The Canadian Institute of Actuaries (CIA) has released the country's first mortality table built specifically for people converting group life coverage into individual policies, giving insurers hard data on a risk segment long priced by guesswork.
GC2020, authored by past CIA president Bob Howard, draws on individual mortality study data from policy years 2016 to 2024, centred on an average experience year of 2020. It gives actuaries a standardized basis for calculating conversion costs and valuing policies issued without medical underwriting.
The study found group conversion mortality is significantly higher than standard underwritten mortality in early policy durations, driven by self-selection among people in poor health who convert precisely because they expect to need the coverage. That pattern lines up with independent research: the American Academy of Actuaries has noted that policyholders with worsening health who cannot obtain new coverage elsewhere are more likely to convert, pushing future mortality assumptions higher.
GC2020 also found a reversal of a long-standing industry rule. In standard individual insurance, larger policies typically carry lower mortality. In the first five years after conversion, the opposite held true, with higher actual-to-expected mortality ratios among larger policy amounts. COVID-19 accounted for roughly 2% to 3% of group conversion deaths during the study period, a share the CIA judged immaterial against the segment's already elevated overall mortality.
Canada's broader life insurance market is also under scrutiny. A recent Insurance Business analysis found mortgage payments are set to rise sharply as pandemic-era fixed terms renew through 2026, which the report identified as the primary driver of the country's household coverage gap. Separate research cited by Insurance Business points to an industry-wide shift toward high-net-worth clients and a decline in the number of advisors, leaving reduced attention on mass-market and term policies. Neither report addresses group conversion mortality directly, but both illustrate the wider pressures on Canada's life insurance market that GC2020 enters into.
That context sharpens why a dedicated pricing basis matters now. As more Canadians lean on group-to-individual conversion in place of new underwritten policies, insurers need mortality assumptions built for that specific population rather than borrowed from standard individual tables.
GC2020 uses a 20-year select period, matching the structure of the CIA2014 standard table, with ultimate mortality applying from duration 20 onward. The CIA produced separate tables for four risk classes – male smoker, female smoker, male non-smoker, female non-smoker – plus an ultimate-only table for unknown smoking status.
Howard built a preliminary ultimate table using a second-order logistic function fitted through least-squares regression across overlapping age ranges of 40 to 70 and 50 to 100. He then applied two-dimensional Whittaker-Henderson graduation, a smoothing technique that irons out random fluctuations in raw data, to actual-to-expected ratios across issue ages 53 to roughly 70–76, followed by a further one-dimensional regraduation of the ultimate rates. Validation checks confirmed the graduated ratios settled within an acceptable range around 1.0 across durations.
"GC2020 represents an important milestone for the Canadian actuarial profession," Howard said, adding that it gives the industry a shared, data-driven foundation for pricing and assessing conversion risk. The CIA said the table is expected to reduce insurers' reliance on proprietary, low-volume datasets and encourage further research into conversion behaviour.
