Insurable Interest Canadian Insurance Blog

Yaelle Gang, the Canadian Investment Review | June 17, 2020 The volatility caused by the coronavirus pandemic made the first quarter of 2020 rough for many Canadian defined benefit pension plans. In early June, the Local Authorities Pension Plan Corp., which is mandated to invest with the Alberta Investment Management Corp., said it began the year with $50.6 billion in assets under management and ended the first quarter with $47.2 billion. But, while an approximately 6.5 per cent reduction to the size of the fund is a hard hit, the results would have been much worse if it wasn’t for a downside protection strategy the LAPP that reversed about four per cent of losses and saved the fund almost $1.9 billion. The LAPP Corp. only became the legal trustee and administrator of the pension plan on March 1, 2019. Until then, the president of the Alberta Treasury Board and the province’s minister of finance was the plan’s legal trustee and administrator. Read: LAPP reporting $3.4-billion loss in first quarter of 2020 Following the change, the new sponsor board was given a two-year period to work on articulating its risk appetite and developing a new funding policy, says Chris Brown, the LAPP’s president and chief...

Even before the COVID-19 pandemic hit, ownership of life insurance fell among households earning less than $100,000, declining by 25% over the past 10 years. This year’s Insurance Barometer Study by LIMRA and Life Happens reviewed 10 years of consumer data on life insurance and related financial issues based on a survey taken in January 2020. In January, 46% of adult consumers did not own life insurance. Although 36% of respondents said they intended to purchase life insurance in the next 12 months, many were without it during the height of COVID-19. Of those surveyed, 44% said they would feel a financial impact within six months if the primary wage earner were to pass away. More than a quarter (28%) would feel it within one month. Perception of cost may be the most significant barrier. Half of millennials believe the estimated yearly cost for a $250,000 level-term life insurance policy for a healthy 30-year-old is $1,000 or more when in actuality, it’s closer to $160 per year, LIMRA reported. “Over the last 10 years, a drop in ownership of life insurance and disability insurance could correlate to a broad decline in employer-paid group benefits, showing that consumers are relying on...

As the world continues to suffer from the financial and public health impacts of the novel coronavirus, several priorities have become top-of-mind for many Canadians. Aside from the obvious desire for liquidity, there’s an increased focus on portfolio risk mitigation, as well as protection in case of death or disability. Addressing such concerns, iA Financial Group has launched iA PAR, its all-new participating life insurance product that can address a range of retirement-planning and estate-planning needs. “We have always strived to offer solutions that meet the evolving needs of our clients,” said Renée Laflamme, executive vice-president, Individual Insurance, Savings and Retirement at iA Financial Group. “That’s why we are proud to now offer our new participating life insurance product and allow them to benefit from its advantages.” With liquidity from annual dividends, clients may use iA PAR to increase their retirement income or establish a solid foundation for their children’s or grandchildren’s future. Aside from that, they stand to benefit from tax-advantaged diversification to alternative assets. “One key aspect and differentiator of our long-term asset allocation is the 55% target allocation to alternatives investments,” said Thomas Drolet, portfolio manager, iA Investment Management. According to Drolet, iA PAR’s investment portfolio includes...

Green Shield Canada and HBM+, its health benefit managements solutions division, have announced the high-level results of a previously announced pharmacogenomics clinical trial study examining whether drug treatment can be improved using information about a person’s genetic profile. “We undertook this study because there were substantial gaps in knowledge regarding the downstream impact of pharmacogenomic testing on patients, but the results confirm that it can be a difference-maker for those suffering with major mental health conditions,” said David Willows, GSC’s EVP, Digital, Innovation and Brand Experience. The study was a single-blinded randomized controlled trial, which followed over 200 outpatients diagnosed with major mental health conditions such as depression and anxiety. Each participant was randomly sorted into either a control group, where drug optimization was conducted purely based on a pharmacist’s clinical judgment, or an experimental group where a pharmacist administered pharmacogenetics-guided treatment. Validated psychiatric instruments – including the Patient Health Questionnaire (PHQ-9), Generalized Anxiety Disorder Scale (GAD-7) and Sheehan Disability Scale (SDS) – were used to evaluate patient response. Over a six-month trial period, participants in the pharmacogenomics-guided cohort reported significantly greater improvements. Compared to the control group, they showed better recovery with respect to depression severity (36% improvement from...

Staff | June 16, 2020 The federal government is extending the Canada Emergency Response Benefit for an additional eight weeks to support Canadians who haven’t been able to find employment as provinces start to reopen their economies. “The reality is that even as we start to reopen, a lot of people still need this support to pay their bills while they look for work,” said Prime Minister Justin Trudeau during his daily press briefing. Read: Employers can’t use SUB plans to top up employees laid off due to pandemic The $2,000 monthly benefit was intended to be available for 16 weeks starting in mid-March. Many Canadians who haven’t been able to return to work would have reached the end of their eligibility period in early July. Anyone currently on the CERB — whether because they can’t find a job or their employer or industry hasn’t been able to reopen — will continue to receive it until the end of the summer. As of June 1, more than 8.4 million Canadians had applied for the CERB and the program had paid out more than $43.5 billion. Read the full article at BenefitsCanada.com

Staff | June 16, 2020 The results of a new study highlight the value of tailoring drug treatment to an individual’s genetic makeup. The pharmacogenetics clinical trial study by Green Shield Canada and the health benefits management division of HBM+ followed more than 200 outpatients who had been diagnosed with major mental-health conditions, including depression and anxiety. Participants were randomly assigned to two groups — a control group, where drug optimization was based solely on a pharmacist’s clinical judgement, and an experimental group, where a pharmacist delivered pharmacogenetics-guided treatment. Participants in the pharmacogenetics-guided group reported greater improvements over a six-month period across a range of clinical outcome measures. Specifically, patient health questionnaire scores showed improvements of 36 per cent and 18 per cent from baseline depression severity in the pharmacogenetics and control group, respectively. Read: Green Shield Canada investing in pharmacogenetics company Similarly, the outcomes for anxiety and disability were around two times greater in the pharmacogenetics-related group compared with the control group — generalized anxiety disorder scale results improved by 41 per cent in the pharmacogenetics group compared to 23 per cent for the control group, while Sheehan disability scores jumped by 44 per cent in the pharmacogenetics group versus 18 per cent in the control group....

Staff | June 16, 2020 Slack Technologies Inc. is offering its employees the option to work from home permanently, along with extending its coronavirus-related office closures past Sept. 1. In a blog post, Robby Kwok, senior vice-president of people, said the company plans to hire workers who are permanently remote. It’s also looking to revamp the design of its offices for the eventual return to work to reduce in-person contact. Read: Shopify moving majority of employees to permanent remote work “In the past, the physical office was the default space for work — from grabbing a small room to check in with your manager, to convening a large group to brainstorm on a whiteboard, to catching colleagues in the hall to hear about their weekend plans,” he wrote. “While we’re still navigating exactly how and when our offices reopen, we expect them to look quite different: fewer amenities such as catered lunches and coffee bars, less focus on in-person meetings with colleagues and more options for focused solo work.” Kwok noted that curtailing or eliminating in-office amenities would affect Slack’s contractor and vendor network. “This is a responsibility we take very seriously, which is why we’re committing to pay all Slack contractors through the end of 2020.” Other technology giants have...

Insurers and everyone along the distribution chain have long anticipated the impending technology infusion that would transform the delivery of life insurance and related products to consumers. That technology transformation crept closer at a glacial pace until the COVID-19 pandemic pushed an industry that relies on face-to-face contact to accelerate its plans. And something happened along the way to the new cyber-reality: insurers, middlemen and agents all learned they can rely on technology to forge a new way of selling insurance products. “It really is touching every aspect of the business,” said Kara Hoogensen, senior vice president of Specialty Benefits at Principal Financial Group. Principal is just one of many carriers who accelerated long-debated technology plans. For example, an online application option in use for life insurance was quickly adapted for use with Principal’s disability insurance products. “We definitely worked to get that out into the marketplaces as soon as we possibly could,” Hoogensen said. “It’s just easier to do business virtually and digitally at this point in time, as opposed to having a broker sit across the table and help an individual fill out a policy for income replacement.” ‘Some Pressure’ Likewise, Principal accelerated use of its Human API...

PR Newswire NEW YORK, June 16, 2020 /PRNewswire/ — Haven Life, the customer-centric life insurance agency backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual), and Benefitfocus, the technology platform driving rapid innovation for employers and health plans, are today announcing a partnership that allows more individuals to digitally purchase the financial protection they need. As a result of the partnership, Salary Protection is now accessible to the millions of individuals whose employers use the Benefitfocus Benefit Catalog. Issued by MassMutual subsidiary C.M. Life and developed in collaboration with key reinsurance partner SCOR Global Life, Salary Protection is a new term life insurance policy that pays an employee’s beneficiary an amount equal to the policyholder’s paycheck every month — for up to 15 years after initial purchase — if they were to pass away during the coverage period. Salary Protection provides more robust coverage amounts than other group life insurance policies, which generally pay out only 1 or 2 times the employee’s annual salary. “At Haven Life, we’re focused on making life insurance not only more simple, but also more convenient to purchase,” said co-founder and CEO Yaron Ben-Zvi. “With Benefitfocus’ extensive reach, far more individuals can now purchase a life...

Despite the economic craziness — or maybe because of it — Americans are trusting insurance agents and companies more than ever, according to LIMRA data. Despite the unsettled economy over the past half year, public confidence in insurance agents is at an all-time high, up dramatically from a low recorded in the wake of the 2008 crash, according to LIMRA data. In October 2008, only 9% of consumers had “extreme/quite a bit” of confidence in insurance agents and brokers in LIMRA’s Consumer Sentiment Survey conducted.In May of this year, that percent had risen to 32%, a 255% increase. That increase occurred even while confidence in the economy overall plummeted from its post-2008 high notched this January, with 56% of consumers having “extreme/quite a bit” of confidence in the economy. That number slid to 21% in May, a 62.5% drop in just a few months. Consumer confidence also increased in insurance companies, with 40% of consumers saying they had “extreme” or “quite a bit” of confidence in life carriers. Jennifer Douglas, LIMRA Research Quality and Performance research director, said consumer contact with their carriers was an important factor. Advertisement “One of the factors that may have contributed to consumers’ increased confidence...