DBRS Morningstar Releases Commentary on Canadian Group Insurance Providers

DBRS Morningstar released a commentary titled “Evaluating the Impact of Weak Economic Conditions on Group Life and Health Insurers in Canada” that discusses how the current weak economic environment, marked by high unemployment and lower expected GDP growth, will affect the group insurance business.

The key highlights include:

-- Weaker future economic conditions, including increased unemployment, will likely slow down the rate of premiums written for group life and health insurance in 2020.

-- While premium growth may slow down, employees' declining use of benefits because of social distancing measures can help profitability.

-- The uneven distribution of job losses so far is also offsetting the adverse impact of high unemployment with a higher rate of job losses for smaller businesses that are less likely to offer group benefits to their employees.

-- The future outlook depends on the survival and ultimate recovery rate of temporarily closed businesses as well as the success of government programs in softening the impact of shutdown measures.

Notes:
All figures are in Canadian dollars otherwise noted.

The commentary is available at www.dbrsmorningstar.com.

For more information on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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