Insurable Interest Canadian Insurance Blog

By Grant Kelly, Chief Economist and VP Financial Analysis & Regulatory Affairs, PACICC Excerpted from Solvency Matters, a quarterly report on solvency issues affecting P&C insurers in Canada Toronto, ON (June 24, 2019) – Insolvency risk, or the risk that an insurer becomes insolvent, has been rising in Canada’s property and casualty (P&C) insurance industry since 2015. One measure of insolvency risk is the percentage of companies within the industry that report losing money. In a competitive industry, there are always winners and losers. Some insurers try new distribution strategies. Others employ different tools to underwrite. Ideas that work are rewarded. In 2015, 83.4 percent of companies that competed in the marketplace reported profits. However, in the first quarter of 2019, just 63.2 percent of insurers that competed in the marketplace reported profits. This is the lowest level of insurer profitability since 1990. Profitable insurers use their earnings to strengthen their financial health and support growth. Trends in earnings are the primary indicator of future capital adequacy. When firms employ unsuccessful strategies and are not profitable, some have to alter their decisions if their owners wish to continue to put their capital at risk by remaining in the market. Sustained,...

New SMA Blog by Deb Smallwood, Founder & CEO, Strategy Meets Action Boston, MA (June 27, 2019) – Nowadays, transformation is a top buzzword in the insurance world. But beyond the buzz, it reflects what is happening in the insurance industry today – as a whole and within each company. It turns out that there is a lot going on in the commercial lines sector. According to recent SMA research, half of P&C insurers state that their company is in “transformation mode.” These insurers will be the leaders that are reshaping the industry as they position themselves for further success. SMA has just released a new research report, Foundational Technologies in Commercial Lines Insurance: Investment, Adoption, and Business Areas. The report investigates the state of the foundational technology landscape in commercial lines insurance (those technologies that insurers have been investing in for decades, for example, technologies that support or enhance BI, core transformation, new products and services, and workforce transformation). The report provides survey results on 26 foundational technologies, outlining investment levels, maturity, business area focus, and SMA trend analysis for these technologies that form the foundation upon which commercial lines organizations can drive transformation initiatives. In addition to an...

Glastonbury, CT (June 24, 2019) – Insurance Systems Inc. (ISI), a provider of enterprise software solutions to the property and casualty insurance industry, is pleased to announce that Connecticut Medical Insurance Company (“CMIC”) has successfully launched ISI Enterprise Accounting as a standalone solution. Headquartered in Glastonbury, Connecticut, CMIC is a leading provider of professional liability and business office insurance products and services for healthcare professionals and facilities throughout Connecticut and Massachusetts. “During the implementation of the ISI Enterprise insurance suite we recognized an opportunity to leverage its accounting package prior to the full implementation completion” said Raymond Lilley, Director of IT at CMIC “within 11 weeks, we launched ISI Enterprise Accounting allowing us to benefit from its increased controls and automated import features”, he added. CMIC went into production with ISI Enterprise Accounting as its sole general ledger, accounts receivable and accounts payable solution. While a typical implementation of ISI Enterprise involves launching the policy administration simultaneously with accounting, CMIC and ISI developed, and successfully implemented, a strategy for a phased rollout. This approach allowed for the accounting department to sunset its legacy system and start using the ISI Enterprise sooner in the project life cycle, ultimately increasing product knowledge...

Novarica profiles 24 vendors in 12th annual report Boston, MA (June 20, 2019) – Interest in new policy administration systems (PAS) remains strong at life and annuity carriers. The primary business drivers are improved speed to market for new products, better customer and agent experience, legacy system challenges, and long-term costs. In its 12th annual Novarica Market Navigator report on Life/Health/Annuity Policy Administration Systems, research and advisory firm Novarica profiles 24 vendor solutions, providing over 300 pages of information to help insurers understand and compare these complex systems. “Carriers see core replacement as important to capabilities like customer experience, business intelligence/analytics, and product innovation,” said Rob McIsaac, Executive Vice President of Research and Consulting and co-author of the report. “Carriers are looking to stand up new environments for new product or market opportunities, allowing solutions to complement legacy environments and enable phased evolutions toward modernized core ecosystems. Carriers are also implementing new PAS environments to support greenfield types of operations, allowing for more rapid support of new products, distribution channels, and marketing strategies.” A preview of the brief is available online. Life/Health/Annuity policy administration systems 2019 (Novarica Market Navigator) This report provides an overview of the available policy administration systems...

Globe & Mail Life, Health and Financial Security Insurance Trends Report: June 2019 Toronto, ON (June 27, 2019) – The Business section in today’s Globe & Mail features a special report on trends for the Life, Health and Financial Security insurance industry in Canada. One article, by Stephen Frank, President and CEO of the Canadian Life and Health Insurance Association (CLHIA) titled “Lifting Everybody Up With Pharmacare” looks at the current discussion about how Canada can best address access to needed medications. In addition, Insurance-Canada.ca partner Doug Grant contributes his thoughts about a key industry focus area of enhanced customer service and innovative ways that the insurance industry is using technology to engage customers, to create new products and help clients better manage their risks. Read the full report: • Globe & Mail June 2019 Life, Health and Financial Security Insurance Trends Report (PDF) The content will be of interest to insurance professionals and business readers. The four articles are available individually online: Seize the opportunity to be part of the next Fall 2019 Globe & Mail Insurance Trends report – Oct. 16 is the deadline to get involved. About the Globe and Mail The Globe and Mail, founded in 1844,...

La Capitale Insurance and Financial Services announced June 25 that it has signed a partnership agreement with Breathe Life, a Quebec insurtech startup, for the development of a digital application. The insurer says the agreement will give La Capitale brokers access to a digital app that they can use to submit life insurance applications. “La Capitale strengthened its commitment to a process of innovation and modernization in the last few years, and we have chosen the best partners to assist us in this endeavour. We believe that Breathe Life’s dynamism and agility will enable La Capitale to fulfill the promise it has made to its partners, namely that it is fast and easy to do business with La Capitale!” said Martin Delage, Executive Vice-President of Individual Insurance and Financial Services. Advisor-Driven Module “Consumer buying habits have changed dramatically, and savvy insurers like La Capitale understand that they have to give their advisors the tools they need in order to be able to provide a customer-centric service experience,” said Ian Jeffrey, Co-Founder and CEO of Breathe Life. He added that the partnership marks the launch of Breathe Life’s Advisor-Driven Module, a solution that he says “uses all the knowledge acquired through products introduced in the market over 12 months ago.” Read the original article at insurance-journal.ca

The International Accounting Standards Board has some amendments to the standard after hearing complaints from insurers. This article is available to INNsider Pro subscribers only. Sign in or register to be an INNsider Pro and access all locked articles. Read the original article at insurancenewsnet.com

Business Wire Although many precursors to the 2008-09 financial crisis are repeating today, AM Best believes the life/annuity (L/A) industry is much more resilient than a decade ago and well-positioned to navigate future challenges. Still, many of AM Best’s concerns in the run-up to the financial crisis exist today, and a new special report looks at how prepared L/A insurers are in the event of a new economic downturn. The new Best’s Special Report, titled, “Are Life/Annuity Insurers Prepared to Weather Another Economic Downturn?” notes that prior to the 2008-2009 financial crisis, the industry had been riding the tailwinds of favorable years, and that economists were expressing concern about global economic volatility, credit cycle downturns, corrections in equity markets and an inverted yield curve that first started appearing in 2006. Macroeconomic conditions in the United States soon became more unfavorable as the effects of the subprime crisis started to emerge. The financial system was flooded with a growing number of loan securitizations as new loans, and the securities derived from them, began to challenge market stability and diminish companies’ ability to manage risk effectively. These factors in combination presaged the financial hardship. In response to the crisis, many L/A insurers...

Chicago Tribune (IL) Jun. 26–The judge overseeing Sears Holdings’ bankruptcy is giving 29,000 retired employees a chance to fight for the life insurance benefits they lost when the retailer canceled their coverage earlier this year. This week, U.S. Bankruptcy Court Judge Robert Drain directed the U.S. Trustee overseeing the case to appoint a committee representing retirees. Sears ended the retirees’ life insurance benefits in March, shortly after selling most of its remaining assets to Transform Holdco, an entity controlled by Sears former CEO and largest shareholder, Edward Lampert, and his hedge fund. As of March 15, about 29,000 retirees had coverage with death benefits worth between $5,000 and $14,500 that cost Sears $1.3 million in monthly premiums, Sears said. “The Debtors determined that, given the financial circumstances of their estates, they could no longer justify paying the significant premiums for the policies,” an attorney representing Sears Holdings said in a court filing. Attorneys representing two retirees who pushed for the committee’s creation have argued that the company gave up the right to end the life insurance benefits as part of a settlement agreement reached in 2001, after the company made cuts to life insurance coverage. But Sears said the changes...

Québec, QC (June 25, 2019) – La Capitale Insurance and Financial Services has signed a partnership agreement with Breathe Life, a Quebec startup, for the development of its digital application. This agreement will give La Capitale brokers access to a digital app that they can use to submit life insurance applications. “La Capitale strengthened its commitment to a process of innovation and modernization in the last few years, and we have chosen the best partners to assist us in this endeavour. We believe that Breathe Life’s dynamism and agility will enable La Capitale to fulfill the promise it has made to its partners, namely that it is fast and easy to do business with La Capitale!” said Martin Delage, Executive Vice-President of Individual Insurance and Financial Services. “Consumer buying habits have changed dramatically, and savvy insurers like La Capitale understand that they have to give their advisors the tools they need in order to be able to provide a customer-centric service experience,” said Ian Jeffrey, Co-Founder and CEO of Breathe Life. “This partnership marks the launch of Breathe Life’s Advisor-Driven Module, a solution that uses all the knowledge acquired through products introduced in the market over 12 months ago, and we are excited to work with La Capitale!” The module will enable us to satisfy...