Canada Life confirmed its immediate withdrawal from the individual protection space, effective by close of business today (8 November).

The insurer announced it is closing its UK onshore business and will no longer accept application for fixed term life assurance and life assurance plus critical illness products.

It confirmed there will be "no impact" on existing policyholders, honouring existing contractual obligations and pay claims in line with its usual processes.

It will also enter a "period of consultation with impacted employees."

Tim Stoves, protection managing director at Canada Life, said the decision will allow the insurer to "refocus on other areas of our business, including group protection and the international (offshore) protection market."

"I'm proud of what we have achieved since 2016 in the individual protection market, but it has become clear we need to make priority calls on where best to utlilise our resource as we continue to focus on our core areas of growth," Stoves commented.

"Canada Life has confirmed it remains committed to protecting its market leading position in group protection, building a customer-led lifetime wealth business which includes other areas of insurance including home finance, annuities and international (offshore) protection."

Commenting on the withdrawal, CIExpert's Alan Lakey said it was "disappointing news for a number of reasons," stating that a "vibrant" protection sector requires competition to keep prices low and to encourage innovation, which has been "lacking over the years."

"Canada Life individual protection was truly innovative in that it offered discounts to vapers when the market view has been to treat them as smokers.  This approach provided a vital, albeit not widely known, facility for those who have forsaken cigarettes," said Lakey.

"Hopefully this is not a harbinger of things to come over the next few years.  During the past decade we have lost numerous insurers - Old Mutual, Bright Grey, Scottish Provident, Bupa, Friends Life, Friends Provident and AXA.  The market has been steadily shrinking since 1990 and this has been bad news for consumers and advisers alike."