Insurable Interest Canadian Insurance Blog

Staff | April 17, 2020 The Investment Management Corp. of Ontario is taking on the Provincial Judges’ Pension Plan as its latest client. The pension plan is joining with $420 million in assets under management. With the Treasury Board of Canada Secretariat as its plan sponsor, the plan pays out about $44.3 million in annual pension payments to nearly 300 beneficiaries. “I am pleased to welcome the Provincial Judges’ Pension Plan as our new client,” said Bert Clark, president and chief executive officer at the IMCO, in a press release. “As the only investment management organization purpose-built to serve Ontario’s broader public sector, we are closely aligned with our clients’ interests. Read: Building blocks of the Investment Management Corp. of Ontario “Our professional investors, sophisticated risk management systems and cost-recovery model enables clients to meet their long-term financial obligations in an increasingly challenging investment climate.” In 2017, the IMCO began managing about $60 billion in assets on behalf of the Ontario Pension Board and the Workplace Safety and Insurance Board. And, with a mandate to provide investment management services to broader public sector institutions, it now manages $70.3 billion of assets on behalf of its clients. In Ontario’s broader public sector, 90 potential...

Whether they realize it or not, many plan sponsors have been following this philosophy in their communications strategies, as they consider the ways in which they share information with their plan members rather than relying solely on the content of that messaging. Indeed, pension communications were once made up of a hefty and unreadable pile of pages; but delivery methods have evolved significantly. These days, it’s more common for plan sponsors to send out personalized emails, connect with members via online apps, share retirement calculators or host in-person workshops and seminars. All of these mediums broaden out the ways in which employees can learn about their savings plans. Read full coverage from the 2020 DC Plan Summit In February, during the 2020 Defined Contribution Plan Summit’s opening keynote session, conference delegates heard about different types of communications. Since some people interpret things symbolically while others do so literally — these are two very distinct ways of learning — why would plan sponsors use a single medium to communicate to all of their employees? The session set the stage for an informative two days that revisited the theme of communication as it ties into plan member engagement. Three plan sponsor case...

Benefits Canada | April 17, 2020 Globally, many pension funds are divesting from carbon and fossil fuels, while others are staying the course and focusing on financial value and their fiduciary duties Simon Archer, partner at Goldblatt Partners LLP and co-director of Osgoode Hall Law School’s Centre for Comparative Research in Law and Political Economy: Political posturing aside, no one seriously disputes the science behind climate change and the threat it poses to societies, economies and, of course, the value of carbon assets held by institutional investors. The key question today is how to get “there” from “here.” When the topic was discussed four years ago, the University of Toronto and the University of British Columbia each decided not to divest from carbon assets, choosing instead to take an engagement approach. At the same time, Swedish giant AP4 and others pursued divestment. Read: Considerations for institutional investors around divestment Today, UBC has committed to divestment and a new campaign is underway at U of T. Around the globe, more than 1,100 institutions have committed to some degree of carbon asset divestment, including university endowments, philanthropic foundations and, notably, pension funds from Australia, France, Denmark, Germany, Norway, the Netherlands, Sweden, the U.K. and the...

The aerospace firm and regional airline, with headquarters in St. John’s, Nfld., provides no-limit tuition subsidies for staff who want to grow within their current roles or set themselves up for other positions in the company. “Education and development is really important to our employees and to us as an employer,” says Laura Cashin, the company’s director of human resources policy and programs. The program has been in place for years and is central to PAL’s focus on internal movement, which makes unique sense for the company. It’s a part of the PAL Group of Companies, which has businesses around the world, so employees have the opportunity to move and develop their career within the group. Read: Canadian employers investing more in employee training: survey “All of our jobs are posted internally and we see a lot of employees keeping an eye out and finding the opportunities that suit them,” says Cashin. “We are a connected group of companies that do similar things . . . and we wanted to point that out to employees and make it known that we’ll support you as you want to grow and change your career here. We are in many provinces across Canada and...

The slow and steady rise in spending among Canada’s private drug plans continued in 2019 as increased use of both traditional and specialty medications outweighed positive steps by Canada’s public health system. In its latest Prescription Drug Trend report, Express Scripts Canada revealed that private drug plan spending in the country underwent a 1% year-on-year uptick in 2019. Traditional drug spending inched up 0.1% year over year, while specialty drug spending rose by 2.8%. Even though specialty drugs figured into just 2% of claims in 2019, they accounted for two thirds of the overall increase in spending among private drug plans. While Ontario’s OHIP+ program and pan-Canadian Pharmaceutical Alliance (pCPA) price negotiations lifted some of the burden of traditional drug spending off private plans’ shoulders, it was negated by a broad uptake of higher-cost drugs and supplies for common diseases such as diabetes. “Utilization will continue to increase for certain diabetes medications like the SGLT-2 inhibitors as other benefits for patients with diabetes are established,” Express Scripts said, adding that expanded use of monitoring technology also played a role. And even as some provinces rolled out programs to allow the use of biosimilars, specialty drug spending among private plans was...

The COVID-19 global pandemic is affecting business in different ways and the insurance industry is no different. Mutual insurance companies have different challenges that come with being a policyholder-owned structure. Mutual of Omaha CEO James T. Blackledge apprised customers this week on the state of the company. “Since 1909, Mutual of Omaha has successfully navigated many challenging environments, guided by our mission to help our customers protect what they care about and achieve their financial goals,” he wrote. As a mutual company, Blackledge said Mutual of Omaha is uniquely positioned “to focus solely on the long-term needs of our customers, not the short-term demands of the stock market.” Mutual of Omaha finished 2019 with more than $50 billion in assets, and its $3.1 billion in statutory surplus “represents added security and protection for our customers,” Blackledge said. The company’s financial strength has been acknowledged with strong ratings of Mutual of Omaha and its insurance affiliates by leading ratings services over many years, he added. “As the COVID-19 pandemic continues to evolve, I’d like to share a few of the specific ways we’re responding to protect our customers and maintain our financial strength and stability,” Blackledge wrote: • We are taking...

An extended COVID-19 pandemic crisis leading to a global economic recession is going to hurt insurers’ financial health. How bad insurers will be hurt is something to monitor. A new assessment of insurers’ financial strength ratings by DBRS Morningstar finds that capitalization will be the first area of impact. Insurers are going to lose the flexibility that comes with a strong capital cushion, the report concluded. Looking forward, there will be greater pressure to restore the capitalization building block, as well as an insurers’ ability to remedy any significant deterioration within a reasonable time, said Hema Singh, vice president from the DBRS Morningstar Global Financial Institutions team. “Companies with low levels of capital buffers and significant exposure to equity market volatility through their asset portfolio or product portfolios offerings could see their solvency position deteriorate quickly during the coronavirus pandemic,” she said. Smaller insurers, in particular, could fit this profile, Singh told InsuranceNewsNet. “I think if things go really bad, really quickly, the smaller insurers will suffer,” she said. Still, other negative factors such as low interest rates, are nothing new for insurers. Rates have been low almost continuously since the 2008-09 collapse of the economy. Insurers are smarter and...

Business Wire Advertisement The negative impact to insurance companies’ capital and surplus as a result of sharp equity market declines could top the surplus losses experienced in the 2008-2009 financial crisis, according to a new AM Best special report. The Best’s Special Report, titled “Hit to Surplus from Equity Exposures Expected,” states that the 20% decline in the Dow Jones since the end of 2019 is hurting U.S. insurers’ balance sheets. At the height of the financial crisis last decade, the stock market dropped 50%, which led to the property/casualty industry reporting $55 billion in unrealized losses on unaffiliated stock investments in 2008, while the life/annuity segment reported more than $23 billion and the health segment nearly $4 billion. These losses contributed to capital and surplus declines of 11.9% for property/casualty insurers, 5.6% for life/annuity writers and 7.8% for health insurers. Significant unrealized losses and their adverse effects on capital because of the COVID-19-led downturn and economic fallout may well be on the horizon for U.S. insurers. Currently, the property/casualty segment has the highest exposure to unaffiliated common stock, at almost 18% of invested assets in 2018, versus 12% in 2009. The health segment’s exposure now is approximately 9%, while...

Home insurance policyholders are ready to share personal data in order to gain rewards from their insurance carriers, according to the latest Aite Group research Boston, MA (Apr. 16, 2020) – As insurance carriers focus on building loyalty and trust, a new opportunity is forming through connected home devices. Consumers are discovering the benefits of connected devices with automated thermostats, doorbell cameras, and smart assistants, and are creating data that insurance carriers could use for marketing, rating, and claims handling. A new Aite Group report, U.S. Home Insurance Rewards: Consumers Are Ready for Smart Home Options, analyzes whether matching the use of connected devices with rewards programs could generate new data streams for insurance carriers. “Carriers gaining access to household data from policyholders on an ongoing basis, or long term, has benefits across the value chain,” explains Greg Donaldson, senior analyst at Aite Group. This report is intended to help carriers design rewards and incentive-based products and programs fitting of the home insurance industry. Based on a Q1 2019 Aite Group online survey of 766 current U.S. policyholders, it provides insights on homeowners and renters insurance policyholders’ ownership and use of connected devices, and their willingness to share this information...

Mississauga, ON (Apr. 13, 2020) – FIRST Insurance Funding of Canada (FIRST Canada), the industry leader in insurance payment solutions, is pleased to announce the launch of customized payment options, effective April 13, 2020. One Partner As a FIRST Canada partner, you can revolutionize your client payment experience. FIRST Canada now offers a simple and flexible way to include all payment methods accepted by your brokerage on one all-inclusive Payment Options Form. You can personalize your payment types, payment instructions, broker logo, and form colours to make the Payment Options Form uniquely your own. One Process Conveniently offer all clients your personalized Payment Options Form at the point of sale. Offer the same streamlined process every time, regardless of how your client chooses to pay. Your newly designed, user-friendly Payment Options Form puts you in control of your client relationships. Present a more comprehensive experience for your clients and a more efficient process for your staff. All Payments Personalize the newly-improved Payment Options Form to include all your payment methods, such as easy monthly payments, credit cards, Interac®, cheque, Online Bill Pay, eTransfer, and more. Include instructions for each payment method and provide your clients with superior service. Your Clients....