FIGURE 2: PREMIUMS PROVIDE A STABLE SOURCE OF FUNDING EVEN DURING DOWNTURNS
STABILITY OF INSURANCE PREMIUMS
40.00%
30.00%
Percentage Change (Annual)
20.00%
10.00%
0.00%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-10.00%
-20.00%
Life and Annuity Premiums
TSX Index
-30.00%
-40.00%
SOURCE: CLHIA
The Industry's Investment in Canadian Companies
Canadian companies raise capital in order to invest in profitable growth opportunities, to bring
new products to market or to execute on a significant strategic expansion, all of which are
critical activities to drive growth and raise living standards for Canadians. Generally,
corporations prefer stable, patient funding over more volatile, shorter-term or speculative,
sources of funds as it allows for more certainty for longer-term planning and investments. As
such, the Canadian life and health insurance industry is an ideal provider of capital to
corporations.
The industry is a significant investor in corporate bonds and equity in Canada. In 2012, the
industry held nearly $106 billion, or roughly 14 per cent of all Canadian corporate bonds. In
addition, in 2012 it held almost $93 billion or about 4 per cent of all Canadian corporate equity
(see Figure 3).
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