Insurable Interest Canadian Insurance Blog

By Jay Gambetta, IBM Fellow and Vice President, IBM Quantum — Yorktown Heights, NY (Sept. 15, 2020) – Back in 1969, humans overcame unprecedented technological hurdles to make history: we put two of our own on the Moon and returned them safely. Today’s computers are capable, but assuredly earthbound when it comes to accurately capturing the finest details of our universe. Building a device that truly captures the behavior of atoms – and can harness these behaviors to solve some of the most challenging problems of our time – might seem impossible if you limit your thinking to the computational world you know. But like the Moon landing, we have an ultimate objective to access a realm beyond what’s possible on classical computers: we want to build a large-scale quantum computer. The future’s quantum computer will pick up the slack where classical computers falter, controlling the behavior of atoms in order to run revolutionary applications across industries, generating world-changing materials or transforming the way we do business. Today, we are releasing the roadmap that we think will take us from the noisy, small-scale devices of today to the million-plus qubit devices of the future. Our team is developing a suite...

Staff  | October 1, 2020 The Northwest Territories and Nunavut Workers’ Safety and Compensation Commission is proposing eliminating lifetime pensions and replacing them with a new system that includes earnings loss and retirement benefits. Currently, the North is the only jurisdiction in Canada with a workers’ compensation system that provides pensions for life, according to a review carried out by the WSCC in 2014. Under the proposed system, workers would receive a one-time lump sum called a non-economic loss payment based on their permanent medical impairment, which could be reassessed if the impairment becomes worse. In addition, workers would receive a long-term earning loss benefit, which would be paid to those who’ve come as far as they can go in their recovery and still aren’t able to work or to regain their earning capacity. The amount for each individual would be calculated based on the difference between what they made before and after the injury.  Read: Veterans Affairs accused of skipping consultations on Pensions for Life These benefits would continue until the injured worker’s earning is the same or more than it was before the injury or until the worker is eligible for an old-age security pension — currently age 65. Workers would also be entitled to a...

Melissa Dunne | October 1, 2020 Ford Motor Co. and Unifor’s new collective agreement tackles everything from racial inequality, medical cannabis coverage and a new pension plan. The $1.8 billion deal ratified on Monday includes a racial justice advocate in a nod to the ongoing racial reckoning occurring in society and workplaces. The newly created role will complement existing inclusivity efforts at Ford plants in Canada and will advocate for Black and other marginalized employees while encouraging fellow colleagues “to take a more affirmative stand against racism,” says Corey Vermey, Unifor’s director of pensions and benefits. Read: Workplace inclusivity starts with acknowledging systemic racism: report “We have had broader equity programs, but this has a more specific focus . . . [by] addressing both the Black Lives Matter issues that have arisen in terms of systemic racism and experiences of Blacks in Canadian society, as well as of Aboriginal and Indigenous peoples. This certainly does flow from recent events and how we want to address those matters by using collective bargaining as a way to address social issues so that the union has a social agenda as much as possible, as well as an economic agenda.” On the economic side, the three-year collective agreement provides a five per...

Staff | September 30, 2020 The coronavirus pandemic led to a sharp decrease in people visiting health professionals and filing claims, resulting in an estimated savings of $4.8 billion for Canadian private insurers between March 15 and June 15, according to a new report by insurance comparison platform Hellosafe.ca. The report, which used data from the Canadian Life and Health Insurance Association, also found many Canadians avoided seeing a range of health providers during the first wave of the pandemic, leading to a corresponding 71 per cent drop in private health insurance payouts over the first six months.  Read: How are insurers working with plan sponsors amid coronavirus pandemic? For example, the data showed medical appointments fell 32 per cent for general practitioners and 73 per cent for specialists, while optical and dental care appointments plummeted more than 90 per cent during the first six months of the pandemic when compared to the same time period in 2018. Read the full article at BenefitsCanada.com

Staff  | September 30, 2020 The Canada Pension Plan Investment Board is committing US$300 million to take an approximate 24 per cent stake in Virtusa Corp., a global digital and information technology services company. The proposed acquisition, alongside Baring Private Equity Asia, follows the announcement earlier this month that Virtusa and BPEA entered into a merger agreement under which funds affiliated with BPEA will acquire all outstanding shares of common stock of Virtusa for US$51.35 per share in an all-cash transaction valued at about US$2 billion.  Read: CPPIB looks to cash in on ‘disruption’ and shifts in technology, demographics “This is a significant opportunity to acquire an interest in a highly differentiated player in the fast-growing IT services industry, alongside our long-standing partner BPEA,” said Frank Su, managing director and head of private equity for Asia at the CPPIB, in a press release. “Virtusa’s ability to partner with a blue-chip client base to rapidly build scale in an industry with strong fundamentals will deliver long-term value for CPP contributors and beneficiaries.” The transaction is expected to close in the first half of 2021, subject to the approval of Virtusa’s shareholders and customary regulatory requirements. Read the full article at BenefitsCanada.com

Melissa Dunne | September 30, 2020 Many human resources teams that are planning 2021 salary adjustments and possible changes to total rewards programs need to focus on immediate ways to keep employee morale up as the coronavirus pandemic rages on, while also focusing on the longer term retention and attraction of top talent. The ongoing economic uncertainty wrought by the pandemic means many Canadian employers are unsure whether they’ll be increasing or freezing salaries next year. While annual salary increases are usually a key way that employers reward employees, HR departments should be looking at other ways to acknowledge their employees this year, according to Gordon Frost, partner and market leader for Mercer Canada, during a webinar on 2021 rewards strategies on Monday.  Read: Third of employers froze salaries in 2020, compared to projection of 2%, finds survey “2020 has been an unprecedented year for us all, the economic situation we’ve all been working through has created exceptional challenges for all aspects of our businesses. We really believe [employers] need to balance the health and resilience of their businesses with the health and resilience of their people. . . . This combination of empathy and economics, which integrates their business needs with their workforce needs is what we believe...

With a rising acknowledgment of its impact on people and society, mental health has gone from being a taboo topic to a condition and disability that cannot be ignored. But even with this shift in perspective, there are still gaps and roadblocks that prevent Canadians from getting help when they need it. In a new survey of Canadians, RBC Insurance found that 51% of respondents view mental illness, such as depression or anxiety as a disability. But a deeper dive into the results revealed that respondents who have needed to take time off due to mental health issues were more likely to accept it as a disability. “We saw from the results as well that some still feel reluctant about admitting that they’ve had struggles with mental illness,” said Maria Winslow, head, Product Strategy and Management, Life * Health at RBC Insurance. “Fifty per cent of our respondents said that it was because they are a private person and they wouldn’t share any struggles that they were having, while 45% said it was because they were afraid that they were going to be treated differently.” While the results point to a tendency among sufferers to shut others out, Winslow said...

During the initial outbreak of the coronavirus pandemic, the life insurance industry was expected to be hit with increased death benefit claims as COVID-19 fatalities rise. But in the case of U.S. companies, actual payouts are turning out to be far less, leading many to revise their projections. “In the past few weeks, many life-insurance companies have sharply reduced estimates of their exposure, as measured by payouts per 100,000 U.S. Covid-19 fatalities,” reported the Wall Street Journal. Citing Credit Suisse stock analyst Andrew Kligerman, the Journal said that estimates have fallen by an average of 40% to 50%. One company, Principal Financial Group, estimated on March 30 that it would have to pay out US$20 million per 100,000 deaths, but has since changed that to US$10 million. Equitable initially projected payouts to fall within US$100 million to US$130 million per 100,000 deaths, but has shrunk it to US$30 million to US$60 million. Prudential Financial, meanwhile, has slashed its forecast from US$200 million to US$70 million. The rapid reduction in exposure estimates has been driven significantly by older Americans and minorities, two groups that are disproportionately impacted by COVID-19. According to the Journal, elderly Americans often have smaller policies than those...

Staff  | September 29, 2020 The Canada Pension Plan Investment Board has formally outlined its expectations for portfolio companies when it comes to environmental, social and governance issues in a new section of its latest annual report on sustainable investing. “To build trust with portfolio companies, we find it helpful to share our expectation of them with respect to considering ESG factors, as they exercise their fiduciary responsibilities to both preserve and grow shareholder value,” the report said. In particular, the CPPIB highlighted it expects companies have effective boards, align incentives, adhere to its proxy voting principles and guidelines, disclose material climate change impacts, clearly articulate how integrating ESG factors has informed strategy and enhanced returns or reduced risk and have a culture that proactively identifies emerging risks and opportunities and seeks solutions to reduce or capture their potential. Read: CPPIB sustainability report shows increased investments in renewable energy The CPPIB also noted it supports companies aligning their reporting with recommendations from the Sustainability Accounting Standards Board and the Financial Stability Board’s task force on climate-related financial disclosures. In addition, the sustainability report said the CPPIB more than doubled its investment in renewable energy companies to a total of $6.6 billion as...

New executive brief provides insights from conversations with members of Novarica’s community of high-performing insurance producers under the age of 40 Boston, MA (Sept. 22, 2020) – Forward-thinking insurers are ensuring that they understand the commonalities and differences of working with the next generation of independent agents. In a new executive brief, Young Agents: Building Partnerships and Understanding Tech Preferences, research and advisory firm Novarica provides insights from conversations with 23 young agents, conducted as part of Novarica’s profile series for members of 400 Under 40, a community of high-performing insurance producers under the age of 40. “Young agents are using technology to meet the evolving needs of their customers and establish their personal brands as risk advisors,” said Emerson Davis, Lead Associate and author of Novarica’s new report. “Insurers that can effectively accentuate the value of independent agents by providing additional transparency and quick responsiveness of underwriters will likely find themselves winning young agents’ business.” Click here for the table of contents or to access the report. Report Summary Young agents are using technology to meet the evolving needs of their customers. Insurers with an eye on the future are making sure they understand how the next generation of agents...