Insurable Interest Canadian Insurance Blog

By Charles Dugas, Insurance AI Lead, Element AI As artificial intelligence reshapes the insurance industry, insurers that embrace AI early on will gain a key competitive advantage—but it may not be the advantage you think. By building the position and experience that accrue to adopting AI early, insurers can redefine intelligent decision-making for themselves and their industry. AI – Data at your service Since its earliest days, insurance has been the business of applying best use of the best possible information. The computing revolution has helped insurers pursue this goal, offering continuous yet incremental improvements to information collection and analysis over the years. Historically, insurers have been prudent about the speed with which they adopt new computing technologies, compared to the quicker pace of peers in other industries. AI is big news now because it’s not an iterative advancement on the insurance software of yesterday. It represents an entirely new approach to designing software. As a result, insurers may wish to rethink their adoption timing. The unique strength of AI revolves around its ability to tame information, rendering it useful and at your service. Applied to the decision-making that constitutes the core work of insurance, AI systems change the definition...

AI can help increase process efficiency, improve customer satisfaction, and decrease incidences of fraud: Aite Group report Boston, MA (May 14, 2019) – Artificial intelligence is redefining what healthcare can look like when the industry dares to break its shackles from data silos, trusts in a robust set of predictive analytics, and leverages data asset management. AI and its technologies in arms—machine learning, natural language processing, and cognitive learning—are paving the way to better engage with customers, impart satisfying customer experiences, and automate manual processes. Aite Group’s latest report, AI in Healthcare: Ten Essential Use Cases, provides relevant use cases that offer many compelling insights. “Healthcare providers can no longer tiptoe around or delay adopting processes powered by AI,” says Inci Kaya, analyst at Aite Group. “Today, healthcare providers are sitting on secrets that remain locked amid their siloed data sources. These secrets, if unlocked by AI or ML, will ensure they are providing appropriate patient care, providing satisfactory customer support, and receiving correct payment in a timely fashion for their services. “Those that make the bold decision to change—a decision that is wrought with internal resistance and doubt—can expect to find a whole new lease on life. Others will...

The Canadian Life and Health Association (CLHIA) President and CEO thinks guideline 19 on disclosure of insurance and group annuity broker compensation has been “misunderstood.” Adopting it is voluntary, he notes. From the get-go, G19 riled the advisors concerned, mainly because they misunderstood the objective of the guideline, Stephen Frank says. “One of the areas of the guideline that is misunderstood is its scope.” His comments came in response to complaints lodged by a group of advisor members of the Canadian Group Insurance Brokers (CGIB), Advocis, the Conference for Advanced Life Underwriting (CALU), the Third Party Administrators Association of Canada (TPAAC), and insurance, group annuity and employee benefits consulting and brokerage firms opposed to G19. Insurance Journal obtained a copy of an email sent to advisors and firm executives that outlines their arguments against G19. The group finds fault with several aspects of the new guidelines. For one, they accuse CLHIA of acting as a regulator, even though it lacks the legislative authority to do so.  The advisors stress that their opposition to the guideline should not be confused with opposition to disclosure. “This is about opposition to a stakeholder who has no regulatory or legislative mandate to impose an...

The National Association of Insurance Commissioners creates model laws for states to pass. A state insurance commissioners’ working group is targeting the summer for completion of its long-delayed “policy overview” summary to accompany life insurance sales. The National Association of Insurance Commissioners’ big Summer Meeting takes place Aug. 3-6 in New York City. Its Life Insurance Illustration Issues working group is down to the fine details of its policy overview charge. Designed to “enhance consumer understanding,” the two-page summary proposal has been in the works for more than three years. During a previous conference call, the group agreed to require distribution of a policy overview in tandem with the buyer’s guide on all life insurance policies. Policies without an illustration will also include a premium and benefit pattern summary. Jodi Lerner, attorney for the California Insurance Department, isn’t so sure that timing is right. “I’ve never seen a situation where a buyer’s guide was not provided prior to the time of policy delivery,” Lerner said during a Thursday conference call. “People are not going to receive this until they receive the policy and it’s just going to be one more piece of paper that they’re not going to look at.”...

Customers demand more comprehensive and personalized insurance products to address ‘coverage gap’ in existing policies and emerging risks Paris (May 14, 2019) – The World Insurance Report 2019, published today by Capgemini and Efma, reveals that policyholders are increasingly concerned that their insurance coverage has become insufficient for emerging risks, from cybersecurity to environmental threats. Insurers are less ready for change than their customers, most of whom want more comprehensive and dynamic coverage. At the same time, a significant opportunity exists for insurers to leverage technology and partnerships to get ahead of macro trends and become more proactive partners to their customers. Key findings of the report include: Insurers have been slow to respond to emerging risks The report identifies five macro trends that are creating emerging risks for insurance customers and their businesses: disruptive environmental patterns, technological advancements, evolving social and demographic trends, new medical and health concerns, and business environment changes. Yet most insurers have been slow to respond to these trends and equip customers for them. Under 25% of business customers across all geographies, and less than 15% of personal policyholders, feel they have sufficient coverage to insure against any one of the emerging risks driven by...

Finding the right life insurance broker in Ottawa is one of the most important and challenging steps in purchasing life insurance. It can mean the difference between getting the perfect policy and buying something you’ll regret a few years down the road. For that reason, it’s especially vital to do your due diligence when looking for a life insurance broker. Here are some tips and things to look for when finding a life insurance broker. Identifies your needs As with any other major purchase, an understanding of your needs is necessary before the broker can recommend a product. A good life insurance broker will take the time to discover your needs. For example, in the event of your death, do you want the mortgage paid off? How many years of income do you want to provide for your family? How many children do you have and how much education funds do you need to leave them? The answers to these questions are referred to as your risk management goals. Your broker should have a clear understanding of them before offering products for you. Choice There are many insurance policies and products out there, each serving a different purpose and demographic. A...

A new direct-to-consumer product is a help, not a threat, to insurance advisors and will assist them in gaining new business. That’s the view of Ian Jeffrey, co-founder and CEO of Breathe Life, who recently announced the general availability of its Consumer-Driven Module, which features tools for carriers and agencies to quickly and cost-effectively sell direct to consumers online via a modern buying experience. The solution was designed to help the insurance industry bring financial security to the millions of customers in the middle market that are currently underserved. Traditionally, Breathe Life believes agents have had little incentive to pursue the middle market because it takes the same amount of effort to write a small policy with small profit margins as it does to write a large policy with large margins. Accenture estimates the resulting life insurance gap to be around $12 trillion for US middle market customers, with $12 billion in new revenue to be gained by simply serving them. Jeffrey said fearful agents would be better off embracing this opportunity. He told LHP: “When most agents hear direct to consumer, they thinm it’s trying to take away business. That is absolutely false – we are building tools for...

Manulife has announced that it is introducing new technology and innovative thinking to its employee benefits plans, promising that they will “transform the benefits experience for Canadians.” Starting July, Manulife said it will expand its Vitality offering to group benefits customers. Through the goal-oriented program, customers can track healthy activities to improve their health and well-being; at the same time, they can potentially earn rewards and discounts upon reaching certain activity levels. “Chronic health conditions are on the rise in Canada and, in combination with an aging population, could soon reach economically unsustainable levels,” said Donna Carbell, Head of Group Benefits, Manulife (Canada). “We are on a mission to help people and organizations become healthier, so employees can be their best at work, feel happier, and be more engaged.” In recognition of Canada’s opioid crisis, Manulife has also developed a two-step opioid management program focused on prevention and early intervention. The first step puts patients on an opioid treatment regime with a short-term supply, while the second step prioritizes the use of short-acting opioids first. These two measures, in concert, allow earlier monitoring of side effects, risk tolerance, and dependence, helping reduce the risk of chronic use. “Through a much...

Canada’s top group insurance providers are increasingly concerned as the impact of drug prices is increasingly felt by organizations, according to a new report. “The emergence of high-cost specialty medications has caused organizations to carefully consider strategies for alleviating the cost impact, while at the same time maintaining high quality coverage for their employees,” said benefits-service firm Accompass in its 2019 Guide to Insurer Health Trends report. Surveying 10 of Canada’s top group insurers including Desjardins, Equitable Life, and Great-West Life, Accompass found that the top drugs claimed in group plans on a cost basis were Remicade, Humira, and Stelara. Representing annual costs that can run into the tens of thousands of dollars for each patient, Remicade and Humira are used to treat conditions including rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, and Crohn’s disease. To assist private drug-plan sponsors, Accompass said six out of 10 carriers have negotiated special pricing for certain drugs. “In addition to negotiated pricing, every major group insurance carrier in Canada now offers additional review and oversight for new medications approved by Health Canada and existing medications for new indications,” the report said, explaining that reviews are conducted before a drug is approved for coverage. Insurers...

The pharmaceutical industry is seeing increased scrutiny in Canada as the Patented Medicine Prices Review Board (PMPRB) steps up actions to rein in prices for patented drugs. Based on an internal review of documents that it conducted, Reuters reported that the PMPRB is targeting an increasing number of expensive drugs. “Data show the number of open PMPRB investigations into potentially overpriced drugs has more than doubled since 2013, reaching 122 as of March 2018,” the news provider said. The PMPRB is a small agency, with a budget of just $15.4 million and approved staff of 83. But its mandate is crucial for Canada as most patented – or generic – prescription drugs in the country are paid for by more than 1,000 public and 100,000 private, employer-sponsored drug plans as well as patients themselves According to PMPRB Executive Director Douglas Clark, the rise in investigations is more due to pharma firms ratcheting up prices rather than a toughened stance by the agency. And with a national pharmacare program under consideration, it could have expanded power to consider the effectiveness of drugs and what Canadian governments can afford in deciding whether prices are excessive. Even now, PMPRB is challenging pharma-industry heavyweights....