Insurable Interest Canadian Insurance Blog

New York, NY (Aug. 9, 2020) – Marsh has released its Global Insurance Market Index for the second quarter of 2020. The increase, the largest since the index was launched in 2012, follows year-over-year average increases of 14% in the first quarter and 11% in the fourth quarter of 2019. As with the first quarter, average price increases were driven principally by increases in property insurance rates and financial and professional lines. Among other findings, the survey noted: Global property insurance was up 19% and global financial and professional lines were up 37%, while global casualty pricing was up 7% on average. Composite pricing in the second quarter increased in all geographic regions for the seventh consecutive quarter. The US (18%), UK (31%), Continental Europe (15%), and Pacific (31%) regions all had double-digit pricing increases. Pricing increases in these regions were largely driven by increases in property and directors and officers (D&O) coverages. Certain D&O markets saw large increases. For example, US public company D&O prices were up 59% on average, with more than 90% of clients experiencing an increase. In the UK, D&O pricing increases average over 100%. A similar situation exists in Australia, where a lack of competition has...

Staff | August 17, 2020 Active membership in Canadian registered pension plans topped 6.4 million in 2018, up about 85,000 members or 1.3 per cent from 2017, according to a new report by Statistics Canada. Female members reached another all-time high at 3.24 million, rising by 49,200, with 35,500 males joining plans, coming to 3.17 million in 2018. In addition, public sector plans saw an increase of about 65,000, with women making up more than twice as many new members as men. Public sector plan membership also accounted for more than half (52.9 per cent) of total registered pension plan members. Private sector plans grew in membership but not by as much, adding more than 15,000 men and just over 5,100 women. Read: 2020 Top 100 Pension Funds Report: How have Canada’s DB pensions changed over the last decade? The report noted 2018 saw a significant increase in overall registered pension plan membership, with a 0.4 per cent rise in the pension coverage rate — the proportion of all paid workers covered by a registered pension plan in the country, which sits at 37.5 per cent as of 2018. While this represents the largest rise in the coverage rate since 2009, it remains lower than the numbers seen in the 1970s through the 1990s, which were consistently above...

Staff | August 17, 2020 Manulife Financial Corp. is appointing Sarah Miller Wright as head of Canadian operations. Miller Wright’s role will be to continue Manulife Canada’s work to reimagine how it interacts with its customers across all channels, improve the customer experience and drive business effectiveness. Read: Manulife sending employees’ kids to virtual camp She joins the insurer from Shaw Communications Inc., where she held a series of senior leadership roles, most recently senior vice-president of digital, product and service delivery. She also previously worked in leadership roles at Virgin Mobile Canada Ltd. and BCE Inc. “Sarah is passionate about creating a high-performing culture through the development of strong talent,” said Manulife in a press release. Read the full article at BenefitsCanada.com

Staff  | August 17, 2020 Guardian Capital Group Ltd. is acquiring a 70 per cent interest in U.S.-based investment management firm Agincourt Capital Management. The acquisition, which is expected to add almost US$7 billion to Guardian’s assets under management, aims to further diversify the firm’s assets under management by geography and investment solutions. “We’re very pleased to partner with the Agincourt principals and to continue to grow our presence in the United States,” said George Mavroudis, president and chief executive officer at Guardian. “They have an excellent pedigree, time tested and proven over the more than 20 years they have been in business. It’s clear that our firms share many of the same cultural values and that adding a firm of this quality to Guardian’s group of companies supports our strategic intent. Read: Willis Towers Watson to acquire Canadian investment manager “The purpose and execution of this transaction has very strong parallels with Guardian’s acquisition of a majority interest in Salt Lake City, UT-based Alta Capital Management early in 2018. The success of that partnership and the same alignment we see in joining with Agincourt gives us confidence in advancing our U.S. strategy.” Patrick O’Hara, managing director of Agincourt, said the firm is excited...

Transamerica announced today that it is now offering a new funeral concierge benefit at no direct cost for qualifying life insurance policyholders. Transamerica developed this new benefit, the Concierge Planning Rider, to provide grieving beneficiaries valuable resources to help plan the funeral of the insured person. This new benefit provides access to a third-party service provider, Everest Funeral Package, LLC. Services include 24/7 access to an expert consultant who assists with planning the funeral and negotiating funeral expenses, as well as online tools for creating a will and other estate planning documents and an online secure location for storage of these documents. The rider is available at no direct cost to policyholders for qualifying Financial Foundation IUL (2017CSO) policies. “Transamerica is providing this service to help families through one of their most difficult times. This new benefit lifts some of the burden from grieving families. Expert help is available 24/7 to help plan the funeral and save money on funeral costs,” said Blake Bostwick, Chief Executive Officer of the Individual Solutions division at Transamerica. “We are always looking for ways to support our policyholders better. End of life discussions are difficult, and this new rider can help facilitate those conversations...

When it comes to life insurance, some buyers may prefer to buy term life, as paying less on premiums would give them more financial room to invest. Others may be advised to get permanent life insurance that allows them to “be their own bank,” or use other strategies that would supposedly make it the only investment they’ll need. But one middle-ground option may prove to be interesting and beneficial to consumers: return-of-premium term insurance. “You have life insurance coverage for some term (20 or 30 years) and if you survive that entire term, … you get all of your premiums back,” explained Derek Tharp, assistant professor of finance at the University of Southern Maine and founder of Conscious Capital, in a piece for the Wall Street Journal. Premiums for such policies, he added, tend to be higher than those for a comparable term-life insurance policy. While return-of-premium policies offer relief from the sting of potentially paying for a product you wind up not using, some say those premium payments still represent a lost opportunity. Even if the premiums are returned, critics argue, it’s still money that has missed out on years of compound interest. But Tharp countered that since the...

Berkshire Eagle, The (Pittsfield, MA) CORONAVIRUS NerdWallet The coronavirus pandemic continues to disrupt the U.S. economy as businesses big and small cut back, close and declare bankruptcy. Consequently, a reported 16.3 million Americans were unemployed in July, compared with just over 6 million the previous year, according to the Bureau of Labor Statistics. In addition to losing their paychecks, many Americans also have lost their workplace benefits like life insurance, which can offer peace of mind in the event of an unexpected death. If you find yourself without coverage due to unemployment, you might be wondering what your options are. The terms of your current or most recent policy, as well as your health, long-term financial plan and employment status, all play a part in deciding what to do next. Advertisement CONSIDER YOUR INSURANCE NEEDS Start by asking yourself why you want to continue or replace your coverage. In general, life insurance is only necessary if your death would place a financial burden on others. If you are the high-income earner or sole earner for a young family, you should assess your situation with a financial planner to make sure your family is protected during your unemployment, says Scott Holeman,...

Research An insured whose dependent children receive Social Security Survivor Benefits is fighting with Cigna over a potential application of an offset related to the dependent benefits. Is Cigna Seeking To Offset Disability Benefit by Social Security Survivor Benefit? Q&A – Applying for Benefits What does it take to get approved for disability insurance benefits?…

A National Association of Insurance Commissioners’ committee had the final word today on Actuarial Guideline 49, approving changes designed to tighten up indexed universal life illustrations. The executive committee and the plenary approved the newly named AG 49A with a lone No vote by New York. There were no comments accepted, but Jillian Froment, director of the Ohio Department of Insurance and chair of the NAIC Life Insurance and Annuities Committee, addressed two objections registered by consumer advocate Birny Birnbaum. Birnbaum pressed to include language banning illustration outcomes suggesting that the rate the policy will pay the policyholder is higher than the rate the policyholder will pay to borrow from the policy. Birnbaum, executive director of the Center for Economic Justice, said this “riskless arbitrage” is a dangerous trap for consumers. “This is analogous to taking out a mortgage on your home and using that money to invest in the stock market – because the market has averaged returns of, say, 8%, while your mortgage loan rate is 3%,” he said in a comment letter. “Of course this would be terrible financial advice because the loan cost is fixed – you have to pay the interest regardless of what your...

Staff | August 14, 2020 The Canada Pension Plan Investment Board posted a 5.6 per cent net return for its first 2021 fiscal quarter, which ended June 30, 2020. The quarter saw the CPPIB’s net assets grow to $434.4 billion from the $409.6 billion it held at the end of its 2020 fiscal year, which ended March 31, 2020. The increase came from $1.9 billion in CPP contributions and $22.9 billion in net investment income. By comparison, the CPPIB had a difficult finish to its 2020 fiscal year, which saw a return of just 3.1 per cent, dragged down by the coronavirus-related market turbulence. Notably, looking at the 2019 calendar year before the pandemic, the fund saw a 12.6 per cent return. Read: CPPIB posts 3.1% gains for fiscal 2020 after difficult final quarter “While global financial markets experienced a strong rebound from March, significant uncertainty in health, social and economic conditions persists,” said Mark Machin, president and chief executive officer of the CPPIB, in a press release. “Amid this environment, CPP Investments delivered solid performance, while our investment teams were active in creating long-term value across our diversified programs.” In particular, the release noted public equity markets bounced back into strong performance during the quarter, which...