Insurable Interest Canadian Insurance Blog

Back in the day, a wise but somewhat gritty insurance manager liked to hear it when new junior professionals asked: “What do we do in the insurance office?” “It’s quite simple,” the manager responded. “One: money comes in to you. Two: money goes out from you.  If One is larger than Two, you’re in.  If One is smaller than Two, however, you’re out. Any other questions?” Old & New Plans A lot of that changed – primarily due to pressures on new, carefully predicted risks.  However, the new approach is not far from the original premise. For example: in the early days (think ships from England in the 17th century), the primary risk was loss of ships’ contents en route to and from countries around the world.  The sailors learned from each success and failure in navigating the ship. The modern approach is to continue to improve the previous content for defining and moderating sales, business plan placement, policy changes, and content payment. The latter is similar to ‘spreading risk,’ encouraging more opportunities and bringing in new specialists, carrying the history of the last 300-plus years supporting the current application. Throughout every century, insurance practitioners developed increasingly important, interesting, and...

Staff | September 23, 2019 Andrew Scheer, leader of the federal Conservatives, is promising to create a new pension system for veterans and clear the backlog of their benefits applications within two years, if he’s elected prime minister next month. He called the current pension system messy. “The reality is, just saying thank you is not enough,” Scheer told a press scrum in Canoe Cove, Prince Edward Island on Sunday. The Liberal’s overhauled benefits system, which took effect in April 2019, was criticized last February in a report from Yves Giroux, the parliamentary budget officer. Read: Reimbursing benefits key unresolved issue for Veterans Affairs, says report card Specifically, the report noted veterans with the most severe injuries would be worse off under the new system, even though the benefits were slightly more generous on average. “From the perspective of the veteran, virtually all clients would be better off if they received the benefits of the (pre-2006) Pension Act,” the report said. It also noted the older system was more costly than the two iterations that followed, at about $50 billion in today’s dollars. The subsequent New Veterans Charter, implemented under Stephen Harper’s Conservative government cost $29 billion, while the latest Liberal system was projected to cost $32 billion, according to the PBO’s report. Read: Veterans Affairs accused...

Staff | September 23, 2019 An alliance of the world’s largest pension funds and insurers responsible for more than US$2.4 trillion in investments is committing to carbon-neutral investment portfolios by 2050. The commitment was launched by the newly formed, United Nations-convened Net-Zero Asset Owner Alliance. It was introduced at the UN Climate Action Summit to strengthen commitments and accelerate the implementation of the Paris Agreement on Climate Change, noted a press release. Read: Global investors call for government action on climate change The alliance’s founding members include the Caisse de dépôt et placement du Québec, the California Public Employees’ Retirement System and PensionDanmark. “The Net-Zero Alliance is the recognition that institutional investors collectively have an important role to play in fostering the energy transition the world needs,” said Michael Sabia, chief executive officer of the Caisse. “For investors like CDPQ, there are so many opportunities to earn commercial returns by investing in low-carbon solutions and to work with portfolio companies to decarbonize. Combined with the necessary changes in public policies, investors’ actions will induce real change in every sector.” Inger Andersen, executive director of the United Nations Environment Programme, said there are no short-cuts to decisive climate action. “We need to take a long-term view....

Ratings agency, AM Best, announced this week that it is upgrading its ratings for SSQ Life Insurance Company Inc. The company upgraded SSQ’s financial strength rating to an “A”, up from an A- , and upgraded its long-term issuer credit rating to an “a”, up from an a-. “The ratings reflect SSQ’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management,” AM Best said in its release on Thursday. “SSQ continues to priorities expanding outside of Quebec, with some success over the long term. The rating upgrades reflect SSQ’s improved risk-adjusted capitalization, decreasing financial leverage and growth of absolute capital over the previous several years,” they add. “SSQ also continues to produce strong and consistent operating performance year-over-year, often posting low double-digit returns on equity. Despite some volatility in earnings by line, SSQ’s core group insurance business continues to generate favourable earnings on growing business volume, which is expected to accelerate in 2020, as the company takes on group business from the nearly 40,000 employees and retirees of HydroQuebec.” SSQ is the sixth largest life insurer in Canada by premium volume. AM Best says...

Intact Financial Corporation announced this week that it is promoting two of its vice presidents, effective January 2020, when Alain Lessard, the company’s current senior vice president of commercial lines retires at the end of the year. Lessard joined Intact eight years ago through the AXA Canada acquisition. The company says he was a driving force in the company, helping to grow and modernize the commercial lines business and initiating the launch of Intact’s specialty lines division in Canada. Replacing Lessard, Darren Godfrey, currently the senior vice president of personal lines, will assume the senior vice president of commercial lines role in January. In his new role, Godfrey will oversee the product pricing and underwriting strategy across all channels “and increase Intact’s competitiveness in commercial lines by brining leading solutions to customers and brokers.” Finally, Isabelle Girard, currently the vice president of actuarial and personal lines will also be promoted to senior vice president, personal lines. Girard has worked at Intact for 20 years, holding positions in commercial lines, personal lines, finance and actuarial and had participated in both the AXA (Canada) and the Jevco (Insurance Company) acquisitions. Read the original article at insurance-journal.ca

Targeted News Service (Press Releases) All life insurance policies have one thing in common – they’re designed to pay money to “named beneficiaries” when you die. The beneficiaries can be one or more individuals or even an organization. In most cases, policies are purchased by the person whose life is insured. However, life insurance policies can be taken out by spouses or anyone who is able to prove they have an insurable interest in the person. If you buy insurance on someone else’s life (a spouse, for example), the policy pays when that person dies. TOP CONSIDERATIONS There are many different types of life insurance policies, you should choose a policy with features that fit your individual needs. Based on their unique characteristics, it is possible to identify several distinct types of life insurance coverages. However, they fall into two classes of life insurance products: term and cash value policies. Term life insurance – is a policy that is purchased for a period of time (a term). The policy pays money to the named beneficiaries if the insured dies during the term. Term life insurance is intended to provide lower-cost coverage for a specific period. Term life policies may include...

The Mutual Fund Dealers Association (MFDA) issued its Reasons for Decision this week, in the case of Roman Vendrov. The documents allege that Vendrov submitted a line of credit application on his own behalf which contained false information, he fabricated supporting documents, then failed to cooperate with MFDA staff during the course of an investigation into his conduct. Vendrov is permanently banned from conducting securities related business in any capacity with any MFDA member firm. He has also been fined $115,000 and ordered to pay the MFDA’s costs of $7,500. According to the MFDA’s decision documents, Vendrov’s position changed as the case progressed. He ultimately claimed that another person was responsible for preparing the falsified and fabricated documents. Despite having signed the line of credit application, Vendrov claims he was unaware of their existence. The fabricated documents contained numbers that inflated the value of Vendrov’s holdings, while other documents were provided for accounts and assets that did not exist. The line of credit was ultimately approved. Vendrov obtained $49,386 from the line of credit, none of which has been repaid. Explanations were unpersuasive in the extreme The MFDA says Vendrov then failed entirely to cooperate with MFDA staff during its...

Staff | September 20, 2019 Fee compression is putting pressure on providers that are seeking to be more innovative in launching new target-date funds, prompting managers to consider more customization, according to new research by Cerulli Associates. The fee compression challenge is bolstering certain trends among target-date managers, including blending passive and active strategies, as well as the push towards transitioning from TDFs to managed accounts later in a plan member’s investment journey. Read: U.S. DC members continue to favour TDFs: report Though active TDFs are still more prevalent than their passive counterparts, the margin is narrowing, at 12 per cent in 2018 compared to 18 per cent in 2017. The report also noted more TDFs are including both active and passive components, which is changing that dynamic.  “Assets invested in hybrid target-date funds are growing and nearly half of target-date managers surveyed believe that hybrid target-date products will gather meaningful defined contribution plan assets during the next one to three years,” said Daniel Uquillas, a senior analyst at Cerulli, in a press release. It might be natural to assume the increased interest in hybrid TDFs is from plan sponsors that currently use active strategies and are seeking to include more passive methods to keep their fees lower. However, the report found...

Staff | September 20, 2019 The University of British Columbia Investment Management Trust Inc. has appointed Dawn Jia as its president and chief executive officer, effective Sept. 13, 2019. In her new role, Jia will be responsible for managing the organization’s portfolios, including the selection and oversight of fund managers and ensuring operating objectives are achieved. Read: Ontario Teachers’ COO of enterprise operations moving to UN pension fund Jia joins UBC IMANT from the Canada Pension Plan Investment Board where she was a senior portfolio manager. Prior to that she was vice-president and head of active equity for North America at State Street Global Advisors, an equity portfolio manager at Barclay’s Global Investors and a quantitative strategist at CIBC World Markets. “Dawn brings significant investment expertise to UBC IMANT and we are delighted to welcome her,” said Lisa Pankratz, chair of the board of UBC IMANT, in a press release. Read the full article at BenefitsCanada.com

New York, NY (Sept. 17, 2019) – NeuralMetrics, a modern InsurTech data provider using natural language processing (NLP) technologies to power a real-time, alternative data engine for commercial lines general or property and casualty (P&C) insurance companies, is pleased to announce the company’s official launch. NeuralMetrics is headquartered in New York City, with additional offices in the U.K., Europe, the U.A.E., and India, and was founded by data and technology experts and entrepreneurs, Prakash Vasant and Marcus Daley. The company’s SmartRatio SaaS platform, which is currently in live in production environments with several commercial lines P&C insurers, uses NLP and machine learning (ML) to extract actionable information from hard-to-access, unstructured public data to enhance decision-making and increase revenues. “The world’s pace of change has accelerated dramatically in the last decade and insurers need more information in order to stay ahead of digital-first competitors,” said Prakash Vasant, co-founder and CEO of NeuralMetrics. “By providing real-time access to new and unstructured data sources, NeuralMetrics is helping transform the accuracy of insurers’ underwriting capabilities.” “One of the greatest opportunities in InsurTech is addressing the information gap in the SME business sector,” explained Marcus Daley, technical co-founder and executive advisor. “The challenge has been...