Consumers less likely to buy insurance product over next five years says Conference Board
Published: March 6, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Canadian insurance companies face a testing future due to an aging population and less consumer spending on big-ticket insurance products. The opinion has been offered by the Conference Board of Canada’s first outlook for the insurance industry.
Canadian Industrial Outlook: Insurance – Winter 2017 shows that the insurance industry will grow 1.3% on average year-on-year until 2021. The Conference Board of Canada announced the figures in a press release on Monday.
“Canadian insurance providers are facing a number of headwinds,” said Michael Burt, director, industrial trends, with the conference board. “Discretionary spending on items that require insurance, such as recreational vehicles and vacation properties, is expected to slow amid rising household debt, and weak employment and wage increases. In addition, Canadian life insurance companies face challenges associated with an aging population, including an increase in death benefit claims and shrinking premium collections.”
In terms of the property and casualty industry, the Fort McMurray wildfire had a big effect on insurers during last year. The costliest insurance event in Canadian history naturally led to a significant increase in claim activity. The conference board points out that claims hit historic heights of $14 billion overall during Q2 2016, which was at the peak of the wildfire.
New technology is also impacting the insurance industry, the report adds. Big data and connected devices will impact insurers, although conversely software will help to improve risk assessment and pricing models.
Claims processing are becoming automated, so a reduction in live agents may be observed in the coming years.