Insurable Interest Canadian Insurance Blog

Staff | June 12, 2020 Desjardins Insurance is joining Obesity Canada’s partnership program, which leverages resources from Canadian organizations to fund obesity research, education and advocacy initiatives. Marc Bertossini, director of marketing for group and business insurance at Desjardins, said in a press release the partnership is another way the organization can support Canadians and help them improve their health. “Over the years, Desjardins Insurance has developed numerous tools and this partnership will enhance Obesity Canada’s services to the benefit of people who live with obesity.” Read: Supporting employees with obesity starts with recognizing it’s a chronic disease Obesity is a progressive chronic disease, characterized by abnormal or excessive fat accumulation that impairs health. Beyond its effects on overall health and well-being, deeply ingrained weight bias and stigma can increase morbidity and mortality, often translating into significant inequities in employment, health care and education. “[Desjardins has] demonstrated a commitment to improving employee health through innovative programs developed for plan sponsors and we look forward to learning from and collaborating with Desjardins to ensure obesity care becomes a top priority in the workplace,” said Arya Sharma, scientific director for Obesity Canada. He also noted the organization is preparing to roll out new clinical practice guidelines...

Martha Porado | June 12, 2020 In seeking to better serve its plan members, the Ontario Teachers’ Pension Plan has been on a journey to change its strategic thinking to access a more meaningful picture of who its members are and what challenges they have in using the plan as it stands. That journey starts by asking what a member is trying to achieve at a certain point in their life cycle and career, said Charley Butler, senior managing director of member services at the Ontario Teachers’, during a webinar hosted by Common Wealth on Thursday. The plan has implemented its so-called voice of the member approach to shake up its perspective and gain new and valuable insights. One key tenet of the approach is curiosity, she said. “[It’s] asking more, what the problems are, not worrying about how we’ve always done things.” Read: Using creativity to engage employees with pensions The approach also involves bringing together different areas of expertise, with frontline services, the data and insight team, the technology team and senior leadership all collaborating. “It’s a small cross-sectional group of people who get together and look at insights from the frontline, data from our membership and we have a huge amount of analysis on what our...

Staff | June 12, 2020 Vestcor Investment Management Corp. returned 11.76 per cent in 2019, with total assets under management rising to $18.5 billion, according to its 2019 annual report. The organization, which manages the investment and administration for several of New Brunswick’s public sector pension plans, said the long-term annualized gross pension fund return since it began its business continues to beat both client return and risk management funding requirements of 7.21 per cent. “Our clients depend on us to provide well-diversified portfolio strategies that meet their specific funding objectives in a risk-controlled fashion,” said John Sinclair, Vestcor’s president and chief executive officer, in a press release. “We also recognize that 2020 has been a much more challenging investment environment and we look forward to these strategies continuing to help our clients meet their long-term investment goals during more volatile market conditions.” Read: New corporation being formed by N.B. pension plans Vestcor’s fixed income portfolio performed well in 2019, noted the report, with nominal bonds returning 6.87 per cent, followed by corporate bonds (8.03 per cent), real return bonds (8.31 per cent), long-term bonds (10.46 per cent) and international high yield (14.52 per cent). “Although corporate bonds trailed their benchmark due to the requirement to maintain...

Jennifer Paterson | June 12, 2020 A new paper is evaluating how global retirement systems are faring in the wake of the coronavirus pandemic and what reforms will be required to facilitate the retirements of future generations. The paper, ‘Building better retirement systems in the wake of the global pandemic,’ by Olivia Mitchell, a professor and executive director of the pension research council at the University of Pennsylvania’s Wharton Business School, offered an assessment of the status quo prior to the spread of the coronavirus, examined insurance and financial market products that may render retirement systems more resilient for the world’s aging population and evaluated potential roles for policy-makers. “It appears certain that low interest rates, low fertility rates and population aging are going to be with us for a long time,” says Mitchell. “In this light, there are few ‘automatic’ stabilizers which will remedy the worlds’ retirement systems without some serious reforms. That is, we cannot simply hope that the capital market will pay high returns, we can’t assume that a growing number of younger workers will be around to keep unfunded pensions afloat and rising longevity will inflict increased demands on retirement systems. So now is the time to move forward to reforms.”...

Staff | June 12, 2020 The Investment Management Corp. of Ontario has sold its interest in Spanish electricity provider Viesgo to funds managed by Macquarie Infrastructure and Real Assets. Prior the sale, the IMCO and MIRA collectively owned 60 per cent of Viesgo, while Wren House Infrastructure Management Ltd. owned the remaining 40 per cent. The initial investment in Viesgo was part of legacy client strategies before the IMCO’s inception and was made alongside MIRA through one of its investment vehicles. As part of the new deal, MIRA-managed funds are acquiring the IMCO’s portion of the shared stake as well as Wren House’s total stake. Read: IMCO adding to investment in European bandwidth infrastructure company “The investment made in 2015 alongside MIRA has generated a strong return due to the successful implementation of a number of strategic initiatives,” said Tim Formuziewich, managing director and global head of infrastructure at the IMCO, in a press release. “We would like to thank Viesgo’s management team and MIRA, who have done a tremendous job at driving value in this investment.” IMCO Infrastructure has been shedding certain energy and utility holdings over the past few months, noted the release. “The infrastructure team is building an investment portfolio that is appropriate for a multi-client environment versus individual...

Despite holding diversified fixed-income assets, Canadian life insurers’ portfolios are in danger of degradation as slowed-down economic activity and extreme market volatility heighten credit risks, according to DBRS Morningstar. In a new commentary, the ratings firm noted that insurance companies generally have highly diversified fixed-income portfolios, with exposures spread across asset classes, industry sectors, geographies, and credit ratings. Public and private investment-grade bonds, as well as commercial loans, frequently make up a large percentage of their portfolios, the firm added. Citing data from MSA Research, the report said that within Canadian Life and Health Insurers’ investment portfolios totalling $832 billion, 68% are held in bonds. As of 2019, they had a reported $93 billion in private placements, $244 billion in publicly listed corporate bonds, and $228 billion in bond securities issued by government and related entities. But the coronavirus pandemic’s chilling effect on global economic activity, as well as turbulence in financial markets, has increased risks in credit markets. The considerably wide spreads in investment-grade and high-yield corporate bonds that erupted toward the end of Q1 have not fully recovered, with significant variation still present across industries and countries. “Market dislocations and lack of information due to suppressed business activity...

Staff | June 11, 2020 For institutional investors, the debate still rages over whether to divest from a company they find to have problematic practices where environmental, social and governance issues are concerned or to remain invested and engage with the company to try to push it in the desired direction. A new paper by smart beta platform provider Scientific Beta is suggesting there’s evidence that both strategies actually achieve the sought-after effect and can go hand in hand, rather than investors being required to choose just one option. There are several ways that divestment and engagement can mingle to strengthen the clout of an investor, the paper found. Collaborative engagement campaigns, where both current and potential shareholders come together to push a message to a company, demonstrate that an investor doesn’t need to be invested to express its views in a powerful and relevant way. As well, shareholders of a company have to maintain the possibility of divestment in order for their engagement to carry its full potential weight. Read: Head to head: Is carbon divestment becoming obligatory for pension plans? “A shareholder who engages with a company without signalling a willingness to draw a red line — by exit in case engagement fails — will enter the negotiation...

MetLife Inc. has agreed to pay $84 million to settle an eight-year-old class-action lawsuit filed by shareholders who claim the insurer underreported its liabilities via claims to deceased policyholders. Plaintiffs claim that MetLife failed to include data from the Social Security Administration’s “Death Master File” in tabulating its Incurred But Not Reported reserves. The SSA database includes all known deaths and is used by insurers to distribute benefits. By failing to include SSA death data, and associated pending payouts, plaintiffs claim MetLife presented an inaccurate financial picture during quarterly reports to shareholders. MetLife also failed to disclose regulatory investigations into its misuse of the SSA death database, plaintiffs allege in court documents. “Lead Plaintiff alleges that when the true facts concerning the nature, scope and financial impact of these alleged misrepresentations and omissions were revealed, the Company’s stock price declined and Members of the Classes suffered damages,” settlement documents say. MetLife admits to no wrongdoing in the settlement documents. “For Defendants, the principal reason for entering into the Settlement is to eliminate the uncertainty, risk, costs, and burdens inherent in any litigation, especially in complex cases such as this Litigation,” settlement documents say. “Defendants have concluded that further conduct of...

Staff | June 11, 2020 The Canadian Life and Health Insurance Association is appointing Jean-François Chalifoux, chief executive officer of SSQ Life Insurance Co. Inc., as the new chair of its board of directors. Chalifoux took on the top job at SSQ in 2015. Previously, he held several executive roles at Canadian insurance companies, including most recently at Desjardins Insurance, where he first headed up the group insurance department and then moved on to manage individual insurance. Chalifoux is a fellow of the Canadian Institute of Actuaries and the Casualty Actuarial Society. Read: Blue Cross, SSQ latest sponsors of digital mental-health program Read the full article at BenefitsCanada.com

Agtech leader digitally transforms insurance businesses by pairing field-centric data with intelligent automation and predictive analytics, cultivating new service-driven revenue streams Virden, MB (June 9, 2020) — Farmers Edge, a global leader in digital agriculture, today announced a wave of new insurance agency partnerships with 25 companies in the United States, spanning the Mid-Atlantic to the Pacific Northwest. Farmers Edge is steering the evolution of crop insurance by equipping each agency with access to a vertically integrated farm risk management platform—FarmCommand®—that digitizes core insurance services and creates a superior data-driven experience for growers and agents alike. FarmCommand includes a suite of digital tools to enhance data management for growers, giving them the option to share information with their agent to automate acreage reporting and claims. Powered by in-field sensors and artificial intelligence, the platform integrates all data into one place and transforms it into actionable insights. FarmCommand is equipped with severe weather forecasting, hail detection technology, highly accurate predictive crop models, digital scouting tools, Daily Satellite Imagery, and crop health change notifications, enabling users to optimize crop production and easily monitor an unlimited number of fields from anywhere. Additionally, the platform includes Smart Claim™ and Smart Reporting™, bridging the gap...