Making insurance accessible
“2018 was marked by several key advances, in line with our strategic objectives.”
To begin, of all the individual insurance applications we received more than 60% were completed online. More than 71% of these applications were issued immediately, thanks to the interactive and smart technologies we have developed over the years.
The launch of 5575.ca, in November 2018, also represents the achievement of another important milestone in our strategy to move from conventional individual insurance activities to a digital platform. With this innovative product offered exclusively online, we are transforming part of our portfolio and positioning ourselves in a market segment where the competition is not nearly as fierce—the baby boomers. In Canada, more than 9 million people, or 25% of the population, are between 55 and 75 years of age, a cohort for which the insurance offer for cancer, health and hospital stays is almost non-existent. With the launch of 5575.ca, all Canadians aged between 55 and 75 years can purchase coverage against diseases such as cancer or strokes in just a few minutes and at very affordable rates.
Over the course of the year, we launched Phase 1 of a major project for the company—improving our transparency and simplifying our policies. Our 5575.ca cancer insurance was the first contract to be converted using this new approach. We are very pleased and enthusiastic about the results we have achieved thus far. Our policyholders and financial security advisors also expressed their great satisfaction with this product, its pricing, purchase process and the wording of the contract.
In terms of expanding our distribution footprint across Canada, 38% of new business comes from outside Quebec. This shows that the investments made in recent years to diversify our geographic reach are paying off. In other words, we are seeing growth in each of our three lines of business – individual insurance, group insurance and travel insurance.
2018 Financial Summary
In 2018, gross premium income growth accelerated to $158,3M, an increase of 10.2% from 2017. This growth is mainly due to new sales of individual life insurance and group insurance, coupled with a renewal rate for our group insurance plans that is nothing short of remarkable.
In terms of expenses, the general expenses for Humania Assurance showed a slight increase of $3.3M to $42.7M. These expenses are in line with our forecasts set at the beginning of the year. This slight increase is largely due to new hires and our technological development thrust.
The earnings before income taxes for 2018 reached $3.4M, slightly lower than in 2017. While more modest, these results are in line with management’s expectations. This slight decline is partly due to the significant investments that we made—based on a specific strategy—for the company's transition to a digital platform.
Individual Insurance Sales
New life insurance sales recorded a substantial growth. IWME Life, our product without a medical exam, was responsible for a major boost in sales in this sector.
We now offer insurance coverage in four distinct categories – life insurance, disability, critical illness and debt insurance – with sales of IWME Life rising by 19.9% 2018. This increase in volume is directly related to the improvements made in 2017 and in 2018. I should also mention that 100% of IWME policies are underwritten online and processed automatically.
The digital shift is significantly improving our corporate agility, which enables us to make changes and enhancements quickly—and at a low cost. For example, for our IWME product, we extended the age group and amended the eligibility rules in less than six weeks.
Sales of our HuGO term remain at a high level. Considering that term insurance represents a new segment for Humania Assurance amid fierce competition, our products are performing at a satisfactory level. However, to further accelerate this product’s growth, some enhancements will be rolled out in 2019.
Group Insurance Sales
In recent years, the company has been trying to specialize in demographic coverage, such as life, disability and critical illness insurance. To date, our in-force policies have reached 54.2%, compared to 37.9% just a few years ago. This type of coverage usually offers better margins and greater stability in client retention. Lastly, this also allows us to take advantage of one of our company’s major strengths—disability management.
We continue to focus on diversifying our networks and distribution channels, both online and in the market outside Quebec. That said, since we felt that certain risk categories had been temporarily under-priced by the market, we limited our growth in this sector in 2018. In fact, the strength of the U.S. dollar is affecting not just the type of travel our policyholders enjoy, but also cost of their claims. Nevertheless, Travel insurance made a positive contribution to Humania Assurance’s results in 2018.
We also continued to explore additional possibilities for travel insurance, such as “employer/employee group travel insurance.” This experience was consistent with our expectations, on the administrative side and in terms of risk management—we are growing increasingly comfortable in this area. Hence, we are ready to aggressively go after this market in the next few years.
We are very pleased to launch our new financial services firm – Lead2action.ca –, an agency that specializes in the distribution of insurance products through programmatic technology. More specifically, Lead2action offers a new, fully automated approach to promote insurance products in the client networks of its business partners. Thanks to this approach, Lead2action helps improve client loyalty, and that of their partners, intelligently.
Moreover, the firm’s interactive approach makes it easier for insureds to learn about, compare and buy insurance products remotely, by phone or videoconference. Lead2action offers access to a wide range of products from several insurers. The firm is currently rolling out two pilot projects to offer clients a 21st century experience, while enabling clients to benefit from the services of a financial security advisor throughout the process.
For its part, Aurrea Signature continues to enjoy its momentum, with the firm recording several years of robust growth. In the last fiscal year alone, this firm posted growth of 32% for new premiums issued and 17% growth of in-force policies.
We continued to roll out our HR strategy as 2018 unfolded. We have built a corporate culture, project by project, based on innovation, collaboration and commitment to support our objective for a digital transformation.
Collective Intelligence as a Success Driver
Once again this year, as part of the “Dragons” project, employees showed that their ideas, both big and small, make a real difference; more than 20 creative initiatives and solutions were put forth in 2018. We are proud of the commitment shown by our employees to find innovative solutions. More than 80% of winning projects were implemented, or will be in the next year. We are proud, and grateful, to be able to count on this powerful collective intelligence!
Mobilize and Communicate to Succeed
Establishing a work environment that promotes our employees’ well-being and happiness is essential for them to thrive and for our collective success. This is why we introduced a new digital tool that facilitates communication and measures in real time the degree to which our teams are mobilized and satisfied. This mechanism enables managers, the HR department and management to listen, implement targeted action plans and make adjustments on an ongoing basis.
In a context of change, being close to employees is important, as is being attentive and agile enough to assert our values, loud and clear! Today, our results prove it: we reached 80%, a very high rate of employee satisfaction and engagement.
Promoting Health and Well-being
Made up of about 10 employees, the Action Mieux-Être (AME) committee launched 14 activities to promote healthy lifestyle habits for a person’s physical, psychological and financial well-being. Our overall initiatives were recognized; the Bureau de la normalisation du Québec (BNQ) renewed our Entreprise en santé (“Healthy Enterprise”) certification.
2019: Future Prospects
The migration of our traditional products toward a digital platform will continue in the year ahead. The 5575.ca platform will enable us to convert and add several coverages to our portfolio, such as hospital stays, reimbursement of health expenses following an accident or illness, and fracture insurance. The P.A.G.E. product should be withdrawn from the market by the end of this process. With an eye on our goals for automation and immediacy, the 5575.ca platform offers the flexibility we need to add simple coverages
In addition, another important project will involve improving our HuGO platform, recognized in the industry as the tool that revolutionized risk management and life insurance underwriting. We will continue to make substantial investments in the product’s decision-making algorithm to increase the already high number of automatic decisions made by HuGO.
In fact, a new process to collect third-party information (teleunderwriting) will be developed. This will help financial security advisors increase their productivity substantially by reducing the time required to fill out the online health questionnaire. Third-party teleunderwriting is an important process that will allow us to finalize the digital shift of more complex products, such as PAIRE and ASSURE-DEBT in 2020.
I would like to thank all of my colleagues, our partners and members of the board of administration who, through their devotion and commitment, contribute to the company’s success.
I would like to congratulate the men and women who worked tirelessly on these many accomplishments: our employees. Throughout the year, our employees have demonstrated innovation, collaboration, agility, integrity and empathy toward our insureds. Every day, each of their actions helps us make insurance available to everyone.