Insurers to rely on acquisitions and partnerships to transform business

Facing sluggish industry growth and agile new competition, insurance executives are actively pursuing acquisitions and partnerships to transform and grow their businesses, according to a new report from KPMG International, Accelerated evolution – M&A, transformation and innovation in the insurance industry. In fact, 80 percent of insurance executives surveyed for the report expect to seek one to three acquisition targets or partnership opportunities over the next three years.

The majority of insurers are intending to make acquisitions that could transform their organization for the future, rather than merely enhance their current business and operating models. More than 60 percent of the 200 executives surveyed globally said transforming their business or operating model would be the key factors driving acquisitions, while just 21 percent identified enhancing their current model as the key factor.

“Insurers are competing for market share in a slow-growth environment, that is experiencing an influx of dynamic new insurtech players,” said Laura Hay, Head of Global Insurance for KPMG International. “They know they can’t rely just on organic growth to meet their objectives, so alliances and acquisitions become essential as insurers look to engage with customers in new and different ways, and gain access to innovative operating capabilities and technology infrastructure to reshape their business and drive future growth.”

Cross-border deals expected to dominate
In terms of geography, a majority of insurance executives are looking for inorganic opportunities outside their country of domicile, with 66 percent expecting to conduct cross-border deals, while just 32 percent say they expect deals to be focused domestically. The distinction is particularly telling with respect to partnerships and alliances over the next three years, with 39 percent expecting these to be cross-border and only six percent anticipating domestic alliances.

North America, particularly the US, is widely expected by the insurance executives surveyed to have the most insurance M&A activity in the coming three years. Asia-Pacific is projected to be the region where insurers have the most partnership opportunities, and Western Europe is expected to drive relatively more divestiture activity.

Identifying the right, transformational deals
Intending to do more deals is one thing, but are insurance organizations up to the challenge of identifying and successfully executing the right deals?  Only ten and seven percent of executives, respectively, say they are extremely likely to find a deal that is a strategic fit for their business and operating model.  Moreover, a majority believe their organization’s capabilities for deal sourcing, evaluation and execution are lagging, with 72 percent saying their deal sourcing objectives aren’t highly aligned with their corporate strategy and 72 percent rating their capabilities for evaluating a target’s strategic fit as moderate to low.

To accelerate their transformation goals, an emerging trend for insurers is setting up dedicated capabilities, including corporate venture capital (CVC) teams, to acquire and accelerate innovation. Eighteen percent of insurers surveyed indicated they either already had an established CVC or had plans to establish one, with the top ranked objective being acquiring innovation for business model transformation.

“To realize value from their deals, insurers need to rethink their approach and their capabilities,” points out Ram Menon, Global Head of Insurance Deal Advisory for KPMG International. “Insurers need to redefine deal success — from acquisition strategy to integration execution — set out a clear path for transformation applying holistic design thinking, accelerate innovation by standing up an inorganic innovation engine, and more importantly, resist short-term thinking. Transformation is not a ‘one-and-done’ event.”

About the report
For KPMG worked with Mergermarket to interview more than 200 global insurance executives involved in M&A, strategy and innovation initiatives at their respective organizations to learn about their outlook for the industry and their expectations as they plan to strategically deploy capital. The research respondents were divided regionally among firms in Asia-Pacific (33 percent), EuropeMiddle East + Africa (33 percent), and North America (33 percent) as well as by the segments Life (25 percent), Non-Life (25 percent), Reinsurance (25 percent), and Other (25 percent) (the segment ‘Other’ encompasses Insurance Brokers and Insurance Services). Companies needed to have a minimum of US$1.5bn in annual revenue to qualify for participation.

About KPMG International
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

SOURCE KPMG International

Fifth anniversary of the June 2013 Alberta floods

Beginning on June 19, 2013 southern Alberta experienced extensive loss and damage from riverine flooding. More than 250 mm of rain fell over a 36 hour period in the foothills west and southwest of Calgary and began rapidly flowing east through the province’s river valleys bringing destruction across southern Alberta. This was the largest riverine flood damage event ever experienced in Canada, with insured damage exceeding $1.7 billion and total economic damage of approximately $6 billion.

Disaster mitigation and policy experts from the Institute for Catastrophic Loss Reduction (ICLR) are available to answer media inquiries concerning the floods. Noted ICLR experts below are available to answer questions relating to the impacts of the event (physical and financial), progress to date on various provincial flood mitigation efforts and whether Alberta is prepared for the next major deluge.

Paul Kovacs is founder and Executive Director of the Institute for Catastrophic Loss Reduction at Western University. He is Canada’s leading authority on insurance, natural hazards and climate change and has been a contributing author to numerous international and Canadian reports on reducing the risk of loss from flood, earthquakes, severe wind and wildfire. He has written more than 200 publications and articles and is a passionate champion for insurance, disaster resilience and adaptation to climate extremes.

Dan Sandink is Director of Research for ICLR. He has led a significant portion of the Institute’s urban flood risk reduction work, and has authored or co-authored dozens of reports and articles on topics related to urban flooding and natural hazards. His work has focused on public risk perceptions, adoption of lot-level practices, insurance, climate change adaptation, lot-level flood protection technologies, inflow/infiltration, construction codes, and mitigation of wildland-urban interface fire and high wind risk for low-rise residential buildings, among other topics.

Both Kovacs and Sandink are authors of the ICLR report Best practices for reducing the risk of future damage to homes from riverine and urban flooding: A report on recovery and rebuilding in southern Alberta, available at www.iclr.org

Glenn McGillivray is Managing Director of ICLR. As an insurance writer and commentator, his work has been widely disseminated across Canada. He has written more than 225 magazine and journal articles, publications and blogposts on a range of issues. He has appeared on CBC’s The National and The Exchange, CTV’s Your Morning and Power Play, CBC Radio’s The Current and CP24, as well as a number of other television and radio news and interview programs. Additionally, he speaks and lectures regularly on subjects related to the area of property and casualty insurance and reinsurance and natural hazards.

Sophie Guilbault is Manager, Partnership Development. She completed her Masters at Tulane University in Disaster Resilience Leadership Studies and holds a Master of Architecture degree from Laval University. At ICLR, Sophie is leading the Cities Adapt research program, ICLR’s Quick Response Grant Program and MEOPAR research on hurricane warnings in Atlantic Canada. Sophie can provide interviews in both English and French.

Established in 1998 by Canada’s property and casualty insurers, ICLR is an independent, not-for-profit research institute based in Toronto and at Western University in London, Canada. ICLR is a centre of excellence for disaster loss prevention research and education. ICLR’s research staff is internationally recognized for pioneering work in a number of fields including wind and seismic engineering, atmospheric sciences, water resources engineering and economics. Multi-disciplined research is a foundation for ICLR’s work to build communities more resilient to disasters.

SOURCE Institute for Catastrophic Loss Reduction

Markers Insurance Introduces Canada’s First Guaranteed-Issue Insurance Product Covering Medical Cannabis

Markers Financial Inc. (“Markers Insurance” or the “Company”), a division of Evergreen Pacific Insurance Corporation (“EPIC”), announces it is introducing Canada’s first guaranteed issue insurance product for individuals providing coverage for medical cannabis prescriptions. The Company plans to launch its individual product, followed by a group product for companies wishing to provide such benefits to their employee group, by August 15, 2018.

Robert Wilson, Chief Executive Officer of EPIC, commented, “our introduction of insurance coverage for medical cannabis will go a long away toward supporting a more legitimate, patient-centric approach to patient care in Canada. We anticipate a very positive market reception in August.”

Similar to the way in which dental insurance is administrated in Canada, medical cannabis producers licensed by Health Canada will be paid directly by the insurer, such that patients will never be out of pocket for the cost of their prescriptions. Policies will be customized to each insured’s actual requirements, with no caps or restrictions based on pre-existing conditions. All medical cannabis producers licensed by Health Canada are eligible to participate in this program. In late May, the Company began the process of enrolling licensed producers as both medical cannabis suppliers and channel sales partners across Canada, and this process is ongoing.

About Markers Insurance

Markers is a Canadian insurance agency and is headquartered at 400-1500 Don Mills Road, Toronto, Canada. The products marketed and sold by the Company will be underwritten by the Canadian insurance industry. See www.markersinsurance.com.

About EPIC

Evergreen Pacific Insurance Corporation Ltd. is a financial-services holding company. EPIC owns, operates, and invests in businesses involved in designing, developing and distributing highly innovative insurance products and risk management solutions. See www.evergreenpacific.ca

The information contained in this news release is provided for informational purposes only and does not constitute an offer to issue or arrange to issue, or the solicitation of an offer to issue, securities of Evergreen Pacific Insurance Company Ltd. (EPIC) or other related entities. The information contained herein is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. The views, opinions and advice provided in this news release are provided for information purposes only. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this news release. Except for statements of historical fact, this news release may contain certain “forward-looking information” within the meaning of applicable securities laws. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. This news release does not constitute an offer of shares for sale in the United States or to any person that is, or is acting for the account or benefit of, any U.S. person as defined in Regulation S under the United States Securities Act of 1933 (as amended the “Securities Act”), or in any other jurisdiction in which such an offer would be illegal. Evergreen’s shares have not been and will not be registered under the Securities Act.

SOURCE Evergreen Pacific Insurance Corporation

Stolen golden eagle in B.C. worth $930,450, not $7M, owner claims in lawsuit

By Laura Kane

THE CANADIAN PRESS

VANCOUVER _ A diamond-studded golden eagle statue reported stolen in a violent robbery in 2016 is worth $930,450, not $7 million as its owner originally claimed, according to court documents.

Ron Shore’s company Forgotten Treasures International Inc. has filed a lawsuit in B.C. Supreme Court against several insurers for denying his claim over the theft of the eagle.

Shore made an emotional plea for the return of the statue at a news conference in June 2016. He told reporters he was in Delta, B.C., when two men ambushed him, hit him over the head with a large flashlight and stole the eagle, plus a less-valuable decoy.

At the time, he said the elaborate eight-kilogram sculpture had been appraised at $7 million and he planned to sell it raise money for breast cancer research.

In the recently filed lawsuit, Shore says the appraised value of the eagle is $930,450.

When reached by phone Thursday, Shore said he could not comment on the discrepancy because of the ongoing police investigation into the theft.

“Everything can be explained in court and it’s a very simple situation,” he said. “I have been instructed by the police not to say anything. It’s all part of the investigation.”

Delta Police spokeswoman Cris Leykauf confirmed officers were still investigating the case.

In the statement of claim, Shore’s company says it operates an international treasure hunt to raise money for cancer research. The focus of the treasure hunt is the eagle sculpture, which is made of solid gold and encrusted with 763 diamonds, the company says.

At the end of the treasure hunt, Forgotten Treasures planned to sell the golden eagle in order to finance the final prize, with the remainder of the proceeds being donated to cancer research, the statement of claim says.

The court document describes the attack that Shore says he suffered. It says he took the eagle to an event to promote the treasure hunt, and as he was walking to his car, he was attacked, hit over the head and robbed.

Thieves snatched the golden eagle as well as a silver eagle worth approximately $175,000, the lawsuit says.

Shore chased one of the thieves and caught up with him when he got into a truck, the lawsuit says. He reached into the truck through the window and grabbed the robber, who dragged him for about 200 metres before running over his leg, it says.

The leg injury resulted in two surgeries and a year-long recovery, the statement of claim says.

It also says a witness called police and, despite Shore’s full co-operation with officers, the theft remains unsolved.

None of Shore’s allegations have been proven in court.

Two insurers named in the lawsuit  Endeavour Insurance Services Ltd. and Hub International Ltd.  did not immediately return requests for comment.

Another firm, Lloyd’s Underwriters, said it cannot comment on matters involving ongoing litigation.

No statement of defence has been filed.

The lawsuit says Shore immediately notified the insurers of the theft, but a claims adjuster “failed to examine the claim objectively, treating the denial of coverage as a foregone conclusion.”

At one point, the adjuster appeared to make an immediate settlement offer if Shore would take a lie detector test, the lawsuit says. Shore immediately agreed to take the test, but the adjuster revoked the offer, the lawsuit says.

The insurers formally denied coverage in October 2016, the lawsuit says.

Shore’s company is seeking $400,000 in compensation for the gold eagle and $53,750 for the silver eagle.

Retired insurance agent wants standard homeowner policy in wake of flood

Philip Drost · CBC News

Retired insurance agent Mac Burns says its time for all insurance companies to use standard wording in their policies, and the provincial government needs to make sure it happens.

“I have a standard wording on my auto policy. We would like to see the same come true for the homeowners policies,” said Burns.

Burns held a meeting on Sunday at the Jemseg Lions Club to help people trying to get insurance money after having their cottages and homes damaged by the flood.

Mac Burns is trying to help people struggling with their insurance companies in the wake of this year’s flood. (Philip Drost/CBC News)

He leads a group called “But For Wind”, which is trying to get insurance companies to recognize that wind also caused damage during the flood.

“If there’s 60 companies that insure homeowners policies in New Brunswick, there could be 60 different policy wordings for what they’re covered for,” said Burns.

Insurance confusion

Dawn Burke doesn’t know when she will get to live in her house again. (Philip Drost/CBC)

More than 50 people went to the meeting, including Dawn Burke. She has a home in Mill Cove, which was hit hard by the flood. She still can’t live in it, and doesn’t know when she will be able to move back in.

“We need as much help as we can. Education is so important for us. We don’t know what we don’t know,” said Burke.

Burke said her insurance company has been difficult to work with, and confusing. She would like things to be a lot clearer.

“For myself, and for many others, we get lost in the wording of a policy, and so then we have to take at face value what our insurance agents and adjusters are telling us, and we don’t really know if that’s the truth or not,” said Burke.

“People talked to me during the flood about how I was able to handle it, and I would say I struggle more now than when the event was actually happening, because of the unknown.”

PC MLA Ross Wetmore said he would support a standard homeowners policy for New Brunswick. (Philip Drost/CBC News)

Progressive Conservative MLA for Gagetown to Petitcodiac Ross Wetmore was at the meeting. He said he supports the idea of a standard homeowners policy across the province.

“I think that’s a great idea, I think it should be a standard policy,” said Wetmore.

Burns said the group’s first priority is to make sure insurance companies recognize people’s claims who had wind cause damage to their property. Then it will move on to pushing for the standardization of policy wording.

Insurance bureau has advice for residents who blame wind for flood damage

Industry group says adjusters evaluate ‘circumstances of the entire event’

Jordan Gill · CBC News

Private insurance companies in New Brunswick are urging people who suffered property damage during spring flooding to contact their agents directly to discuss their individual policies and whether wind damage is covered.

This comes after retired insurance agent Mac Burns launched a campaign to help people who have had their claims turned down because they don’t have flood coverage, even though in many cases the damage didn’t happen until powerful winds came up the first weekend in May.

Burns said that since the “But For The Wind” campaign began, he has been contacted by 23 people whose claims have been denied by insurance companies.

Erin Norwood, the Atlantic manager of government relations for the Insurance Bureau of Canada, said people may not have “correct information.”

“When a claim is presented for loss or damage … the circumstances of the entire event are analyzed against the coverage terms and conditions,” she said.

Insurance ombudsman can help

Richard and Judy Ingram say their insurance adjuster attributes the damage in their cottage to the flood, although wind was the prime culprit. (CBC)

Richard and Judy Ingram said their insurance adjuster told them the damage to their cottage likely wouldn’t be covered because they didn’t have flood insurance.

But the Ingrams say the damage was actually caused by the wind, which their policy does cover.

Norwood said all factors that contributed to the damage will be taken into consideration by insurance companies.

Some retired insurance agents have banded together to form a task force to help get information to people who suffered wind damage on May 5 during the spring flood. The Insurance Bureau of Canada’s Erin Norwood is the Atlantic Manager of Government Relations, she says every policy is different and people need to check with their broker to get the correct information. 11:46

“Loss or damage from a single occurrence with multiple causes, such as this case, are adjusted and settled as one event. A policyholder doesn’t need to submit a water claim and then a distinct wind claim for the same occurrence.”

Norwood said if cottage owners have a complaint about an insurance adjuster’s findings, each company has an in-house ombudsman who can help.

“It is available, it’s there to be used, and if you do have concerns that’s where you should be sending them,” she said.

Urged to call insurance agents

Norwood said the best people to answer questions about a cottage owner’s insurance policy are at the company that provided the insurance since there’s no standard in the industry as to what’s covered.

“Every policy is worded differently, ” she said.

“The insurance industry is a very competitive market, so products offered by companies differ to meet different consumer … needs.”

Norwood said the Insurance Bureau of Canada also has staff who can answer questions.

Just as cottage owners have been denied help under their insurance policies, they have received only limited assistance from the province.

Cottage owners can apply for flood recovery assistance up to $6,100, but only for cleaning up debris outside their cottages, not for cleaning anything touched by floodwaters inside their cottages.

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