Insurable Interest Canadian Insurance Blog

The life/annuity industry’s net income fell by 66% in the first half of 2020, compared with the year-ago period, A.M. Best reported today, driven by a major reinsurance agreement inked between Jackson National and Athene. This financial review is detailed in a new Best’s Special Report, titled, “First Look— Six-Month 2020 Life/Annuity Financial Results.” Although some life insurers provided COVID-19-related premium refunds to policyholders, the primary reason for the steep premium decline was Jackson National’s ceded coinsurance agreement with Athene Life Re, the report concluded. The deal had the effect of moving approximately $27 billion of premium out of the U.S. statutory industry population and into Bermuda. Total expenses for the industry increased 1.1%, as a 5% decline in surrender benefits, a 13.3% decline in general and other expenses and $11.6 billion less in transfers to separate accounts offset an 11.4% increase in death benefits. Advertisement In addition, the premium decline and minimal expense increase resulted in a drop in net operating gain of 95.3% from the prior-year period, to $1.6 billion. Despite the reduction in net income and a 50% decline in unrealized gains, capital and surplus increased by 4.1% to $440.8 billion over the six-month period. The data...

Staff  | September 1, 2020 The British Columbia Investment Management Corp. is investing in an Indian telecommunications tower company alongside Brookfield Infrastructure Partners and its institutional partners. The transaction totals an equity commitment of about US$3.4 billion, with the investors buying a 100 per cent stake in the company from Reliance Industrial Investments and Holdings Ltd., a wholly-owned subsidiary of Reliance Industries Ltd. “For BCI and our clients, this investment is well-aligned with our long-term strategy of investing in high quality companies and assets that fulfill essential needs of the communities in which they operate,” said Lincoln Webb, executive vice-president and global head of the BCI’s infrastructure and renewable resources program, in a press release. Read: Caisse investing in data centre operator, telecom infrastructure “Data services are increasingly critical to societies and economies in today’s world, promoting both opportunity for individuals and potential innovation for local communities. BCI is excited by the opportunity to invest in infrastructure that will play a vital role in enabling India’s continued economic growth.” The investment includes a portfolio of about 135,000 recently constructed communication towers throughout India, with about 40,000 more in the works. In other investment news, Greystar Real Estate Partners is joining the Canada Pension Plan Investment Board and Cyrela Brazil Realty in a joint...

Life insurance sales struggled mightily during a pandemic-marred second quarter, according to new data from Wink’s Sales & Market Report. “Product repricing for 2017/PBR is definitely catching up with everyone,” said Sheryl J. Moore, president and CEO of both Moore Market Intelligence and Wink Inc. “This cyclical reduction in sales is something we see every time the mortality tables update, but this time it was definitely more severe.” Non-Variable Universal Life Non-variable universal life sales for the second quarter were $642 million, down 16.6% when compared to the previous quarter and down 27.5% as compared to the same period last year. Non-variable universal life (UL) sales include both indexed UL and fixed UL product sales.Noteworthy highlights for total non-variable universal life sales in the second quarter included Pacific Life Companies retaining the No. 11 ranking overall, for non-variable universal life sales, with a market share of 11.2%. Pacific Life Pacific Discovery Xelerator IUL 2 was the No. 1 selling product for non-variable universal life sales, for all channels combined, for the fourth consecutive quarter. Advertisement Indexed life sales for the second quarter were $494.9 million, down 6% when compared with the previous quarter, and down 14.3% as compared to the...

Philly.com Montgomery County financial adviser Dean Vagnozzi says a federal lawsuit criticizing lender Par Funding and Vagnozzi’s ties to the firm could end up hurting investors in his unrelated funds, but the court-appointed receiver in the case says Vagnozzi’s recent actions make him hard to trust. On Friday, Vagnozzi warned that a federal judge’s freeze on his bank accounts — ordered in response to the U.S. Securities and Exchange Commission’s lawsuit — threatens to halt the payment of premiums for life-settlement policies packaged as investments for hundreds of his customers. He asked U.S. District Judge Rodolfo Ruiz to unfreeze money to pay those premiums so the policies bought by investors don’t expire starting as soon as Wednesday. Brian P. Miller, a lawyer for Vagnozzi, expressed impatience with the SEC’s criticisms in a court filing Friday. “Mr. Vagnozzi is sick and tired of being falsely accused of being uncooperative,” Miller wrote. “And this has zero to do with whether life insurance premiums should be paid.” Advertisement But in his court response Monday, Gaetan Alfano, the attorney for the court-appointed receiver who has taken control of Par and Vagnozzi’s businesses, questioned whether it was clear which were the right funds to pay...

Staff | September 1, 2020 The Office of the Superintendent of Financial Institutions is lifting the temporary freeze on portability transfers for private pension plans. The move reverses the OSFI’s response in March to market volatility caused by the coronavirus pandemic, which froze portability transfers and annuity purchases from defined benefit pension plans. The restrictions are no longer needed, it noted in a release, as markets have sufficiently stabilized. Read: OSFI temporarily freezes portability transfers, annuity purchases due to coronavirus “The changes announced today result from our ongoing effort to ensure that our regulatory measures continue to be appropriate for this unprecedented situation while remaining risk-focused and forward-looking,” said Jeremy Rudin, superintendent of the OSFI, in the release. The OSFI noted private pension plans have demonstrated resilience during the tumult of the past five months, adding it remains ready to take further action if needed, given the remaining risks to the financial sector as the pandemic continues. Read the full article at BenefitsCanada.com

Tom Milne | September 1, 2020 How long is your attention span? Be honest and think back to the last time you received an email about your employee benefits and didn’t tune out just a little bit. Now think about your intended audience and where their heads are at these days. The reality is, most people now have an attention span that’s better suited to the length of a TikTok video. We’ve gone from 140 characters on Twitter to single image infographics, all in the hope of holding an eyeball for that extra second. Before you know it, we’ll be back to hieroglyphics. While the ancient Egyptians may not have had the written word, maybe they already knew a picture was worth 1,000. Better yet, maybe the most basic form of written/visual communications just yields better understanding. People in marketing get it — they’ve mastered the art of using visuals and short, direct content to drive messages home. Most video advertisements on social media no longer need sound. By distilling their content down to the most basic form of written/visual communications, they improve their chances of delivering their message in a short period of time. Read: Innovative benefits communication nets award for WSP Canada As human...

‘Migration’ continues HTM’s digital transformation strategy Coburg, ON (Aug. 17, 2020) – HTM Insurance Company (HTM) migrates their Personal Property operations to the Cognition+ platform as part of their continuing work on Digital Transformation. Joining the automobile line of business on the Cognition+ solution, this move enables all forms of personal property including residential, seasonal, watercraft and other assorted personal insurance product lines of business. The quality of the product and the consistency with the auto line of business allowed the team at HTM to adopt all transaction types on day one with ease. The guided workflow along with Task Management has improved overall efficiency, service and control. “I am really proud of our team at HTM how they’ve been able to push this project through to a successful completion during these current uncertain times,” said Alec Harmer, President & CEO of HTM Insurance Company. “While initially the pandemic posed some early challenges to the Change Management process, the team has used a combination of virtual tools and collaboration to overcome not being able to work directly together. Our team has been working closely with Cognition+ to ensure a smooth transition. We’re extremely pleased how our first week on the...

Tara Deschamps, The Canadian Press | August 31, 2020 Uber Technologies Inc. is trying to keep its Canadian drivers from joining or starting class-action lawsuits against the company — a move that threatens to upend a $400-million fight from drivers wanting to be recognized as employees, says a lawyer. Employment lawyer Lior Samfiru, who is pursuing the case, said drivers using the platform were asked to sign new contracts days ago that asked them to agree not to pursue class or collective action. Uber, instead, wants drivers to agree to settle their issues with the company through arbitration or on an individual basis, he said. “The drivers get locked out of the Uber app, unless they accept this new agreement. For a driver that is trying to earn a living wage, especially during these difficult times, what are the chances that someone is actually going to read this in detail, understand what it means, understand the options and make an informed decision?” Read: Uber Black drivers fight for unionization at labour board hearing In a statement to The Canadian Press, Uber said “with the updated arbitration clause, dispute resolution is now more accessible to drivers, bringing Uber Canada in line with other jurisdictions.” However, Samfiru...

GlobeNewswire CINCINNATI, Aug. 31, 2020 (GLOBE NEWSWIRE) — Ohio National Financial Services is pleased to announce the addition of the Protector Plus and Level-premium Paid-up Additions (PUA) riders to its limited pay whole life insurance lineup.  Previously available together only on the Prestige 100 II lifetime pay whole life policy, their combination on limited pay whole life policies gives producers greater flexibility to help their clients with a wide range of individual and business planning needs. When added to a Prestige 10 Pay II, Prestige 20 Pay or Prestige Max III (Paid to 65) limited pay policy, the Protector Plus rider can be paired, or blended, with the Level-premium PUA rider to enhance early guaranteed cash value and dividend-earning potential. This can be especially helpful for individuals and businesses needing greater and/or faster access to policy values. “We believe the addition of Protector Plus rider to our Prestige limited pay policies gives our producers a competitive advantage,” said Karl Kreunen, CLU, vice president, product marketing. “We are one of a few carriers offering a PUA rider/term blending capability on limited pay whole life policies. Adding extra flexibility to the already efficient Prestige limited pay product suite, the Protector Plus rider...

Staff  | August 31, 2020 More than 90 per cent of global public investors have specific environmental, social and governance investment policies in place or are in the process of developing them, according to a new report by BNY Mellon and the Official Monetary and Financial Institutions Forum. The report combines the results of two separate surveys, with respondents to the first including 17 global pension funds, 11 sovereign funds and 50 central banks and respondents to the second including 27 pension and sovereign funds. Motivations for implementing ESG policies included the expectation of superior risk-adjusted returns and the need to align investment strategies with organizational values or minimize reputational risks. However, respondents said they struggle to formally measure the impact and non-financial performance of investment decisions, even though many said they aim to do so in future. Read: Most Canadian institutional investors engaging in ESG issues: survey Some 81 per cent of pension funds said they apply exclusion or negative screening strategies compared to 58 per cent of sovereign funds and 28 per cent of central banks. The sectors most frequently excluded are tobacco, arms and coal, while a minority of investors said they exclude oil and gas, though only partially. Among pension funds, 93 per...