Insurable Interest Canadian Insurance Blog

The Canadian Life and Health Insurance Association (CLHIA) has released its 2020 Canadian Life and Health Insurance Facts report, which includes a statistical snapshot of the Canadian industry from last year as well as selected trends covering the previous decade. According to the CLHIA report, the country’s life and health insurers provide financial protection for over 29 million Canadians, paying out $103 billion in benefits last year. “Over 90% of benefit payments went to living policyholders,” the report said. “Total benefits paid out have increased over 60% from a decade ago.” With respect to life insurance, last year saw a total of $5 trillion in coverage encompassing 22 million Canadians. Consumers received $12.1 billion in life insurance benefits paid last year, including $7.7 billion issued as death benefits and $4.4 billion paid to living policy holders through disability benefits, cash surrenders, or dividends. The CLHIA reported that four fifths (81%) of life insurance in Canada is purchased through agents or advisors in the form of individual policies, and one fifth (19%) is sold through group plans. Individual life insurance coverage has been on the rise for at least the past decade – driven primarily by term life policies – with...

Staff | September 15, 2020 The median projected solvency for Ontario’s defined benefit pension plans increased to 90 per cent at the end of 2020’s second quarter, up from 85 per cent in the first quarter, as measured by the Financial Services Regulatory Authority of Ontario. The regulator estimated about three-quarters of plans had double-digit investment returns for the quarter, partially offset by the drop in solvency observed the previous quarter. Net of fees, the estimated return stood at 10.9 per cent and 11.1 per cent before expenses. Just 26 per cent of pensions are projected to be fully funded on a solvency basis as of the end of the second quarter, while 36 per cent are projected to have a ratio below 85 per cent. Read: Canadian DB pension plans see rebound off strong equity gains: reports “The World Health Organization declared the COVID-19 outbreak as a pandemic on March 11, 2020 and global equity market indices dropped sharply to their lowest levels of the year just before the March 31, 2020 quarter end,” noted a report from the FSRA. “Fortunately, fears of continued deterioration did not materialize and capital markets rallied in Q2 2020, even as the economy was constrained by efforts...

Staff  | September 15, 2020 The Ontario Teachers Insurance Plan and its group of companies are the latest employers to join the Colleges of Applied Arts and Technology’s DBplus pension plan. Effective Sept. 7, 685 full-time employees — including 639 from Ontario, 23 from Alberta and 23 from Quebec — joined DBplus on a go-forward basis. In addition, all part-time and contract employees will have the option to join the plan. With the change, the employees move from a defined contribution into a defined benefit pension. Members will be able to transfer their DC balances to purchase the additional pension with DBplus. Read: Canadian law firms to join CAAT’s DBPlus pension plan Since the plan was introduced in 2018 and launched in 2019, more than 15,000 members from more than 30 employers have joined. The CAAT now has members across Canada from nine industries and 14 different labour unions. “OTIP and the OTIP group of companies are delighted to join CAAT and offer our employees the security of a defined benefit pension plan,” said Vic Medland, chief executive officer of the OTIP, in a press release. “Being able to provide enhanced value for our hard-working and dedicated staff, while maintaining the same fixed costs for the organization made...

By Susan Ghalili The COVID-19 pandemic has put a spotlight on the significant role life insurance plays in the cycle of life, as well as the importance of modernizing the sales model to withstand dramatic disruptions to the ways the industry typically operates. The current situation has emphasized the fact that the future is unpredictable. This is one of the main drivers behind why people purchase life insurance – to hedge against some of that unpredictability. For distributors, the pandemic has not changed goals and objectives, and many distributors are still working to meet aggressive sales targets. For consumers, the uncertainty surrounding the pandemic, related to both health and financial well-being, has prompted them to assess their own preparedness and has made life insurance more top-of-mind. As an industry, we must continue to look forward and find innovative ways to work together to meet consumer needs, especially under challenging circumstances. Central to this transformation is modernizing the purchasing process for consumers. While we have seen an uptick in the number of individuals interested in purchasing life insurance throughout the pandemic, social distancing and safety measures have made traditional steps in the sales process impractical, if not impossible. These traditional steps...

Business Wire Industry has more than $8.6 trillion invested in the economy. NEW YORK–(BUSINESS WIRE)– Between 2010 and 2018, the U.S. life insurance industry distributed nearly $1.5 trillion in claims and benefits to policyholders, an amount equal to 19 percent of all Social Security payments made over that same period, according to a study released today. These numbers highlight the crucial role that life insurers play in relieving pressure on government programs. If Social Security had to finance all the benefits provided by private life insurance, U.S. payroll tax revenue would have to increase by at least 19 percent. “The life insurance industry has always functioned as a private sector safety net. At a moment when public finances are strained by the COVID-19 pandemic and the economic downturn, the benefits we pay are more important than ever,” said Mike Zarcone, head of Corporate Affairs for MetLife. “Our industry also helps create the foundations of long-term prosperity by investing trillions in the economy. This study puts the magnitude of our impact into perspective.” Social Security and Life Insurance Payments (2010-2018) Social Security Life Insurance Survivor $1,021 billion $623 billion Retirement $5,323 billion $693 billion Disability $1,244 billion $161 billion Total $7.588...

Staff | September 15, 2020 The Financial Services Regulatory Authority is seeking stakeholder input on draft guidance on providing consent for asset transfer transactions under the Pension Benefits Act. Aiming to support predictability and transparency for defined benefit plan administrators, sponsors and members and to protect of the rights of members, the guidance sets out how the FSRA will exercise its discretion and may provide its consent for the purposes of an asset transfer transaction under the act. As an example, a transaction may occur when two businesses merge or one organization acquires another and their individual pension plans are to be partially or fully merged. It could also happen if a single employer pension plan merges into a jointly sponsored pension plan. Read: How to deal with DB pensions in an M&A transaction “Regardless of the underlying reason for the asset transfer transaction, this approach guidance supports pension plan administrators’ understanding of how to seek FSRA’s consent to the transfer and when and how FSRA will exercise its discretion.” In a press release, the regulator noted the guidance aims to protect DB plan member and beneficiary entitlements; to speed up the review process that examines whether original and successor plans will remain able to deliver on their long-term pension promises; to...

Life insurance can pay for final expenses and provide financial security for loved ones left behind, but a new national survey from Erie Insurance shows many people are confused about it. Large percentages of respondents were unsure how various occupations and health conditions might affect who can or can’t get life insurance, and many significantly overestimated the cost. Respondents also shared the reasons they first got life insurance, and the reasons they do – or don’t – have it now. “Getting a life insurance policy is one of the most important things a person can do to take care of their families and yet, it’s a topic that many people don’t want to think about. As a result, there is a lot of confusion about it,” said Lou Colaizzo, senior vice president, Erie Family Life. “Erie Insurance commissioned this survey to help raise awareness of the benefits of life insurance and to take some of the mystery out of it.” Reasons for not having life insuranceWhen asked why they don’t have life insurance, almost four in 10 (38%) said it would be too expensive. However, the survey suggests most people probably overestimate the cost. For example, at Erie Insurance, a...

Toronto, ON (Sept. 14, 2020) — Zensurance , Canada’s most advanced online commercial insurance platform, is rolling out a first-of-its-kind Commercial Broker Training Program. The five-week training program presents an exciting opportunity for those with limited industry experience to receive the specialized training required to succeed in the commercial insurance space bolstered by the innovative principles that enabled Zensurance to become Canada’s fastest-growing InsurTech start-up. The Program, developed in conjunction with the regulatory body, The Registered Insurance Brokers of Ontario (RIBO), and membership organization, The Insurance Brokers Association of Ontario (IBAO), follows a comprehensive curriculum “designed to set up new insurance talent with the training and tools required to lay the foundation for a rewarding career in Commercial Insurance,” according to Vice President of Operations at Zensurance, Trevor McIntosh. The first cohort will commence on August 31 with a private two-week RIBO prep course, which will provide new hires with the training required to pass their Level 1 Licensing Exams. Following the licensing exam’s successful completion, the newly licensed brokers will partake in Zensurance’s in-house ZenAcademy Commercial Broker Training Program, a three-week-long “memorable and immersive” training program, designed and delivered virtually by Irene Gomes, Manager of Learning & Development. The...

Navacord solidifies national benefits practice with addition of B.C. consulting firm Dehoney Financial Group Toronto, ON (Sept. 10, 2020) – Navacord Corp., one of Canada’s top four commercial insurance brokerages and a leader in risk management services, expands its benefits business coast-to-coast with the addition of B.C.-based broker Dehoney Financial Group (DFG). Now in its 40th year of business, Dehoney Financial Group has grown from modest beginnings to become the most significant independent benefits broker in British Columbia, providing a complete portfolio of corporate solutions including benefit and retirement consulting, administration, and life insurance products for executives and employees. They service a mix of public and privately owned companies across all major sectors of the Canadian economy. “Strong leaders and builders like Dehoney Financial Group represent the type of brokers that Navacord attracts and chooses to partner with as we continue our journey to build the great Canadian brokerage,” says T. Marshall Sadd, Executive Chairman of Navacord. “Our unique model allows them to continue their legacy while building a next-generation management team to take the company into the future.” With a strong national presence in P&C insurance, this partnership now also extends Navacord’s reach from coast-to-coast in group benefits—an identified...

New York, NY (Sept. 9, 2020) – Chubb is pleased to announce the launch of Chubb StudioSM, a new global platform that will simplify and streamline the distribution of the company’s insurance products through its partners’ digital channels around the world. The platform enables Chubb’s partners in retail, e-commerce, banking, fintech, airline, telecommunications and other industries to add digital insurance options to their own product and service offerings. Chubb Studio provides partner companies with digital access to Chubb’s extensive range of consumer insurance products, including personal accident, supplemental health and life, residential and contents, mobile phone and travel as well as small business insurance, customer services and claims. “Chubb Studio provides significant speed-to-market for our partners and offers a secure and scalable platform with multiple APIs to simplify the process.  What once took months can now be accomplished in days,” said Sean Ringsted, Chief Digital Officer and Chief Risk Officer at Chubb. “It’s what we call ‘insurance in a box.’ Chubb handles the insurance stuff such as underwriting and claims that is then digitally wrapped by Chubb Studio, allowing partners to rapidly deploy insurance solutions to their customer base.  The new platform provides a full range of integration options for our...