Insurable Interest Canadian Insurance Blog

Julius Melnitzer | November 2, 2020 A recent decision from the Supreme Court of Canada suggests the test for employers seeking to limit recovery for unlawful termination damages related to long-term incentive plans may be insurmountable in practice. The mid-October ruling concluded that David Matthews was entitled to a payout under his incentive plan when the company was sold 13 months after he’d been constructively dismissed as vice-president of Ocean Nutrition Canada Ltd., a Nova Scotia-based nutritional supplement manufacturer. Read: Court of appeal ruling highlights language in incentive plans This despite the fact the long-term incentive plan: required Matthews to be a “full-time employee” at the time of sale; stipulated the plan would be “of no force and effect” when his employment ceased; stated the “no force and effect” clause applied regardless of whether Matthews resigned or was terminated “with or without cause;” and provided the plan wasn’t to be “calculated as part of (Matthews’) compensation for any purpose, including in connection with the employee’s resignation or in any severance calculation.” Although the court did clarify the law by reconciling conflicting decisions from various provinces, employers remain in a bind as to language that will relieve their long-term incentive plan obligations after termination....

Burns & Wilcox expands personal insurance capabilities, launches cyber protection product line Farmington Hills, MI (Oct. 26, 2020) – Burns & Wilcox, North America’s leading and largest personal insurance wholesale broker and underwriting manager, is pleased to announce the launch of Cyberman365, a new exclusive product line that mitigates Personal Cyber risks for individuals, families and homes. A collaboration between Burns & Wilcox and Node International, Cyberman365 provides personal cyber protection for the entire household, including individuals, children, and home network devices, through two digital wellbeing products: IDNotify and Homesafe. The products are now available to insureds exclusively through certified insurance brokers and agents appointed with Burns & Wilcox. While individuals and families are spending more time online to work, attend classes and socialize, cyber criminals are increasingly taking advantage of security vulnerabilities. According to the FBI’s Cyber Division, there has been a 300 percent increase in cybercrime activity since the start of the COVID-19 pandemic, and in 2019, there was $3.5 billion reported as losses related to fraud recovery among adults and children. The threat of attacks on smart devices, like routers, cameras and smart locks, also continues to increase as more are connected with in-homes devices, resulting in...

A new report from Aon that employer-provided medical benefit costs in Canada will accelerate faster than inflation next year. In its 2021 Global Medical Trend Rates Report, the firm projects the costs of medical benefits provided by Canadian employers will grow 6% in 2020 and accelerate to 7% in 2021, outpacing general inflation by 5.7%. Aside from an expected continuation in launches of new and expensive therapies, the report said Canadian employer-sponsored medical plans should expect costs to rise due to increased spend for drugs in general. That trend comes as a host of health risk factors assail Canadians today. Confirming the rising impact of non-communicable diseases, musculoskeletal issues topped the list of leading medical conditions driving plan sponsor costs in Canada. That was followed by cardiovascular conditions, mental health issues, diabetes, and cancer. The report also confirmed that unhealthy personal habits are an increasingly influential source of risk to employee benefit plan costs. Aside from poor stress management, excessive alcohol or drug use and insufficient sleep were identified as the top health risk factors in Canada. While some of the risk factors impacting benefit plan costs are manageable through a combination of drug therapies and wellness initiatives, Aon said...

Staff | October 30, 2020 The Canada Infrastructure Bank is appointing Ehren Cory as chief executive officer. In the new role, Cory’s first priorities will include implementing the bank’s $10-billion growth plan and drawing more private capital to the Canadian infrastructure market. He most recently served as CEO of Infrastructure Ontario, a role he held since 2017, after previously serving as president of the organization’s project delivery division and before that, executive vice-president of transaction structuring. Read: A profile of Janice Fukakusa, chair of the Canada Infrastructure Bank Prior to his time at Infrastructure Ontario, Cory was a partner at management consulting firm McKinsey & Company. “I am honoured to be the CEO of the Canada Infrastructure Bank,” he said in a press release. “I am convinced the CIB can be a vital catalyst for innovative investment in Canada. I look forward to working with the talented CIB team and our partners to accelerate projects that create economic and environmental benefits for Canada.” Read the full article at BenefitsCanada.com

Staff  | October 30, 2020 The University of Toronto Asset Management Corp. is making significant progress toward its goals on climate change, according to its fourth annual responsible investing report. In terms of its goal to reduce the carbon footprint of its pension and endowment portfolios by at least 40 per cent compared to 2017 levels by the end of 2030, the report noted, as of Dec. 31, 2019, the carbon footprint was 109.3 tonnes of CO2 equivalent per million dollars invested, a reduction of 19.7 per cent from 2018 and 21.5 per cent from 2017. In addition, the absolute emissions in the portfolios have decreased by 12.9 per cent since 2017. Read: UTAM looks under the hood at investment managers’ ESG approaches The report, which included a detailed account of how the UTAM weighs the potential impacts of environmental, social and governance factors in its investment activities, also highlighted the organization’s endorsement of the recommendations of the task force on climate-related financial disclosures in early 2020. “U of T was the first Canadian university to make this endorsement with respect to its pension and endowment funds,” said a press release, noting the report provides disclosures in line with these recommendations for the first time. The...

Staff | October 30, 2020 While the shift from driving to an office in a suit to shuffling to a laptop in slippers was supposed to be a temporary reaction to the global health crisis, the majority of employees want it to be a permanent change. The majority (80 per cent) of U.S. employees said they expect to work remotely at least three times per week after the coronavirus pandemic is over, according to a new survey by Owl Labs and Global Workplace Analytics.  The survey, which polled 2,025 full-time workers in June and July, also found one in two respondents said they won’t return to jobs that don’t offer remote working once the crisis is over. Read: Head to head: Should remote working continue after the pandemic? Indeed, survey respondents preferred remote working so much that 23 per cent said they’re willing to take a pay cut of more than 10 per cent in order to continue to work from home at least some of the time, compared to only eight per cent in 2019. “Leaders, take note. Requiring all employees to be in an office or onsite is now a policy of the past,” said the report. “Employees now expect the flexibility to work where they want. Remote work...

Milwaukee Journal Sentinel (WI) Northwestern Mutual Life Insurance Co. is paying a record $6.2 billion dividend to policyowners as the pandemic continues to cause economic turmoil. Policyowners with Northwestern Mutual will receive an estimated $6.2 billion through the 2021 dividend payout, the company announced in a news release Thursday. The payout tops the 2019 dividend payout of $6 billion. Other payouts for term life insurance, individual disability income insurance and portfolio income annuities are also the highest in the company’s history. Northwestern Mutual has paid a dividend to its policyholders every year since 1872. “This record dividend payout is a sign of our commitment to our policyowners,” John E. Schlifske, chairman, president and CEO of Northwestern Mutual, said in a news release. “When the pandemic began to disrupt our world in early 2020, Northwestern Mutual was strong, prepared, and ready to navigate the challenges and continue delivering strong results to help our clients become more financially secure.” Advertisement Dividends can be received in cash or used to increase cash value of a policy and reduce the cost of premiums. The pandemic did not deter business for Northwestern Mutual. The company has had a record number of new clients, a record...

Insurers should be comfortably able to account for and shoulder life and health claims arising from the COVID-19 pandemic, according to a new report. In new research conducted with the University of St. Gallen, the Geneva Association said that the health and life risks for a pandemic resembling COVID-19 pose no fundamental insurability challenges. It pointed out that excess mortality associated with diseases is a well-documented and researched topic among epidemiologists around the world. Aside from that, the report said life policyholders on average typically have significantly lower mortality rates compared to the general population, mainly due to medical underwriting in individual life insurance business. “Also, due to higher than expected mortality rates, annuities may offer a natural hedge to the mortality shock caused by a pandemic,” the report said, noting that many life insurers focus on annuities rather than pure risk products like term life. The upshot, then, is a tendency for life expectancy increases to be viewed as more of a concern than sudden jumps in mortality. The standard pandemic scenario used by insurers and regulators, according to the report, would assume an excess death ratio of 1.5 per 1,000 in the U.S., implying about 500,000 deaths –...

New York, NY (Oct. 13, 2020) – InsurTech NY, the largest InsurTech community in the New York metro area, announced today its growth-stage InsurTech accelerator cohort. 22 startups were selected to participate in its insurance carrier and broker sponsored program that focuses on providing resources to support traction, talent, and financing. The program will provide access to insurance carriers and brokers looking to deploy new technologies and provide financial backing to digital managing general agencies (MGAs). “Our member carriers and brokers worked closely with us to hand-select startups that align with their organizational goals,” said David Gritz, InsurTech NY Managing Director. “The goal of the program is to help startups accelerate the process of building long-term strategic relationships and gain knowledge on the best way to do so.” Selected startups include: Life and Annuities Lines: Amenity Analytics, Best Fit, Breathe Life, Everyday Life, Fenris, Gerald App, Insurmi, IXN, Sensely, Sorcero, Vymo; Property and Casualty Lines: Assurely, Dealer Policy, Ecopia, GradientAI, Guardhog, Harbor.ai, Honcho, Neural Metrics, Pinpoint Predictive, Relay, TrustLayer. For traction, 18 member corporations will work closely with the startups to establish proof of concepts and partnerships. For talent acquisition, startups will be invited to present at the InsurTech Matchmaking Expo on Oct 29. For...

Business Insurance Action Team to address commercial insurance challenges in hospitality sector Toronto, ON (Oct. 27, 2020) – To help struggling small businesses in Ontario secure insurance amidst the economic challenges the COVID-19 pandemic has created, Insurance Bureau of Canada (IBC) is announcing the launch of a new Business Insurance Action Team (BIAT). BIAT will help to find viable insurance solutions for as many small businesses in Ontario’s hospitality sector as possible. The BIAT will launch in November and will initially focus on Ontario-based small businesses in the hospitality sector, including restaurants and bars that have been impacted by COVID-19 and are currently experiencing challenges securing insurance. “There is no question that these are especially challenging times for small business owners in Ontario’s hospitality sector, and we understand and acknowledge the frustration they are feeling,” said Don Forgeron, President and CEO of IBC. “That’s why insurers have committed to a new and innovative solution to help tackle insurance challenges that small businesses are currently facing.” Working directly with insurance brokers and business owners, a risk manager and a committee of insurers will assess and review eligible business applications to make loss prevention recommendations, and determine the level of coverage and...