Insurable Interest Canadian Insurance Blog

Yaelle Gang, the Canadian Investment Review | September 4, 2020 The Healthcare of Ontario Pension Plan is well-known for its liability-driven investing strategy, which helped it successfully weather the 2008 financial crisis. During the coronavirus fallout, in an era of historically low interest rates, the HOOPP is working on developing LDI 2.0. “We’re very focused on liabilities, but what you do when interest rates are at really extreme lows, in our view, is different than what we did in the past,” said Jeff Wendling, the plan’s president and chief executive officer, during Benefits Canada and the Canadian Investment Review‘s 2020 Plan Sponsor Week in mid-August. In 2006 and 2007, the HOOPP had very large fixed income holdings, he said. “We’ve ridden those fixed income positions all the way down to these lows [in yields] here now and that’s worked out very well for the fund. But at this point, we think fixed income assets provide minimal returns going forward. So that’s a big challenge for us.” Read: HOOPP names veteran Jeff Wendling new president and CEO For instance, he noted, fixed income assets don’t hedge the plan’s liabilities as well as they did when yields were higher nor do they provide the same kind of...

Yaelle Gang, the Canadian Investment Review | September 4, 2020 The Halifax Port ILA/HEA found a way to provide its defined contribution pension plan members with a defined benefit upon retirement — and it’s been doing so successfully for 35 years. As a private sector multi-employer plan, the pension has about 450 active members, 300 retirees and about $210 million in assets. The DB plan was closed to current service in 1984. Also in the ‘80s, the plan was capped at 25 years of service, whereas many members were working for much longer than that, said Blair Richards, the Halifax Port ILA/HEA’s chief investment officer. “They effectively could work half of their career without accumulating any higher pension. It was a real problem,” he said during a session at Benefits Canada and the Canadian Investment Review’s 2020 Plan Sponsor Week in mid-August. Read: Blair Richards moves to CIO of Halifax Port ILA/HEA pension plan After capping out their available DB service, plan members could take advantage of the DC plan, which was introduced in 1985. However, as is the case with DC plans, members didn’t know what retirement income they’d receive from the DC benefit, said Richards. “From early on, we were [determined] to try...

Yaelle Gang, the Canadian Investment Review | September 4, 2020 While rising government deficits and debt are concerning for many bond owners, they should actually be more concerned that deficits aren’t big enough, said David Bezic, an independent economic consultant, during a session at Benefits Canada and the Canadian Investment Review’s 2020 Plan Sponsor Week in mid-August. Many of the concerns around debt and deficits are founded on misconceptions, he noted. “These misconceptions arise because it’s a natural tendency to apply our personal experience to our analysis. And, when we look out at the world, we apply our own budget constraints, our own financial situation to other entities when it might not be entirely relevant. Then also, some of these misconceptions just result from a misunderstanding of the way the money system actually works at an operational level.” Read: Will social bonds’ popularity grow with coronavirus recovery? As an example, Bezic noted the idea that a government defaulting on debt or being downgraded will impact bond yields is based on a misconception that puts currency issuers into the same bucket as the people who use the currency. Currency issuers include countries with their own currency that also have debt denominated in that currency, such as Canada...

Given the scale of economic devastation that’s occurred around the world thanks to COVID-19, the hundreds of pharmaceutical companies searching for a vaccine might be forgiven for thinking that whoever finds it first should be able to name their price. But according to one health economist, there are far more important factors to consider than normal supply and demand. “When you have an infection that is endemic in the population, what you need is for the vaccine to achieve herd immunity, and that means you need to get between 60 and 80 per cent of the current population vaccinated,” said Christopher McCabe of the University of Alberta in an interview with Folio. As explained by McCabe, who’s also the head of Alberta’s Institute of Health Economics, setting the price too high risks the possibility that not enough people in the population get vaccinated, which defeats the purpose of aiming for herd immunity. Citing work by Tufts University, McCabe said the standard estimated cost of research and development for a new drug is US$1.3 billion, which takes into account sunk costs incurred from the vast majority of prospects that don’t make it past the hurdles of clinical trials and regulatory approval....

Staff | September 3, 2020 The Ontario Teachers’ Pension Plan is investing US$350 million with Indian private debt manager Edelweiss Alternate Asset Advisors. The investment, which establishes a long-term partnership between the pension fund and the debt manager’s parent company Edelweiss Group, will focus on private credit investment opportunities in India. “We are pleased to enter into a long-term partnership with Edelweiss Group, which has a proven track record and demonstrated ability to originate, underwrite, structure and realize on private credit investments in India,” said Gillian Brown, senior managing director of capital markets at the Ontario Teachers’, in a press release. “This partnership will further expand our presence in, and provide additional insights on, the important Indian market.” Read: BCI investing in Indian telecommunications, CPPIB in Brazilian real estate Ben Chan, the pension fund’s regional managing director for Asia Pacific, added that the investment is part of a long-term strategy to build multi-asset exposure to the country, tapping into its growth potential. “As a global investor, Ontario Teachers’ hopes to leverage our select list of partners including Edelweiss for local insights and acumen as we navigate to grow profitably in this important market.” In other investment news, the Caisse de dépôt et placement du Québec...

Aite Group’s latest report explores the benefits that IoT devices provide for carriers in claim control, agent involvement, customer engagement, and rate control Boston, MA (Sept. 3, 2020) – The use of connected IoT devices in the home is growing as more consumers discover the benefits of voice commands, smart appliances, and monitoring systems. They generate constant streams of data that can be used by insurance companies, which present new challenges for carriers. Finding a balance between customer benefit and return on investment (ROI) will be imperative for carriers, and those capable of leveraging IoT will create a competitive advantage through better rate control, reduced loss exposure, increased customer engagement, and positive agent involvement. A new Aite Group report, IoT Connected Devices in the Home: A Game-Changer for Homeowners Insurance, identifies trends and strategies to help insurers tackle integrating smart home data into their value chain to help mitigate claim expanses, create more accurate rating systems, and increase customer engagement opportunities. “Given the propensity for IoT devices to help prevent or mitigate claim expenses, the long-term ROI for carriers is very good,” states Greg Donaldson, senior analyst at Aite Group. Click here for the online summary or to download the...

Chicago, IL (Aug. 28, 2020) – The latest iteration of the Semi-Annual U.S. Insurance Labor Outlook Study, conducted by The Jacobson Group and Aon plc, found 83 percent of respondents intend to maintain or increase staff in the next 12 months. “The insurance industry has proven relatively stable in comparison to the overall economy and insurers continue to compete for top talent,” says Gregory P. Jacobson, co-chief executive officer of Jacobson. “Recruiting difficulty has not eased during the pandemic and has even increased slightly for most insurance functions. Though employment will continue to grow in the next 12 months, it will be at a significantly slower pace.” Some of the study’s key findings include the following: Most vacant positions are still moderately difficult to fill; of the 11 functional areas reported on in the study, eight have increased in recruiting difficulty compared to one year ago. Fifty-eight percent of companies expect increased revenue growth, 19 points lower than six months ago. Thirty percent of companies expect flat growth, 13 points higher than January 2020. In the coming year, companies are most likely to increase staff within the technology function, followed by underwriting and analytics. The primary drivers of staffing changes...

Marlborough, MA (Sept. 1, 2020) – OneShield Software is pleased to announce that U.S.-based RubiQon Risk & Insurance Services – a newly-launched Managing General Agency (MGA) and a subsidiary of intelligent decision platform provider QOMPLX Inc. has chosen OneShield Market Solutions (OMS) as its Software-as-a-Service (SaaS) provider for policy, billing, claims and reporting. Focused on offering comprehensive risk management solutions from cybersecurity to tailored cyber insurance, RubiQon Risk believes product speed-to-market will be the key business driver and a competitive advantage for them. “By combining the telematics and decision-making tools in the QOMPLX Underwriting technology platform with OneShield’s complementary policy management capabilities, RubiQon is able to get our new cyber insurance solutions to market quickly and offer our customers the high level of services and automation they should expect from us,” says Conan Ward, RubiQon Risk’s General Manager and President. OneShield provides end-to-end policy management from quoting, binding, and servicing, handling the billing lifecycle from invoicing through to payment, and offers comprehensive claims administration from first notice of loss through to payment. Extended capabilities include document management, reporting, and analysis. “OneShield has extensive experience working with startups and we understand how to mobilize to help them go live quickly,” says...

Surrey, BC (Sept. 2, 2020) – Westland Insurance Group Ltd. is pleased to announce the closing of four acquisitions, effective August 31, 2020. The new retail offices, which are located in British Columbia, Alberta and Manitoba, support Westland’s expansion strategy to serve more communities across the country. “This is an exciting time for Westland as we continue our strategic expansion across Canada. These acquisitions strengthen our presence in western Canada, and, for the first time, provide us the opportunity to support clients in Manitoba,” said Jason Wubs, CEO of Westland Insurance. “These are all client-focussed agencies with deep roots in their communities, and they are perfectly aligned to Westland’s core values. Their professional advisors will continue to provide the same great service, and we are excited to welcome our new team members to the Westland family.” Manitoba King Insurance: Founded in 1962, King Insurance is a family-owned brokerage located in Winnipeg, Manitoba. Its professional insurance advisors are experts in residential, auto, business, life and disability insurance. Alberta Johnson Agencies: Johnson Agencies has served the insurance needs of Leduc, Alberta, and the surrounding areas since 1967. They provide residential, auto, recreation, commercial, farm, travel and life insurance. Hedderick Insurance Agencies: Located...

Calgary, AB (Sept. 1, 2020) — Doug Laird, President of Edmonton’s McLean & Shaw Insurance Inc. and Lee Rogers, President and Bruce Rabik, Chief Operating Officer of Calgary-based Rogers Insurance Ltd. are pleased to announce the partnership of these respective firms. Rogers has acquired a significant minority interest in McLean & Shaw and both Doug Laird and Ryan Lyster, Managing Partner, will become shareholders in Rogers Insurance Ltd. Since 1956, McLean & Shaw has developed tremendous expertise in the transportation, oil and gas servicing, manufacturing and farm sectors and has grown a very loyal base of customers. “Our partnership with Rogers Insurance provides additional access to markets which means more choice for our clients and allows us to focus on our areas of expertise so we can aggressively expand our clientele in Edmonton,” said Doug Laird. “McLean & Shaw’s core values of authenticity, passion and accountability are aligned with our new partners and we are pleased to be joining an organization with one of the best work environments in Alberta. Our team is committed to continue delivering best-in-class service for our clients.” As part of this transaction the name of McLean & Shaw will change to “Rogers McLean Shaw Insurance...