As tech changes the insurance industry, what should investors look for?

In the past few years, some big changes have been unveiled in one of the world’s most traditional industries.

John Hancock, one of the oldest and largest North American life insurers, recently announced it will stop underwriting traditional life insurance. Instead, the 156-year-old insurer, owned by Canada’s Manulife Financial, will sell only interactive policies that track fitness and health data through wearable devices and smartphones.

Prudential Financial said it will go straight to consumers with its insurance and investment products for the first time in its 143-year history, offering products through its website rather than selling exclusively through its large network of advisers and employer-sponsored programs.

And Manulife recently announced it will contribute $400,000 to the Artificial Intelligence Institute at the University of Waterloo for research in disability claim prediction as well as fraud detection and language comprehension in customer service.

These developments in the past month are only a few examples of the sea change in the insurance industry, showing how established companies are turning to technology to find new ways to expand business in light of online startups and rivals that are challenging the established order.

Consulting firm Accenture says about two-thirds of insurers have begun using artificial intelligence-based “virtual assistants.”

“Millennials and other younger people have large purchasing power,” John Barnidge, a Sandler O’Neill analyst, told Reuters, adding that they do not value insurance agent relationships as much as previous generations.

So, what does this shift toward a growing demand for online sales mean for the bottom lines of insurance companies – and what are the best ways for investors to play the trend?

“I’ve frequently described the insurance industry as being behind the technology curve, but we’re seeing significant advances,” says Meyer Shields, managing director at investment firm Keefe, Bruyette and Woods in Baltimore.

As one example, he points to the use of increasingly sophisticated data analysis to vary price rates in personal auto insurance. Other examples include artificial intelligence applications to augment underwriting decisions, and the use of drones to evaluate insured property damage.

As far as specific companies leading the way in using these techniques, Mr. Shields singles out auto insurer Progressive (PGR-NYSE) as a leader in data analysis, with cutting-edge capabilities in data-driven insurance pricing. He says commercial insurers Travelers (TRV-NYSE) and The Hartford (HIG-N) are both very strong at utilizing technologies to improve outcomes in lines of business such as worker compensation. He also points to global insurer Chubb (CB-NYSE) for its advanced use of artificial intelligence and technology-based distribution.

Mr. Shields says his firm’s overall investment thesis for the insurance sector is that commercial casualty rates are likely to rise, while personal and commercial auto rate increases will decelerate, and property insurance rate increases will probably reverse course. As a result, he favours the commercial insurers that should see underwriting margin expansion in coming quarters – AIG (AIG-N) and The Hartford are the firm’s top picks in that space.

Keefe Bruyette also likes insurance brokers such as Arthur J. Gallagher (AJG-NYSE)and AON PLC (PLC-NYSE) as they expect rising rates combined with economic growth driving faster revenue growth, margin expansion and improving cash flows.

Canadian insurers are also taking a lead in this technology revolution. Manulife’s (MFC-TSX) move in this direction has caught the attention of Meny Grauman, head of institutional equity research at Cormark Securities in Toronto. He’s impressed with their push toward a ‘vitality’-based business.

As well, both Manulife and Sun Life (SU-TSX) rely on their Asian units for a significant part of their growth. Mr. Grauman considers that region as being more advanced in its use of technology in the insurance industry. He notes that in China it is possible now to buy life insurance and process claims over the popular WeChat messaging app. “That kind of thing doesn’t exist yet in North America,” he says.

While he appreciates the technological edge of Manulife and Sun Life, Mr. Grauman’s top pick in the sector is Industrial Alliance (IAG-TSX). He likes the Quebec-based insurer’s strong track record of performance, and the development of its wealth advisor and distribution networks. He feels the company is set to rebound from concerns over a chief executive officer transition and a couple of “not so strong” quarters. “It’s underappreciated,” he says.

The tech revolution in insurance has also caught the eye of Gordon Reid, president and CEO of Goodreid Investment Counsel in Toronto. Here in Canada, he notes Manulife’s plan to spend $1.5-billion on technology, with 30 per cent directed toward “changing the client experience.” He is impressed as well with Sun Life’s use of “nudges’ – that is, the process of using technology to encourage plan members to enrol in money-saving options. He also notes Great-West Life’s (GWO-TSX) use of its MPower division to allow other operators to outsource record keeping and administration.

In the United States, Mr. Reid points to the innovative work in the Optum division of United Health (UNH-NYSE). Optum bills itself as a “health-care intelligence” firm, using data, analytics and expertise to deliver services in the most effective ways possible. His top pick in the sector is Indianapolis-based insurer Anthem Inc. (ANTM-NYSE). His firm initially recommended the company’s shares for its client portfolios on a valuation basis, due to its low stock-price-to earnings ratio. “Today the theme is scale, and the resulting action has been industry consolidation,” he says.

He notes Anthem’s purchase of the hospice operator Aspire, Cigna’s purchase of Express Scripts and drugstore chain CVS buying insurer Aetna. “All of this is intended to vertically integrate, allowing more touchpoints with the patient,” he says. And while that can come in many forms, including face-to-face contact, new technologies are increasingly playing a key role.

Majority of Canadians worry about drug-impaired driving

As Canada approaches marijuana legalization many stakeholders have been raising serious concerns with drug impaired driving. A new Desjardins survey supports these concerns as the majority of Canadians (86%) are worried about drug impaired driving. In fact, 75% are concerned with progress in crucial areas like legislation, testing and awareness.

Most respondents (71%) believe there will be an increase in impaired driving when marijuana becomes legal and more (77%) still worry that there has not been enough driver education on the topic. In a new report from the Traffic Injury Research Foundation (TIRF), the percentage of fatally injured drivers who tested positive for marijuana rose to 20.9% in 2015 from 15.9% in 2000.

When it comes to which age group is most associated with marijuana-impaired driving, 90% of respondents stated 16-34-year-olds. According to TIRF, the two biggest age brackets for fatally injured drivers who tested positive for marijuana in 2015 were 16-19-year-old drivers (32.1%) and 20-34-year-old drivers (35.9%). Also, the percentage of 35 to 49-year-old drivers who tested positive is substantial at 16.9% and 14.9% among 50 to 64-year-old drivers.

According to Statistics Canada’s National Cannabis Survey, one out of every seven marijuana users with a valid driver’s licence is getting behind the wheel within two hours of consuming marijuana. This is especially alarming because Canadians are not confident that law enforcement has the means to deal with the challenge; 81% of respondents believe we lack the tools and resources necessary to identify marijuana-impaired drivers.

“As a leading insurer, committed to our communities, we have concerns regarding any form of impaired driving,” said Denis Dubois, President and Chief Operating Officer of Desjardins General Insurance Group. “Cannabis and drugs can impair your ability to stay focused and alert on the road. It endangers yourself and others and we firmly support laws against its consumption while behind the wheel.”

A collective effort
“Government, law enforcement and other stakeholders are all working hard to address this issue. This is a collective effort and Desjardins will continue to invest in awareness and education to mitigate injury and help save lives. We’ve always encouraged Canadians to drive responsibly and safely and we’ll continue to do so,” he added.

Marijuana isn’t the only drug-impaired driving Canadians are worried about. Three in four respondents are also concerned about those driving under the influence of prescription drugs:

  • One in six Canadians say they have driven under the influence of an over-the-counter drug (for example, medication that can cause drowsiness).
  • One Canadian driver out of five has driven at least once under the influence of a prescription drug.

Partners with a common goal
Desjardins works closely with national partners, like the Traffic Injury Research Foundation, to better inform Canadians about the risks of the road.

“Desjardins’ survey results are very much in line with other studies and illustrate the importance of education campaigns for the public and stakeholders alike,” says Dr. Ward Vanlaar, COO from the Traffic Injury Research Foundation. “That’s why we created the Drug-Impaired Driving Learning Centre, a web-based resource that summarizes the latest research about drug-impaired driving in several key areas.”

Desjardins is proud to share two additional resources that will help combat drug-impaired driving:

  • Drug-Impaired Driving Learning Centre is a web-based resource that was designed to share the latest research about the problem, increase awareness, and inform the development of effective strategies to tackle drug-impaired driving.
  • A new Traffic Injury Research Foundation report on Marijuana Use Among Drivers in Canada examines the role of marijuana in collisions involving fatally injured drivers between 2000 and 2015.

About the Survey
The online survey, conducted in March 2018, polled 3,020 respondents of driving age across Canada.

About Desjardins Group
Desjardins Group is the leading cooperative financial group in Canada and the fifth largest cooperative financial group in the world, with assets of $290.1 billion. It has been rated one of the Best Employers in Canada by Aon Hewitt. To meet the diverse needs of its members and clients, Desjardins offers a full range of products and services to individuals and businesses through its extensive distribution network, online platforms and subsidiaries across Canada. Counted among the world’s strongest banks according to The Banker magazine, Desjardins has one of the highest capital ratios and credit ratings in the industry.

About the Traffic Injury Research Foundation (TIRF)
Established in 1964, TIRF’s mission is to reduce traffic-related deaths and injuries. As a national, independent, charitable road safety institute, TIRF designs, promotes, and implements effective programs and policies, based on sound research. TIRF is a registered charity and depends on grants, contracts, and donations to provide services for the public. Visit us online at

SOURCE Desjardins Group

IBC: Calling bull on ICBC

Prince George Citizen

In its recent editorial, ICBC is defending its new $50 fee for unlisted driver protection by arguing that this is “common practice across North America and beyond” and that “in many other jurisdictions, insurers will likely not cover your claim if an unlisted driver crashes your vehicle.”

Unfortunately, ICBC’s justification simply does not hold water. As the association representing Canada’s private insurance companies, we are compelled to inform that this is not common practice in other auto insurance markets across Canada or in the United States.

While auto insurers often request drivers to list other family members living in their homes who may use their vehicles, listing all incidental drivers like friends, neighbours, and co-workers is not. Nor is denying claims if an unlisted driver causes an accident.

Many of the upcoming ICBC changes that are designed to price auto insurance based on driver risk and to make accidents follow driver records – as opposed to their vehicles – are an effective way to incent better behavior on our roads, and mirror the way auto insurance is priced in other provinces. ICBC’s new unlisted driver protection fee does not.

With British Columbians paying more for auto insurance than anyone else in Canada, this is just the latest example of why B.C. drivers deserve choice and the freedom to shop around for their auto insurance needs. If ICBC were open to competition and drivers didn’t want to purchase “unlisted driver protection” they wouldn’t have to – they could take their business elsewhere.

Aaron Sutherland

Vice-President, Pacific Region

Insurance Bureau of Canada


Before travelling abroad to participate in an event or race, check your insurance policy

Excerpted article by by  |

Ask Oli: Rider insurance

In May, I crashed during a race in North Carolina. It wasn’t terrible, but on account of my knee cap being exposed and me fainting, I was sent off in an ambulance and had some x-rays done.

Crashing is a reality of racing and since usually the rider assumes responsibility for any injury they receive while racing or training, it is expected that all riders will have travel insurance. Really you should also have travel insurance regardless of whether you are racing or not. Well, I certainly thought I had it, so despite asking people around me not to put me in an ambulance and not to take me to the hospital (just in case), I wasn’t actually that worried when I was tossed onto a stretcher.

Anyway, fast forward to the end of August. I return late one night from a five day hike and find a letter in the kitchen addressed to me, and it’s a collection notice from the ambulance and hospital back in North Carolina. The sudden jolt of reality and reminder of a sort of past life, after spending the better part of a week sleeping on beaches on a remote island and staring at campfires and the night sky instead of a screen; it was rude welcome home.

I was staring at a bill for several thousand dollars, and I had planned to register myself for some university courses the following morning.

After a few days my good friend, Jon Watkin, informed me that when purchasing a Cycling BC license, you’re also purchasing insurance. I had no idea and was definitely a bit skeptical. As it turns out, Jones Brown does in fact insure Cycling BC members for accidents that take place during sanctioned events if their existing medical plan won’t cover certain expenses.

This was amazing news. As of this morning, I no longer owe an American hospital thousands of dollars for some band-aids, a fancy ride, and some black and white photographs. In fact, I can go to school instead.

I’m not sure how I missed this and I don’t doubt that many of you already know about the insurance, but just in case, I suggest looking into your provincial cycling association to see what they have to offer. I now know that ManitobaSaskatchewan and Ontario are part of Cycling Canada’s National Insurance Program provided by Holman Insurance Brokers. I’m guessing that most provinces are. It appears to me that the insurance provided in this plan is more or less the same as what I received from Jones Brown.

Now that I’ve researched it a little bit, I realize that I was quite ignorant. I’m so happy to see this sort of support for cyclists. I was always under the impression that there wasn’t any support like this, and that’s my bad. I feel very fortunate to have received coverage and hope that everyone is aware of what we have access to.

How driving high affects your auto insurance

Ottawa Business Journal

Driving under the influence of drugs is a criminal offence, with potentially devastating – even deadly – consequences.

And yet impaired driving is still alarmingly prevalent in Canada. A 2017 study on drug-impaired driving by Public Safety Canada found that 28 per cent of surveyed marijuana users admitted to operating a vehicle while under the influence. Furthermore, one in three Canadians have been passengers in a vehicle operated by a driver who was under the influence of marijuana.

The recreational use of marijuana will be legal in Canada on Oct. 17, 2018. In anticipation of the new legislation coming into force, it is important to note that in addition to posing a risk to yourself and others, driving high can result in a criminal conviction and carries significant implications for your own insurance coverage.

What are no-fault benefits?
As part of the legislative scheme for car insurance in Ontario, all drivers and passengers injured as a result of the “use and operation of a motor vehicle” have access to Statutory Accident Benefits. These benefits are commonly known as “no-fault benefits.” They are available without regard to whether you caused or contributed to the accident, but some exceptions apply.

How does driving high impact your no-fault benefits claim?
With regard to no-fault benefits, if you are found to be impaired by alcohol and/or drugs at the time of the accident, your insurer may not be required to pay you an income replacement benefit, a non-earner benefit or other benefits such as lost educational expenses, expenses of visitors and housekeeping and home maintenance benefits.

Under section 31 of the Statutory Accident Benefit Schedule, there is no obligation on the part of your insurer to pay for those no-fault benefits to a person who is convicted of “operating an automobile while the ability to operate the automobile is impaired by alcohol or a drug.” It is important to note that this exclusion will apply not only to the driver, but also to any passenger of the automobile.

In an impaired driving scenario, you would not be entitled to the benefits listed below:

Income Replacement Benefits (“IRBs”): Maximum coverage of $400 per week, unless optional benefits are purchased to increase IRBs to $600, $800 or $1,000 per week.

Non-Earner Benefits (“NEBs”): $185 per week less the total of all other income replacement assistance, if any, for the same week.

Lost Educational Expenses: Maximum coverage of $15,000 if you were enrolled in a program of elementary, secondary, post-secondary or continuing education and are unable to continue the program.

Expenses of Visitors: Reasonable and necessary expenses incurred by certain people visiting you during your treatment or recovery.

Housekeeping and Home Maintenance: Maximum coverage of $100 per week, but only payable if optional benefits were purchased or you sustained a catastrophic injury.

Although the benefits described above would no longer be available to you, you may still have access to some no-fault benefits.

For example, provided that you qualify for benefits generally, you will still have access to reasonable and necessary medical, rehabilitative and attendant care benefits.

Key takeaway
To underscore the obvious: You should not drive while under the influence of marijuana or any other drug.

But beyond the potentially devastating impact of impaired driving on its victims and survivors, you should also consider the detrimental impact of impaired driving on your no-fault benefits claim.

In short, if you get into a car accident while driving high, or you are a passenger in a car driven by someone who is high, the consequences may be significant and your insurance coverage for no-fault benefits will be significantly reduced.


Ludmilla (Milla) Jarda is an associate lawyer with Nelligan O’Brien Payne LLP, and a member of the firm’s commercial litigation, insurance defence, personal injury and Indigenous law practice groups.

Shift Into Winter Before You Get Behind the Wheel

The Winter Driving Safety Alliance — an organization committed to promoting safe winter driving — urges all drivers and workplaces to Shift into Winter by preparing their vehicles and adjusting driving behaviour to reduce the risk of a crash in challenging winter conditions.

Depending on where you drive in the province, winter road conditions vary, from snow and ice in the north and on high mountain passes, to rain and fog commonly found in the Lower Mainland and southern Vancouver Island. B.C. drivers — and employers with workers who operate fleet or personal vehicles for business purposes — need to think ahead and prepare for changing road and weather conditions, as winter tires or chains are required on designated B.C. routes, starting October 1.

On average, each year in B.C., the number of casualty crashes caused by driving too fast for conditions doubles in December, compared to October — 246 crashes in December compared to 123 in October (police-attended crashes, 2013-2017). The winter months of November, December, and January are a particularly dangerous time for people who drive for work, with nearly 28 per cent of all work-related crashes resulting in injury and time loss claims occurring during these months (WorkSafeBC Data 2013 – 2017).

Starting October 1, most B.C. highways require passenger vehicles to have winter tires (three-peaked mountain and snowflake, or mud and snow) with at least 3.5 mm of tread depth and commercial vehicles to carry chains.

While winter tires, chains and other devices enhance safety by providing better traction in rain, snow, slush and icy conditions, drivers are encouraged to:

  • Plan your route ahead of time – check current highway and weather conditions on Delay travel if conditions are unsafe.
  • Invest in winter driving training – Learn how to brake safely, how to get out of a skid, and how your car handles in winter weather.
  • Slow down – The posted speed limit is the maximum speed under ideal driving conditions, so when inclement weather hits, you should slow down and drive with extra careKeep at least four seconds distance between you and the vehicle in front of you to allow plenty of room in situations where you may need to brake suddenly on a slippery surface.
  • Be prepared – Bring suitable clothing, emergency supplies and a fully charged cell phone if you have one in case of travel delays or a motor vehicle incident.

For employers and supervisors – Employers are legally required to ensure the safety of their workers who operate motor vehicles for business purposes.  The Winter Driving Safety online course and Employer Toolkit on the Shift Into Winter website provides useful information for planning, implementing and monitoring a winter-driving safety program.

For more information about what you can do to stay safe while driving this winter, visit


Hon. Harry Bains, Minister of Labour:
“Safety on the job must always be the top priority, for employers and workers alike, and it can be particularly difficult when the workplace is mobile. I urge all drivers to be extra vigilant as we move into the winter season with its challenging road conditions. Be alert, be cautious – and let’s all get home safely at the end of each shift.”

Hon. Claire Trevena, Minister of Transportation and Infrastructure:
“We want everyone to drive safely and get home to their families this winter. Safe winter driving is a shared responsibility, and I urge people do their part by using good winter tires, planning ahead by checking DriveBC, slowing down and driving to conditions.”

Darrin McCaskillDirector, Programs, Projects and Initiatives, WorkSafeBC:
“Every day hundreds of British Columbians drive on our roads for work – tow trucks, taxis, transports, delivery vans and buses. Organizations need to prepare now, before road conditions deteriorate, by winterizing their safety plans, assessing and addressing risks and ensuring that workers and contractors are instructed on safe driving procedures. There are a number of resources on the Shift into Winter website. WorkSafeBC can also be contacted directly on its prevention line: 1-888-621-7233.”

About the Winter Driving Safety Alliance 
The Winter Driving Safety Alliance is dedicated to improving road safety throughout the province, through the delivery of an annual Shift Into Winter campaign, using multiple platforms to promote safe winter driving and awareness.

Members include Ambulance Paramedics of B.C. (CUPE 873), Automotive Retailers Association, BCAA, BC Forest Safety Council, BC Road Builders and Heavy Construction Association, BC Trucking Association, City of Prince George, Concrete BC, Government of BC, Insurance Corporation of BC, Justice Institute of British Columbia, Kal Tire, Mainroad Group, Pacific Coach Lines, RCMP, SafetyDriven, Tire and Rubber Association of Canada, Wilson M Beck Insurance Group, and WorkSafeBC.

About WorkSafeBC: 
WorkSafeBC is an independent provincial statutory agency governed by a Board of Directors appointed by the provincial government. The organization serves approximately 2.4 million workers and 238,000 employers throughout British Columbia. In administering the Workers Compensation Act, the organization is accountable to the public through the provincial government.    

SOURCE Winter Driving Safety Alliance

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