MTHEL131 Lecture Notes - Lecture 2: The Great-West Life Assurance Company, Manulife, Life Insurance
7 Apr 2014
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Document Summary
Snapshot of the life insurance industry in 2013 canada: provides a wide range of financial products. 90% of payment made to living policy holders, 10% to death: important role of life insurance: meet financial needs of all levels of government. (federal, provincial, municipal) Revenues come from personal and cooperate income taxes, which are not enough to cover the expense of the government-run hospitals, schools, military and prisons. Government creates bonds and sells bonds to raise money. (typical federal gov. bonds: 100000 dollars, 1. 8% interest rate with high credit, maturity 20 years ). Main buyers of government bonds are other countries, institutional investors (pension funds), banks and life and health insurance company. 20% of insurance industry assets are invested in government bonds. Most capitalized, secure industry in canada: internationally successful. Highly competitive domestically (100+ companies: largest market share among all other industries (cars, smartphones, groceries, etc. ) 87% of policies bought in canada offered by canadian insurance companies: support small business.
