Amid greater regulatory scrutiny, industry consolidation, tech disruption and the trend of independence, successful life agents will be those who build business skills, meet evolving compliance requirements and offer advice as opposed to information.

During a discussion on the future of insurance distribution at Advocis’ annual symposium on Thursday in Toronto, panellists weighed in on the skills life agents must build to thrive.

Phil Marsillo, president and CEO of IDC WIN, suggested advisors improve their skills in running a business versus a sales organization. (Marsillo is also president of the Canadian Association of Independent Life Brokerage Agencies.)

“In the old days, you were working within an agency [and] things were done for you,” Marsillo said. “Today, even if you’re working with an MGA [managing general agency], you are still considered an independent business person.”

He also suggested life agents understand the concept of teaming. As products become increasingly complicated, work with people and organizations that can support you in areas outside your own expertise, Marsillo said. “That’s how you build value, that’s how you’re going to grow your business.”

Marsillo also noted the importance of documentation. During life agent audits, “reason why” letters are often missing, he said. And audits will increase as regulators place greater scrutiny on insurers and MGAs. He suggested recording Zoom meetings with clients as the basis for “reason why” letters.

Stephen Frank, president and CEO of the Canadian Life and Health Insurance Association, said expectations for documentation are increasing, requiring “the professionalization” of the sales process.

“We’re trying to shoot to a principles-based, not a checklist-based, regulatory world,” Frank said. As such, life agents must be “more professional at documenting and being able to demonstrate [they’ve] treated [their] clients fairly…. Everyone’s going to have to up their game around that.”

Brent Lemanski, executive director of LIMRA and LOMA Canada in Toronto, suggested life agents focus on advice. “There’s a bifurcation between access to information and advice,” Lemanski said. He suggested life agents “move away from spreadsheet selling to story selling.” That means building skill at recognizing consumers’ needs and offering them a personalized story about how they’ll benefit from advice, he said.

Lemanski also suggested building hybrid skill sets. Examples are adding personal touches to your video background as a way to better connect with clients, and learning how to conduct client meetings virtually. “We need to be more aware of consumer needs and even perhaps segment our client base based on their desire for communications — whether it’s virtual and or in person,” he said.

Advisor.ca and sister publication Investment Executive were media sponsors of the event.

The Supreme Court of British Columbia has ordered a man who perpetrated one of the province’s largest investment frauds to pay the B.C. Securities Commission (BCSC) annual payments from two of his registered accounts.

Earle Pasquill, who owes the BCSC $36.7 million, must forfeit to the regulator any payments from his two life income fund (LIF) accounts, the BCSC said in a release on Friday.

The LIF accounts totalled $551,349 as of April 2024, and Pasquill withdraws about $75,000 annually from the accounts, the release said.

“Any payments the BCSC receives from [the LIFs] will be made available to victims of the fraud,” the regulator said in the release.

The decision follows amendments in 2023 to B.C.’s Pension Benefits Standards Act and the Pooled Registered Pension Plans Act to make clear that certain pension-derived funds aren’t exempt from enforcement processes, the release said.

In 2014, a BCSC panel found that Pasquill and Michael Lathigee, who jointly directed and controlled the Freedom Investment Club, defrauded investors of $21.7 million in 2008 through a real estate development scheme.

Pasquill is liable for that amount as well as an administrative penalty of $15 million.

He has paid none of the sanctions, the release said.

In 2023, the commission sought to collect sanctions from Pasquill’s wife using amendments to B.C. securities legislation that took effect in 2020.

Those amendments allow the regulator to collect against relatives who receive property from fraudsters for less than market value, including property transfers that occur before the misconduct.

Advisors say planning for a family with a disabled child involves setting up the right life insurance for relatives, a Henson trust, registered accounts and taking advantage of provincial and federal programs. 

“You want to ensure that the special needs individual is properly cared for when the parents are no longer here,” said Joseph Trozzo, vice-president of national investment sales and MGA at Equitable Life in Toronto.

Trozzo has a son with autism, who has played soccer in the Special Olympics. 

Insurance 

Parents can buy a permanent, joint last-to-die life policy on themselves to fund a Henson trust and term insurance to protect income, said Ron Malis, a financial advisor with Reegan Financial in Toronto who serves clients living with disabilities. 

Another option is to explore buying life insurance on the grandparents’ lives. “It takes a village, especially when you have a special needs person in your life,” Trozzo said. 

Henson trust 

Assets held in a Henson trust for the benefit of a person living with a disability aren’t considered as belonging to them, and won’t put their eligibility for asset-tested government benefits at risk. 

Almost anything can go into the trust. For example, the parents can put a second property in to exempt it from capital gains tax when they die, Malis said. 

Advisors should talk to their clients about a Henson trust as soon as possible. It’s only allowed if the testator includes it in their will before they die, Malis said. They should also pick reliable trustees and connect them with professionals like advisors and accountants. 

Parents can name more than one trustee as well as backup trustees to a Henson trust, said Guerlane Noël, assistant vice-president of tax and estate planning at Mackenzie Investments in Montreal. For example, one trustee could have financial expertise, while the other could have a health-care background. 

Disability tax credit 

The disability tax credit (DTC) is a non-refundable tax credit for people with severe and prolonged disabilities that last at least 12 months. Applicants need a medical professional to complete a form, and qualification can be either temporary or permanent. 

Apart from the tax benefit, the DTC certificate is key to qualifying for several federal programs, such as the registered disability savings plan (RDSP) or the Canada Disability Benefit, which will begin distributing up to $200 a month to eligible beneficiaries in July 2025. 

Registered disability savings plan 

There is no annual limit on contributions to an RDSP, which has a lifetime limit of $200,000. An RDSP can also get matching grants every year. Families earning under the specified income threshold can get up to $70,000 in grants with $30,000 of contributions over 20 years.  

“An RDSP is almost always a no-brainer,” Malis said. 

If there is sufficient contribution room, families can transfer their grandparents’ registered retirement income fund (RRIF) into the RDSP, Noël said. This will defer taxes on the RRIF, so it’s only due at the time of withdrawal from the RDSP. 

Registered education savings plan 

Families with more than one child can set up a family registered education savings plan (RESP). If the special needs child doesn’t pursue post-secondary education, their siblings can use the funds, Trozzo said. 

“You don’t want to put limitations on [the special needs child], but they’re going to be challenged to go to post-secondary education,” he added. 

Any unused individual RESP funds can be transferred into an RDSP, but any government contributions to the RESP must be returned first, Malis said. 

Ontario Disability Support Program

In addition to federal schemes, provincial disability support programs can also help. For example, the Ontario Disability Support Program (ODSP) pays up to $1,368 per month for a single person. 

Although benefits could be paused or clawed back if the recipients exceeds prescribed asset or income limits, there are exemptions. For the ODSP, anything held in a Henson trust and up to $100,000 of life insurance products are exempt as chargeable assets, and payments from an RDSP account aren’t considered chargeable income, Malis said. 

If a special needs child is due to receive an inheritance that could make them ineligible for ODSP, the assets could be deposited into an RDSP or funnelled into a segregated fund, Malis said. Segregated fund withdrawals are chargeable income, however. 

The financial handover 

A special needs child can outlive their parents, so parents should involve the next generation of caretakers early in the process. For example, they could be Henson trust trustees or the child’s siblings, Trozzo said. 

They should pass on information such as medical care instructions, the doctor’s name and specific details from the last will and testament to ensure the handover is as seamless as possible.

Trozzo’s son has a grilled cheese sandwich daily but won’t eat it unless it’s cut a specific way. “If that information is not captured … you’re going to be scratching your head thinking, ‘why isn’t he eating his grilled cheese anymore?’” he said. 

The new caretakers should also participate in financial planning sessions with the financial advisor to fully understand the strategy behind using the different registered accounts and government programs, Trozzo said.  

Proper financial planning can help ease parents’ anxiety, Trozzo said. “God forbid if you’re not here or your spouse isn’t here, you have a plan in place. … When you go to bed at night, you can put your head on the pillow and say, ‘I know [that] financially, my special needs child is going to be OK.’” 

Ontario is consulting on a new pension option, known as a variable life benefit (VLB), that would allow pension plan members to opt for a lifetime monthly benefit geared to investment performance.

The province published a consultation paper on the creation of a legislative and regulatory framework to allow the option (also known as a variable payment life annuity) for certain sorts of pensions, including pooled registered pension plans, defined contribution plans, and plans that allow voluntary contributions.

According to the consultation paper, the new payout option was made possible by changes to federal tax law in 2021, but also requires amendments to provincial pension legislation.

The current options for retirees include transferring their pension money to a locked-in retirement account, purchasing an annuity from an insurer, or leaving their money in their pension fund. The VLB option would allow retirees to invest some or all of their pension holdings in a fund — managed by the plan administrator — that makes monthly payments to members for life.

“These monthly payments would vary depending on the VLB fund’s actual rate of return relative to its expected return, as well as the mortality experience of the members in the VLB fund relative to the assumed life expectancy,” the paper noted.

Plan sponsors would be responsible for the design of the VLB, including its investment strategy, fees and compliance with the provincial legislation. The VLB funds would have to be registered with Ontario’s pension regulator.

“Plan administrators would retain fiduciary responsibility for the VLB, which includes the requirement to adjust benefits to reflect investment returns and mortality experience,” it said.

Under the tax rules, once a retiree purchases a VLB and receives a payment, their assets are locked-in to the fund, however the rules do allow funds to be structured to provide a partial return of capital if the plan member dies before receiving payouts that equal their initial investment.

In the consultation, the government said it is seeking feedback on a framework for VLBs that protects plan members, enables them to make informed decisions about their options, minimizes the regulatory burden, and harmonizes with the rules in other provinces.

The paper noted that fees are particularly important to a VLB, since they represent “a lifelong commitment and the fees charged could impact the amount of the benefit a member receives.”

By contrast, traditional annuities don’t charge annual fees and the benefits are guaranteed — and retirees that manage their own investments can shop around for more competitive fees.

Given the importance of fees, the paper is seeking feedback on regulating those fees.

It also said that effective disclosure to plan members will be “critical.” Consequently, it proposes plan members get upfront disclosure before they buy a VLB, followed by annual disclosure, and would also set disclosure requirements for a pension, or a VLB, that is wound up.

Among other things, the government also wants feedback on the permitted frequency of VLB benefit changes; whether there should be limits on funds’ expected return rates; portability options; and rules around plan/fund termination.

The consultation is set to run until Jan. 10, 2025.

Including a life insurance policy in a prenuptial agreement can be complicated. Couples need to consider how to split a policy in case of separation, possible tax implications of splitting or cashing out a policy, and beneficiary changes.

And when couples draft a prenup, considering how to split a life insurance policy isn’t top of mind. “It’s not so romantic to talk about the nuts and bolts of life [insurance],” said Linda Cartier, president of the Academy of Financial Divorce Specialists in Sudbury, Ont. “They might be talking about who’s going to pay what bills, but they usually aren’t talking about much of anything else.”

Still, a couple is at least “rational and caring” at that stage compared to when they’re separating, Cartier said.

Prenuptial and cohabitation agreements (the latter are for unmarried or common-law spouses) are essentially the same in B.C., noted Ari Wormeli, a family lawyer and partner with YLaw in Vancouver.

A permanent life insurance policy with a cash surrender value can be divided like any other asset, and its division can be specified in the agreement, he said.

A policyholder doesn’t have the option to split any single life insurance policy to insure two lives. But couples could agree, if they were to separate, to partially convert a single term policy into two current-dated policies on the original life insured, with different beneficiaries, said Ladelle Baar, assistant vice-president of product taxation and financial underwriting with Canada Life in London, Ont.

If a couple realizes, when drafting a prenup, that a life insurance policy can’t be split based on the contract, they could buy a second policy instead, Baar said. The two policies wouldn’t mirror each other exactly, given that the partners may be of different sexes, health conditions, and ages. However, having two policies could potentially prevent tax consequences by avoiding the surrender or conversion of a single policy.

The couple should understand the possible tax implications of their prenup agreement. If a policy will be surrendered to buy two new policies, for example, the surrender of the first policy could result in tax consequences if it has cash value.

Some insurers sell joint life policies with the option to exchange such a policy for two single life policies, and policyholders should understand whether their contract includes that option, Baar said. Also, conversion to a current-dated policy could have tax implications.

“People don’t realize that they’re actually disposing of one and buying another one,” Baar said.

Beneficiary considerations could also be part of a prenup. For example, a couple could agree that at separation, one spouse gets the primary residence or liquid assets, while the other becomes an irrevocable beneficiary of a life insurance policy, Wormeli said. However, this arrangement may work only if the life insured has a short life expectancy.

Even when a prenup states that one person in the couple will become the beneficiary of a policy, the couple should make sure that the beneficiary designation is updated with the insurer, Baar said.

Also, if a policy will be transferred from one person to the other upon separation, the policyholder should ensure the policy can be transferred and is not assigned to a bank for a loan, Baar said.

Editorial note: A previous version of this story erroneously stated that a couple could agree to split a universal life policy. We regret the error. The story has also been updated to clarify that a policy is “surrendered,” not sold.

Cancer survivors may be nervous about qualifying for life insurance, but with survival rates increasing and underwriting procedures changing, they stand a better chance of getting coverage, says Darren Devine, a financial planner with Sun Life and the president of Devine and Associates Financial Services in Guelph, Ont.

“The majority of people who’ve had cancer believe that obtaining insurance is absolutely impossible,” Devine said. “But the underwriting world has evolved greatly.”

In the past, life agents would tell cancer survivors to turn to specialty insurers that issue policies with limited face value, exclusions and high rates. But mainstream insurers will now consider those applications and may offer standard ratings depending on factors like cancer type and stability period, said Banasha Shah, a consulting actuary at Jennings Consulting.

“The type of treatment that they had, and the length of time since they’ve been in remission will, I think, inform whether or not people will qualify,” Shah said. “But the fact that [they] can apply now without [being told], ‘Don’t bother, go to one of those specialty products,’ is what has really changed.”

Sun Life offers coverage for cancer survivors across all its life products, said Michael Van Alphen, vice-president, insurance solutions with Sun Life. Underwriting depends on a sufficient recovery stability period to ensure there has been no reoccurrence for several years, depending on the type and stage of cancer.

Each cancer survivor’s case is assessed individually, but Sun Life can make an offer “the majority of the time,” Van Alphen said. “Some of the offers will have a rating, but it is possible that a cancer survivor could qualify for a standard offer.”

Cancer survivors can apply to all of Manulife’s life products based on similar underwriting factors after the applicant has completed treatment, said Karen Cutler, head of underwriting at Manulife.

More people survive cancer than ever before, Cutler said.

Insurers tend to follow cancer survival data closely to understand how various cancer types respond to the latest medical interventions. The five-year survival rate for some thyroid cancers, for example, is close to 100%. For pancreatic cancer, on the other hand, it is 20% or less, according to the Canadian Cancer Society.

Even with low survival rates, the longer an applicant survives with cancer, the more likely they are to qualify for coverage, said Byren Innes, managing director of Jennings Consulting.

Higher-stage cancers have an increased risk of recurrence, Cutler said. While applications within the first five years of treatment completion are more likely be rated, those premiums come down over time. For example, someone who had melanoma skin cancer removed six years ago could have a standard-rated policy, depending on the stage of the cancer they survived, Cutler said.

If an applicant is denied for applying too soon after treatment ended, the insurer could issue a lesser product in the meantime and ask the applicant to reapply for a mainstream product later, Shah said.

Unlike diabetes, cancer doesn’t have ongoing management, so insurers want to get cancer survivors into mainstream products as part of the standard population, even if there is a rating, Shah said. “We want to bring them into the mainstream and adjust for their survival statistics.”

When working with clients who survived cancer, life agents should ask for details such as the type and stage of cancer, the treatment received, when treatment was completed and whether there are ongoing concerns, Cutler said.

Agents should also ask about the client’s premium tolerance early in the conversation. If the offer comes back rated, agents should gauge whether the client can pay the higher premium or would prefer to take a lower face amount, as an underwriter may reach out to the agent offering two quotes, Cutler said.

To temper client expectations, agents should inform them that the insurer could rate or deny the policy altogether, Devine said. “The last thing you want to do is over-promise and under-deliver.”

If the application is rejected, they could look at guaranteed issue products like a group insurance plan from an employer, Devine said. Self-employed clients may be able to join a group plan through a professional association.

In addition, agents should encourage their client’s partner to buy life insurance.

“The spouse that has suffered the illness always looks back with a little bit of regret saying, ‘Shoot, I should have dealt with this stuff in advance,’” Devine said. “Unfortunately, it reiterates to the healthy spouse, ‘I better take a really good look at [insurance] because it’s health that buys the coverage.’”

A recent Advisor.ca article discusses the costs and planning aspects of long-term care (LTC). The costs are such that clients may be left with the choice of either planning for that eventual need or simply hoping for the best. The cost of LTC insurance products can have a big impact on your clients’ cash flow and may require clients to redirect savings to fund these plans. How can advisors help clients plan for the day they will need LTC in the face of these costs and limited competition in the market?

When we address the value proposition that insurance-based products provide, it’s vital to move the conversation away from discussing which product has the lower premium or offers the higher payout on death. Basic comparisons such as these commoditize not only the products but also the value that the advisor provides. If we continue along this path, we’ll eventually make insurance planning as simple as a market analysis website, and artificial intelligence chatbots may be able to provide these kinds of services in a few years.

Here are a few examples of the ways you can look beyond premiums to build a plan that takes into account variables such as sudden disability and the need for flexibility.   

A case study

Let’s look at a 45-year-old medical professional who is the owner of a professional corporation. He has a projected capital gains liability of around $1.5 million. In this case, you position an earlier cash-value whole-life policy with a guaranteed premium of $25,000 a year for 20 years. You run your projections, which demonstrate that by age 85, the death benefit will be in the range of almost $1.95 million at current scale, $1.71 million at current -1% (see graph below), and $1.46 million at current -2%. 

From a risk perspective, the product should be able to address the projected capital gains need. It also addresses the concern regarding earlier cash value in the event something unexpected happens.

However, is that really the only metric you must consider? At the very least, should you not have a conversation about what variables could change to alter the outcome? What about gains or losses from mortality, lapses, expenses, taxes or hurdle rates? (For more on those conversations, see Managing expectations when clients have older whole life plans.)  

Life happens

Your client may ask you what will happen if they can’t afford to pay the premiums because of illness or disability. You could easily pivot to talking about a waiver of premium rider, but that’s just an additional cost to address a hypothetical situation that may or may not arise.

Consider the basics, such as how flexible or adaptable a product is. If circumstances change, you might suggest a non-forfeiture option, such as reduced paid-up (RPU); or the ability to switch the cost structure from a guaranteed 20 to a life pay based on the client’s issue age, so that they can adapt to their new cash-flow realities. These are some of the things to bring into your discussions to provide some context to your decision-making. 

Sudden disability or illness

Suppose your client has asked what would happen if they suddenly became unable to work. If this event were to occur at age 58, the client would be a little too young to retire, and his retirement portfolio would be adversely affected if he were to make some earlier-than-planned withdrawals. 

In this case, the client decides to elect RPU and officially submit his claim for disability thereafter. The election of the RPU will force some cash out of the contract to maintain policy-exempt status. This results in $36,102 being paid out of the contract, leaving $34,861 net of taxes (assuming 50.17%) inside his corporation. That translates to a 23.32% pre-tax equivalent yield. Then, the election of the disability provision in the contract allows up to 100% of the cash surrender value to be paid out on a tax-free basis, rather than being treated as a taxable disposition.

In this example, the client elects another $57,559 to be paid out of the policy on a tax-free basis, which is equivalent to a pre-tax yield of 38.5%. Now, the corporation has $93,661 of cash on hand, which could be paid out as a dividend, a bonus, or a tax-free payout should there be any shareholder loans owed to him by his corporation. Alternatively, it could be used to pay down a corporate line of credit facility rather than liquidating his investment portfolio inside the corporation, which may be a taxable event.

Another benefit of this solution is that the disability payout reduces the adjusted cost basis (ACB), dollar for dollar. This could be of interest if the client would like to accelerate the ACB reduction in order to maximize capital dividend account (CDA) credits in the event he has a shortened life expectancy due to his medical event.

The CDA credit is a unique aspect of life insurance that is not available in traditional living benefit products such as critical illness (CI) or disability insurance. (It’s also worth noting that the disability payout cannot be included as part of the CDA calculation.)

Now, let’s assume the illness shortens his life expectancy to age 78 (year 33).

No disability event			Disability event
Death benefit (-1%)	Net to estate (47.74% dividend tax)	Net to estate IRR*	Death benefit (-1%)	Net to estate (47.74% dividend tax)	Net to estate IRR**
$1,545,515	$1,405,031	4.76%	$662,904	$607,278	3.98%

*Internal rate of return

** IRR adjusted to reflect the adjusted cash inflow due to the payout of cash values at time of event

The client’s projected capital gains liability under the original financial plan is around $1.1 million by age 78. So, the death benefit payout does fall short at current -1%, but these are the kinds of conversations that are important to help the client understand the trade-offs.

This client also could have added a term or permanent CI rider to the policy, which would have provided an alternative way of receiving living benefits to fund lifestyle costs post-disability or illness.

Life insurance is a powerful planning tool and a unique asset class, and it is important for clients to engage with an insurance advisor and move beyond determining which quote is cheaper. We are now moving the discussion away from basic metrics toward a more nuanced conversation about product flexibility and addressing unexpected life events. These kinds of conversations separate you from others and show that you have a deeper understanding of financial planning issues, and that you can incorporate the product features to address your client’s unexpected needs.

Winnipeg-based insurer Canada Life and Mississauga, Ont.–headquartered managing general agent Primerica Canada signed a distribution agreement that provides Primerica’s advisors access to a “curated” segregated fund shelf, the insurer said Friday.

Primerica serves many new and working-class Canadians, and will extend the market reach of Canada Life’s existing distribution, David Stewart, senior vice-president of independent distribution with Canada Life, told Advisor.ca in an interview. “This is going to be an opportunity for us to really help the underserved mass market.”

Stewart said the product shelf includes a “core group of funds” with different fund managers.

The training and onboarding of Primerica Canada advisors will be phased beginning in 2025. Stewart said advisors must have an appropriate understanding of segregated funds and where they fit in a financial plan to provide the right advice to clients.

Primerica has more than 10,000 licensed financial reps, the firm’s website says. Canada Life says it has more than 16,000 advisor relationships.

“At Canada Life, there is no impact to existing distribution or advisors,” the insurer said in a release.

Last year, Canada Life acquired wealth management firms Investment Planning Counsel (a fellow Power Corp. subsidiary) and Value Partners Group. The distribution agreement with Primerica will complement the insurer’s strategy to bring more wealth management products through new sales channels, Stewart said.

In its second-quarter report to shareholders, Great-West Lifeco, Canada Life’s parent company, reported individual wealth management sales in its Canada segment of $4.6 billion, up from $2.4 billion a year earlier. The increase was attributed primarily to strong segregated funds and mutual funds sales, both proprietary and third party, as well as the addition of IPC and Value Partners.

Canada Life’s contractual service margin (CSM), or the value of unearned profits, in its segregated funds on June 30 was $1.90 billion, down $41 million from the previous quarter, attributable to “unfavourable experience” in seg funds.

Great-West Lifeco’s CSM in its segregated funds was $3.35 billion, down by $76 million from the previous quarter. The drop was attributed to market impacts in Europe and net outflows in Canada.

“If you look at the overall seg fund market, yes, it has been challenged, but we feel very optimistic that this is a growth opportunity,” Stewart said.

Segregated funds account for more than one-third of Great-West Lifeco’s total assets under administration in Canada.

Canada’s life and health insurers paid a record $128 billion in benefit claims in 2023, the Canadian Life and Health Insurance Association (CLHIA) said Tuesday in its annual statistics report.

The total was up 13% from the previous record set in 2022, and up 68% from a decade ago, the report said.

Life insurance claims totalled $17 billion, up from $16 billion in 2022.

The CLHIA said 23 million Canadians own $5.7 trillion in life insurance coverage, with total coverage increasing steadily over the past decade, given the need to cover larger mortgages and a higher cost of living.

Average life insurance protection per household was $483,000, the report said, up from $474,000 in 2022, and represents about five times household income.

Most life insurance (83% of premiums) was purchased by individuals through a life agent or advisor, the report said, with the remainder representing premiums from group plans.

Also, individual life insurance now equals 65% of the value of total policies in force, the report said — up from 58% a decade ago. The increase was driven mostly by term life insurance, it said.

Nearly $63 billion was paid in retirement benefits, up from nearly $54 billion in 2022. Over 80% of these benefits were provided through segregated funds, the report said.

Health claims set a new record of $48 billion. Prescription drug costs continued to account for the largest share of health benefits, the report said, at $15 billion in 2023.

The $730 million paid in mental health support claims was a 12% increase from the previous year.

Total premiums collected by insurers in 2023 rose to $157 billion, up from $145 billion a year prior. The increase was led by premiums for annuities and segregated funds (up 9.1%), health insurance (up 8.7%), and life insurance (up 6.4%), the report said.

Strong fee income helped power a couple of the large life insurers — Great-West Lifeco Inc. and Manulife Financial Corp. — to better-than-expected second-quarter results, Moody’s Investors Service reports.

The rating agency said Great-West exceeded expectations in the quarter with $1 billion in net earnings attributable to shareholders, which was double the $498 million it posted in the same quarter a year earlier.  

“Overall, the credit-positive results reflect strong business fundamentals in the U.S. and Canada, and exceeded our expectations, with [Great-West] well-positioned to weather a weakening global macroeconomic environment,” Moody’s said. 

“The increase in net earnings mainly was due to improved market experience from interest rate movements and improved investment returns on non-fixed-income assets,” it said. Lower restructuring expenses also bolstered earnings.

Moody’s noted that Manulife also reported net income of $1.04 billion for the second quarter, which was in line with the same quarter in 2023.

Core earnings were up 6% year over year, it said, “primarily driven by higher fee income in global wealth and asset management as well as an improved net insurance experience in Canada and Asia.”

“Overall, these credit positive results were higher than our expectations, and reflect the strength of [Manulife’s] diversified business, with continued earnings momentum in Asia,” it said.

Moody’s noted that the Asia region generated 44% of Manulife’s earnings in the first half, which, it said, has the company on track to reach its goal of 50% by 2027.

In the wealth and asset management division, core earnings were up 25% in the quarter, Moody’s said, driven by stronger fee income from higher average assets under management and administration.