Best’s Market Segment Report: Steady Growth Brings Steady Results for Canada’s Life/Annuity Insurers

OLDWICK, N.J.--(BUSINESS WIRE)--Canada’s life/annuity insurance industry recorded favorable performance in 2024, bolstered by record high new annualized premium growth, with assets under management and fee-based income business also helping to increase revenue, according to a new AM Best report.

AM Best is also maintaining its stable market segment outlook for the Canada L/A sector, driven in part by the segment’s favorable earnings and underwriting, in addition to overall prudent regulatory capital levels and financial flexibility that supports steady growth. At the same time, the segment faces headwinds, including ongoing uncertainty over the country’s economy going forward and the potential for further interest rate cuts from the Bank of Canada. Canada’s L/A insurers also contend with an ongoing coverage gap for life insurance products, reflective of an underserved market.

LIMRA statistics indicate that new annualized premium hit a record high of CAD 2.4 billion in 2024. This marked an 8% increase over the prior year and was mainly driven by whole life premium, which accounted for 69% of the new market premium. The sales growth was supported by technology-driven, customer-centric business models, and increased accessibility to customer data.

“Economic uncertainty has led some individuals to purchase life insurance to help prepare Canadians for a more secure retirement and wealth planning,” said Ed Kohlberg, director, AM Best. “This includes growth in the affluent market, which continues to buy permanent life insurance.”

In the United States, most of the growth has been supported by asset-intensive annuity business growth. “But the Canadian industry has focused more on mortality business and assets under management fee-based business for growth,” said Kevin Varvaro, senior financial analyst, AM Best. “We believe that the Canadian L/A insurers are well-equipped to navigate changing conditions over the near term while focusing on steady growth and capital preservation.”

Group life insurance continued to be the leading line of business in Canada by revenue with just over CAD 33 billion in 2024, followed closely by individual life insurance at just over CAD 29 billion. Both lines saw a pre-tax return on revenue of approximately 7% with operating gains of CAD 2.5 billion and CAD 2 billion, respectively. The annuity business resulted in insurance revenues of CAD 6.1 billion for group segment and CAD 4.7 billion for individual, with each generating returns on revenue of 13% and 15%, respectively.

AM Best will host an insurance market briefing on the state of Canada’s insurance industry at the Sheraton Centre Toronto Hotel on Thursday, Oct. 30, 2025. During the complimentary half-day event, AM Best analysts will deliver market insights and present overviews of Canada’s main insurance sectors, including discussion of emerging trends such as catastrophe losses, climate risk mitigation, cyber and artificial intelligence, and updates around the IFRS 17 accounting practices.

To register for AM Best’s Canada Insurance Market Briefing - Toronto, please go to AM Best’s Canada Insurance Market Briefing - Toronto.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=359351.

A video discussion of this report also is available at http://www.ambest.com/v.asp?v=ambcanadala1025&AltSrc=182.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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