Insurable Interest Canadian Insurance Blog

Kathryn Söderberg was in eighth grade when she fell in love — with the Spanish language. Spanish was an easy subject for her in school, and she would practice speaking the language with her friends at home as a secret language that her parents did not understand. She even would follow Spanish speakers into a store, just to listen to them talk. She majored in Spanish in college, studying in Mexico and Spain. She dreamed of being a linguist, traveling the world and ultimately ending up as a translator at the United Nations.But her parents had a thriving insurance practice in Lynnfield, Mass. She knew she could have a rewarding career by taking the foundation her parents had created and building on it. “I realized if I could somehow marry my love for Spanish with my love for business, I would have a formula for success,” she said. Söderberg is president of Söderberg Insurance Services, the company her parents founded 54 years ago. She used her love of Spanish to guide her practice toward its niche of providing life and property/casualty insurance and mutual funds to Hispanics who live and work in the urban communities north of Boston — cities...

It was almost a decade ago when I heard the news that a company that cannot stand indexed annuities had launched an “indexed annuity.” No better way to confirm the information than to go straight to the horse’s mouth: I gave the product management division of the company a call. “Did you guys launch an indexed annuity?” I asked with disbelief. “Oh yes, we are about to submit sales to your competitor in the market research space. Would you like us to send our sales to you as well?” they asked. “Wait! [XYZ Insurance Company], whose wholesalers have bad mouthed indexed annuities for years has launched an indexed annuity? What does your product look like?” I was dying to know. They explained the fairly simply design of the product, and the uber-competitive cap rates caught my attention. “And that has a zero percent floor?” I asked doubtingly. “No, the client absorbs all losses beyond the first [10%].” “That isn’t an indexed annuity. That is a security; a type of variable annuity, but not an indexed annuity.” The insurance company proceeded to insist that I must list their product sales under the indexed annuity portion of Wink’s Sales & Market Report....

Trail commissions are shaping up to be the compromise between large upfront commissions and asset-management fees that seem to be an awkward fit for annuities, according to two marketing organization executives. Trails could provide the firmer direction that the industry has been seeking. The large upfront commissions are under attack from critics and regulators, while the advisory world claims that agents charging management fees for assets they don’t manage doesn’t work either. “I think trails probably become the preferred option,” said Jason Jenkins, chief marketing officer with Simplicity Group Holdings, a financial marketing organization with nearly $4 billion in 2018 annuity sales. “If an advisor can (utilize trails), it’s a smart way to build a book of business.” Not everybody in the business loves trail commissions. Ohio National rattled the industry with its September decision to cut off trail commission payments on specific variable annuity contracts. The insurer was sued several times and, to date, no other companies have cut off trail commissions.The shocking Ohio National decision shows how much turmoil and uncertainty the industry faces, Jenkins said. “What happens over the next 10 years will be the biggest change and impact in this industry — ever,” he said. “That’s...

The quickest way to lose a family’s business when a client dies is to disappear when they need you most. It makes sense that if you or your company is not there when the family needs you, they are likely to realize they don’t need you very much. This is an essential element of Amy Florian’s message to insurance agents and financial advisors. Florian became a grief expert after plunging into widowhood when her husband died. Florian was a 25-year-old mother of a 7-month-old boy when a car accident changed her life. Of course, events and grief of that magnitude change anyone. But in Florian’s case, grief became her life’s mission. She has since studied the subject and has become a resource for advisors and companies to understand grief and their role in responding to it.In last month’s interview, Florian spoke about things to say and not to say. This month, Florian discusses how advisors and companies can help families through difficult times. And, as Florian said last month, grief is not restricted to death. It arises out of most of life’s changes, particularly life-altering ones.Platitudes won’t work in those cases, either. You have to show up and keep showing...

While other rulemaking efforts garnered most of the attention and opposition, Nevada lawmakers plugged along on financial advice rules that attracted scant attention. That is no longer the case. After the specifics were released earlier this year, industry insiders quickly realized that the broad scope of the Nevada rules make it a very tough hurdle. Some are comparing it to the late Department of Labor fiduciary rule and claim it would contribute to the death of the commission-based model. Like the DOL rule, which was tossed out by a federal appeals court last year, the Nevada rules provide for a private right of action. The law places fiduciary responsibilities on broker-dealers, registered investment advisors and some financial services sales representatives. Those professionals have been excluded from the existing state law covering the fiduciary duties of “financial planners.” The Nevada Secretary of State’s office has yet to release the final rules. The law only applies to sales of insurance if accompanied by investment advice, however, the rule definitions are wide in scope, analysts say. As written, costs of compliance are going to skyrocket, wrote Gary A. Sanders, vice president of government relations for the National Association of Insurance and Financial Advisors,...

Most insurance agents and marketers I know did not start in that career. But for me, it was my childhood dream. Kids in my kindergarten class laughed when I said I wanted to be an insurance agent when I grew up. But I knew being an insurance agent was the key to the candy store — a candy warehouse, in fact. That was one of the things I learned from my dad, who was an insurance agent just like his father. I loved tagging along with my dad as he visited clients. I would watch him as he drew out their concerns and then offered solutions. How many other kids got to see their father help solve the most difficult problems families and businesses face? But sometimes tagging along meant I had to wait outside in the car with nothing to do but listen to the radio. (How many parents would dare do that today?) One time after what seemed like forever, my dad stepped out of the huge building he was visiting and waved me inside. Once in, his client led us into what turned out to be a warehouse of candy. He turned and invited me to pick...

The Canadian Association of Financial Institutions in Insurance (CAFII) says that many people could find themselves without adequate insurance if the Ontario government moves ahead too quickly with its decision to end OHIP’s emergency services coverage for Ontarians travelling outside Canada. The government has set Oct. 1, 2019 as the implementation date to end OHIP’s out-of-country coverage. However, CAFII says more time is needed to transition to this change – at least one-year. New premium rates A lengthier transition period would enable the government “to undertake a robust, multi-year communications campaign to inform Ontarians about the change and resulting implications.” More time would also allow the insurance industry “to determine what the new premium rates will be, and to ensure its employees are ready to communicate about the changes and properly serve their customers.” “We believe a robust communications campaign by the Government that supplements what the insurance industry is already doing will be critical in mitigating the risk to the travelling public of this change in insurance coverage,” says Keith Martin, Co-Executive Director of CAFII. “That communications campaign should emphasize to Ontarians the importance of having travel health insurance in place before travelling outside Canada, so that they and...

Horizons ETFs has announced the launch of Horizons Global Uranium Index ETF, a new exchange traded fund that provides exposure to global uranium companies. Units of the ETF have begun trading on the Toronto Stock Exchange under the ticker symbol HURA. HURA seeks to replicate the performance of the Solactive Global Uranium Pure-Play Index net of expenses. Horizons ETFs says HURA is the first ETF in Canada to provide direct exposure to the global uranium sector. “Global mining ventures can carry significant investment risks. By investing through a diversified ETF like HURA, you can potentially achieve greater stability and risk-mitigation to your uranium-sector exposure,” said Nick Piquard, Portfolio Manager and Options Strategist at Horizons ETFs. “Our global basket approach to the uranium sector provides access to production happening across the globe – from the world’s largest in Kazakhstan to emerging mining operations in the United States.” Canada is the second-largest uranium producing country and is home to the world’s largest publicly traded uranium company, Cameco. Read the original article at insurance-journal.ca

Desjardins Group’s P&C insurance sector posted a net deficit of $81 million in first quarter 2019, in stark contrast with the $26 million surplus in the corresponding period in 2018. Gruelling weather conditions amplified claims frequency, causing net results to plunge. However, this loss was offset by higher net premiums, Desjardins explains. Weather conditions to blame  “Difficult weather conditions this winter and spring had a major impact on the performance of our property and casualty insurer, due to a jump in home insurance claims compared to 2018,” President and CEO, Guy Cormier stated. “These difficult conditions are ongoing, and Desjardins is wholeheartedly committed to those affected by the flooding. We are empathetic and attentive to our members and clients in these difficult times and are offering them relief. Despite the impact of weather conditions on our results in property and casualty insurance, Desjardins performed well in the first quarter due to its highly diversified activities and the good results posted by the other business segments. I’m also proud of the growth in member dividends. Our dividends are now more accessible and consistent, and more effectively recognize member loyalty. Starting this year, 840,000 more members will receive a dividend.” Net premiums...

… but China seen as obstacle to artificial intelligence advancement in the United States: EY 85% of US CEOs and business leaders are AI optimists 87% of respondents are investing in AI initiatives this year 47% see China as the biggest obstacle to the advancement of AI in the US New York, NY (May 14, 2019) – A study of US CEOs and business leaders, conducted by EY, revealed that most senior executives (85%) classify themselves as artificial intelligence (AI) optimists, citing increased investment and trust in the technology. Eighty-seven percent say their company will invest in AI initiatives this year. US C-suite faces international and domestic challenges with AI Despite the growing optimism around AI among the US C-suite, they are faced with international and domestic challenges with AI that could derail the US’ position in the global AI race, with China taking the lead. More than half of respondents (52%) ranked the US first when asked which country was leading the global AI race and half of respondents (50%) selected the US as the country with the best long-term AI strategy. However, China was the clear runner-up; 47% of respondents selected China as the country that is the...