Issue 2001-20:   October 8, 2001

This newsletter is for members of the Canadian Insurance Industry, and those who serve it. The newsletter is published weekly, and notes information mostly about the use of the Internet and related technologies in the industry. Some is international, where we feel it is relevant to Canada.

The P&C Industry

As had been predicted by many observers, the first quarter 2001 was not kind to p & c insurance. Statistics Canada's final release indicates that insurers experienced strong premium growth and reinsurers did even better. Unfortunately, in both cases, claims growth substantially exceeded premium growth. Reinsurers produced a better loss ratio than insurers but both were unacceptable.

Insurance and Financial Services Distribution will continue to reshape

Sun Life Financial Trust Inc., a member of the Sun Life Financial group of companies, announced today that it has signed an agreement with Berkshire Investment Group Inc. and Berkshire Securities Inc., to launch the Berkshire Premium Program. The Program will be available through Berkshire financial advisors in conjunction with Sun Life Financial Trust. Under the terms of the nonexclusive agreement, Berkshire financial advisors will solicit applications for a variety of Sun Life Financial Trust products white-labelled for Berkshire, including high interest savings and chequing accounts, debit card capabilities, overdraft protection, lines of credit, mortgage services and other financial products. More at www.insurance-canada.ca/distribution/canada/SunBerk200109.php

PETHEALTH INC. "Pethealth" ( the parent company of PetCare Insurance Brokers Ltd., "PetCare"), the leading provider of pet insurance to owners of dogs and cats in Canada, announced today that it has entered into a strategic alliance with Canadian Petcetera Limited Partnership ("Petcetera") that calls for Pethealth to become the exclusive provider of pet insurance to Petcetera customers in Canada. More at www.insurance-canada.ca/distribution/canada/PetH200110.php

A good time to be a financial services customer. Competition from new competitors is making life more varied and interesting for these consumers. Banks and insurance companies that don't fully understand their customers' needs do so at their peril, according to the 10th annual Cap Gemini Ernst &Young Special Report on the Financial Services Industry. The Report, entitled Paths to Differentiation, surveyed 250 senior executives from over 100 financial services organizations in 13 countries, including 50 executives from 20 of Canada's leading banks and insurance companies. More at www.insurance-canada.ca/ebusiness/canada/CapGem200110.php

Inherent infrastructure costs are being tackled. Harmonization proposals for a national life agent proficiency standard were approved last Friday by the Canadian Council of Insurance Regulators (CCIR) at its semi-annual meeting in Fredericton. Standardizing licensing education requirements across Canada will reduce regulatory complexity and enhance internal trade while ensuring consumers are protected throughout Canada. More at www.insurance-canada.ca/distribution/canada/CCIR200110.php

Direct industry participants focus on reducing distribution costs and duplication. Markham General Insurance Company (MGIC) is pleased to announce that it has been chosen as one of the 3 insurance companies in Canada to move into the testing phase of the new CSIO Insurance Portal. The Portal will provide a new function for many, on-line real-time guaranteed quotes over the Internet to independent brokers through a standardized web interface. The portal will also provide the ability to reduce the number of copies of rates and rating engines which are supported today. More at www.insurance-canada.ca/distribution/canada/MGICCSIO200109.php

Policy Management and Administration

Castek Software Factory, Inc., a provider of software systems for financial services organizations, today announced that it was honoured with the "Top Product Launch of the Year Award" by Branham Group Inc. for its Insure3 (insure cubed) family of insurance software for Property & Casualty insurers. The award was announced and presented at the inaugural Branham Awards Gala in Ottawa on September 26th, 2001. Castek's Insure3 is a family of flexible, core business handling software for property and casualty (P&C) insurance carriers. Insure3 directly enables the business users and takes information technology off the critical path of strategic corporate initiatives. More at www.insurance-canada.ca/poladmin/announce/Castekaward200110.php

Castek has signed Erie Insurance Group (The ERIE) to a master software license agreement. Castek will provide Insure3 Policy for The ERIE's personal and commercial lines. The ERIE selected Castek to replace its core, online policy processing application and to help achieve the company's information technology mission -- to satisfy corporate objectives through the use of advanced technology. Insure3 Policy will be integrated with The ERIE's claims management, billing, financial, and CRM systems. More at www.insurance-canada.ca/poladmin/announce/CastekErie200109.php

Claims

Examples of Internal and External Challenges and Opportunities, by Patrick Vice. The claims profession is the front line for insurers in their effort to provide excellent service, while maintaining control over loss costs and expenses. However, technology has, and is playing a role. Although data is difficult to come by, it is common wisdom that claims receive a disproportionately low share of attention when it comes to technology spending. This appears to be changing. We look at examples of internal and external claims technology developments. More at www.insurance-canada.ca/claims/canada/PVice200109.php

Technology and e-Business

DWL Incorporated, a leading provider of enterprise customer management applications, today announced the completion of a third round of financing led by U.S.-based investors Insight Venture Partners and MMC Capital, Inc., a wholly owned subsidiary of Marsh &McLennan Companies, Inc. Insight Venture Partners and MMC Capital Technology Fund II invested US$31 million in DWL. More at www.insurance-canada.ca/ebusiness/announce/DWLfunds200109.php

The Internet Revolution is dead. Long live the Internet Revolution. The technology that once promised to change everything is doing just that, despite the recent failure of the dot-coms. That's the chief finding of "Digital Strategies Survey 2001," a wide-ranging survey of nearly 150 senior executives cosponsored by global strategy and technology solutions firm DiamondCluster International (Nasdaq: DTPI), Context magazine, and the Wharton School of the University of Pennsylvania. Even as the dot-coms fade, seventy percent of senior executives in the survey believe Internet technologies have become either "important" or "essential" to their core business success and that the positive effects are only now just beginning. More, including links to the study report, at www.insurance-canada.ca/ebusiness/other/Diamond200110.php

from Doug:

Our hearts reached out, as we celebrated Thanksgiving, to those many who were directly and indirectly hurt by the Sept. 11 terrorist activities. Some things will never be the same. Everyone is continuing to assess, and reassess, how are lives, and livelihood's, have been changed. Senseless at best, we hope that the "damage" will somehow eventually lead to a better world for us, our families, and our brothers and sisters worldwide.