Insurable Interest Canadian Insurance Blog

After a pandemic-driven pullback in mergers and acquisitions activity in the first half of 2020, acquisitions and dispositions have come back strongly in the second half of the year, and the higher pace of transactions will likely continue into 2021, Moody’s Investors Service reports. The main force behind all the activity is a recognition among management teams of an increased likelihood of lower interest rates persisting for an extended period, accelerating the sector’s transition to lower-margin products, higher growth and capital-light businesses that require greater size or scale. In the lower-rate environment, insurers are evaluating which businesses will deliver the greatest return on capital, how to deploy excess capacity, identifying and exiting non-core or legacy businesses, and expanding the scope of new and existing businesses that include digital capabilities. Private capital is playing a key role in this industry transition, expanding its capabilities to manage a greater share of insurance assets, often through M&A and other partnerships or investments. Overall, Moody’s sees three themes emerging: Pullback in M&A activity will lead to a larger offensive pipeline in 2021 as insurers seek growth and scale. The pandemic-driven economic disruption in 2020’s first half caused many life insurers to hit the pause...

By Lisa Seguin, Field Marketing Manager, Insurance, Element AI — In 2020, it’s difficult to think of a sector that artificial intelligence (AI) won’t disrupt. The technology promises to transform businesses ranging from transportation to telecommunications, while also holding promise for sectors held back by manual processes and legacy technology. Insurance is one such sector. Insurance is striving to modernize, and AI can help streamline processes within multiple areas, including underwriting and business intelligence. As professionals responsible for taking on commercial risk, underwriters are under pressure to assess applications accurately and with a high level of technical detail. This involves analyzing past decisions and mining extensive application documents for necessary information. “A commercial property inspection document may be up to 50 pages long,” explains Charles Dugas, an AI expert, who has worked as an actuarial analyst and lectured on actuarial science. “You’re trying to sift through these pages in order to retrieve a single piece of information.” Now, imagine repeating that manual process for each new application. This slows down the underwriting process, which is often a race toward a fast policy decision. “Brokers will send the same piece of information to various insurers,” says Dugas. “In some cases, they’ll...

Irish InsurTech Blink launches new business interruption solution developed within the prestigious Lloyd’s Lab innovation accelerator programme Open-banking validation, real-time impact assessment and automated pay-outs hurricane non-damage parametric insurance can cut average claim process time by up to 95% Cork, Ireland (Nov. 19, 2020) – Irish InsurTech Blink, will today present the latest offering in its suite of parametric insurance solutions to an audience including Lloyd’s market, insurance and reinsurance experts and mentors of the Lloyd’s Lab innovation accelerator programme. “Blink Interruption” is the culmination of 10 weeks intensive work on the prestigious course, on which Blink led the charge of participants by developing a market-ready offering which can cut average business interruption claims processing time by up to 95%.[1] The Hurricane Non-Damage Parametric Insurance solution provides liquidity to small and medium-sized businesses in the immediate aftermath of an insured event (i.e. a hurricane), thereby reducing overall claims totals as a direct result of early intervention. It uses automated financial validation and immediate pay-out solutions to allow businesses to get back on their feet just days after the event occurs. Blink Co-Founder & CEO Paul Prendergast echoed the outlook of John Neal, Lloyd’s CEO, who in a recent report on...

J.D. Power Study Finds Empowered Consumers Are Driving Shift in P&C Insurance Distribution Trends Troy, MI (Nov. 16, 2020) – The perennial dominance of the agent channel in the insurance industry continues to face strong headwinds due to increased competition and evolving consumer expectations that have been highlighted by the COVID-19 pandemic. According to the J.D. Power 2020 U.S. Independent Agent Performance and Satisfaction StudySM, misalignment and poor execution continue to place agent-based carriers on their heels in their ongoing battle with direct-to-consumer insurers as the channel of choice among modern property and casualty insurance consumers. The study, now in its third year, was developed in alliance with the Independent Insurance Agents & Brokers of America (IIABA). It evaluates the evolving role of independent agents in P&C insurance distribution, general business outlook, management strategy and overall satisfaction with personal lines and commercial lines insurers in the United States. “The effects of COVID-19 have highlighted the importance of personalized insurance as consumers seek help navigating their way through this period,” said Tom Super, head of property & casualty insurance intelligence at J.D. Power. “Ironically, in many instances it was direct-based carriers, which have made a concerted effort in recent years to...

Building a Leading P&C Insurer: Intact Financial Corporation, together with Tryg, to acquire international P&C insurer RSA Insurance Group Plc. for £7.2 billion (C$12.3 billion) Intact to acquire RSA’s Canada, UK and International operations Intact to pay $5.1 billion (£3.0 billion) representing 0.9x book value Expands our leadership position in Canada Bolsters our leading specialty lines platform and adds international expertise Entry into the UK and Ireland at scale Increases investment in our core capabilities to strengthen our outperformance High single digit NOIPS accretion in the first year, increasing to upper teens within 36 months Maintaining mid-teens OROE target and BVPS increasing in excess of 25% at closing Total capital margin over $1.5 billion at closing Toronto, ON (Nov. 18, 2020) – Intact Financial Corporation has announced that, together with Tryg A/S, it has reached an agreement with RSA on the terms of a recommended all-cash acquisition for the entire issued and to be issued share capital of RSA at a price of 685 pence per common share, representing a total consideration of approximately £7.2 billion ($12.3 billion). Intact will pay $5.1 billion (£3.0 billion) of the total consideration payable and Tryg will pay $7.2 billion (£4.2 billion). In addition...

London, UK (Nov. 19, 2020) – Aon plc, a leading global professional services firm providing a broad range of risk, retirement and health solutions, has launched a new product with Hudson Structured Capital Management Limited (undertaking its re/insurance business as HSCM Bermuda) to protect insurers and reinsurers against systemic and catastrophic cyber events. Aon and HSCM have already closed the first transaction, a retrocession contract on behalf of an undisclosed cedent. C–suite awareness, reputational risk and regulation – in addition to an increase in cyber attacks – are driving rapid growth in the cyber insurance market, with premiums expected to rise from USD6 billion in 2019 to USD20 billion by 2025, according to Aon and market analysis. Insurers play a critical role in providing cover for businesses to protect their assets from cyber risk but the supply of traditional reinsurance cover is being challenged by demand. Now, Aon is enabling re/insurers to rethink access to capital with a new source of capacity and protection from the capital markets. The cover allows for limits of up to USD 70 million and will protect against increasing cyber loss aggregations on re/insurers’ balance sheets. The product is structured to protect the cedent from...

New digital insurance experience that aims to be secure, fair, personalized and easy to use Detroit, MI (Nov. 18, 2020) – For more than 20 years, General Motors’ OnStar brand has empowered customers to drive with confidence, offering services that provide added peace of mind on the road. GM announced today it will take its relentless focus on safety and delivering a world-class customer experience one step further with OnStar Insurance. GM’s new insurance agency, OnStar Insurance Services, will be the exclusive agent for OnStar Insurance. A vehicle is one of the most significant purchases a person will make during their lifetime. OnStar Insurance Services intends to leverage its unique understanding of the vehicles GM produces to offer a secure, fair, personalized and easy-to-use digital insurance experience for drivers. “OnStar Insurance will promote safety, security and peace of mind,” said Andrew Rose, president of OnStar Insurance Services. “We aim to be an industry leader, offering insurance in an innovative way. GM customers who have subscribed to OnStar and connected services will be eligible to receive discounts, while also receiving fully-integrated services from OnStar Insurance Services.” Over the next few years, OnStar Insurance Services plans to develop a digital insurance experience...

Melissa Dunne | November 19, 2020 Demand for defined benefit pension plan sponsors to focus on environmental, social and governance factors through their investments is growing. Both plan sponsors and members have been increasingly vocal about keeping ESG issues top of mind. For example, the Healthcare of Ontario Pension Plan has worked on balancing this increased appetite for ethical investing with an overall responsible investing strategy. “At HOOPP, we think, while it’s challenging, the investment universe is large and there are opportunities where those two seemingly different aims overlap,” said Sarah Takaki, the pension fund’s senior director of sustainable investing, during an Association of Canadian Pension Management virtual roundtable on Tuesday. “With the pandemic, the changes we’re experiencing now even highlight that overlap. . . . Those two circles really overlap and that’s a space we really like to play in as an investor.” Read: Benefits of integrating ESG include long-term alpha, minimized risk: survey The Alberta Investment Management Corp. has taken a similar approach, focusing on investments that are ethical while balancing ESG issues with other considerations such as the long-term viability of investment portfolios, according to Alison Schneider, the organization’s vice-president of responsible investment, also speaking during the roundtable. While there’s sometimes pressure...

Staff  | November 19, 2020 The College of Physicians and Surgeons of Newfoundland and Labrador is the latest employer to join the Colleges of Applied Arts and Technology pension plan’s DBplus. The college’s 14 employees were contributing to a defined contribution arrangement before joining the plan on Nov. 1. The individual employees have the option to convert their DC accounts to the DBplus pension. Read: Canadian law firms to join CAAT’s DBPlus pension plan “The College of Physicians and Surgeons of Newfoundland and Labrador is pleased to have joined with the pension experts at CAAT to provide our valued staff with access to a secure and sustainable lifetime pension,” said Linda Inkpen, the organization’s registrar, in a press release. “CAAT’s defined benefit plan will help the college continue to attract and retain its top talent.” Since DBplus was made available to all Canadian workplaces in 2019, members from more than 30 employers have joined. The CAAT now has members across Canada from nine different industries and participation from 14 different labour unions. Read the full article at BenefitsCanada.com

Milwaukee Journal Sentinel (WI) Northwestern Mutual Life Insurance Co. is starting a new effort to support Black entrepreneurs by dedicating $20 million of its venture capital funding to Black-founded startups and launching an accelerator. Northwestern Mutual Future Ventures will dedicate $20 million to investing in companies founded by Black entrepreneurs, the company announced in a news release Wednesday. It will also partner with gener8tor, the nationally ranked startup accelerator based in Milwaukee, to launch the Northwestern Mutual Black Founder Accelerator. “Innovative thinking is required to drive breakthrough solutions to close the racial equity gap, and by supporting Black founders through Northwestern Mutual Future Ventures and the new accelerator program in partnership with gener8tor, we can make a difference to close this funding gap,” Abim Kolawole, vice president of digital innovation at Northwestern Mutual, said in a news release. Northwestern Mutual Future Ventures launched with $50 million and subsequently announced an additional $150 million in 2019. It dedicated $20 million of its funding to female-founded startups in 2019. Company founders who are Black receive just 1% of all venture capital funding in the U.S., according to current estimates. Advertisement “At Northwestern Mutual we’re dedicated to supporting and promoting diversity not just...