Reflecting the second year of the Covid-19 pandemic, Canada’s life and health insurers paid more benefits to more people than ever before in 2021.
Specifically, insurers paid over $113 billion in life and health benefits last year, up 17% from 2020 and nearly $10 billion above pre-pandemic levels, the Canadian Life and Health Insurance Association (CLHIA) said in its annual statistics report published on Thursday.
In the report, CLHIA CEO Stephen Frank described 2021 as “a year of recovery.”
“Insurers have been proud partners in this, helping employers and their employees get back on their feet by providing workplace benefits that are flexible and relevant to attract and keep top talent and help people plan for retirement,” Frank said in the report.
Over half ($58 billion) the benefits paid represented annuity claims. The record amount compared to about $46 billion the previous year, an increase of 26%.
Health insurance benefits totalled nearly $41 billion — also a record and up by about $4 billion from the previous year.
Life insurance benefits were similar to the previous year, at $14 billion. The figure included $580 million in claims related to mental health — up by 75% since 2019 and up by 45% since 2020, the report said.
Total premiums collected by insurers in 2021 rose to $139 billion, up from $123 billion or 13% compared to the previous year.
The increase was led by premiums for annuities and segregated funds, up about 21%, the report said.
A ban on the deferred sales charge (DSC) structure in segregated funds is expected in 2023, to align with the DSC ban for investment funds implemented this past June.
Insurance regulators are also consulting on a potential ban on upfront commissions for segregated funds.