AM Best, the credit rating agency, reported that Canada’s life and annuity (L/A) insurers delivered strong results in 2024.
According to AM Best, the outlook for the Canadian L/A market remains stable, supported by consistent earnings, sound underwriting performance, and prudent capital management across the industry. The agency noted that these factors, combined with insurers’ financial flexibility, have helped sustain steady growth in a competitive market.
However, AM Best also highlighted several ongoing challenges for the sector, including economic uncertainty and the potential for additional interest rate cuts by the Bank of Canada. The agency further emphasised that Canada’s life insurance market continues to face a persistent coverage gap, leaving many individuals without adequate protection.
Leading insurers such as The Canada Life Assurance Company, Manulife Financial Corporation, Sun Life Assurance Company of Canada, and iA Financial Group (Industrial Alliance) remain central to this growth. AM Best attributed much of the sector’s positive momentum to these companies’ continued investments in technology, data analytics, and customer-focused distribution strategies.
Citing LIMRA data, AM Best reported that new annualised premiums reached a record CAD 2.4 billion in 2024, an 8% increase over the prior year. Whole life insurance products represented approximately 69% of total new premiums, underscoring strong consumer demand for permanent protection and stable long-term financial planning solutions.
“Economic uncertainty has led some individuals to purchase life insurance to help prepare Canadians for a more secure retirement and wealth planning,” added Ed Kohlberg, Director, AM Best. “This includes growth in the affluent market, which continues to buy permanent life insurance.”
In the United States, much of the expansion has been driven by growth in asset-intensive annuity products. “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.”
According to AM Best, group life insurance remained the leading source of revenue for Canada’s life and annuity industry in 2024, generating just over CAD 33 billion. The agency noted that individual life insurance followed closely, contributing slightly more than CAD 29 billion. Both lines reported a pre-tax return on revenue of approximately 7%, with operating gains of CAD 2.5 billion for group life and CAD 2 billion for individual life.
AM Best reported that the annuity segment also produced solid results during the year. Group annuity products generated CAD 6.1 billion in insurance revenue, while individual annuities accounted for CAD 4.7 billion. The firm stated that both categories achieved strong profitability, posting returns on revenue of 13% and 15%, respectively.
Looking ahead, AM Best announced it will host an insurance market briefing on the state of Canada’s insurance industry at the Sheraton Centre Toronto Hotel on Thursday, October 30, 2025.
During this complimentary half-day event, AM Best analysts will provide detailed market assessments and discuss key trends across Canada’s primary insurance sectors. The agenda will feature insights on catastrophe losses, climate risk mitigation, cybersecurity, and artificial intelligence, as well as updates related to IFRS 17 implementation and its impact on financial reporting.
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