Canada life insurers post growth as digitization supports 2025 sales

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Canada life insurers 2025 growth

Highlights

Canada's life and annuity insurers report 4% pretax and 7% post-tax operating gains for 2025, with insurance revenue up just over 2% to CAD 102.8 billion.
Digitization, including AI-driven underwriting, accelerates policy issuance and boosts sales momentum, as European revenue rises more than 8% and Asian revenue nearly 18%.
Net investment results for Canada's life insurance segment fall 24% to just over CAD 6.7 billion in 2025, despite whole life premiums growing 10% to a record CAD 2.3 billion.

2025 results and digital sales momentum

As reported by AM Best, Canada’s life and annuity insurers are seeing growth in their core business lines in 2025, with digitization and technology-led customer models supporting accessibility and faster policy issuance.

In its Best’s Market Segment Report, "Canadian Life/Annuity: A Focus on Digitization Bolsters Growth," the ratings agency says sales are being lifted in part by efforts to speed up life insurance purchases, including the use of artificial intelligence to accelerate underwriting decisions. Kevin Varvaro, senior financial analyst at AM Best, says coverage gaps are emerging because policies bought in earlier years are not keeping pace with inflation, including larger mortgages and salaries, creating a need for innovation and a more streamlined sales process.

The report says the segment records year-over-year pretax operating gains of 4% and post-tax operating gains of 7% in 2025. Insurance revenue rises just over 2% from the prior year to CAD 102.8 billion, while international business lines continue to outpace the mature domestic market, with European revenue growing more than 8% and Asian revenue nearly 18%.

Risks remain despite stable outlook

AM Best maintains a stable outlook on Canada’s life and annuity insurance industry, supported by operating fundamentals and capital levels that remain notably above supervisory targets among AM Best-rated insurers.

At the same time, the agency says an escalating trade dispute with the United States, inflationary pressures and cyber threats are creating added challenges and uncertainty for carriers. Edward Kohlberg, director at AM Best, says these factors are weighing on the sector even as underlying business trends remain supportive.

Other findings in the report show net investment results for Canada’s life insurance segment fall 24% in 2025 to just over CAD 6.7 billion, following a 33% increase in 2024. Separately, LIMRA data cited in the report show total new annualized life insurance premium in Canada reaches a record CAD 2.3 billion in 2025, driven mainly by whole life premiums, which grow 10%.

Our earlier article on AM Best’s rating action for Genworth Financial Group outlined how the agency affirmed the group’s key credit ratings while revising parts of its outlook to stable from positive. It highlighted Genworth’s exposure to long-term care claims costs and the importance of premium rate increases, benefit reductions and runoff management in supporting capitalization and earnings stability.

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