Canadian life and health insurers processed nearly $600 million in claims related to mental health in 2021, up 45 per cent since 2020 and 75 per cent since 2019, according to the Canadian Life and Health Insurance Association’s annual fact book.
“2021 was a year of recovery and insurers have been proud partners helping employers and their employees get back on their feet with workplace benefits that can help attract and retain talent,” said Stephen Frank, president and chief executive officer of the CLHIA, in a press release. “As part of this, mental-health supports have become an increasingly important and relevant health benefit that’s helping so many people through the strains of the pandemic.”
In total, the industry paid out more than $113 billion in benefits from life and health insurance plans last year, up 17 per cent from 2020 and nearly $10 billion since before the coronavirus pandemic. This included payments for health insurance claims, life insurance and retirement.
Two-thirds of total insurance products were sold as part of group benefits plans in 2021. Indeed, 90 per cent of health insurance plans were offered on a group basis, most often as workplace benefits plans.
In 2021, health insurers paid out a record $40.8 billion in total claims, including prescription drugs and dental, up 11 per cent from 2020. The breakdown for health benefits includes $13.4 billion for drugs, $9.5 billion for dental, $1.3 billion for vision, $1.1 billion for massage, $1.1 billion for other paramedical and $600 million for mental health. Other substantial claims paid out included $7.2 billion for long-term disability and $1.6 billion for short-term disability.
Looking specifically at drug plans, the increased use of specialty drugs has been a driver of higher claims costs, according to the fact book, which noted year-over-year spend per plan member for specialty drugs increased by 6.8 per cent in 2021, compared with less than four per cent for traditional drugs. And specialty drugs now represent 29 per cent of total drug spend.
In terms of pension plans, insurers paid out $58 billion in annuities to retirees in 2021, up 26 per cent from the previous year. Two-thirds (66 per cent) of annuities are purchased through a group retirement plan. And accumulation annuities have driven growth in retirement assets held by insurers, up an average of seven per cent annually since 2011.
The fact book also found 85 per cent of small employers that provide pensions, registered retirement savings plans and tax-free savings accounts to their employees do so through an insurance company.
As the provision of capital accumulation plans grows, insurers manage seven per cent of Canada’s pension assets — or $373 billion of the $5 trillion in total pension assets in Canada in 2020. This includes assets in more than 15,000 private workplace plans offered to 3.1 million people.