Life Insurance - Canada - March 2020

OVERVIEW
Regional classifications
Income
Glossary
Annuities
Term life insurance
Whole life insurance/Permanent life insurance
Universal life insurance
EXECUTIVE SUMMARY
The issues
Around two in three Canadians have life insurance
Figure 1: Life insurance ownership, December 2019
Cost/affordability and lack of knowledge inhibit ownership
Figure 2: Reasons for not owning life insurance, December 2019
Manulife and Sun Life are the leading consumer choices
Figure 3: Choice of provider for life insurance bought directly, December 2019
Majority interested in at least one app feature
Figure 4: Interest in app features, December 2019
The opportunities
Human contact is important when buying life insurance
Figure 5: Buying preferences, December 2019
Trust is a barrier although less among Quebecers and over-55s
Figure 6: Perceptions about the life insurance industry (% agree), December 2019
Small business/gig segment is an opportunity
Figure 7: Life insurance ownership through employer, by type of employment, December 2019
Claims is a key area for digitization
What it means
MARKET FACTORS – WHAT YOU NEED TO KNOW
Canada’s population is ageing
Increased diversity means greater considerations for life insurance companies
InsurTech and life insurance
Market impact of InsurTech
AI and life insurance
MARKET FACTORS
Immigration is fuelling Canada’s population growth…
Figure 8: Percent of Canadians who are visible minorities or not visible minorities, by age, 2016
…and Asia is the primary source
Increased diversity means greater considerations for life insurance companies
Canada has more seniors than children
Figure 9: Population aged 0-14 and 65+, 1995-2035*
Opportunities and challenges come with an ageing population
WHAT’S NEW – INSURTECH 
InsurTech and life insurance
AI and life insurance
Life insurance and big data
InsurTech companies in life insurance
RateHub: online comparison platform
Canadian robo-advisor launches Invisor TermLife
Other Canadian players
Sherpa (UK): a trusted personal guide
Untangler (UK)
Haven Life (US)
Ethos and Bestow (US)
KEY PLAYERS – WHAT YOU NEED TO KNOW
PolicyAdvisor aiming to digitize life insurance
Element AI announces first product for the insurance market
SSQ and La Capitale announce merger
Philip Morris entering life insurance
Ontario launches new insurance regulator
INNOVATIONS & INDUSTRY DEVELOPMENTS
PolicyAdvisor aiming to digitize life insurance
Element AI announces first product for the insurance market
SSQ and La Capitale announce merger
Philip Morris entering life insurance
Ontario launches new insurance regulator
MARKETING CAMPAIGNS
Manulife’s Life Lessons Scholarship Program
Figure 10: Manulife Life Lessons Scholarship, August 2019
Diversity and life insurance
Figure 11: Manulife/CPA Term Life direct mail campaign, November 2019
Babylist and Prudential partner to bring life insurance to new parents (US)
Figure 12: Prudential/Babylist life insurance offering, July 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Around two in three Canadians have life insurance
More Canadians buy life insurance directly than through employer
Cost/affordability and lack of knowledge inhibit ownership
Manulife and Sun Life are the leading consumer choices
Majority interested in at least one app feature
Human contact is important when buying life insurance
Life insurance literacy gap exists
LIFE INSURANCE OWNERSHIP
Around two in three Canadians have life insurance
Figure 13: Life insurance ownership, December 2019
Younger consumers more likely to own term and older permanent/universal insurance
Figure 14: Life insurance ownership, 18-44s vs over-45s, December 2019
Men, parents and higher-income households have higher ownership
Figure 15: Life insurance ownership, by gender, December 2019
Financial health also drives ownership
Figure 16: Life insurance ownership, by financial health, December 2019
Quebecers also have higher ownership
DIRECT VS EMPLOYER PURCHASE 
More Canadians buy life insurance directly than through employer
Figure 17: Direct vs employer purchase, December 2019
Figure 18: Type of life insurance purchased, by channel, employer vs direct, December 2019
Older more likely to buy directly; younger more reliant on employer coverage
Figure 19: Direct vs employer purchase, by age, December 2019
Small business/gig segment is an opportunity
Figure 20: Life insurance ownership through employer, by type of employment, December 2019
REASONS FOR NOT OWNING
Cost/affordability and lack of knowledge inhibit ownership
Figure 21: Reasons for not owning life insurance, December 2019
Lack of knowledge is a barrier to product sales
Figure 22: “I don’t know enough about life insurance” as a barrier to ownership, by age, December 2019
Men more likely to have been declined coverage
Figure 23: Reasons for not owning life insurance, 18-44s vs over-45s, by gender, December 2019
CHOICE OF PROVIDER
Manulife and Sun Life are the leading consumer choices
Figure 24: Choice of provider for life insurance bought directly, December 2019
Bank insurance subsidiaries favoured by younger
Figure 25: Choice of provider for life insurance bought directly, 18-44s vs over-45s, December 2019
Sun Life, Canada Life and Manulife are leading employer insurance choices
Figure 26: Choice of provider for employer coverage, December 2019
INTEREST IN APP FEATURES 
Majority interested in at least one app feature
Figure 27: Interest in app features, December 2019
Younger consumers are more interested
Parents with young children are more open to app features
Figure 28: Interest in app features, parents vs non-parents, December 2019
Asian Canadians also have a higher interest
Figure 29: Interest in app features (select), Asian Canadians vs overall, December 2019
Claims is a key area for digitization
TURF Analysis
Interest in life insurance mobile app features
Figure 30: TURF analysis – interest in mobile app offerings, December 2019
Methodology
BUYING PREFERENCES
Human contact is important when buying life insurance
Figure 31: Buying preferences, December 2019
Brokers remain a dominant channel for life insurance
Younger consumers and men, in particular, prefer buying through associations and online
Figure 32: Buying preferences (% agree), 18-44s vs over-45s, by gender, December 2019
GENERAL ATTITUDES
Life insurance literacy gap exists
Figure 33: General attitudes towards life insurance, December 2019
Nearly two in five 18-44s consider life insurance a “waste of money”
Figure 34: General attitudes (select) towards life insurance (% agree), 18-44s vs over-45s, December 2019
Around half of men feel life insurance matters only for those with children
Figure 35: General attitudes (select) towards life insurance (% agree), by gender, December 2019
INDUSTRY PERCEPTIONS
Two in three feel life insurance customers are treated fairly
Figure 36: Perceptions about the life insurance industry, December 2019
Trust is a barrier, although less so for Quebecers and over-55s
Trust is on the future agenda
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms