Insurable Interest Canadian Insurance Blog

Montreal, QC (Apr. 30, 2020) – Spring brings with it the risk of flooding. In the context of the pandemic, Insurance Bureau of Canada is reminding citizens it is important to prepare themselves in the best way possible and take certain measures to ensure their safety and protect their property. Advice for citizens In order to follow the social distancing measures issued by the Quebec government, citizens living in flood risk zones must, as soon as possible, identify accommodation options they can turn to in case of evacuation or losses. They can also take other measures to prevent or minimize damage to personal property: Move all objects from the basement to the ground floor. Outside the home, remove or secure all property that is likely to be displaced or carried away by the waters. Check waterproofing around doors and windows, and make sure they are closed. Prepare a three-day supply of food and drinking water, an emergency kit as well as candles, flashlights or a generator. Closely follow the situation and respect safety instructions. Insurance and flooding Some insurers have offered flood insurance, in the form of an endorsement, since 2017. However, the offer varies from company to company, as...

Staff | May 4, 2020 Recent reports of significant investment losses on the part of the Alberta Investment Management Corp. are overblown, according to chief executive officer Kevin Uebelein. In recent weeks, many Canadian publications have pointed to problems with a volatility strategy that performed poorly amid the massive spike in volatility that equity markets have experienced due to the coronavirus pandemic. “This occurred because the losses that quickly accrued as market volatility dramatically increased and remained elevated were not able to be offset by the gains that would normally be realized as volatility returned to more typical levels,” said Uebelein, in a press release. “Markets behaved in a manner never-before-seen and the result was a very unfortunate loss.” Read: AIMCo earns 10.6% return for 2019, underperforms benchmark But the losses from that strategy have been entirely overstated, by between 43 and 100 per cent, according to Uebelein, “Realized and unrealized losses combined to date are approximately $2.1 billion of the $118.8 billion of assets we manage on behalf of our clients. While that figure will likely change, we have actively taken a number of steps to limit the eventual loss. Actual losses will not be finalized until the strategy is completely wound down, which...

Staff | May 4, 2020 The coronavirus pandemic could reduce employer health-care costs by as much as four per cent in 2020 as medical care for non-infected patients has declined, according to a new analysis by Willis Towers Watson. The analysis of large, self-funded U.S.-based employers is an update to a similar study conducted in March that projected employer costs could rise by as much as seven per cent due to coronavirus-related costs. Read: U.S. employer health-care costs could rise 7% with coronavirus testing, treatment “With treatment for COVID-19 top of mind, people have been putting off non-emergency medical care, including routine office visits and elective procedures at hospitals,” said Trevis Parson, chief actuary at Willis Towers Watson, in a press release. “Given this reduction in use of medical services, we expect cost reductions due to care deferral to more than offset projected cost increases associated with COVID-19 infections.” According to the analysis, at a one per cent infection level (i.e., rural areas), employer costs could decline between one and four per cent, depending on how much medical care is deferred. At a 15  per cent infection level (i.e., metro areas), employer costs could rise or fall by roughly one per cent depending on...

Empire Life has augmented its group benefit plans with the automatic inclusion of a new mental health support service. The Mental Health Navigator is confidential and personalized service provided by Best Doctors, which is part of Teladoc Health. It offers users expert assessment, treatment recommendations, and an action plan. “According to the Mental Health Commission of Canada, one in five Canadians will experience a mental health problem this year,” said Vanessa Lycos, Vice President, Group Product and Marketing. “And now with COVID-19, life is a lot more challenging for many Canadians—especially those employed by small and medium-sized enterprises. “Mental Health Navigator helps our customers and their families access guidance and resources they may need to feel more like themselves again,” Lycos added. The navigator helps users get care on their terms, regardless of their location, through continuous guidance from a registered nurse or social worker with expertise in mental health. The service draws on an integrated team of clinicians, psychologists, psychiatrists, and expert physicians. “As increased awareness and acceptance of the need for mental health grows within and outside the workplace, support services like Mental Health Navigator are more important than ever before to employers and their members,” said Karen...

Staff | May 1, 2020 The Empire Life Insurance Co. is including a mental-health navigator in all of its group benefits plans beginning May 1. Through the navigator, which is provided by Teledoc Health Inc.’s Best Doctors, plan members are guided by a registered nurse or social worker specializing in mental health. It draws on a care team of clinicians, psychologists, psychiatrists and physicians to deliver an assessment, treatment recommendations and an action plan, according to a press release. Read: How to support employees’ mental health during coronavirus “According to the Mental Health Commission of Canada, one in five Canadians will experience a mental-health problem this year,” said Vanessa Lycos, vice-president of group product and marketing at Empire Life, in the release. “And now with COVID-19, life is a lot more challenging for many Canadians — especially those employed by small- and medium-sized enterprises. Mental health navigator helps our customers and their families access guidance and resources they may need to feel more like themselves again.” In addition, TeksMed Services Inc. is launching a free, app-based mental well-being program to help employers and employees during the pandemic. The program, called QuikCare Thrive, is through a partnership with Thrive Therapeutic Software Ltd. Users can access the app 24/7 to help build...

COVID-19 has had the biggest short-term effect on life insurance in two ways: Insurers extending grace periods for paying premiums. Placing a greater emphasis on accelerated underwriting. Those were among the insights from Nancy Bennett, senior life fellow with the American Academy of Actuaries. Bennett was among the presenters at a recent webinar describing how COVID-19 will affect insurance and retirement plans. She spoke with InsuranceNewsNet on the pandemic’s short-term impact on policy management and underwriting. COVID-19 has prompted a number of insurers to voluntarily extend grace periods, while some states have mandated those extended grace periods. This creates a challenge for insurers, Bennett said. “It’s one thing to say you have to set a grace period but then their systems would normally be set up to automatically process a policy lapse after a specified period of time. So they have to go in and make adjustments to their system so the lapse does not happen. And then there’s also the issue of, OK, the policy hasn’t lapsed but the premium hasn’t been received. So what do we do to the contract values and how is each company going to change or modify the contract values?” Bennett said carriers could...

Yaelle Gang, the Canadian Investment Review | May 1, 2020 Almost all jurisdictions across Canada have introduced variable benefits as an option for defined contribution plan sponsors, but what’s on the horizon from an investment perspective? The industry is well-versed in the upsides of variable benefits for both plan sponsors and plan members. But Canada is slightly further behind other countries when it comes to robust options from an investment fund perspective during decumulation. Read: Variable benefits in DC pension plans now allowed in Ontario For plan sponsors proceeding with variable benefits, it’s important to consider the available investment options, says Zaheed Jiwani, principal at Eckler Ltd.,  “They need to think about — should the investments look a little bit different? They should. They should probably offer a few more vehicles that would be more appropriate just for decumulation that they wouldn’t have offered for the accumulation members.” He suggests plan sponsors consider the differences between target-date funds that offer a flat glide path versus those that offer a de-risking glide path in decumulation. And he believes more attention will be paid to this part of the glide path going forward. “I think you’re going to start to get a little bit more attention paid for variable benefits and other...

Staff | May 1, 2020 More than four in 10 (41 per cent) Canadian businesses laid off staff in the wake of the coronavirus pandemic, according to a new survey by Statistics Canada. The survey, which polled representatives from more than 12,600 Canadian businesses, also found 38 per cent of businesses said they’ve reduced staff hours or shifts. Nearly one-fifth (18 per cent) said they laid off 80 per cent or more of their staff. And, among the employers that said they laid off at least one employee, 45 per cent laid off 80 per cent or more of their staff. Read: 35% of Canadians expect to lose their jobs in the next four weeks: Stats Can Companies in the accommodations and food services sector reported the largest layoffs, with 69 per cent saying they’ve laid off at least 80 per cent of their staff. However, 27 per cent of survey respondents said they haven’t implemented any staffing changes in the wake of the pandemic, with more than half (54 per cent) of employers in the agriculture, forestry, fishing and hunting sectors reporting no changes. Employers also reported that remote work has become more prevalent in their workforces. Almost half (48 per cent) of respondents...

Green Shield Canada (GSC) is intensifying a push to make technology part of its benefits offerings through a partnership with Canada’s leading digital pharmacy. The health and dental benefits provider has announced a collaboration with PocketPills, a tech company that promises to manage the full pharmacy experience — including discussions with pharmacists, refilling prescriptions, and ongoing disease management — in a purely digital environment. “As a leading advocate for evidence-based digital health technologies and the impact they can have on the health care experience for Canadians, GSC is always on the lookout for like-minded partners ready to innovate on the delivery of critical services,” said David Willows, GSC’s executive vice president of Digital, Innovation and Brand Experience. Using technology-driven workflow automation, PocketPills reduces the cost of operations, which allows it to pass on savings to patients and plan sponsors in the form of low dispensing fees and free home delivery. Since its launch in 2018, it has helped thousands of patients connect instantly with pharmacists and manage their medications online through a mobile app. “In an online world, Canadians deserve health care services with a streamlined patient experience, and this partnership is going to take that experience to the next...

Staff | April 30, 2020 OMERS Ventures, the venture capital arm of the Ontario Municipal Employees Retirement System, has closed a US$750 million venture capital fund. The transatlantic fund is investing in companies related to financial systems, insurance, property, logistics, health and workplace technology in Canada, the U.S., the U.K., and other countries in Europe, raising series-A to series-C financing. “As has always been the case, initial investments typically range between $5 million to $25 million, with the opportunity for follow-on investments as a company grows,” said a statement from the organization. “There will be times when we will look at investments on either side of this range, but it gives founders a good steer as to what we are most interested in.” Read: OMERS Ventures hires former Uber executive as London managing partner The establishment of the fund coincides with an increased focus from OMERS Ventures on widening its geographic footprint, having established offices in London and in California’s Silicon Valley in 2019. “We’ve believed for a while that, as successful startups increasingly meet the demand to go global (current circumstances notwithstanding), so too must their investors,” said the OMERS. “With this fund, we are putting our money where our mouth is and offering the founders we back access to a...