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MGAs Advisors speak out about where their MGAs are performing well – and where they could do better

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ISSUE 1.02

CONNECT WITH US Got a story, suggestion or just want to find out some more information? twitter.com/CLPMagCA


plus.google.com/+LifehealthproCa facebook.com/CanadianLifePro

UPFRONT 03 Editorial

Why you don’t need to worry about Google Compare – yet


MGAs 14


WHY IT PAYS TO PLAY You don’t need a background in professional sports to get in the game of insuring athletes



06 Head to head

Is life insurance for children a smart financial strategy, or just a waste of money?

07 Opinion

Comparing life insurance to mortgage insurance allows savvy advisors a chance to shine Given FSCO’s recent struggles, is the era of advisor self-regulation dawning?

10 Intelligence



Even in the midst of a sluggish economy, premium sales are growing

08 News analysis


Advisors reveal where their MGAs are performing well – and where they could improve


04 Statistics




With disease rates on the rise, critical illness insurance is more important than ever for Canadians

Since taking over from his father, Greg Sutton has grown Sutton Special Risk into one of Canada’s top athlete insurance firms

This month’s key corporate moves and new products

12 Life insurance update

How ultra-low interest rates are affecting life insurance pricing

FEATURES 30 Creating shareable social media videos

You don’t need to rely on gimmicks to make your video stand out –follow these 5 tips instead





Today’s clients demand more than ‘service with a smile’ – here’s how to make yourself stand out

32 Favourite things

Ken MacCoy of RitePartner Financial Services and Edge Benefits


2 www.lifehealthpro.ca

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www.lifehealthpro.ca SUMMER 2015 EDITORIAL Editorial Director Vernon Clement Jones Senior Writer Nicolas Heffernan Writer Will Ashworth Copy Editor Clare Alexander

CONTRIBUTORS Marylou Dunn Victor Godinho Nikki Heald Marcus Seeger John Tenpenny

ART & PRODUCTION Design Manager Daniel Williams Designers Joenel Salvador Kat Vargas Production Manager Alicia Salvati Traffic Manager Kay Valdez

SALES & MARKETING National Account Manager Tristan Cater National Accounts Manager Dane Taylor Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Claudine Ting Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL INQUIRIES vernon.jones@kmimedia.ca

SUBSCRIPTION INQUIRIES subscriptions@kmimedia.ca

ADVERTISING INQUIRIES tristan.cater@kmimedia.ca

KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, Manila

Life Health Professional is part of an international family of B2B publications and websites for the insurance and finance industries INSURANCE BUSINESS CANADA john.mackenzie@kmimedia.ca T +1 416 644 874O

INSURANCE BUSINESS AMERICA cathy.masek@keymedia.com T +1 720 316 0154

Who’s afraid of the big bad Google?


oogle Compare – and any other threat from online giants – has insurance advisors quaking in their boots. But should they be? “It’s a lot of bull that we’re having to wade through, and all the talk doesn’t really add up to much,” says one very frank life advisor. “They’re no threat to us.” Not too many brokers on the P&C side are displaying that kind of bravado as the media buzz around Google’s auto comparison site grows to a crescendo. The attention has ignited consumer interest, providing just enough incentive for social media titans such as Facebook (and perhaps LinkedIn) to follow Google’s lead. Expert consensus is that such a move would hurt consumer-direct insurers,

Consumers aren’t yet ready to entrust life and health decisions to a nameless, faceless order-taker on the phone – or, indeed, on the web but independent P&C brokers would come away unscathed. The thinking has everything to do with the perceived value-add of insurance professionals and the need to apply that muscle to coverage more complex than your gardenvariety auto policy. The wall of protection that affords is even higher and more impenetrable for life and health advisors, given the expertise they leverage on behalf of their individual and group clients. Simply put, consumers aren’t yet ready to entrust life and health decisions to a nameless, faceless order-taker on the phone – or, indeed, on the web. But before advisors get too smug, consider that Google may still find a way to grab some of your business. The vastness of its consumer database is not to be discounted, say experts. By partnering with a life carrier, the tech giant would provide the ultimate in online lead generation. It would then fall to an army of advisors to follow up on surprisingly warm leads. Want to wager a bet on conversion rates? What about when Gen Yers start buying homes and start the inevitable hunt for term life coverage? It’s a bit of a guessing game, but chances are that any threat that emerges in the auto insurance arena will eventually make its way to the life and health sector.

The LHP editorial team

WEALTH PROFESSIONAL dane.taylor@kmimedia.ca T +1 416 644 874O Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss


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Kick-starting life insurance sales

BC Individual $2,066m Group $722m

Alberta Individual $1,675m Group $884m

Despite low interest rates and poor economic conditions, life insurers in Canada have found innovative ways to keep premium sales positive LIFE INSURANCE is the largest and most developed segment in the Canadian insurance landscape, accounting for 39.8% of gross written premiums in 2013. But given the economic climate of slow growth, prolonged low interest rates and rising household debt, it hasn’t been easy to sell. The life sector posted a compound annual growth rate of -0.2% between 2009 and 2013. Yet the industry

still saw sustained record high premiums during 2013 – $17.2 billion, up 4.1% from the previous year. Insurers have adapted to the sluggish economic environment by adopting innovative strategies, including expanding their product offerings through government approvals for Pooled Registered Pension Plans [PRPPs] and Voluntary Retirement Savings Plans [VRSPs].

LIFE INSURANCE BY PROVINCE Life insurance in Canada is mainly clustered in central Canada, where Quebec and Ontario make up more than 70% of premium income

Life insurance by premium income for Canada as a whole

$17.2 billion 21 million


Number of Canadians who own life insurance

Combined group and individual life premiums





Prairie provinces



38.8% 0





11% 7%



Average policy amount per household

$13,028m $4,215m

Advisors aren’t dead yet. Despite chatter about online direct sales, face-to-face meetings with advisors are still what Canadians want when purchasing life insurance – even more so than in the US

In 2013, 65% of life insurance Canadians purchased was sold on an individual basis. About 718,000 policies were sold, primarily through advisors, averaging about $309,400 each Atlantic provinces


Average policy amount per individual



9% 16%














work site


direct by mail or phone


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Quebec Individual $3,386m Group $1,347m

Newfoundland & Labrador Individual $156m Group $126m

PEI Individual $58m Group $28m

Saskatchewan Individual $396m Group $255m

Manitoba Individual $443m Group $284m

Nova Scotia Individual $316m Group $205m

Ontario Individual $6,073m Group $2,306m

New Brunswick Individual $343m Group $160m

LIFE INSURANCE BY TYPE OF OWNERSHIP Group insurance growth has been left in the dust by individual life insurance since the early 2000s. The average annual growth rate over the last decade has been 6% for individual life versus 3.8% for group life Number of policies 2,500,000

GROUP INSURANCE BY REGION New contracts, which include transfers of coverage from one insurer to another, account for about 90% of the group insurance purchased. The remainder is composed of increases in coverage under existing contracts


Atlantic provinces






Prairie provinces




1,000,000 individual group 500,000


1960 1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013








Source: CLHIA, “Canadian Life and Health Insurance Facts 2014”


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Does insuring children make sense for Canadian families? Often scorned as, at best, a waste of money, life insurance policies for children are gaining popularity among advisors

David LeNeveu

Francois Langlois Senior investment advisor Manulife Securities

Senior estate planning consultant The McClelland Financial Group at Assante Capital Management

“I am 100% for Canadian parents insuring their children. I have a family with children who were diagnosed with diseases that will make them uninsurable moving forward. A whole life product, purchased when then children were eligible, would have served two purposes: First, it would have protected their insurability moving forward while providing them with a base amount of insurance; second, it would provide them with cash values that could be used in addition to or instead of a government RESP. The newly approved universal child tax benefit provides families with a great way to protect and invest in their children’s future.”

“Yes, insuring children does make sense when thought of as an investment that will benefit not your children, but your grandchildren much later on.  If you have the discretionary income now, it makes sense because the premiums on insuring children are very low due to their age. So you are basically helping your children leave tax-free funds sometime well into the future for their kids (your grandchildren). You also can consider transferring the policy to your children sometime in the future when they are earning income, and have them continue paying the low premiums. Very good strategy!”

“We could talk about how buying insurance on children is inexpensive and guarantees their insurability. But that’s not a reason clients buy insurance. Insurance has to be an emotional purchase. Losing a child is something nobody wants to imagine, but consider what state you would be in if something like that happened. Bereavement time comes out of your vacation days; beyond that, you are entitled to take up to eight weeks of job-protected family medical leave time. However, that’s unpaid time. That’s where insurance on your children could provide you with the time you need to grieve without worrying about your income.”

Advisor CK Insurance Brokers

Jorge Ramos

A NEW PERSPECTIVE There’s nothing more important to most parents than their kids. But for a long time, the vast majority of advisors have been reluctant to recommend life insurance for children. Many argued that life insurance is designed to cover financial responsibilities, including providing for dependents and remaining debts, which doesn’t apply to children. But this view seems to be going the way of the dodo bird. Whether it’s giving parents the time to grieve, locking in insurability or taking out a policy as a creative investment strategy, insurance for children seems to be gaining a prominent place in clients’ portfolios.



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GOT AN OPINION THAT COUNTS? Email lifehealthpro@kmimedia.ca

Opportunity to shine Most advisors are already extolling the benefits of life insurance over mortgage insurance, but they might be missing the chance to add more value THE DEBATE over the merits of creditor insurance among LHP readers has been pretty one-sided – the product has been described as ‘junk’ and ‘terrible.’ This may be common knowledge for advisors, but are consumers aware? Banks have unfettered access to Canadians when they buy their homes and have been pushing the substandard insurance product on consumers for years. But it appears Canadians are starting to fight back as negative media attention pushes consumers toward individual advisors for term policies that provide much better value. With average home prices in Canada at $566,696 and the average sale price of a detached house in Toronto cruising past the $1 million mark, there’s a huge opportunity for advisors, as Victor Godinho explains. For every practicing insurance professional, the conversation of mortgage protection versus life insurance arises multiple times a week. To the average insurance professional, this conversation is usually overcome quite effortlessly with what I like to call ‘The Big 3’ – the three reasons of why life insurance trumps mortgage insurance. The ‘Big 3’ consists of: 1. Individualized underwriting, which results in a higher probability of the death benefit being paid out to the client’s family or estate and in some cases a lower premium. 2. Portability, which provides flexibility and retains the policy’s status as ‘in force’ if the client moves houses and/or provinces. 3. Level face value coverage, which can protect debt obligations and income replacement. This way, the client is fully

covered – not just the bank or lender – for the mortgage funds. However, industry-leading professional advisors will see opportunity in this conversation. They will use this opportunity to add true value to a client’s experience and practice. They will take the time to dig deeper and offer

insurance in the tax planning opportunities as well. Not only can a client’s family enjoy a tax-free benefit that does not pass through probate, but, if used in a charitable giving strategy to a registered charity, the donation can be used to receive a nonrefundable tax credit that will be applied to 100% of the deceased’s earned income in the year of death, and any excess can be carried back one year. This is an extremely large benefit that can save the average Canadian with an RRSP portfolio, capital property and non-registered investments a significant amount in taxes. Another avenue to explore with your clients about the benefits of life insurance is the ability to allow for the excess death benefit to cover any shortfall in distributions to the beneficiaries. Many clients do not update their wills regularly, and as a result, when the client passes away, some assets that were to be distributed to a specific beneficiary may no longer exist or may not have the intended value. This is called

“Not only can life insurance deliver debt and income replacement coverage, it also can provide opportunity for charitable giving strategies” meaningful advice. They will take control of the discussion on how life insurance can be used to fulfill a client’s estate planning needs and explore various other options. Not only can life insurance deliver debt and income replacement coverage, but it also can provide opportunity for charitable giving strategies, which play a role in tax planning and fulfillment of bequests in a client’s will. In a white paper entitled “Everything Charities Need to Know About Life Insurance Gifts,” Richard M. Weber and Randy A. Fox pointed out that “charitable institutions alone [are] beneficiary to at least $590 million in policy death benefits.” Many of your clients may wish to contribute to their community or a social cause close to their heart. Using life insurance to make that happen is very advantageous. Life insurance excels past mortgage

ademption and abatement. Having a life insurance policy in place that covers more than the mortgage amount owed will result in excess funds that become part of the estate, which may solve some family issues that form due to unsatisfactory estate distribution. I encourage all advisors to use the mortgage versus life insurance debate as an opportunity to add meaningful value to the client’s educational experience. Going one step further is what will separate you as a professional and thought leader in the life insurance industry.

Victor Godinho, CLU, is president and senior financial planner at Pangea Personal Financial Planning, which recently bought VTAG Financial Group, the company he founded.


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The time is now for self-regulation As the Financial Services Commission of Ontario continues to struggle amid mounting criticism, the timing is right for industry self-regulation

FSCO IS like a listing ship floundering through a hurricane. The under-resourced regulatory body for advisors in Ontario is struggling on valiantly, but it might not last much longer. After months of mounting criticism and pressure, industry selfregulation is starting to seem like a matter of when, not if. It started in November when Ontario’s auditor general, Bonnie Lysyk, released a scathing criticism of the organization’s lax standards on enforcing the rules for advisors. She recommended that FSCO “explore opportunities to transfer more responsibility for protecting the public interest and enhancing public confidence to new or established self-governing industry associations, with oversight by FSCO. Areas that

“This is the first time a mandate review of FSCO and DICO is being undertaken,” said Scott Blodgett, spokesperson for the Ministry of Finance. “The FSCO Act has not been significantly amended or reviewed since its enactment in 1997, and the scope of FSCO’s mandate has changed over the years.” With the government essentially admitting there are issues with FSCO, perhaps there is no clearer indication that the time is now for self-regulation. “I’m just over 10 years now as an advisor, and these issues keep popping up,” says Chris Dewdney, a financial advisor at DWL Financial Services. “I think self-regulation is ultimately going to be the evolution of where the industry is going – whether that happens now or later, I think ultimately

“I think self-regulation is ultimately going to be the evolution of where the industry is going ...” Chris Dewdney, DWL Financial Services could be transferred include licensing and registration, qualifications and continuing education, complaint handling, and disciplinary activities.” Things came to a head in early March, when the ministry of finance launched a review into FSCO’s mandate; advisors and the financial services sector were invited to participate in consultations.


that’s going to be the outcome.” Greg Pollock, president and CEO of Advocis, certainly thinks it should happen sooner than later. “What we might see is the government divesting itself of the responsibility of day-to-day oversight of these insurance agents, and Advocis could certainly take on that kind of responsibility. We think at the end of the day, that would

be more efficient in terms of oversight.” Pollock pointed out that Advocis has been a professional association for well over 100 years, has education and continuing education programs in place, and investigates complaints from the public about its members. “I think we could see a relatively smooth transition if some of these responsibilities were to be transferred from FSCO to an organization like Advocis,” he says. “I don’t think it would be all that difficult.” In fact, the industry is already taking steps to regulate itself – an advisor screening, contracting and compliance service is nearing completion. The service was designed by Apexa, a subsidiary of LOGiQ3, in an almost unprecedented collaboration between Canada’s provincial regulators, independent advisors and the country’s largest life insurance companies and brokerage agencies.


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2013 Advocis launches its Professions Model, a proposal to raise the bar for financial advisors and strictly regulate the professional title ‘financial advisor’ 2003 Official launch of Advocis, The Financial Advisors Association of Canada, takes place 2002 The Federal Parliament of Canada passes a Special Act combining CAIFA and CAFP 1999 CAIFA and CAFP (the Canadian Association of Financial Planners) discuss matters of common interest to their members and consider merging the two associations

“The way we look at Apexa is, this is a small step, but it’s a good first step for the industry trying to regulate itself in this specific circumstance before it gets mandated,” says Chris Murumets, CEO of LOGiQ3 and interim leader of Apexa. “I

Advocis already has a framework prepared through its report, “Raising the Professional Bar,” and many of its recommendations mirrored what the auditor general produced. Advocis’ report was released two years ago, and since that time,

“What we might see is the government divesting itself of the responsibility of day-to-day oversight ...” Greg Pollock, Advocis think it’s a good sign and a step in the right direction. I think this does prove that the industry is mature enough to want to try.” Despite the potential of this tool, it would cover only a portion of self-regulation; further details would still need to be fleshed out.

there have been discussions with regulatory bodies across the country, including Ontario. “Certainly some of the regulators have been receptive to the concept,” Pollock says. “They would argue that the devil is in the details. Who will do what? How will those

1998 LUAC officially changes its title to the Canadian Association of Insurance and Financial Advisors [CAIFA] to reflect the diversifying financial services provided by its members 1906 Members of the Life Underwriters Associations of Montreal, Quebec City, Prince Edward Island and Toronto found the Life Underwriters Association of Canada [LUAC] responsibilities get transferred, and so forth? We certainly have made no assumptions or are making no assumptions in terms of how that might work, but certainly we are open to that dialogue.” Shifts of this nature take time – Pollock is anticipating a two- to three-year process at the least. The key question is how to engage everyone in the process. “These things don’t happen overnight,” he says. “Definitely in terms of an organization like Advocis, the infrastructure is in place, but there are other stakeholders to consider as well, and that needs to be discussed.”


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Sunshine Coast Credit Union [SCCU]

Co-operators and SCCU entered into an arrangement to provide clients and members with more convenient access to each organization's products, services and expertise

Financial Horizons

R.G. Packman and Associates

Financial Horizons continues its buying spree after recently purchasing three MGAs

Great West

The Equitable Life Assurance Society

Great West’s subsidiary, Canada Life, acquired the assets and liabilities associated with Equitable Life's annuity business

Hub Financial

Cortex Financial

The acquisition broadens Hub’s footprint in Canada and its reach to advisors seeking multi-fund insurance and risk solutions while maintaining their independence

IDC Worldsource Insurance Network

First Prairie Financial

In a deal that could reconfigure the MGA landscape, IDC WIN acquired a leading regional MGA in Alberta and Saskatchewan


DBS Bank

The two companies have entered into a 15-year regional distribution agreement covering Singapore, Hong Kong, China and Indonesia

Rogers Insurance

Sylvan Agencies

Rogers purchased Sylvan under the previously formed Inowest Insurance Brokers to continue its commitment to the Central Alberta marketplace

Sun Life

Ryan Labs

The completion of the agreement signed early in the year will enable Sun Life to expand its asset management into the US

Sun Life adds to wealth management suite

Sun Life continues to grow its wealth management business by launching Sun Life Guaranteed Investment Funds to help Canadians navigate the current economic climate. The product helps Canadians reach their savings goals with an opportunity for gains similar to other investment vehicles, but with the guarantees and flexibility of an insurance solution to safeguard retirement savings from market volatility. It also includes a first in the Canadian market – a guaranteed income product with an innovative feature that locks in market gains to grow retirement income.

Major insurer purchases majority interest in MGA

The Co-operators has purchased a majority interest in The Edge Benefits, ensuring its continued stability and long-term success in promoting its best-in-class product offerings from leading Canadian insurers. The Edge, meanwhile, should benefit from the backing of a national multi-product insurance company. “This was a natural fit, as the two organizations share similar values and have an established successful relationship,” said Kathy Bardswick, president and CEO of The Co-operators. “We look forward to the future, as The Edge Benefits will continue to operate independently with the same business model and management team.”


Foresters sponsors mortgage app

Foresters has teamed up with a top-rated mortgage app to offer its contracted life insurance agents a meaningful way to connect with their customers. The Canadian Mortgage App is the number-one rated app for mortgage calculations on the iTunes store and number two on Google Play in Canada. “Our exclusive insurance rate sponsorship of the Canadian Mortgage App is a win-win for both homebuyers and life insurance advisors,” said Rob Baboth, vice president of sales at Foresters Canada.


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PEOPLE Manulife launches no-medical term product Manulife launched a new term insurance product for Canadians looking for a quick, simple protection with no medical tests. “Manulife Quick Issue Term is designed for today’s busy clients and their advisors seeking an easier and faster insurance purchase experience,” said David Baker, assistant vice president of insurance products and retail markets at Manulife. “The client still works with their advisor, but we’ve drastically reduced the turnaround time by automating the application and underwriting processes.”

National Bank offers disability savings plan

National Bank Direct Brokerage [NBDB] is now offering clients the opportunity to contribute to a Registered Disability Savings Plan [RDSP]. This plan helps people with severe and prolonged disabilities achieve greater financial security over the long term, and offers peace of mind to parents and other contributors who want to open an account in the name of a beneficiary with a disability. Anyone who qualifies for the disability tax credit is eligible for an RDSP; investors can choose from a wide range of investment products offered by NBDB for registered accounts.

Manulife tweaks universal life product

Manulife has lowered the minimum issue ages on both of its level cost of insurance universal life products by 15 years. The youngest single-issue age will change from 45 to 30, while youngest joint last-to-die issue age will be lowered from 55 to 40. The insurer also is increasing the taxadvantaged deposit room available for new and existing UL clients, and is waiving the 1% management fee for all Manulife UL Gold policy owners until March 30, 2017.





Peter Berczi

Rogers Communications

Benecaid Health Benefit Solutions


David Black


Cowan Insurance Group

VP of business development, Ontario

Christopher Cartwright

The Financial Education Institute of Canada

Employee Financial Well-Being


Andrew Cook


Manulife Financial

VP of technical underwriting

Darryl Ingham

SSQ Life Insurance Company

GroupHEALTH Benefit Solutions


Cheryl Neal

Liberty Mutual Insurance


Executive VP and president, North American life insurance

Richard Nesbitt


Global Risk Institute in Financial Services

President and CEO

Dr. Laureen Rance



Director of pharmaceutical relations

Heidi Worthington


Pacific Blue Cross

Senior VP and chief marketing officer

Manulife creates first-of-its-kind pharma role

Manulife has appointed Dr. Laureen Rance to the new role of director of pharmaceutical relations. Rance’s appointment, in combination with customer services, an expanded authorization program and home delivery options, is part of a pharmacy benefits strategy that will tackle the significant challenges related to the cost and accessibility of prescription drugs. “My extensive background working with varied pharmaceutical stakeholders will enable me to work with the manufacturers,” Rance said. “Together we will find effective ways to continue to provide Manulife customers with affordable access to medication and quality care.”

Foresters hires North American president and executive VP

In a move a year in the making, Foresters has hired Cheryl Neal to be the company’s executive vice president and president of North American life insurance. The role was created by CEO Tony Garcia in 2014 as part of strategic restructuring. “When I joined this organization last year, I identified the need for a visionary leader to helm the new North American Life Insurance division,” Garcia said. “With extensive financial services experience and a proven track record of building performance-driven teams, I know [Neal] is the right choice to help lead Foresters into sustainable, profitable growth.”


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LIFE INSURANCE UPDATE NEWS BRIEFS First life claim from Nepal quake filed with MetLife

MetLife Nepal made the first life insurance claims settlement for a victim of the devastating earthquake that hit Nepal on April 25. The claim was made by telephone to the MetLife office and settled on the same day. The policy owner died after a building collapsed due to the earthquake in Chisapani, a town five hours from the capital of Kathmandu. Meanwhile, the Life Insurance Corporation of India’s subsidiary in Nepal is gearing up to settle more claims in the earthquake-hit country.

Client perception doesn’t match reality

It’s a case of good news, bad news for advisors, as new research suggests just how astronomical consumers think the cost of life insurance is. A new LIMRA study finds that 80% of consumers misjudge the price for term life insurance. Millennials were off by the most, overestimating the cost by 213%, while Gen Xers overestimated by 119%. However, consumers’ ignorance offers advisors an opportunity to win them over when they point out just how cheap insurance can be.

Proposal puts leading insurers in danger in Quebec

Five leading Canadian insurers won’t be able to avoid taking a hit from a specific anti-avoidance rule under the FAPI [Foreign Accrual Property Income] regime. “It is still too early to definitively determine what the specific regu­ latory and tax implications would be should the proposal be approved


this year,” said an AM Best report. It “could potentially have a negative impact to the business profile of the companies whose activities fall under this ruling.”

Regulator fines carrier over creditor insurance

Foresters Life Insurance company was fined $25,000 by the Autorité des marchés financiers [AMF] for violating Quebec’s distribution regulations regarding creditors group mortgage insurance products. “When Foresters Life Insurance Company was notified by the regulator in Quebec, we took appropriate steps and arrived at an agreement that was satisfactory to the regulator,” said Lori Abbott, Forester’s manager of corporate marketing. “Both the regulator and Foresters Life Insurance Company agreed that the details of that agreement are confidential and cannot be divulged.”

Canada’s leading insurer revamps strategy

Manulife has decided to go in another direction in order to secure the company’s competitive position in the future. “Major trends and disruptors threaten to make our industry less and less relevant,” said president and CEO Donald Guloien during Manulife’s Investor Day. “In our opinion, the status quo is no longer an option.” The company will focus on developing more holistic and longlasting customer relationships, building and integrating global wealth and asset management businesses, and leveraging skills and experiences across the company’s international operations.

Interest rates creating problems There’s no reprieve on the horizon following the Bank of Canada’s January rate cut There are many challenges affecting the life insurance industry at the moment, but one looms largest above all. “No question – the biggest challenge at the moment is the interest rates,” says Carl Laflamme, senior vice president of group insurance at SSQ Financial Group. “That is an enormous preoccupation for all carriers. They are at a record low, and they’re saying they might even get lower.” In January, the Bank of Canada announced a cut in its overnight rate from 1% to 0.75%. The surprise move was done to counteract the negative economic impact of lower oil prices, a reduced GDP growth forecast and fears of a housing bubble. Rates have been trending downward since the economic collapse of 2008. “It’s an unprecedented period for low interests rates,” says Foresters president and CEO Tony Garcia. “I still think that we will be challenged by lower interest rates. They’re going to continue to be not only a 2015 challenge, but I don’t see that changing potentially over the next three, four or five years.” An AM Best report found the decline in rates and sluggish economic growth also could trigger slower life insurance sales. “Low interest rates have led many insurers to adjust pricing to preserve profit margins, and further price hikes may make certain products uncompetitive for strapped


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consumers, especially in areas hard hit by the sharp decrease in oil prices,” the report stated. The costs are now being downloaded on to consumers through increases in prices. While term products have emerged relatively unscathed, longer-term products are feeling the pinch. “When interest rates go down, it makes life insurance much more expensive,” says Mike Stocks, vice president of insurance


Lorne Marr Independent advisor and director of new business development LSM Insurance

“When interest rates go down, it makes life insurance much more expensive”

Years in the industry 22

marketing at Empire Life. “So what happened with whole life insurance over the last five to 10 years is that many whole life insurance plans have become unaffordable for many Canadians.” With the rates unlikely to rise soon, the outlook appears bleak. “As long term rates stay low, there is more and more pressure on profitability for the insurance companies,” says Nazir Valani, KPMG’s senior actuary for life and pensions, “so it will create a significant problem if interest rates stay where they are for an extended period.”

Career challenge Leaving a client base of 5,000 to enter the brokerage world in 2004 and essentially starting from scratch

Career highlight Qualifying for the Million Dollar Round Table and signing up for LSM’s first MGA contract in 2008

Coping with lower interest rates What effects have you seen from the low interest rates we’re currently experiencing? They’ve definitely raised the rates on the permanent policies. On term policies, there’s generally not much of an impact. On a universal life, level cost or a whole life or term 100, those have all had an increase in rates due to the lower interest rates. It’s limited the options definitely for some of the policies for kids. One popular policy was a 20k whole life policy, where the coverage is with you for life but you’re paid up after 20 years. Those types of policies have either gone up in cost, or some companies have gotten rid of them all together.

Has it impacted sales? It’s definitely going to impact sales to a certain degree because there are fewer options, and the options that are available are at a higher price.

What advice would you give other advisors to overcome the obstacle of higher premiums because of interest rates? You can let them know that if interest rates remain low, there’s a chance that the rates will go up further or more companies will bail on those products. So as much as they’ve gone up, there is definitely a possibility that they could go up further.

What strategies are you using to cope with low interest rates? Making sure we check the different insurance solutions with multiple carriers rather than just one or two. Insurance carriers often react differently to market stimulus like low interest rates. Some may react more passively, whereas others act more aggressively, and this can impact the best solution for a given client.  Some carriers also have offered adjustable whole life policies with certain guarantees that may be an attractive solution to higher premiums.

If interest rates remain low – as many expect them to – what impact could that have going forward? I think you’re seeing a shift toward more adjustable whole life policies where the premiums aren’t guaranteed. If the rates go down or remain low, then the insurer has the option to adjust the premium. You may see a shift from guaranteed whole life policies to adjustable whole life policies.


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5/06/2015 8:13:48 AM




MGAs We asked advisors to let us know how their MGAs were performing. Here’s what they had to say



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HOW IS your MGA performing? LHP wanted to know, so we recently surveyed hundreds of advisors, asking them to rate their MGAs’ performance in several key areas. The results were encouraging. Most survey respondents seemed to think their MGAs were doing very well overall – though they still had criticisms. While their overall experience with MGAs was positive, many respondents cited underwriting slowdowns and slow response times to agent requests as concerns. For the most part, though, survey respondents rated their MGAs relatively well in every area. Among the top 10 MGAs, less than a full point separated number 10 and number 1. So how did MGAs fare in the individual categories? We’ve broken down the results starting below.

The methodology We asked advisors to name the MGAs they used, then rate their performance in seven critical areas: • Reputation • Premium pricing • Range of carriers offered • Claim responsiveness/turnaround time • Underwriting responsiveness/turnaround time • Automation • Marketing support We asked advisors to rate their MGAs on a scale of 1-5, with 1 being poor and 5 being excellent. We then averaged each MGA’s score in all seven categories to come up with an overall rating. Note: A minimum number of survey responses was required for an MGA to be included.

TOP 10 MGAs Here are the top 10 MGAs as ranked by LHP readers. To find the top 10, we asked readers to rank their MGAs’ performance in seven categories on a scale of 1-5. We averaged the MGAs’ scores in each of those categories to arrive at the final ranking.

1 Assante Estate and Insurance 4.43 2 Financial Horizons 4.31 3 Manulife Financial – Affinity Markets 4.26 4 PPI Solutions 4.24 5 Copoloff Insurance Agencies 4.15 6 Hub Financial 4.08 7 Investors Group 4.03 8 LSM Insurance 3.87 9 Gryphin Advantage 3.85 10 Bridgeforce Financial 3.69


Average score: 4.00 Top score: Manulife Financial – Affinity Markets, 4.50


Average score: 3.99 Top score: PPI Solutions, 4.81

Advisors felt very happy about MGAs’ premium pricing, rating MGAs overall at 4 out of a possible 5. The top performer in the category, Manulife Financial, received an impressive average of 4.50 out of 5.

Most survey respondents felt their MGAs had fairly good reputations in the industry, as evidenced by MGAs’ overall score of 3.99 out of 5. PPI Solutions was far and away the favourite among our respondents in this category, earning an average score of 4.81 out of 5.



Average score across all MGAs


Average score of advisors’ top 10 MGAs


Average score: 4.15 Top score: Copoloff Insurance Agencies, 4.84 Advisors were especially happy with the range of carriers offered by MGAs. With an average score of 4.15 out of 5, this was the category with which survey respondents were most satisfied. The top score went to Copoloff Insurance Agencies, which averaged a commanding 4.84 out of 5.


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Average score: 4.03 Top score: Assante Estate and Insurance, 4.60 Advisors were quite satisfied with claim responsiveness, too. Survey respondents rated their MGAs at an average of 4.03 out of 5 in this area. Assante Estate and Insurance took the top spot in this category, averaging 4.60 out of 5.

WHAT WILL BE THE MOST IMPORTANT ISSUE AFFECTING THE MGA/ADVISOR RELATIONSHIP IN THE NEXT 12 MONTHS? Commissions: 26% Products: 21% Claim responsiveness: 3% Marketing support: 27% Underwriting: 23%


Average score: 3.94 Top score: Hub Financial, 4.34 If there’s an area where MGAs could be performing better, it’s underwriting responsiveness and turnaround time. While still scoring a respectable 3.94 out of 5, MGAs scored lower on average in this category than any of the others. Many survey respondents mentioned underwriting responsiveness specifically as their top concern. “Underwriting is taking a long time,” wrote one. Several others also complained about the “slow turnaround time on underwriting.” The top performer in the category was Hub Financial, which scored 4.34 out of 5.


Average score: 3.96 Top score: LSM Insurance, 4.75 Automation was another area where MGAs weren’t performing quite as well. While their average score of 3.96 out of 5 is hardly something to be ashamed of, advisors saw definite room for improvement. LSM Insurance wrecked the curve a bit in this category, scoring an impressive 4.75.


Average score: 3.99 Top score: Assante Estate and Insurance, 4.80 MGAs did fairly well when it came to marketing support, scoring an average 3.99 out of a possible 5. The top score in this category went to Assante Estate and Insurance, which scored a nearly perfect 4.80 out of 5.


Advisors praise MGAs In addition to rating their MGAs, we asked advisors to tell us what they liked best about them. Many advisors cited the marketing materials their MGAs offered or the educational opportunities they provided. “They have made a considerable effort to help arm me with the knowledge required to be a better advisor,” wrote one respondent. “The marketing team support is exceptional,” wrote another. “The consistent education and marketing tools are second to none.” Others cited the professional assistance they received from their MGAs. “Our MGA has provided us with numerous industry specialists who can assist in complex issues with our clients,” wrote one advisor. Another raved that his MGA representative “met with me one-on-one to review my business needs and challenges. He offered suggestions on new carriers who could fulfill these requirements.”

Top concerns We also asked advisors to share their top concerns about working with MGAs. Their responses ranged from the traditional worries about turnaround times to complaints about staffing and lack of personal service. “The workload put on administrators is too great,” wrote one respondent. “They do not have the time to improve underwriting because they are processing such a large block of business.” “Although service is relatively good, there are times


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– likely due to insufficient staffing of administration – that service can lag,” wrote another. Yet another respondent complained that his MGA “[does] not have someone who is my go-to person when I have questions or concerns.” Other advisors complained that their MGAs would rather pass the buck than work on a complex problem. “Companies assign policies to MGAs that are not responsive to agent requests and want to do as little work on client files as possible, sending agents to company websites for anything needed – whether or not the website can help,” wrote one. We also asked advisors to name what they felt would be the most important issue affecting the MGA/advisor relationship over the next year. On that question, advisors were relatively evenly split between four categories. About 27% said they were most concerned about marketing support. Nearly 26% said they felt


4.15 4.03 4.00 3.99 3.99 3.96 3.94

Range of carriers offered Claim responsiveness/turnaround time Premium pricing Marketing support Reputation Automation Underwriting responsiveness/turnaround time 0







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5/06/2015 8:15:26 AM


COVER STORY: ADVISORS ON MGAs READERS RESPOND: WAYS MGAS COULD IMPROVE THEIR SERVICE > “More automation and quicker ability to issue applications” > “Survey us prior to booking clinics to ensure they are relevant” > “Provide training on their processes when advisors sign up with them for the first time” > “Contact from senior staff on how to help my business” > “Communicate and have wholesalers out to talk about business building and strategies” > “Be thorough when processing paperwork and responding to questions” > “Hire support staff who get involved, want to do a good job and are willing to go the extra mile”

commissions would be the most important issue over the next 12 months. About 23% named underwriting as their biggest concern, while nearly 21% said they were most concerned about the products offered. Less than 3% were worried about claim responsiveness.

The bottom line Overall, advisors seem very satisfied with their MGAs. They’re happy with the support they receive in marketing and claims, and more than satisfied with MGAs’ premium pricing and the range of carriers they can access through MGAs. And despite some challenges, most advisors seem satisfied with MGAs’ underwriting responsiveness and turnaround times. One survey respondent summed it up when he spoke of the peace of mind MGA support provided him. His MGA, he wrote, “allows me to sleep easy.”

TOP 5 MGAS BY CATEGORY We also broke down the five top-rated MGAs in each category. Here’s who came out on top:

REPUTATION 1 PPI Solutions 4.81 2 Manulife Financial – Affinity Markets 4.63 3 Assante Estate and Insurance 4.40 4 Investors Group 4.38 5 Financial Horizons 4.34

PREMIUM PRICING 1 Manulife Financial – Affinity Markets 4.50 2 Assante Estate and Insurance 4.40 3 Financial Horizons 4.39 4 PPI Solutions 4.31 5 Investors Group 4.38

RANGE OF CARRIERS OFFERED 1 Copoloff Insurance Agencies 4.84 2 Financial Horizons 4.74 3 PPI Solutions 4.65 4 Assante Estate and Insurance 4.40 5 Hub Financial 4.36

UNDERWRITING RESPONSIVENESS/ TURNAROUND TIME 1 Hub Financial 4.34 2 Manulife Financial – Affinity Markets 4.21


3 Copoloff Insurance Agencies 4.17 4 Financial Horizons 4.04 5 Assante Estate and Insurance 4.40

CLAIM RESPONSIVENESS/ TURNAROUND TIME 1 Assante Estate and Insurance 4.60 2 Financial Horizons 4.35 3 Manulife Financial – Affinity Markets 4.29 4 PPI Solutions 4.02 5 Copoloff Insurance Agencies 4.00

AUTOMATION 1 LSM Insurance 4.75 2 Assante Estate and Insurance 4.40 3 Manulife Financial – Affinity Markets 4.13 4 PPI Solutions 4.06 5 Financial Horizons 4.04

MARKETING 1 Assante Estate and Insurance 4.80 2 Copoloff Insurance Agencies 4.67 3 Financial Horizons 4.30 4 Investors Group 4.25 5 LSM Insurance 4.13


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5/06/2015 8:15:46 AM



Why it pays to play Some might look upon insuring athletes as unattainable, but advisors don’t need to be ex-professionals to make a career out of it A LOT of advisors might look at insuring athletes as a dream job but mistakenly dismiss it because they don’t have the connections. “Some of our best clients in Canada didn’t play hockey at all and had no real connections to pro sports, but they just dedicated their careers to those kinds of people,” says Chris Lack, executive vice president of Excep-


tional Risk Advisors’ sports and entertainment insurance division. “Having played professionally is definitely not a prerequisite to being successful.” But in order to be successful, advisors need to recognize that they’re dealing with a unique demographic. “It’s a very specific subset of society with some really pressing needs in a short period

of time,” Lack says. “There are unique challenges; it’s a quick amount of wealth in a very short period of time. A lot of advisors who do very well are mainly concerned with protecting the individual athlete’s ability to maximize their income and their return on their income and make it last for the rest of their life.” Like most companies that insure athletes, Exceptional Risk Advisors doesn’t work directly with the players. “We only work with licensed insurance advisors or financial planners that are licensed,” Lack says. “The athlete may have his name on the policy, but our clients are really the licensed financial professionals.” The company takes a collaborative approach with advisors when an athlete comes searching for coverage. “We like to have our advisor work with the athlete ahead of time, before they even come to us, and have an idea of what coverage amount they want to


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“A lot of advisors who do very well are mainly concerned with protecting the individual athlete’s ability to maximize their income ... and make it last for the rest of their life” Chris Lack, Exceptional Risk Advisors have, how long they need it for, what their financial concern is,” Lack says. The primary coverage Exceptional Risk offers to athletes is career-ending disability insurance, which pays out a lump sum in the event a player’s career is cut short due to injury or illness. Disability is the most popular, but the company also offers key person coverage, contractual indemnification, failure to sign coverage (which protects top-ranked college

athletes), interim life insurance, accidental death and dismemberment, coverage for risks that may void a guaranteed contract, and kidnap and ransom. The long view Exceptional Risk covers the four major American and Canadian professional team sports, as well as individual sports like skiing, golf, motor sports, professional sailing and horse racing.

After the initial meetings, the advisor works with the athlete to figure out his or her needs going forward. The coverage is designed to cover the player’s professional earning potential in salary. Potential endorsements aren’t taken into account. But even if a player is projected to make $50 million over the course of his professional career, he might conclude after discussing it with his advisor that he only needs $10 million in coverage to fund investments, buy the house he wants, take care of his kids’ college funds and live the life he wants. “What’s enough? Some players buy a lot more; some players by a lot less,” Lack says. “It really is a mechanism of financial planning and figuring out what they need to fulfill their portfolio and take care of their long-term needs.” In some ways, it’s similar to the needs analysis an advisor does for a doctor or CEO, but in a lot of other ways, it’s very different. “If you’re a doctor or CEO, you don’t go to the office thinking each day could be your last,” Lack says. “When you’re playing pro sports, just by nature of what you do, something can happen, and that can be the end of your career real quick.” That’s another challenge the company and advisors face: making athletes, who have lived their lives performing feats most of the population can’t, realize that their bodies may let them down in the future. “It’s definitely a challenge making athletes recognize that,” Lack says. “They all seem to think they’re invincible. There’s an endless list of people [whose] careers have been cut short. If you look at it on paper, every player should be able to play until their mid-30s – that would be a typical ‘successful career,’ but the majority of guys don’t even get to their 30s.” Lack is seeing that message get through to more and more athletes. “The insurance has gotten better. The wording, the security behind the insurance, the companies involved and the people involved are a lot more polished. At the same time, the career value is just so incredibly high for these guys that they’re smart enough to recognize that they need to protect that income.”


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5/06/2015 8:17:15 AM



Protecting professional athletes Greg Sutton was hooked on the family business at an early age. Forty years later, he’s now in charge of a leading special risk insurance firm

IT WASN’T long after his father created William J. Sutton & Co. in 1978 that Greg Sutton knew he wanted to follow in the family business. That summer, a young Sutton was playing street hockey in Toronto during his dad’s party to celebrate the launch of the company. “All these people started to arrive to the house … including probably half a dozen Leafs – Darryl Sittler, Pat Boutette, Lanny MacDonald,” Sutton says. “I remember playing on the street and my friends looking at me, saying, ‘What’s going on?!’” Nearly 40 years later, he took over as president of Sutton Special Risk. “In terms of the sports component of the business, that was a bug that was very easy to catch,” he says. Sutton set on the path of following in his father’s footsteps by working part time in the company’s claims department before attending the University of Toronto. He moved to London for a couple of years and worked in the Lloyd’s market. He eventually

returned to work with his dad in 1995 before taking over day-to-day operations in 2001. A decade later, Sutton purchased the company from his father, and Sutton Special Risk was born. The company might have started off by insuring athletes, but it now also provides coverage for key businesspeople, contingency, war risk, terrorism, kidnap ransom, extortion, domestic and expatriate benefits, and reinsurance.

“In terms of the sports component of the business, that was a bug that was very easy to catch”


Changing landscape

Sutton provides insurance to all the major professional sports and amateur athletes, but the majority of its business is still hockeyrelated, followed closely by baseball. Most of the policies the company issues are for disability, but Sutton also sells specialty life coverage and accidental death, and has administered the NHL’s health plan for the last 30 years. During the 40 years the Suttons have been in business, the sports landscape has changed almost


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beyond recognition. When the elder Sutton first started, the risks were mainly associated with teams travelling together. In the ’80s and ’90s, as players earned more money, agents became more aware of the importance of players protecting their future value against injury or illness. “That’s when we got into the disability coverage that the players buy to this day,” Sutton says, referring to permanent total disability [PTD], which pays out a lump sum in case a player suffers a career-ending disability or illness. “We insure over 450 hockey players, and the majority are with PTD, with most insured to reflect their future value. Some players have $1 million in coverage, and some have $25 to $30 million in coverage.” While agents were the catalyst to help players understand the benefits of insurance, advancements in medicine also have altered the landscape for underwriting athletes. “We’ve gone from back in the ’80s, being worried about knee and shoulder injuries – now, with the advancement in medicine and surgical procedures, you can fix certain things, and the athletes can be well enough to play,” Sutton says. In the ’90s and 2000s, eye injuries were the main concern, when Bryan Berard’s gruesome injury in Ottawa brought things to a head. In 2013, the NHL implemented mandatory visors for players who had played fewer than 25 games. Furthermore, the unknowns about concussions have made underwriting player’s contracts extremely complicated. It’s placed unparalleled importance on getting an accurate picture of their concussion history: when they’ve had them, what the severity was, how much playing time they missed. While progress has been slow, the medical and research community is making breakthroughs. “I think one of the things we found out is, with concussions, the brain doesn’t always fully heal,” Sutton says. “So you can get to the stage of being symptom free, but you’re never really 100% ever again.” “Our job is to be there and provide protection for the player,” he says. “If the player is healthy and


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“We’re certainly not one of the large insurance companies, but we have pretty large capabilities. We’re able to underwrite very large limits, and we’re also able to underwrite pretty unique and high-risk exposures”


really hasn’t had any concussion issues, then we always want to issue a policy without any exclusion, so if they do suffer one down the road, we’re there to respond. What we don’t want is to put coverage in place on someone that has a pre-existing condition, and we’re … leaving ourselves exposed to losses from an occurrence that happened before we even put the coverage in place.”

Niche knowledge Besides the fact that athletes are insured for much higher sums, there are other subtle differences in insuring them compared to other professions. “It’s a little more of an intricate process because the coverage is really designed to protect them from not being able to continue their professional career,” Sutton says. “If you’re a lawyer or a businessperson, you can have some ailments that would prevent you from playing professional hockey, for example, but would still allow you to perform your regular operation.” Attracting athletes is also much different than procuring regular clients. “The professional sports business generally comes to us through player agents,” Sutton says. “The insured would not be coming to us – they would talk to their agent, who would then go out and canvass the market.” Looking to the future, Sutton sees room for his company to grow all over the world, but he’s looking to expand in Western Canada next. He’s also hoping to add more staff to the company’s US office, which he launched shortly after taking over the firm. In the end, however, Sutton is quite comfortable with where the company is today. “We’re one of the leaders in our niche,” he says. “We’re certainly not one of the large insurance companies, but we have pretty large capabilities. We’re able to underwrite very large limits, and we’re also able to underwrite pretty unique and high-risk exposures. So I like to think that we’re a leading market for specialty life, accident and health insurance.”

HIGHEST ATHLETE COVERAGES Some of the highest-insured athletes are across the pond; the sums insured are eye-watering:


Lionel Messi

The Argentinian forward is in the running for the best player to ever play the game, and his insurance policy is equally impressive: He’s reported to have his legs insured for a ludicrous €750 million.


David Beckham

The English superstar has transcended soccer to become a fashion icon. He began by insuring his legs for about £100 million. This was later increased to a £195 million policy on his entire body, which included a disfigurement clause that would cover him financially if he were to lose any of the endorsements that depended on his looks.


Cristiano Ronaldo

The forward’s club, Real Madrid, has an insurance policy on Ronaldo worth more than €103 million, which covers him in case of any injury to his legs.


Iker Casillas

One of the best goalkeepers of all time insured his hands for €7.5 million each in 2007. He is covered for injuries sustained on or off the field.


Fernando Alonso

The two-time Formula One champion had his thumbs insured by a Spanish bank for about €10 million.


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5/06/2015 8:19:16 AM

Canada’s Online News Source and Community Canada’s Online News SourceProfessionals and Community for Life and Health Insurance for Life and Health Insurance Professionals


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5/06/2015 8:19:24 AM


ASK AN EXPERT WHAT’S THE most important product you sell? For most advisors, the answer is easy: life insurance. After all, it offers families security should the worst happen. Second on that list is probably disability; it’s pretty hard to live with no wages. And a distant third is critical illness [CI]. However, a strong case can – and, indeed, should – be made for CI insurance as one of the most important coverage types.

Critical illness on the rise

Critical illness more critical than ever Not many advisors are selling critical illness insurance in Canada, but given the rates of disease in this country, they should. Marylou Dunn, vice president and chief underwriter at Munich Re, explains why 26

Consider the facts: About one in three Canadians will be diagnosed with a critical illness in their lifetime. Cancer, heart disease and stroke are the leading health issues facing Canadians today: 38% of Canadian women and 44% of Canadian men expect to develop cancer during their lifetime, there are more than 70,000 heart attacks each year, and every 10 minutes, one person has a stroke. In fact, the Canadian Cancer Society recently released a report that predicts there will be a 41% increase in the number of diagnosed cases of cancer by the year 2030, when it’s estimated there will be 277,000 new cases per year in the country. But unlike in the past, these life-altering illnesses aren’t killing Canadians. Cancer mortality rates are declining for males of all ages and for females under the age of 70. The survival rate among patients hospitalized for a heart attack has increased to 92% in recent years, and 80% of Canadians hospitalized for stroke each year leave the hospital alive. However, they are costing Canadians – and unfortunately, the safety net of a CI policy is simply not there for the vast majority of people. According to recent surveys, the penetration of critical illness insurance for Canadians is barely in the double digits. Studies show that on average, for every 100 active individual life advisors who sell one policy per month, there are only 13 active critical illness advisors who sell at least a policy per month. In some ways, the lack of CI coverage for Canadians is understandable, albeit regrettable. After being introduced about 30 years ago in Canada, CI is still a relatively new


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product, without the awareness among consumers that life and even disability insurance have. It is a highly technical product, and consumers don’t always fully understand what they’ve purchased. The industry has to work together to better inform consumers so they understand the differences between a CI and disability policy. A CI policy, for instance, doesn’t pay out for every heart disease, nor will it provide a financial safety net for someone unable to work due to back injury or depression.

accessible and understandable for advisors and consumers. Five years later, the definitions were revisited to ensure that they continued to be consistent with the most common and up-to-date treatment modalities and to ensure they reflect truly ‘critical’ illnesses. These streamlined definitions will positively impact the consumer. Take Alzheimer’s as an example, which has seen its definition expanded to “dementia, including Alzheimer’s disease.” This will now provide coverage for forms of dementia that were not covered under the prior wording.

Underwriting perspective Another challenge is that life and CI insurance underwriting don’t always equate. One product can be standard, while the other requires a rating or exclusion. Ratings, which lead to higher premiums for life insurance, generally aren’t charged below 150%. Conversely, the extra rating for living benefit products (CI and DI) starts at 125%. This means that a 45-year-old male who is 5'10" tall and weighs 250 pounds may be a standard risk for life insurance, but a substandard risk for CI. To put this in context, this applicant has a body mass index [BMI] of 35.9. The optimal BMI for someone of that age lies between 18.5 and 24.9 – an optimal weight between 129 and 174 pounds. At 250 pounds, this applicant is greater than 140% of his expected weight. For CI, we are concerned with the risk of heart disease associated with obesity. From an underwriting perspective, someone who has had a heart attack may go on to live many years beyond the initial event. The CI proceeds, however, are payable immediately following the event, so the payout comes many years earlier, making him a greater risk. Such differences in the underwriting of life and critical illness may seem to complicate the sales process. But the underwriting on this product has evolved, and will continue to change based on medical advances as well as advisor and consumer experiences. In 2008, benchmark definitions were developed and introduced to support the sales process by ensuring classifications were

“[CI insurance] provides a social and financial benefit to the recipient, and we, as an industry, should be proud that we can and are changing lives” For many advisors who are new to critical illness insurance, the definitions may appear to be overly technical and difficult to understand. The insurance industry requires this specific language to be able to adjudicate very complex medical histories at claim time. With help from underwriters and some online resources featuring consumerfriendly explanations published by the major carriers, we can bridge the gap between the complex language used in definitions and the consumer’s need to understand their purchase. As we’ve improved the definitions of CI, we’ve also refined underwriting guidelines to reflect our experience. We’ve developed exper­tise in the use of exclusions, or combinations of exclusions and ratings, to ensure that as many consumers as possible can be effectively underwritten and insured. Over the past few years, we have seen a movement toward more streamlined under-

writing processes to overcome these concerns. Some companies are now offering a simplified CI product that focuses on the core conditions of heart disease and cancer, but with fewer underwriting questions and requirements.

The way forward On the consumer side, there has been and continues to be more non-disclosure of current or previous illnesses under this product than under life applications, whether purposeful or otherwise. Consumers who know or suspect they may have an increased risk for cancer, heart disease or any of the other covered conditions may be tempted to under-report their medical history. The end result, if the underwriter does not fully develop the applicant’s medical history via additional questions, questionnaires or physician’s statements, will be an under-priced block of business and early claims. Also, the industry will have tough decisions to make as the pace of medical and technological advances transforms conditions that were previously considered to be life-altering into manageable chronic conditions. Advances in early diagnosis will reduce the time to claim, thereby upsetting the actuarial assumptions put in place when the product was developed. All of these issues contribute to the lack of buy-in for critical illness in Canada. A recent Munich Re survey found that more than 90% of companies selling CI reported a decrease in new business premiums between 2013 and 2014, and the average sale is still under $100,000. It is, however, encouraging to hear that these same companies are predicting growth in 2016. CI has the ability to offer transformative coverage at a time when it’s needed most. It provides a social and financial benefit to the recipient, and we, as an industry, should be proud that we can and are changing lives. It’s practically a statistical certainty that your clients will have a need for this product. Once they truly understand what it does, it could be the most important product you sell.


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5/06/2015 8:20:44 AM



Client service excellence – with more than a smile Clients are more demanding – and more fickle – than ever before. One false move on your part, and they’re gone. Nikki Heald reveals how to keep them happy – and keep them on your books

SO, YOU think you’re a great service provider? You always make sure you smile and have a pleasant demeanour. A friendly disposition and a smile are certainly important; however, in today’s competitive market, a smile is just not enough. The way we treat our clients is emerging as a critical differentiator for advisors and can provide a competitive advantage. Today’s clients are savvy, less loyal and more demanding. They realize they have a choice and that you are not the only advisor to choose from. Additionally, client awareness around service standards also has increased. Good, ordinary and average are simply not good enough. It’s about providing an experience for your client that makes them want to come back, as opposed to being forced or compelled to come back. So, what is service excellence? Exceptional client service is about going beyond what is realistically expected. It’s about surprising –



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disappointment. From a client’s perspective, and often delighting – your clients, turning it’s the little promises you keep that matter them into enthusiastic referral sources who most. Returning a phone call, providing inforwill stick with you not only because you do mation or simply getting to know them on a great work, but because of the value you bring. personal basis can significantly As an advisor, imagine if you could get existing clients to tell DID YOU KNOW? impact the relationship. Providing great service is others about the value you offer. really about consistency, and The beauty of word-of-mouth realistically, that’s not too referrals is that they save on difficult for you or your team to marketing costs, cold-calling and the time it takes to network. achieve. For leaders, it is vital Great service is not just • 68% of clients will walk due to to communicate clearly to your doing your job, but establishing rude or discourteous service, employees the service behavan emotional connection with without any prior warning. iours that are expected with your clients. It’s about valueIt’s not safe to work on the both internal and external adding and finding ways to premise that no news is clients. Explain to your team good news. why service excellence matters, be unique. It’s about getting not only for the company or to know them and being heartfelt. Research suggests that client, but also for the personal emotion influences purchasing satisfaction experienced in making others feel valued. decisions six times as much as rationale. So, if something or So, what are some simple someone makes us feel good, we things you can do to enhance are more inclined to buy. • It costs five times as much to service excellence? Remember, people do business win a new client as to retain an existing one. Remember to • Be responsive with people they like. Unfortunately, many businurture these alliances, too. Speed is everything, so try to nesses believe that delivering reply to your clients as soon as exceptional service will cost them too much you can and keep them in the loop and informed. Procrastination doesn’t help anyone, in staff time, training or developing service and you’re going to have to respond sooner or standards and procedures. These in-focused organizations are only concerned with later. May as well do it now! company profit and cutting costs, and give little thought to how to keep clients happy. • Take time to listen Additionally, in these organizations, staff Avoid speaking, and really listen to what recognition and retention is low, which signifthey’re saying. It’s important you understand icantly impacts growth and profit. Training what your clients are communicating to you. yourself or your team on how to deliver That way, you will be able to successfully meet standout service is an investment that will their needs and provide the right solution. reap significant personal satisfaction and reward. • Do what you say you’re going to do One of the biggest gripes in business today is Realistically, bad service is actually more costly to your firm than the time taken to that people simply don’t do what they say provide great service. Poor service influences they’re going to do. If you say you’re going more than just a negative customer experience to do something, then do it! It enhances your – it reduces revenue and drives up costs. It professionalism and personal brand, and damages public perception, credibility and demonstrates you value your client. market reputation. As we all know, a dissat• Know your stuff isfied client is more likely to spread the word about a poor service experience than a positive Your client’s perception is that you are the one. Nowadays, unhappy clients will take to paid expert. That’s why they’ve come to you social media platforms to broadcast their to handle their mortgage. So be sure to keep

Today’s clients are savvy, less loyal and more demanding. They realize they have a choice and that you are not the only advisor to choose from your skills up to date, and be on top of the game in your profession. Unfortunately, if you convey a lack of knowledge, then you risk ruining your credibility.

• Give a little If a client asks you to do something that really won’t cost you a lot in time or money, then treat it as an opportunity to go the extra mile. By doing so, you not only have a contented and indebted client, but also someone who is more than happy to refer to you. Finally, within the life insurance industry, advisors really should view their book of clients as their most valuable asset and develop a plan around taking good care of them. Most important, develop long-lasting personal relationships by keeping in touch regularly, both in good times and in bad. As advisors, you’re not just selling a product, but providing expert advice that can significantly impact people’s livelihood and circumstances. So, if you haven’t given much thought to your service levels, then perhaps it’s time to conduct an audit. Remember, if you don’t bother to make the client feel valued, respected and important, then you can be sure your competitors will!

Nikki Heald is the managing director of Corptraining. For more information, visit www.corptraining.com.au.


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5/06/2015 8:21:49 AM



The key to creating shareable social media videos Your social media video doesn’t have to include babies, celebrities or dancing to become immensely popular, according to Marcus Seeger. Read on to find out how to lift your social media presence to greater heights

IT IS CLEAR that social media has grown rapidly over the last decade, and more recently, there has been a significant growth in social media video. YouTube is the leading social media video platform, but 2014 saw Facebook step up and compete, along with others such as Vine and Instagram. Social media videos are typically shared across a single platform, but recent statistics from YouTube, revealing that 700 YouTube video links are shared on Twitter every minute, and that 500 years of YouTube videos are watched on Facebook every day, demonstrate the increasingly highly shareable nature of social media video across different platforms. There are many reasons why someone will elect to hit share, rather than simply like or comment on the video. They might want to be the first to share and be seen as having their ‘finger on the pulse’, or perhaps gain kudos by association, or maybe sharing is coming from an altruistic perspective. Almost half of video shares occur in the first three days after the video is posted, so it’s critical to promote newly published videos as much as possible in those all-


important early days. As Seth Godin says, you need to get early adopters actively campaigning on your behalf to get the ball rolling. When planning your content, it is extremely useful to look at audience profiling and determine what elements are most likely to result in the video being

shared. What are your audience’s preferences – do they like funny, cute, funky or inspiring? Much also depends on whom your audience is sharing the video with. Who are their friends, and who is in their network? What interests and passions do they share? Can you somehow tap into the zeitgeist?


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One element popular videos have in common is that they hit emotions very hard. It’s not enough for a funny video to make you smile – you need to be laughing loudly before you even think about sharing it. Think about the videos you personally share on social media, and ask yourself why you shared them. This will help you gain insight into your own experiences, and that knowledge can help you identify triggers in others. Here are five key strategies for creating popular shareable social media videos.


Educate your audience

The ‘how-to’ genre is often overlooked, but it offers significant opportunities to create popular shareable content. Typical how-to videos are not particularly complex to create and can offer a solid ROI, particularly if you focus on a topic that is in high demand. The popular ‘life hack’ sub-genre is a good example of a successful how-to niche. A proven approach is to share significant insight and provide truly valuable content, as this is more likely to be shared. If you’re concerned about protecting what you know, you must move on from this mindset and share some of your most valuable content if you are looking to create the type of video that will be popular. By sharing your insider knowledge or ‘secret sauce,’ you have a good chance of standing out from the crowd.


Go for entertainment value

Video that entertains will, in most markets, have a higher chance of being shared. Can you think of a funny angle on your industry, or perhaps a clever parody or spoof that can be turned into a video? While these types of videos will have more of a hit-or-miss success rate, if they work, then they typically do very well. But be prepared for an epic fail if it all turns pear-shaped – can your business (and your ego) handle this?


Engage with a story

Storytelling is so incredibly powerful because it’s built into our DNA. If you go back hundreds of thousands of years to early mankind, we used to communicate knowledge through storytelling. Today’s digital campfire hasn’t really changed all that much, and videos that have strong narratives are predisposed to being shared with friends, peers and beyond.

Typical how-to videos are not particularly complex to create and can offer a solid ROI, particularly if you focus on a topic that is in high demand Is there an element of your business or product that has a strong story behind it that would engage your audience enough to make them ‘tell the world?’ Keep in mind that the key to a good story is to be authentic. Certainly don’t pretend that the story is something that it’s not, because online audiences are very mediasavvy and will notice right away if your story is a fake. And remember to make your story entertaining. It is a wonderful opportunity to put some thought into your script. Make it the best that it can be. Your audience will appreciate it, and you will benefit from the results.


Become crystal clear on outcomes

Don’t be daunted when you see videos with millions of views or thousands of shares;

instead, be inspired. You must have courage, because until you publish your video, you will not know how it will be received. It’s important to set goals and determine how to measure ROI. You will need to set your own standards to measure the success of your video. For a small business start-up, just 100 shares might well offer unmeasurable business opportunities if the right people watch the video. What does success look like for your video?


Be remarkable

A video that stands out by going against the grain of audience expectations is often a recipe for success. The 2014 #likeagirl campaign from Always is a good example of developing a theme in a direction that is not immediately predictable. It also picks up on strategies 2, 3 and 4 outlined above. (Watch it at http:// youtu.be/XjJQBjWYDTs.) If you want people to share your video, it needs to be unique in some way. The ‘same old, same old’ content quickly gets stale and simply will not be shared. Creating shareable social videos is perhaps more challenging today, as there is simply an avalanche of content, and audiences don’t have the time to consume even a fraction of it. We are experiencing ‘content shock,’ which is why Facebook filters out the majority of possible content and serves only what is most likely to be of interest to us. Your challenge is to create original, authentic, entertaining videos that inspire your audience to hit that magical ‘share’ button. It’s a challenge worth aspiring to, as the benefits of a popular social media video that is highly shareable can be extremely profitable. Marcus Seeger is the number-one Amazon bestselling author of Video Marketing for Profit; 14 Proven Strategies for Accelerated Business Growth. He is also the managing director of video marketing and production agency Video Experts. For more information, visit www.videomarketingforprofit.com.au.


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Life, disability and employee benefits specialist, RitePartner Financial Services and Edge Benefits Golf, steak salad and a resort in Mexico – these are a few of Ken MacCoy’s favourite things

Favourite music All kinds, especially rock: Supertramp, Genesis/Phil Collins, Sting The best thing about working in Insurance The people I meet and providing peace of mind. Also, clients who become personal friends

Favourite sport Golf – but I have more success with my vegetable garden

My best day in insurance The day I delivered a CI cheque for $100,000 to my golf buddy

Favourite food At home, my wife Betty’s steak salad; at a restaurant, sushi My weirdest ever coverage A caller who wanted life coverage right away – he changed his mind after I explained the two-year suicide clause

Favourite vacation spot Club Intrawest Resort in Zihuatanejo, Mexico

Favourite book Any books by Clive Cussler


Favourite movie The Bourne Identity


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Global strength

Regional teams

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Not if, but how

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To learn more, please contact our FlexSave™ team: flexsave@hubfinancial.com 1-800-561-2405

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