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What awaits the industry in 2018



December 21, 2017 09:45

The year 2018 is approaching, and the Newspaper journalists of the insurance industry have identified for you the issues and challenges the industry will face over the next few months.

The universe of Star Wars does not exist !


By Serge Therrien
President and publisher
Journal of insurance

To parody our neighbor to the South, I would say that these are «fake news» ! Fun, but unreal. You can’t take a spaceship to another planet, even if Elon Musk believes it.

The reality is that there is only one planet Earth. However, it is extremely in a poor state. More than 15 000 scientists from 184 countries come again to launch a cry of alarm about the diseases of the planet.

In the world of global finance, the reinsurers are among the financial institutions more cautious. However, for them, there is more doubt about the global warming ! Read their annual reports, to discover a curious mix of finance and environment. Mixed in with the numbers, we find the words : hurricane, flood, storm, tornado, earthquake, forest fires, hail, volcano, cyclone, drought. These experts in finance have become experts in climatology !

What is the cause ? The human footprint by the combined effect of the demographic evolution and socio-economic development.

Swiss Re is clear : «the world must understand that warming is a fact «. Better than anyone else, the institution knows it : it just display a loss of 468 MILLION US$ after nine months in 2017. The reason for this ? Natural disasters.

The message is clear : «Society needs ‘to wake up’ to climate changes, says reinsurance CFO. «

Munich Re suffers too : its third quarter, the institution reported a loss of 1.65 billion US$. Alone, the hurricanes Harvey, Irma and Maria it will cost US $ 3.1 billion.

The experts in climate of the reinsurer now anticipate that 2017 will be one of the hottest years to date.

The reinsurer reminds us, what we can easily forget through the messages that we fill on a daily basis, that the climate issues are the concern of all.

And the majority of reinsurers are affected, as reported by the Journal of insurance. In fact, insurers such as Great-West have recorded losses in reinsurance over the last year.

Solutions ?

The political leaders hold in their hands the beginning of the solution : they can become leaders capable of bringing together scientists, insurers and consumers. Individually, none of them has the solution. Together, solutions can emerge. They urge, however, to speed things up.

The Journal of the insurance intends to intensify its coverage on the evils of the planet Earth.

Dive into the unknown


By Hubert Roy
Journal of insurance

Rarely a new year holds so much uncertainties for professionals in insurance and financial services as of 2018.

This is particularly true for brokers in damage insurance. The provisions of bill 150 call for a clarification of the role of the broker.

In spite of the turbulence on the horizon, several of the brokers that I have met in recent weeks say they are confident in the future, as any entrepreneur who believes in its business model and its added value.

Maybe is this the key to 2018 : assert its added value !

Some fear the impacts of the sale of insurance via the Internet. Others see it as an opportunity to meet the demands of consumers, who strive for efficiency and simplicity.

Anyway, 2018 will be a turning point for the insurance industry. Does she feel ready to dive into the unknown ? Sure ! The many investments that insurers, firms, and vendors in technology to prove it, and regardless of the surprises that governments and regulators will play out for the industry.

Regulations and draft laws will be in 2018 as a pivotal year


By Alain Theriault
Director, life and investment
Journal of insurance

The projects of act 141 and 150 will affect a multitude of articles of existing laws, ranging from the civil Code of Québec Act respecting the distribution of financial products and services, through the future Law on the insurers.

Although everything seems to be a steamroller for financial advisors, these many changes could address some of their problems. For example, bill 141 would amend the securities Act to allow the mfd to share the commission with the office of a counselor in mutual funds, which is currently prohibited, and that the industry is crying out for a very long time.

If bill 141 is adopted as is, the tags of the distribution via the Internet will be defined. The bill 150 balisera the process of assignment of police to a third party without interest.

The segregated fund will be living, in their turn, the pressure of the disclosure of costs imposed on mutual funds since the advent of MRCC2 in 2016. On the side of mutual funds, the commissions integrated should survive, so that they seemed destined to fall by the wayside. Rather, the redemption fees deferred which would be prohibited, the consensus in the industry.

We should also expect that theAuthority of financial markets presents in 2018 guidelines for assessing the mechanisms of mitigation of risks among the insurers face incentives to sell. The new rules of taxation of the minister of Finance of Canada Bill Morneau , will also be under the magnifying glass, because their impacts will be felt from the first days of 2018.

Developments are also expected in relation to the tax on services of general agents. The interpretation, which will Revenu Québec and theCanada revenue Agency could end up costing hundreds of thousands of dollars to some general agents.

Moreover, international studies show that the majority of insurers are planning to invest significantly in electronic subscription and analysis of big data by 2018. More think to resort to sources of external data to price the risk : criminal history and motor vehicle driving, credit score, and electronic medical records, genetic testing… the discussion of ethics is not to be missed.

No matter how it will end, 2018 is called to be a pivotal year for the life insurance industry.

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