Close up on a file tab with the word life insurance, focus on the main text and blur effect. Concept image for illustration of family protection policy
© Le Moal Olivier / 123RF Stock Photo

U.K.-based GlobalData has updated its growth forecasts for Canada’s insurance industry, with life insurance versus general insurance expected to be hardest-hit by the pandemic.

The data analytics firm expects Canada’s life insurance industry will contract 4.2% in 2020. That compares to the firm’s initial growth estimate of 4.7% pre-pandemic.

Canada’s total insurance industry is forecasted to contract 1.4% this year, a downgrade from an initial growth forecast of 3.8%.

General insurance accounts for 70% of Canada’s insurance industry, so the smaller life sector will help contain losses, GlobalData said in a release.

The data analytics firm also expects the market for general annuities to decline, forecasting a drop of 11.4% in 2020, versus a pre-Covid-19 forecast of 8.1% growth.

Its annuities outlook is based on the temporary freeze on portability transfers and annuity purchases of defined benefit pension plans, as announced by the Office of the Superintendent of Financial Institutions in March.

GlobalData noted the industry’s positive responses to the pandemic, such as the adoption of digitization to ensure remote connectivity with clients.

Further, “Insurers are doing everything they can to keep business going,” said Deblina Mitra, an insurance analyst at GlobalData, in the release.

“They are offering an extension to the grace period, and the waiving of missed payment fees or payment deferrals to individuals, families and businesses who are unable to pay premiums.”