The life and health insurance industry plays a significant role in the lives of Canadians by providing insurance against unexpected events and helping individuals plan their financial future. Overall, universal life remains the dominant individual life product in Canada and is beginning to gain sales momentum because of the improved equity markets. Universal life business will continue to be competitive as companies strive to capture an increasing market share of this growing segment. The segments growth is being driven by increased demands from an aging population for flexible and tax-efficient products.
This report analyzes Canada’s Life Insurance Industry in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.
