Even as the Covid-19 pandemic lost some of its grip on daily life last year, Canada’s life and health insurers set another record for benefits paid.
Insurers paid $114 billion in life and health benefits in 2022, slightly more than the previous record set in 2021 and $11 billion more than pre-pandemic levels, the Canadian Life and Health Insurance Association (CLHIA) said Tuesday in its annual statistics report.
Nearly half ($53.7 billion) the benefits paid represented annuity claims, down from $58.1 billion in 2021, while health insurance benefits set a new record of $43.9 billion. The $650 million paid in mental health support claims was a 10% increase from the previous year and nearly double the 2019 total.
Life insurance benefits increased to $16 billion last year from $14 billion in 2021. The CLHIA said 22 million Canadians own $5.5 trillion in life insurance coverage, with total coverage increasing “steadily” over the previous decade. “The increase may be due to individuals needing to cover larger mortgages and higher cost of living,” the report said.
Individual life insurance made up 65% of the total life policies in force, up from 58% in 2012. The growth was driven largely by term insurance, which accounted for 40% of all life insurance.
Total premiums collected by insurers in 2022 rose to $145 billion, up from $139 billion the previous year. The increase was led by premiums for health insurance (up 9.4% to $55.9 billion) and life insurance (up 5.5% to $27 billion), the report said, while premiums for annuities and segregated funds were basically flat (up 0.2% to $62.2 billion).
The deferred sales charge (DSC) structure in segregated funds was banned this year, to align with the DSC ban for investment funds implemented this past June.
Insurance regulators are also developing a guidance on upfront commissions for segregated funds after a consultation found risk of customer harm.