CLHIA-ACCAP

Canadian Life and Health Insurance Facts, 2014 Edition

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17 L ife and health insurance providers receive funds from two main sources: premiums and deposits paid by policyholders and earnings on investments. The portion of premium payments not used to pay benefits or expenses in the current year becomes available for investment in the nation's economy until needed to pay future benefits. In product pricing, the anticipated investment earnings are taken into account, thereby reducing the cost of life insurance, health insurance and annuities to policyholders. Total premium income The total premium income in Canada for life and health insurance providers during 2013 was $92.2 billion, including deposits to segregated fund products and premium equivalents for uninsured contracts administered by life insurance companies and not-for- profit health care benefit providers such as provincial Blue Cross organizations. Of this amount, 41 per cent was from health and disability products, 40 per cent was from annuities, and 19 per cent from life insurance policies. The 2003 distribution was 41 per cent, 37 per cent and 22 per cent, respectively. In 2013, group contracts produced 68 per cent of the total premiums, up from 62 per cent 10 years ago. Total premium income (including premium equivalents) rose 4 per cent during the year and has grown at Premium Income ❖ In 2013, Canadians paid premiums for: Life insurance $ 17.2 billion Annuities 37.4 billion Health benefit plans* 37.6 billion Total $92.2 billion ❖ Total premiums rose 4 per cent during the year, with health and disability products as well as life insurance leading the way (up 4.5 and 4.1 per cent, respectively) while annuity premiums rose 3.5 per cent. Overtaking annuities, health and disability products moved into top place with a 41 per cent share of total premiums. ❖ Segregated fund premiums rose 1.8 per cent to a record high of $31.5 billion, accounting for 34 per cent of the total. * Includes premium equivalents for uninsured contracts totalling $13.7 billion Total Premium Income in Canada (millions) Year Life Insurance Annuities Health Benefit Plans Total Individual Group Individual Group Individual Group Group (Insured) (Uninsured*) 1960 $ 660 $ 109 $ 33 $ 151 $ 40 $ 151 $ — $ 1,144 1970 1,128 325 126 311 85 315 — 2,290 1980 2,318 952 1,762 1,465 221 1,602 49 8,369 1990 4,840 1,879 7,299 4,554 670 4,338 1,751 25,331 2000 8,737 2,542 13,297 10,185 1,638 9,185 6,496 52,080 2005 10,332 3,273 13,155 14,419 2,387 13,666 9,631 66,863 2006 10,769 3,363 13,733 15,680 2,631 14,158 10,475 70,809 2007 11,109 3,478 16,390 18,006 2,753 15,134 11,277 78,147 2008 11,559 3,571 16,868 17,947 2,926 16,215 11,886 80,972 2009 11,752 3,646 17,198 19,307 3,018 16,577 12,400 83,898 2010 11,980 3,707 17,022 19,504 3,152 17,255 12,678 85,298 2011 11,969 3,885 15,353 20,524 3,319 17,974 13,057 86,081 2012 12,554 4,009 14,044 22,054 3,285 19,297 13,428 88,671 2013 13,028 4,215 12,730 24,617 3,685 20,284 13,675 92,234 Sources: OSFI, CLHIA Premium deposits to segregated funds are included Premiums are reported on a net of reinsurance basis Figures since 2000 have been restated to include business of insurance companies (life and property and casualty), fraternal benefit societies, and not-for-profit health care benefit providers such as provincial Blue Cross organizations. Earlier years include data for insurance companies only Since 2011, premiums exclude amounts deposited under Investment and Service contracts (reclassified from Insurance contracts under IFRS), which totalled over $1 billion in 2013 *Premium equivalents (benefit payments + administration fees) for uninsured contracts administered by life insurance companies and not-for-profit health care benefit providers such as provincial Blue Cross organizations

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