Insurable Interest Canadian Insurance Blog

Staff | July 9, 2020 Among Canadians with a retirement plan, 77 per cent said they’re confident they’ll have enough money to last the rest of their lives, compared to 52 per cent without one, according to a new survey by Franklin Templeton Canada. The survey, which was conducted in February, prior to the coronavirus pandemic, also found that among retirees, 54 per cent with a retirement plan said they’ve saved enough for retirement, compared to 33 per cent of those without a plan. “The uncertainty and financial hardship related to COVID-19 has caused many individuals to reconsider their short- and long-term financial priorities,” wrote Manmeet Bhatia, head of private wealth at Franklin Templeton Canada, in a blog post. Read: Canadians reducing retirement savings due to coronavirus “Individuals without adequate savings may not only need to curb everyday spending, but also delay their retirement or other long-term goals. The virus has put the spotlight on financial preparedness and the importance of having a strategy to cope with unforeseen events or things generally beyond our control.” Indeed, when asked to choose from a list of different current financial goals or priorities, survey respondents cited “having sufficient emergency savings to cover unexpected expenses” more frequently than saving...

Staff  | July 9, 2020 Sandra Nuttall, who spent her career in the pension industry, passed away on July 5 due to complications from dementia. Before she retired in 2011, her roles included consultant at Towers Perrin, before it became Willis Towers Watson; head of pensions at Moore Corp.; and president of AllianceBernstein Canada, where she spent the last 15 years of her career. During this time, she was also a member of the Toronto CFA Society, Pension Investment Association of Canada and the Association of Canadian Pension Management. Read: AllianceBernstein rebrands According to a close colleague, Nuttall loved the industry and her job. She had a hard time with the decision to retire but finally decided to get to her bucket list of travel, diving and volunteer work. She’s remembered fondly for her professionalism, intelligence, humour and kindness to all. She’ll be very much missed by her family, friends and the professionals in the pension industry with whom she worked and so positively impacted. Read the full article at BenefitsCanada.com

Arlington, Va., July 8, 2020: Two-thirds (67%) of Americans say that the pandemic has been a wake-up call for them to reevaluate their finances, according to a new study by Life Happens, a nonprofit dedicated to educating consumers about the importance of life insurance and other related products for sound financial planning. The survey, “Tough Talks During COVID-19,” asked 2,000 Americans aged 18–56+ how they feel about their finances in light of COVID-19, how it has impacted family conversation, and if they’ve adjusted their behaviors as a result. The study also draws comparisons to a similar survey Life Happens conducted in January 2020 that uncovered a delay in Americans’ life milestones and a greater focus on their finances. Normalizing Family FinancesThe COVID-19 pandemic has sparked open conversations about end-of-life and future emergency plans. Americans say they are now less likely to avoid talking about financial matters at the dinner table than they were before COVID-19—40% compared with 45% avoiding these topics in the survey fielded in January 2020. The top five topics that have dominated dinner table discussions are: 1. Wills and inheritance – 33%2. Current health issues and concerns – 32%3. Life insurance coverage – 30%4. Current financial status – 29%5. Emergency savings –...

Montreal, QC (July 9, 2020) – Apollo Insurance Solutions Ltd. (“Apollo”), Canada’s largest online insurance marketplace, has partnered with AXIS Insurance, a business segment of AXIS Capital Holdings Limited, to add standalone General Liability Insurance for Realtors to the Apollo Exchange’s rapidly growing catalogue of digital insurance products. This product offers real estate brokers and agents General Liability with $1M and $2M limit options, with $50,000 optional contents coverage. Pricing for this product starts at $42 per month. Canadian insurance brokers are able to access all of the products on the Apollo Exchange by registering for free. “This is a great standalone product that realtors often require to supplement their existing Professional Liability coverage which is provided from their provincial association,” said Margo Lyons, Head of Broker Distribution at Apollo. “We’re excited to serve the real estate brokerage community and expand our product variety with another great product from AXIS.” This is the second AXIS product on the Apollo Exchange; the first was a Cyber Insurance product. As with every APOLLO Exchange product, the entire process, from quoting, binding coverage, and issuing policy documents is immediate, online, and paper free. AXIS is one of several carriers that offer their products...

Organizations successfully scaling their AI initiatives see biggest benefit in growing revenue, ahead of improving operational efficiency Latest Capgemini research highlights what AI-at-scale leaders are doing to succeed Paris (July 8, 2020) – A new report from the Capgemini Research Institute examines the pace of enterprise Artificial Intelligence (AI) adoption in the last three years. Over half (53%) of organizations have now moved beyond AI pilots, a marked increase from 36% in Capgemini’s 2017 report on the same subject. Furthermore, 78% of AI-at-scale leaders[1] continue to progress on their AI initiatives at the same pace as before COVID-19, while another 21% have increased the pace of their deployment. This is in stark contrast to the “struggling organizations”[2]: 43% of whom have pulled their investments while another 16% have suspended all AI initiatives due to high business uncertainties related to COVID-19. The new report, The AI Powered Enterprise: Unlocking the potential of AI at scale, reveals that the successful implementation of AI at scale delivers tangible benefits on the top line, with 79% of AI-at-scale leaders seeing more than a 25% increase in sales of traditional products and services. In addition, 62% of the AI-at-scale leaders saw at least a 25% decrease...

Fourth-highest insured damage event in Canadian history Edmonton, AB (July 8, 2020) – The hail, rain and windstorm that hit Calgary, Airdrie, Rocky View County and the surrounding area on June 13 caused almost $1.2 billion in insured damages, according to Catastrophe Indices and Quantification Inc. (CatIQ). The majority of the insured damage is to personal property and vehicles, with a smaller percentage of damages to commercial property. “This event was fourth most expensive insured natural disasters in Canadian history. Our thoughts are with those affected by this devastating storm, and we are here to help Albertans fix their homes, cars and businesses,” said Celyeste Power, Vice-President, Western, Insurance Bureau of Canada (IBC). “Insurers will be on the ground assisting until the work is done. If residents have insurance questions, they can also contact IBC’s Consumer Information Centre at 1-844-2ask-IBC. We are here to help.” Damage caused by hail and wind is typically covered by home, commercial and comprehensive auto insurance policies. In addition to the $1.2 billion in insured damages, the Government of Alberta announced financial support for residents who experienced overland flooding as this type of insurance can be less available in flood-prone areas. “Albertans know too well...

Staff | July 9, 2020 Private drug plans saw the largest yearly increase in their average eligible costs in 2019, according to Telus Health’s annual drug trends report. The report attributed the rise to a jump in the use and cost of specialty drugs and a growth in younger Canadians using medication for mental-health challenges. It also noted the repeal of the OHIP+ program in Ontario and an increase in overall costs for traditional drugs also contributed to the 7.6 per cent spike in private plans’ eligible monthly costs across all plan members. This is well up from a decline of 3.6 per cent in 2018. Provincially, Ontario saw the highest spike in eligible costs at 10.2 per cent, largely attributed to the OHIP+ rollback — but, Telus Health noted, when it removed costs for plan members under age 25, eligible costs in the province had still increased 5.4 per cent, compared to a 2.4 per cent drop in 2018. Quebec saw cost increases of 5.8 per cent (up from a three per cent increase in 2018), followed by the Atlantic provinces (4.2 per cent, up from a 1.1 per cent decrease in 2018) and western provinces (four per cent, up from a 0.3 per cent drop in...

Staff | July 9, 2020 While the Pension Investment Association of Canada strongly supports Nova Scotia’s recent pension funding changes, it’s calling on the provincial government to tweak the provision for adverse deviation calculation and access to solvency reserve accounts. Nova Scotia’s pension funding changes took effect on April 1, reducing solvency funding to 85 per cent, with any shortfalls required to be funded over five years and enhanced going-concern funding to be funded over a period of 10 years, up from 15 years previously. The changes also introduced a PfAD calculated by combining a fixed five per cent with a percentage based on the pension plan’s combined target asset allocation for non-fixed income assets. Read: N.S. moving forward with new DB pension solvency regime In a letter to the Nova Scotia government, the PIAC said it’s in favour of the province’s approach to the PfAD and its broad alignment with other provincial regimes, but it called for further optimization. “The regulations, for example, do not appear to give credit for better alignment of fixed income portfolio duration with liability duration, which is an important consideration for most plan sponsors in their basic portfolio construction,” wrote Simon Fréchet, chair of the PIAC, in the letter. “And conversely, the regulations appear to give...

State insurance regulators are set to take an important vote Friday on rule changes designed to rein in indexed universal life insurance illustrations. The Life Insurance and Annuities Committee will vote on 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. But not everyone is happy with the proposed changes to AG 49. Birny Birnbaum, executive director of the Center for Economic Justice, submitted a lengthy letter to the life and annuities committee this week and is expected to speak forcefully against adoption. Birnbaum challenged committee members to decipher and explain a 55-page IUL illustration from a leading insurer selling the product. “If you, as Commissioner of Insurance in your states, cannot (explain the illustration), it should be evident that illustrations – used for selling life insurance products for which consumers transfer some or all of their savings in hopes of achieving future retirement security – are broken and need a major re-imagining and re-engineering to actually protect consumers.” Advertisement Birnbaum urged the committee to reject the ACLI language in favor of a second proposal, known as the Independent Proposal, signed by a group...

The class action was filed in June 2016, in the Western District of Missouri by Michael Vogt and other individuals who owned universal life insurance policy form 94030 issued by State Farm. The lawsuit alleged that State Farm breached the terms of the policies by overcharging policyholders through cost of insurance provisions causing policies to lose value and in many cases lapse, leaving many without life insurance. Trial commenced June 1, 2018 and the jury awarded $34.3 million to approximately 24,000 Missouri policyholders. State Farm appealed to the Eighth Circuit asserting various errors and Vogt cross appealed. Vogt prevailed on all issues. “We’re very happy with the court’s decision to affirm the trial court,” said John Schirger, co-lead counsel and founding partner of Miller Schirger LLC. “We hope that these policyholders, who for decades were unknowingly overcharged, will soon finally receive payments.” “Many insurers define the cost of their insurance fees by delineating factors outside typically considered mortality elements and in this case the costs of charges weren’t outlined with specificity,” said Norman Siegel, co-lead counsel and founding partner of Stueve Siegel Hanson LLP. “The court’s decision affirms that, simply put – if you want to charge for it, you...