Insurable Interest Canadian Insurance Blog

The Canadian economy may be continuing its gradual recovery, but Russell Investments remains neutral on the outlook for Canadian equities given potential trade tensions and the country’s high household debt level. “With global concerns escalating, valuations not yet compelling, nor sentiment indicators suggesting conditions are oversold, Russell strategists remain neutral on their outlook for domestic equities,” the company said in a recent report. Recession fears intensify Recession fears have intensified despite mostly above-industry data compared to global counterparts and are testing the longevity of the current economic expansion heading into 2020, potentially forcing the Bank of Canada’s hand. What Russell found impressive is the steady flow of consensus-beating economic data, especially when compared to other developed countries. The relative strength of Canadian data is partly due to the lower expectations in the country’s economy as it sputtered over the last half of 2018. Russell deemed the Canadian labour market as “exceptional” with unemployment near historic lows. “[But] while we believe the Canadian economy is gradually recovering, we must keep in mind that Canada is not an island. By the Bank of Canada’s (BOC) own admission, the output gap, which measures actual growth relative to potential, has once again turned negative...

The Alberta Securities Commission (ASC) has sanctioned Vernon Ray Fauth of Calgary for breaching the province’s Securities Act in connection with the sale of investments in Espoir Capital Corporation. An ASC panel previously determined that Fauth illegally dealt in securities of Espoir, made misrepresentations to Espoir investors and perpetrated a fraud on investors. The ASC panel ordered Fauth to pay an administrative penalty of $400,000, a disgorgement order of $2,585,414.87 and investigation and hearing costs of $250,000. It also ordered an array of permanent market access bans. To learn more, consult the sanctions decision on the ASC website. Read the original article at insurance-journal.ca

BMO Nesbitt Burns announced on June 27 that a number of funds will be wound up. These funds are: BMO Advantaged Equal Weight Banks TACTIC™ Fund; BMO Advantaged Equal Weight Oil & Gas TACTIC™ Fund; BMO Advantaged Laddered Preferred Share TACTIC™ Fund and BMO Advantaged S&P/TSX Capped Composite TACTIC™ Fund. The funds will be terminated on September 27, 2019 or as soon as practicable after this date, says the company which announced on March 20, 2019 that these funds would be impacted by certain amendments to the Income Tax Act proposed by the Minister of Finance in the Federal Budget on March 19, 2019.  “As a result of the proposed changes to the Tax Act, the Manager believes that it is no longer commercially feasible to continue the Funds and that it is in the best interests of shareholders of each of the Funds to terminate the Funds,” stated the company. FinTech Sector fund will also be wound up In a separate statement issued on the same day, BMO Nesbitt Burns also announced the termination of the BMO FinTech Sector TACTIC™ Fund on September 27, 2019 or as soon as practicable after that date. Read the original article at insurance-journal.ca

A small group of winners captures much of the economic profit in the insurance industry. New McKinsey research quantifies just how far ahead the leaders are—and what other insurers can do to catch up. By Alex D’Amico, Mei Dong, Kurt Strovink, and Zane Williams — read the whole report Chicago, IL (June 25, 2019) – Every year, at insurance companies around the world, strategic planning processes unfold. They aspire to set bold new direction but frequently yield incrementalism and strategic inertia—in insurance, and in just about every other industry. In fact, research by our colleagues shows that economy-wide, in multidivision companies, the amount of capital allocated to each business unit from one year to the next is nearly identical; the mean correlation is .92. There are myriad reasons for this, ranging from risk aversion to corporate politics to the Quixotic quest for the perfect strategy that does not exist. And there’s also an empirically substantiated way out: recognize that strategy is about playing the odds. Not every decision is going to result in a win—but companies that increase their batting average, so to speak, are more likely to succeed. Strategy is probabilistic, not deterministic. That, too, is the case in...

Aviva investing in data-driven solutions and strategic collaborations to make safer roads a reality for all Toronto, ON (June 27, 2019) – Aviva Canada has launched its new social impact platform – Take Back Our Roads – which is focused on tackling dangerous roads and school zones through community projects, innovation and strategic partnerships, and leveraging our claims data externally. More than just an educational campaign, Take Back Our Roads is a longer-term investment in innovation and data-driven solutions to implement real environmental changes to reduce the number of people killed or injured on our roads. “Where other road safety initiatives seek to influence the behaviour of road users, Aviva Take Back Our Roads is designed to affect the physical environment they interact with,” says Jason Storah, CEO at Aviva Canada. “We’ll be leveraging our knowledge, data, partnerships and funding to invest directly in road safety initiatives.” More than 156,000 people are injured or killed on our roads every year,[1] making road safety an extremely pressing issue. Through proprietary data and strategic collaborations, Aviva Canada is uniquely positioned to make meaningful change in this space and to help improve road safety for Canadians. Aviva Canada will gather claims data, collected...

Business Wire Cash value can help protect against risk from market downturns INDIANAPOLIS–(BUSINESS WIRE)– Not having enough assets to generate income in retirement or losing assets because of market downturns are common concerns of those preparing for retirement, but whole life insurance as part of a solid retirement strategy can do more to alleviate those issues than many people might think, a recent report shows. “Integrating Whole Life Insurance into a Retirement Income Plan: Emphasis on Cash Value as a Volatility Buffer Asset,” by Wade D. Pfau, Ph.D., CFA, and Michael Finke, Ph.D., CFP, considers several asset scenarios of people preparing for retirement. In each case, scenarios including cash value of life insurance policies result in more income for retirees down the road than scenarios that don’t include whole life insurance. “This report shows that using insurance with other investments can really lay the foundation for better outcomes in retirement,” said Pfau, professor of retirement income at The American College of Financial Services in Bryn Mawr, Penn. “We often hear that we don’t need life insurance in retirement because we have investments, but this research shows it’s harder for the market to beat a strategy with both life insurance and...

Hamilton, ON (June 26, 2019) – Today, the Honourable Filomena Tassi, Minister of Seniors, reaffirmed the Government of Canada’s commitment to Canadian seniors and to ensuring they have a safe and secure retirement. This year, single seniors who have little or no income other than the Old Age Security (OAS) pension will be more financially secure than ever. As a result of quarterly indexation, on July 1, 2019, the maximum OAS pension amount will increase to $607.46, and the maximum Guaranteed Income Supplement (GIS) amount will increase to $907.30 for single seniors and to $546.17 for each member of a couple. The most vulnerable single seniors will have received, by the end of 2019, $2,097 more in OAS/GIS benefits compared to what they would have received in 2015. Budget 2019 measures will ensure that Canadian seniors are more financially secure by: enhancing the GIS earnings exemption so that working low-income seniors can keep more of their benefits in combination with their income from work; safeguarding the security of workplace pensions by boosting federal pension protections and making companies’ bankruptcy proceedings fairer and more transparent; and automatically enrolling Canada Pension Plan contributors who are 70 years or older in 2020 but...

Beijing, China (June 27, 2019) – Ping An OneConnect, a leading technology service platform for the entire financial industrial chain, has launched four InsurTech solutions targeting three areas: insurance risk control, operation and marketing. Leveraging AI, big data and blockchain, the solutions were launched at the second China Insurance Technology Application Forum in Beijing, AI · Empowerment · Ecology, held June 25 by Ping An OneConnect in collaboration with the Insurance Society of China. For the first time, OneConnect proposed the construction of an auto aftersales ecosystem by empowering insurance companies via the provision of technologies, helping them complete their digital transformation and reshaping the overall insurance ecosystem. The intelligent risk control solution optimizes risk control for insurance companies in underwriting and claim settlement. Along with technological development, the risk of insurance fraud is becoming ever more pronounced, with fraudsters more professional and more cases being gang crimes. According to an evaluation by the International Association of Insurance Supervisors (IAIS), 20 to 30 per cent of all claims filed each year worldwide are likely to have been fraudulent in some aspect. The FBI estimates the total cost of non-health insurance fraud to be more than US$40 billion per year. For...

New pilot program will help build infrastructure that can withstand extreme weather Bracebridge, ON (June 27, 2019) – The Ontario Government is funding a new pilot program to help ensure communities across the province are protected from future extreme weather damage. The Municipal Disaster Recovery Assistance (MDRA) program provides financial assistance to eligible communities that face extraordinary emergency response and repair costs after a natural disaster. “This spring we saw the devastating effect of flooding in many Ontario communities,” said Steve Clark, Minister of Municipal Affairs and Housing. “We want to help municipalities build back better – to flood damaged roads, bridges and other infrastructure to a higher standard, so it can better withstand extreme weather and we know that some municipalities have limited financial resources to improve local infrastructure. By not having to rebuild the same washed-out road or bridge again and again, communities will save money over the long-term.” As part of a $1 million pilot project, the province will provide municipalities that qualify for MDRA funding with up to 15 per cent above the estimated cost of rebuilding damaged public infrastructure to make it more resilient to extreme weather. Examples could include raising roads to provide better...

A British Columbia independent agent, Pamela Peen Hong Yee, has lost her license to sell insurance and has been ordered to pay over $27,000 in fines, investigation and hearing costs. Following a January hearing, requested by the licensee to dispute an earlier decision, the Insurance Council of British Columbia (Council) announced in June that it has revoked her life accident and sickness insurance agent’s license until June 2021. In the Council’s hearing committee report, it is alleged that Yee made material misstatements on a life insurance application, made misrepresentations to the insurer about previously purchased policies in place, processed an electronic life insurance application without a client’s consent, then improperly tried to influence the client to keep the policy even after they declined to proceed. Among other things, Yee allegedly berated the client for being inconsiderate and not thinking about others’ feelings when the client declined to take the insurance. Allegedly offered to pay the client’s policy premiums It was also alleged that Yee offered to pay the client’s policy premiums in order to maintain her commission from the insurer. Yee purchased a condo during the material period. One issue debated in the hearing was whether she had encouraged her...