(January 16, 2004) What a difference a year makes. In 2003, the organizer of the first World Critical Illness Insurance (CI) conference told delegates Canada trailed other countries in its knowledge of CI. At this year’s conference, the message is remarkably different.
Ben Miclette, Munich Re’s vice-president of living benefits, says the Canadian market generated $60 million in CI sales last year.
And as riveted as the delegates were when they heard stories from CI pioneer Dr. Marius Barnard — the South African doctor who assisted in the world’s first heart transplant — they were equally moved by Miclette’s announcement on guaranteed rates.
“We know brokers want to be able to offer their clients guaranteed rates,” Miclette said during the conference’s opening session yesterday, “and we know insurers want to offer it. I am happy to tell you all that we have decided to maintain the rate guarantee and we will continue to work with insurers on this.”
The applause from the 600 or so producers seated in the Empress Hotel was thunderous.
“It’s a pretty big deal for advisors,” says David Wm. Brown, a conference delegate and a veteran insurance advisor with AIG Brown and Associates in Toronto. He says he would like to see Munich Re put this promise down on paper but in the meantime it’s a message he will pass on to clients.
The reason being, of course, is that continued guaranteed rates, as valued in Canada as our healthcare system, won’t come cheap. If advisors are suggesting clients consider a CI policy, now might just be the time to do so.
When asked to look into his crystal ball about the future of CI in Canada, Miclette didn’t pull any punches. “The next year could bring price increases to reflect rate guarantees,” he predicted. “Premiums could go up 13% to 17%. The increases in premiums will ensure the product will be there for the long term.”
In addition, Miclette predicted there would be more improvements to the product, including enhancing the attractive return of premium rider.
“I also hear a lot of complaints from advisors on the complicated medical definitions that go along with the product,” he said. “This year will bring stable, covered conditions.”
Advisors can look forward to definitions that are easier to digest and explain to clients. It doesn’t mean standardized definitions, though. It looks like that Canadian wish won’t come true this year.
Miclette also said that Canada made a smart, strategic move in learning from the growing pains of South Africa, Australia and England, three CI pioneers. Based on those countries’ experiences, the Canadian CI market learned how to tightly define covered conditions, including creating a moratorium on cancer and develop thorough and strict underwriting requirements.
“CI has a bright future in Canada and there will be continued sales growth,” said Miclette. “CI is going to outpace growth in the other lines of business.”
Advisor.ca will have more coverage from the world critical illness conference next week.
What are your concerns or recommendations about CI? What strategies have you found that work when approaching your clients about CI? Share your thoughts about this relatively new kid on the block with your fellow advisors in the Talvest Town Hall on Advisor.ca.
Filed by Sheila Avari, Advisor’s Edge, email@example.com