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Daily News Alerts

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December 7, 2021

COVID IMPACTED CLAIMS

The first and second waves of the COVID-19 pandemic noticeably impacted individual insurance claims across Canada, says an analysis from the Canadian Institute of Actuaries (CIA). Data was collected on exposure, total insurance claims, and claims related to COVID-19 at an aggregate level monthly, covering both individual and group lines of business. While life insurance companies weren’t able to consistently collect data on cause of death, most were able to provide data on COVID-related deaths. A total of 3,244 reported individual claims were identified with COVID-19 as cause of death in 2020 and 1,678 more were reported from January 2021 to May 2021. While very few claims were identified as due to COVID-19 in January to March 2020, aggregate individual claims for that period exceeded the comparable monthly equivalent amounts during the same months in 2019, which the CIA says makes it possible that life insurance claims were seeing a COVID impact even before April. As the second wave of COVID-19 in Canada receded, the trend in individual insurance claims moderated to a level more consistent with that seen in 2019. Consistent with the pattern of excess deaths in the overall Canadian population, individual insurance claims increased in May 2021, but still remained below the elevated level seen in 2020.

December 7, 2021

DIABETES REMAIN SILENT PANDEMIC

Like many chronic conditions, diabetes has taken a bit of a back seat during the COVID-19 pandemic as healthcare providers focused on other priorities. Yet diabetes remains a silent pandemic that is costing employers and insurers millions of dollars a year in lost productivity, disability claims, and drug spending, says a Telus Health ‘Benefits Hub.’ The incidence of diabetes did not slow down in 2021: a staggering one in three Canadians has diabetes or prediabetes, and more than 20 people in Canada are diagnosed with the disease every hour of every day. Employers should note that over half of all new cases are in people who are of working age. Driving this growth are three factors: obesity, lack of exercise, and age. Approximately 60 per cent of Canadians are overweight and half of Canadians over the age of 12 are inactive – something that may be getting even worse with the growing trend of working from home. Yet awareness of the risks and early warning signs of the disease tends to remain low. The result is benefits plans are facing drug costs that are four times higher for diabetes claims than for mental health claims. There are many ways that people living with diabetes can manage their health, including lifestyle changes and new technology that provides rapid or continuous glucose monitoring. But employers can also play a big role helping to tackle Canada’s diabetes problem. A good place to start is by raising awareness in the workplace about the risk factors associated with diabetes and leveraging resources like the government of Canada’s free online assessment to help employees assess their risks for the disease.

December 7, 2021

FOCUS ON CRYPTOCURRENCIES GROW

Professional investors are increasingly focusing on cryptocurrency and digital assets as worries about stretched equity valuations and poor yields in the fixed income markets grow, says global research digital institutional investment platform VALK. Its study found a third have invested in crypto assets for the first time recently while 55 per cent have increased their allocation to crypto. Almost all the investors questioned in the UK, U.S., France, Germany, Hong Kong, Singapore, Australia, and Brazil believe the strong performance of crypto asset class during the COVID-19 crisis has changed institutional views on the sector. More than half (53 per cent) ‘strongly’ agree that digital assets are a viable asset class while 45 per cent ‘slightly’ agree with this view. As well, around 91 per cent are concerned about stretched equity valuations with 48 per cent saying they are very concerned, while 90 per cent are worried about fixed income yields with 39 per cent very worried. More than a fifth (22 per cent) expect a dramatic increase in the number of investment grade bonds paying negative yields in the year ahead.

December 7, 2021

AGA, WBL TEAM UP

AGA Benefit Solutions and WBL are teaming up with AQIC (Association québécoise de l’industrie du cannabis) as its official group insurance partners. Established in 2019, the AQIC represents an ecosystem of firms that do business in Quebec and operate under federal and provincial legislation and regulations or engage in commercial or professional cannabis-related activities. This association currently has approximately 50 members, namely businesses involved in recreational and medicinal cannabis growing, microculture, processing, and extraction, along with research and businesses with cannabis-related commercial or professional activities.

December 7, 2021

NORMANDIN BEAUDRY EXPANDS TORONTO OFFICE

Normandin Beaudry, a total rewards and actuarial services consulting, has opened a new office in the downtown core of Toronto, ON. The company established a foothold in the city in 2018 and has expanded with the new office with a broader team of experts as part of its growth and commitment to supporting its clients nationally.

December 7, 2021

INFLOWS RISE IN CANADIAN ETFS

Canada’s ETF industry saw strong inflows again last month as investors ploughed $5.4 billion into the space, bringing the 2021 year-to-date record to $48 billion, says a report from National Bank. Equity ETFs continued to lead as creations in the category reached $3.8 billion. Canadian equity ETFs gathered up $2.1 billion, while U.S. equity ETFs and international equity ETFs took in $870 million and $843 million, respectively. Fixed income ETFs saw $308 million in flows, though some sub-categories sustained redemptions. That includes Canadian government bonds, which lost $163 million, and sub-investment grade bond ETFs, which investors pulled $52 million from.

December 7, 2021

ONTARIO TEACHERS’ PARTNERS ON OPHTHALMOLOGICAL CLINICS

The Ontario Teachers’ Pension Plan Board (Ontario Teachers’) and PAI Partners will acquire Veonet, a pan-European network of ophthalmological clinics, from Nordic Capital IX. Veonet is headquartered in Munich, Germany, and operates more than 190 ophthalmological clinics across Germany, the UK, the Netherlands, and Switzerland.

December 7, 2021

WATSON JOINS CHUBB

Robert Watson is vice-president ‒ Chubb Workplace Benefits at Chubb. Most recently, he was vice-president – divisional manager (Ontario) at Combined Insurance Canada.

December 6, 2021

UNPRECEDENTED VOLUMES SEEN FOR ANNUITY BUSINESS

The year 2021 is likely to see unprecedented annuity business volumes in the Canadian market, thanks to a general improvement in pension plan financial conditions, says a LifeWorks’ ‘Pension Risk Bulletin.’ With increasing group annuity demand from sponsors and plan administrators, and a limited supply of insurer capacity, plan sponsors should ask themselves how to make their transaction stand out from the rest. There are many data-related elements that insurers consider, notably data quality, availability, and completeness. It says annuity purchase data tells the evolving story of the plan’s experience and its demographic profile. This is in contrast to pension administration ‒ and actuarial valuation-quality data, which are data snapshots at a point in time. As well, transforming your pension administration data into annuity purchase data influences insurer pricing and their willingness to participate in a quotation process and good data management and governance should start now as it not only pays off for risk transfer transactions, but also in on-going plan management.

December 6, 2021

POOLING THRESHOLDS INCREASE IN QUEBEC

There will be some increases to pooling thresholds per group size for Quebec groups with more than 125 members in 2022, say an Eckler ‘GroupNews.’ On average, a moderate increase of 4.4 per cent will be applied for annual factors without dependents, with a few group sizes seeing the annual factors reduce by 2.5 per cent to 2.9 per cent. For annual factors with dependents, a significant increase in pooling costs is expected, leading to an average increase in annual factors of 30 per cent. This increase for certificates with dependents is mainly explained by a new SCAMQ (Société de compensation en assurance médicaments du Québec) study that led to a different ratio between coverage with and without dependents. Insurers are starting to factor in those changes in expected pooling costs for the upcoming 2022 renewals, so plan sponsors can expect an increase in required drug pooling costs.

December 6, 2021

ANNUITY DISCHARGE PERMITTED

New Brunswick’s Bill 71, An Act to Amend the Pension Benefits Act will provide for an annuity discharge by pension plan administrators and permit them to establish reserve accounts, says an Aon ‘Radar.’ The bill has passed third reading and is awaiting royal assent. It makes a number of other changes including permitting the electronic disclosure of information if the recipient consents; providing employees with the right to refrain from membership in the plan due to religious reasons; and allow plans to provide for a shorter period of full-time continuous employment for membership eligibility than is set out in the PBA. As well, it lets the superintendent require a certified copy of a restated plan text, not just a plan amending document, upon registration of a plan amendment.

December 6, 2021

SUN ACQUIRES DIALOGUE SHARES

Sun Life Assurance Company of Canada has acquired 6.03 million common shares of Dialogue Health Technologies Inc. This further investment follows Sun Life’s initial announcement of a strategic commercial partnership with Dialogue. Its Lumino Health Virtual Care is powered by Dialogue.

December 6, 2021

VC DISBURSEMENTS SET RECORD

With strong backing of American VC (venture capital) and hedge/mutual funds, Canadian venture capital disbursements continue to set new Canadian records with 538 financings completed in the first nine months, says the ‘Canadian Venture Capital Report’ from CPE Analytics. These raised $10.7 billion for Canadian companies. The continuing and record-setting Canadian VC disbursement level has been driven primarily by U.S. and foreign investors. For the first nine months of 2021, U.S. investors and investors from 46 countries or regions invested $6.15 billion and $1.81 billion, accounting 57 per cent and 17 per cent of the total disbursements respectively. Canadian investors contributed only 26 per cent of the total.

December 6, 2021

FELX HAS NEW ROLE

Christian Felx is head of responsible investment for Desjardins Global Asset Management (DGAM). Previously he was its manager of research and responsible investment. Prior to joining the firm in 2007, he worked at the Caisse de dépôt et placement du Québec as a quantitative analyst.

December 3, 2021

STUDY QUESTIONS TRANSITORY INFLATION

Inflation may not be as transitory as many central banks suggest, says a Fraser Institute study. It questions this belief and suggests that multiple factors could create a rising inflation environment for longer. Central banks, including the Bank of Canada (BoC), have been supercharging money supply and inflation in Canada has jumped. In September it was at a 4.1 per cent annualized rate, well above the average 1.9 per cent rate in the years since 1991. The view that inflation is currently elevated due to supply chain disruptions related to the COVID-19 pandemic is addressed by Steven Globerman, professor emeritus at Western Washington University, resident scholar at the Fraser Institute, and co-author of ‘The Outlook for Inflation and Its Links to Monetary Policy.’ “While COVID’s effect on the economy has certainly contributed to the rising cost of goods and services, if central banks and governments continue their aggressive policies, higher inflation could persist even after the pandemic subsides,” he says. Post-pandemic inflation could be fueled by several key factors, he says. Aging populations in developed countries including Canada will contribute to slower growth of the labour force, reduced entrepreneurship, fewer new business startups, and slower overall economic growth. As well, higher business taxes and more government regulations could discourage business investment and slow productivity growth. He also says energy mandates (such as Ottawa’s emissions cap for Canada’s oil and gas sector) could divert resources away from private investment and raise energy costs. “If central banks want to ensure that today’s higher inflation is transitory, they need to stop injecting unprecedented amounts of money into the economy and return to a more measured monetary policy,” says Globerman.

December 3, 2021

ACPM CALLS FOR FACILITATION OF AUTOMATIC DC FEATURE

With planning for the Ontario spring budget likely underway, the ACPM (Association of Canadian Pension Management) is urging it to commit to modifying the Employment Standards Act (ESA) and the Pension Benefits Act (PBA) to clearly permit and facilitate the inclusion of automatic features in CAPs, it says these will help more Ontarians save for a secure retirement. These changes would explicitly allow employers to deduct employee contributions from payroll automatically without a burdensome consent process. This would enable automatic enrolment and automatic escalation features in voluntary workplace capital accumulation plans (CAP) with employer matching contributions. As affirmed recently through the Financial Service Regulatory Authority’s (FSRA’s) Guidance on automatic features, it acknowledges that the PBA does not prohibit employers from implementing automatic features for new hires. However, employers must adopt non-standard, labour-intensive, and costly processes to do so. Moreover, due to ESA requirements, there remain concerns about implementing automatic features for existing employees who were hired under different terms. This impacts the ability of an employer to modify its savings and retirement plan design to improve the retirement readiness of all members. In addition, facilitating use of such features will provide plan sponsors with additional tools to increase member engagement and focus decision-making on retirement outcomes, the two key recommendations resulting from the recent work of the Joint FSRA and OSFI Technical Advisory Committee on Defined Contribution Plans.

December 3, 2021

DC MEMBER OUTCOMES IMPROVE

Despite muted investment returns in the third quarter, capital accumulation plan (CAP) member outcomes improved as annuity rates continue to rise, says Eckler’s ‘CAPit.’ A typical male CAP member retiring at age 65 at the end of September achieved a gross income replacement ratio of 59.5 per cent and a female CAP member achieved 57.9 per cent – a record high not seen since 2015. The numbers show that there are significant discrepancies in lifetime income depending on the income option. Looking beyond the numbers there are other implications for CAP sponsors to consider, however, including fiduciary duties, eligible fund types, control of investment decisions, fees, time of conversion, and death benefits. Sponsors should take the time to understand the different solutions available today, as well as those on the horizon, to evaluate which will be of most interest and value to their members, and acceptable to the sponsoring organization.

December 3, 2021

NEW SOURCES OF ALT DATA SOUGHT

With logistics bottlenecks disrupting the performance of companies around the world, institutional investors are seeking new sources of alternative data on supply chains to help inform future investment decisions, says a Coalition Greenwich report. It says ‘alt data’ are new, unique data sources that can add valuable explanatory power to both quantitative and fundamental investment models. It learned that 44 per cent of institutional investors in North America now use alt data and another 24 per cent have plans to start in the near future. As they do so, 48 per cent say they plan to source alt data on supply chains and another 41 per cent plan to employ alt data on the related category of logistics. While investors believe alt data on supply chains will give them an edge, employing alt data is no easy task. Alt data needs to be normalized, interpreted, and incorporated into investment and portfolio construction processes.

December 3, 2021

AMUNDI TOPS IN GREEN ASSETS

Amundi has more green assets under management than any other investment fund in Europe, says a PricewaterhouseCoopers study assessing how the industry is adapting to new regulations introduced this year. About a third of all assets in European investment funds are now green, with so-called light and dark green products climbing to $3.78 trillion at the end of June, it says. BlackRock was ranked second, followed by BNP Paribas, Swedbank, and Nordea Bank. Europe started enforcing the Sustainable Finance Disclosure Regulation (SFDR) in March, a rule designed to fight greenwashing by forcing transparency on the market for environmental, social, and governance investing. SFDR is part of a wider European regulatory framework intended to redirect capital away from activities that pollute or feed social injustice, and instead steer funding into more ethical endeavors. The firm expects ESG assets under management to ‘skyrocket’ to 57 per cent of total EU-domiciled assets by 2025.

December 3, 2021

CANADA LIFE ADDS DIALOGUE

Dialogue Health Technologies Inc.’s internet-based cognitive behavioural therapy (iCBT) program is now available to all Canada Life Assurance Company ‘Consult+’ users across Canada. iCBT uses similar principles and techniques as in-person cognitive behavioural therapy programs, but is delivered in a structured digital format consisting of educational material and interactive toolkits.

December 3, 2021

VATVANI JOINS PICTON MAHONEY

Pawan Vatvani is director, portfolio construction, with Picton Mahoney’s portfolio construction and consultation service team. In this new role, he will provide portfolio consultation services to advisors, such as data analytics, stress testing, and scenario analysis. He joins the firm after spending close to 14 years within the BlackRock organization (in Australia and Canada), where he held a variety of roles.