Insurable Interest Canadian Insurance Blog

Joe Jordan delivers a presentation. The current financial crisis stemming from COVID-19 is different from other recent financial downturns because the present situation has given consumers the fear of death and disability in addition to the fear of losing their money. That was the word from Joe Jordan, industry speaker and author of A Life Of Significance. Jordan spoke at Monday’s online town hall meeting held by the National Association of Insurance and Financial Advisors. The COVID-19 situation brings the need for protection products such as life insurance to the forefront, Jordan said, advising NAIFA members, “Don’t waste this crisis.” Jordan told advisors that prospecting in addition to contacting existing clients are the two things they need to do right now. “The foundation of our business is based on two things: 1) prospecting, and 2) everything else,” he said. Advertisement He advised focusing on the DCC – daily contact commitment. Advisors must commit to getting in front of a certain number of prospects every day. “Manage efforts and not results,” he said. “Prospecting is a reaffirmation of what you do.” He said the COVID-19 crisis is a good opportunity to review with clients the way protection products such as life...

Kelsey Rolfe | April 28, 2020 Vancouver City Savings Credit Union has put its frontline staff on a rotation system and introduced a virtual health-care app to support them during the coronavirus pandemic. When the pandemic hit British Columbia, Vancity began to see a steep climb in unexplained absences, reaching as high as 140 a day. “Like many people across the country when this first broke, [our financial services representatives] were really unsure and quite scared. They didn’t have the confidence coming into work,” says Tamara Vrooman, Vancity’s chief executive officer. Read: BMO highlights health supports for staff during coronavirus “We could tell early on that if we didn’t pay attention to not only the health guidelines and how to comply with them — and, of course, we would do that — but also the less tangible, but really important, confidence of our staff that they were working in a safe and secure environment, that their needs were paramount, those numbers were likely to rise.” In response, the credit union moved its frontline staff onto three-week rotations as of mid-March. Employees spend one week in a Vancity branch, one week working from home or in an office location on administrative work or supporting the credit union’s call centre and one...

Jennifer Paterson | April 28, 2020 The Financial Services Regulatory Authority of Ontario has confirmed it will permit a suspension of employer contributions to defined contribution pension plans on a temporary basis. However, any change to either employer or employee contributions can only be on a go-forward basis and must be supported by an amendment to the plan text, said the regulator. “If an employer wanted to decrease employee or employer contributions, that has to be done pursuant to a plan amendment because a plan text now always sets out the contribution rates,” says Terra Klinck, partner at Brown Mills Klinck Prezioso LLP. “That’s why it has to be prospectively, because if you were to try to do it retroactively, it would be a void amendment under . . . legislation.” Read: Are CAP sponsors changing contribution rates amid coronavirus? The regulator also noted the provisions of a pension plan text requires careful consideration and analysis of a number of factors, including the plan-specific amending provision and any collective agreements that govern the plan, as well as potential employment law implications and member notice requirements. “If a DC plan is collectively bargained, an employer would need to obtain union consent,” says Klinck. “The employer always needs to...

Martha Porado  | April 28, 2020 The coronavirus pandemic is hastening certain trends that institutional investors incorporating environmental, social and governance issues have been eyeing for some time. One trend is the democratization of technology, which Catherine Flockhart, a director at Baillie Gifford, says her firm has been positioned for in certain strategies. While many point to the sudden increase in demand for tools that enable online connectivity and business continuity, the underlying physical technology is also at play. “We’re investing in a couple of companies that have really invested huge amounts of research and development into bringing down the cost of semi-conductor chips, because we’ve long been of the view that that connectivity is absolutely critical for the global economy, and so helping emerging markets leapfrog. And we’re seeing that crystallize in front of our eyes and we’re seeing forced behaviour changes that may last for the long run.” Read: What opportunities does the oil glut offer Canadian pension portfolios? Those behaviour changes have far-reaching impacts for multiple ESG issues, she says. The sudden drop in demand for oil likely won’t results in a v-shaped recovery, but rather a more fundamental, structural shift in the energy industry. With the cost-competitiveness of renewable...

As unprecedented economic pressure builds on consumers, auto insurance will need to adapt: J.D. Power COVID-19 consumer impact and outlook report Troy, MI (Apr. 27, 2020) – In the midst of the global coronavirus pandemic and its economic fallout, auto insurers in particular have announced a variety of plans to support their customers, ranging from premium discounts to waived fees and deferred payment options. But these relief measures are not having the desired effect: rather than increasing customer loyalty, they are inciting consumers to shop around for alternative coverage from other insurers, according to a new study from market research company J.D. Power in partnership with Cambridge Mobile Telematics. “Auto insurance satisfaction levels continue to decline,” says the report. “Customers’ initial satisfaction levels are fading toward uncertainty — based upon our historical consumer sentiment database, this almost always results in increased shopping activity.” J.D. Power found that many customers are not even aware that the relief measures exist: Just 37% of survey respondents said they were aware of the discounts and refunds being offered as of April 14. But even among respondents who knew about the relief measures, half said they were more likely to shop for new insurance or...

Staff | April 27, 2020 With the increase in job losses, illnesses, uncertainty and self-isolation, how is the coronavirus survey affecting Canadians’ emotional and psychological well-being? Half of Canadians reported a worsening of their mental health with 10 per cent saying it has worsened a lot, according to a new survey by the Angus Reid Institute. When asked to describe how they’ve been primarily feeling in recent weeks, survey respondents were most likely to say they’re worried, (44 per cent), anxious (41 per cent) and bored (30 per cent), although one third (34 per cent) also said they’re grateful. Read: Global sales of mental-health drugs could hit US$40B by 2025 due to coronavirus The combination of deteriorating mental health and ongoing financial troubles at the household level creates a portrait of how the nation is faring through the crisis, noted Angus Reid, grouping Canadians into four main categories as part its report: those who are managing well mentally and financially; those who are mentally struggling; those who are financially struggling; and those who are hardest hit, feeling the effects of both factors worse than anyone else. The survey also found at least one in five Canadians in each region fell into the hardest hit category....

Staff | April 27, 2020 The British Columbia Investment Management Corp. is aligning itself with other global pension investors by signing a new joint letter calling for long-term sustainability to become a more prevalent concern for corporations and asset managers. The letter was co-signed in early March by three institutional investors — Japan’s Government Pension Investment Fund, the California State Teachers’ Retirement Scheme and the U.K.-based Universities Superannuation Scheme. Along with the BCI, the letter has also been signed by the ABP, the Environment Agency Pension Fund, the Fonds de Réserve pour les Retraites, the HESTA Super Fund, Nest Corp. and the RPMI Railpen. Read: BCI posts 6.1% return for fiscal year, driven by private assets “We are committed to those companies and partners that create long-term value for our clients and who integrate environmental, social and governance matters into their decision-making processes,” said Gordon Fyfe, the BCI’s chief executive officer and chief investment officer, in a press release. “They must have a clearly defined vision for sustainable growth because the [environmental, social and governance] factors that we face today will affect the returns of tomorrow.” The letter emphasized the need to fold the potential effects of long-term considerations like climate change into investment strategies, as well as how...

The IBM Quantum Challenge, by Jay Gambetta, IBM Fellow and VP of Quantum Computing Armonk, NY (Apr. 27, 2020) – As we approach the fourth anniversary of the IBM Quantum Experience, we invite you to celebrate with us by completing a challenge with four exercises. Whether you are already a member of the community, or this challenge is your first quantum experiment, these four exercises will improve your understanding of quantum circuits. We hope you also have fun as you put your skills to test. The IBM Quantum Challenge begins at 9:00 a.m. US Eastern on May 4, and ends 8:59:59 a.m. US Eastern on May 8. To take the challenge, visit https://quantum-computing.ibm.com/challenges. In recognition of everyone’s participation, we are awarding digital badges and providing additional sponsorship to the Python Software Foundation. Continued investment in quantum education Trying to explain quantum computing without resorting to incorrect analogies has always been a goal for our team. As a result, we have continuously invested in education, starting with opening access to quantum computers, and continuing to create tools that enable anyone to program them. Notably, we created the first interactive open source textbook in the field. As developers program quantum computers, what they are really doing is building and running...

2020Q1 Emerging Risks Monitor report highlights executive concerns around strategic assumptions and social instability even before emergence of COVID-19 Stamford, CT (Apr. 22, 2020) – “Strategic assumptions” remained the top concern for senior executives in first quarter of 2020 as numerous other risks are set to be exacerbated by the current COVID-19 crisis, in Gartner, Inc.’s latest Emerging Risks Monitor Report. Gartner surveyed 107 senior executives across industries and geographies on the top concerns facing their businesses with results showing that “strategic assumptions” remained the top emerging risk for the second consecutive quarter (see Table 1). The survey was in the field from mid-February to early March of 2020 and reflects only the early stages of the coronavirus crisis. “Executives had been concerned with the validity of their strategic assumptions well before the current crisis situation,” said Matt Shinkman, vice president with the Gartner Risk and Audit Practice. “The economic and operational fallout as a result of the global COVID-19 pandemic have forced many executives, particularly in the hardest hit industries, to start from scratch, even with a great deal of uncertainty still ahead.” Table 1: Top Five Risks by Overall Risk Score: 2Q19-1Q20 Rank 2Q19 3Q19 4Q19 1Q20 1...

Globe & Mail Insurance Trends Report: April 2020 Toronto, ON (Apr. 24, 2020) – The insurance sector is responding to the immediate impacts of COVID-19 and looking to an uncertain future. Canada’s insurance providers are taking action to help their customers deal with the short-term impacts of COVID-19. At a time when large numbers of Canadians are working from home, many insurers are offering consumers lower auto insurance premiums, to reflect reduced driving. Companies are also providing financial relief to both consumers and businesses losing income and revenues – for example, by deferring premiums and waiving fees. On April 8, 2020, Insurance Bureau of Canada (IBC) announced that its member companies would provide relief measures for a 90-day period. This national association represents private home, auto and business insurers, which collectively make up 90 per cent of the property and casualty (P&C) insurance market in Canada. Separately, digital insurance company Onlia offers its customers flexibility and financial relief, Pieter Louter, CEO at Onlia expands on their basic premise of increased safety “We can play a role in the broader safety of Canadians by rewarding safe behaviour – both on and off the road.” “The purpose is to reinforce safe driving...