
- Group sales through employers is the dominant channel for health insurance
- Travel insurance sales is more multi-channel
- Brokers are generally viewed favourably, but some trust issues persist
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- Figure 17: Attitudes about insurance brokers, July 2016
- Older consumers have more positive views about brokers, while Quebecers are relatively less favourably inclined
- Brokers face challenges as distribution channels evolve
Insurance Purchase Decision
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- Around half of consumers are open to switching for a major price cut
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- Figure 18: Attitudes related to purchase preferences, July 2016
- Younger consumers more influenced by recommendations
- Consumers are very hesitant about buying insurance from newer companies
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- Figure 19: Attitudes towards insurance purchase, July 2016
General Attitudes towards Insurance
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- Majority of consumers agree on the need for re-evaluating insurance needs after major life events
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- Figure 20: Attitudes related to purchase decisions, July 2016
- Majority of consumers rate price as the most important choice factor
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- Figure 21: General attitudes about insurance, July 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
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