Insurable Interest Canadian Insurance Blog

George Nichols III, president and CEO of American College of Financial Services George Nichols knows that when he does his four- to five-mile walk every day, he is not the president of The American College of Financial Services. He is not the former top-level executive of New York Life. He is not the former Kentucky insurance commissioner. He is a threatening black man. People who know Nichols would likely see him as the affable 60-year-old man and capable leader he is. But Nichols knows that is not what many other white people see. “At my age and at my level of success, I still have to calculate how I make sure I’m not perceived as a threat when I walk into an environment where I may be the only black,” Nichols said. His is the only black family in his upscale neighborhood, so he knows the drill when he goes for his walk. He strides briskly, doesn’t look at anybody’s house too intently, greets everybody and wears bright colors so the neighbors can recognize him. But that does not mean every police officer driving through the neighborhood recognizes him. Like a month or so ago during his walk when Nichols...

A state regulator task force took another step Thursday toward agreement on rule changes designed to rein in index universal life insurance illustrations. In another “straw poll” vote, Life Actuarial Task Force members buried the in-force issue by voting 13-3 to affirm that any changes will only apply to new policies. Illinois, New York and California regulators voted against. The task force is considering language proposed by the American Council of Life Insurers to shore up Actuarial Guideline 49 and bring IUL illustrations more in line with actual returns. Members are racing the clock to present a proposal for adoption by its parent A Committee during the committee’s July 10 call. The vote followed a spirited debate during which Birny Birnbaum, executive director of the Center for Economic Justice, repeatedly pressed regulators on the logic of illustration changes that exclude existing policies. “We don’t understand why you would go to the trouble of saying ‘We want to fix the problems of AG 49,’ but to the consumers who have already purchased the product, they shouldn’t get the benefits,” Birnbaum said. Industry representatives claim it would confuse consumers to receive new illustrations that might be drastically different. The background: AG 49 was...

Staff | June 5, 2020 The Local Authorities Pension Plan is reporting a $3.4-billion loss in an “exceedingly difficult” first quarter, reducing the size of the fund by 6.5 per cent. The LAPP reported $47.2 billion in assets as of March 31, down from $50.6 billion at the beginning of the year. However, it said the impact on the fund would have been worse if it hadn’t directed its investment manager, the Alberta Investment Management Corp., to implement a downside protection strategy. The AIMCo sustained a 10.2 per cent loss, or about $5.1 billion during the quarter, but the LAPP said the strategy reversed about four per cent of the AIMCo’s losses, saving almost $1.9 billion. Read: AIMCo earns 10.6% return for 2019, underperforms benchmark “Putting LAPP’s strategy aside, the remaining $3.4-billion loss is still significant and sets LAPP Corp. back in its goal to further de-risk the plan,” said Chris Brown, chief executive officer of the organization, in a press release. “We will continue to work with AIMCo to achieve LAPP’s goals and we are considering all available options for attaining better alignment with AIMCo on its approach to taking risk in investing LAPP’s assets. The upcoming review of our investment management agreement required by legislation provides a...

Staff | June 5, 2020 While some defined contribution pension plan members may push their retirement plans back because of market turmoil caused by the coronavirus, others won’t be willing to do so. Those soon-to-be retirees will have to take other measures to ensure they can retire, which will likely include diversifying their potential sources of retirement income, according to a new report by data analytics and consulting firm GlobalData. “With the value of pensions being especially vulnerable to volatility in capital markets, pension holders in these age groups may now have to push back their retirement plans to offset the losses that have occurred due to COVID-19,” said Daniel Pearce, senior insurance analyst at GlobalData, in a press release. Read: Could coronavirus delay DC plan members’ expected retirements? “However, other individuals in these age groups may not be willing to continue working and, as a result, look towards other assets as means to fund their retirement, such as income from rental property or equity release on mortgages.” Both rental income and mortgage equity are relatively insulated from market volatility, contributing to their potential popularity, noted the report. “The insurance industry should prepare for individuals to look for a more diverse portfolio of assets...

Ownership of life insurance might have declined in the U.S. over the past decade, but shifts in consumer demand and preferences could create an opportunity for the industry to turn that trend around. In its 2020 Insurance Barometer Study conducted with Life Happens, LIMRA found that U.S. life insurance ownership declined by 9 percentage points to just 54%. According to researchers, that stemmed from a decrease in employer-paid group life insurance benefits, which went from 32% in 2011 to 27% in 2020. However, the study also found that plans to purchase life insurance are at an all-time high as 36% of Americans surveyed said they intend to do so in the next 12 months. Alison Salka, Ph.D., senior vice president and head of LIMRA research, said that the COVID-19 pandemic may boost purchase intent by increasing the perceived need for life insurance. Increasing acceptance of social media was another prominent theme in the poll. Nearly half of consumers polled said they have turned to social media – most notably Facebook and YouTube – for information on financial topics, companies, or advisors. The use of both Facebook and Youtube for financial topics has doubled just in the period from 2019 to...

Staff | June 4, 2020 The Investment Management Corp. of Ontario is adding €250 million to its previous investments in euNetworks Group Ltd., a European bandwidth infrastructure company. The cash injection is set to fund the company’s further organic growth, mergers and acquisitions and general corporate purposes. The company operates deep fibre networks in 17 cities in Europe. “We seek to invest in world-class infrastructure businesses globally and are excited to be supporting one with our investment in euNetworks as they continue growth of their European platform,” said Tim Formuziewich, managing director and global head of the IMCO’s infrastructure program, in a press release. Read: Ontario Teachers’ investing in SpaceX, CPPIB in British entertainment company “We see bandwidth demand growth being extremely differentiated to other value drivers of infrastructure assets that offers diversification to our clients’ portfolios. That growth profile combined with euNetworks’ leading position in the European bandwidth infrastructure market and track record of successful capital deployment presented a strong investment opportunity for IMCO.” Read the full article at BenefitsCanada.com

Staff | June 4, 2020 Green Shield Canada is partnering with ManagingLife Inc. to offer the software developer’s Manage My Pain app at no cost to benefits plan members for the rest of 2020. The app allows users to track, analyze and share the details of their chronic pain condition with their physician and other health-care providers. It also provides insights and uncovers unique patterns, which turn day-to-day experiences with pain into data. Read: Green Shield Canada, PocketPills partner on virtual pharmacy access “With the limitations on in-person treatment as a result of the ongoing COVID-19 situation, it has never been more important to ease the burden on those suffering with chronic pain,” said David Willows, the insurer’s executive vice-president of digital, innovation and brand experience, in a press release. “The Manage My Pain app positions them to take control of their pain and it serves as a daily reminder that they are not alone.” Read the full article at BenefitsCanada.com

Montreal, QC (June 4, 2020) – Apollo Insurance Solutions Ltd., Canada’s largest online insurance marketplace, has launched their first personal lines product, a Renters Insurance product available to purchase online through the Apollo Exchange platform. The Apollo Renters Insurance product offers eligible purchasers protection from liability between $1 million and $2 million, with pricing starting at $17 per month. Brokers are paid 20% commission on this product. “This is a great product that brokers can offer to their clients online, which is especially important given COVID.” said Apollo CEO Jeff McCann. “Apollo’s rich functionality also allows brokers to follow up on quotes and ensure they’re offering the expertise, advice, and counsel their customers need to make an informed buying decision.” Other coverage highlights include: Additional Living Expense up to $30,000 Jewelry up to $10,000 sublimit Bicycles up to $3,000 Computers up to $10,000 Sewer backup coverage – Optional enhanced with extended water damage coverage, up to property limit. Named Risk package and All Risk package available. Contents up to $100,000 (minimum $10,000) This product offers brokers the flexibility to pick and choose coverages, tailoring the policy to their clients’ needs. Canadian insurance brokers are able to access this product along...

New Novarica brief explores low-code/no-code applications and use cases in insurance; profiles vendors with experience supporting insurers Boston, MA (June 2, 2020) – As insurers accelerate their digital transformation efforts, platforms that allow non-developers to participate in the development process can increase collaboration between the business and IT, while reducing time to market and cost. In a new report, Low-Code/No-Code for Insurers: Overview and Prominent Providers, research and advisory firm Novarica introduces low-code/no-code technology, explores applications and use cases in insurance, and profiles vendors with experience supporting insurers. “Low-/no-code platforms offer a compelling alternative to traditional development environments,” said Martin Higgins, Vice President of Research and Consulting and co-author of Novarica’s new report. “During the COVID-19 pandemic, organizations have leveraged low-code/no-code platforms to develop and deploy digital workaround solutions in days to enable the shift to work from home. Such adaptations would have been impossible with traditional development tools and processes.” Click here for the table of contents or to access the report. Report Summary This brief introduces low-code/no-code technology, explores applications and use cases in insurance, and profiles vendors with experience supporting insurers. Low-/no-code development platforms support the development of business software without the need for traditional computer programming....

Brokercore becomes first BMS vendor verified for Level II in CSIO’s Commercial Lines Certification Program Toronto, ON (June 2, 2020) – CSIO is pleased to announce that Brokercore has become the first CSIO member to achieve the Level II – Verified milestone in the Commercial Lines (CL) Certification Program. To reach this, Brokercore successfully demonstrated their implementation of CL Data Standards and real-time quoting functionality from their BMS for sample contractors’ business. The Commercial Lines Certification Program is comprised of three levels, each representing an important milestone in the adoption of CL Data Standards. The levels are: Level I – Foundation Level II – Verified Level III – Certified The program was launched in early May to support insurer and service provider members who have implemented CSIO CL Data Standards, providing the foundation for real-time quoting. Certified members are recognized as innovative leaders who are committed to providing brokers with straight-through processing functionality. This results in streamlined workflows and improved operational efficiencies. “Incorporating data standards to improve broker connectivity consistently remains a priority for us and we’re excited with what has been accomplished to reach this level,” says Chris Farris, Director, Business Development of Brokercore Inc. “Achieving this type of progress without CSIO, an organization...