Canada Life’s closure of its individual protection business cost the insurer C$29m, approximately £17.1m, it has reported.
This is according to 2023 financial results for the company’s parent Great West Life Co which showed that around 47,000 customer policies will transfer to Countrywide in 2024.
That is subject to the completion of a court-approved transfer following its agreement to sell its individual onshore protection business to Countrywide Assured plc, a subsidiary of Chesnara plc, on 16 May 2023.
The sale followed on from Canada Life UK’s decision to close its onshore individual protection insurance to new business in November 2022, with the firm adding: “As a result of this agreement, divestiture costs of C$29m (£17.1m) have been excluded from base earnings in the second quarter of 2023”.
The insurer did not include details of its UK group protection arm in its results publications and did not release them when asked by Health & Protection.
Sales up
Across its European operations the insurer posted group life and health book premiums at 31 December 2023 of C$2.4bn (£1,42bn), an increase of C$67m (£39.6m) compared to 30 September 2023, primarily due to organic growth of in-force business.
For full year sales, the group posted sales of C$3,851m (£2,278m) an increase of C$68m (£40.2m) over the same period last year.
That was primarily due to strong individual annuity and bulk annuity sales in the UK and the impact of currency movement, partially offset by lower equity release mortgage sales in the UK, it said.
Workplace solutions sales (which indlues the UK group protection business) for the fourth quarter of 2023 came in at C$596m (£352.6m), up by C$228m (£134.9m) compared to Q4 2022, primarily due to pension sales growth in Ireland and the impact of currency movement.
Workplace solutions for the full year also saw an increase with sales of C$2,343m (£1,386m) an increase of C$379m (£224m) compared to the same period last year. That was primarily due to the same reasons discussed for in-quarter results.
The group saw individual wealth and asset management sales for the fourth quarter of 2023 of C$6,260m (£3,704m) up by C$1,037m (£613.6m) compared to the corresponding quarter last year.
The group attributed that primarily due to higher wealth fund management sales in Ireland and the UK and the impact of currency movement.
Full year sales came in at C$24,947m (£14,761m) an increase of C$3,414m (£2,020m) over the corresponding period last year.
Insurance and risk solutions sales for the fourth quarter of 2023 were C$1,216m (£719.5m) an increase of C$369m (£218.3m) over equivalent quarter last year.
That growth was attributed primarily to strong individual annuity sales from higher interest rates and from bulk annuities reflecting improved operational capabilities in the UK, as well as the impact of currency movement.
But the insurer added this was partially offset by lower equity release mortgage sales which resulted from higher interest rates and lower bulk pay out annuity sales in Ireland.
‘Good’ group risk premium growth
Lindsey Rix-Broom, CEO of Canada Life UK, (pictured) pointed to “good” premium growth across the insurer’s group protection business.
“In the group protection business our in-force premium growth has been good, aligning to our focus on scheme retention and sustainable growth,” she said.
“Proposition developments included the launch of an industry first for group protection, Toothfairy, a virtual dentistry support service.”
Rix-Broom added: “We’ve delivered a strong performance in challenging conditions which demonstrates how we, as a well-diversified business, can weather the ever-changing headwinds.
“Our record sales of individual annuities have been driven by the high levels of income available, coupled with the demand from customers for secure income solutions in uncertain times, including our fixed-term options.
“We continue to invest in our bulk annuity business, and secured our first deferred members transaction.
“In total, we completed eight deals last year, of which five included deferred members, and we are very positive about the potential for this business in a very active market.”