The “Canadian-ization” of our insurance industry

For the first time in over 50 years, the private insurance industry in this country is solidly in Canadian hands.

With INTACT’s purchase of AXA Canada from AXA’s Paris-based parent in September, 7 of the top 10 general insurers are Canadian-owned and headquartered in this country.  (This list excludes auto insurers owned by provincial governments in BC, Saskatchewan, Manitoba, Quebec.)

What does this mean for policyholders in Canada?

Increased stability at a time of global economic uncertainty.

Although previously thought by some to be onerous and unduly conservative, Canada’s financial services regulatory system is the envy of the world.  This was most evident during the financial meltdown of 2008-09 when many name-brand global financial players required government life-support, or simply lurched into a dramatic demise.

And some Canadian subsidiaries suffered because of the unsteadiness – and need for government support – of their foreign parents (AIG in the U.S., ING in the Netherlands).

As the industry relies less on foreign capital and control, Canadian policyholders have greater reason for confidence amid world-wide financial uncertainty.

In other words, you buy an insurance policy as a promise to respond to the threat of risk.  To the extent the risk of that insurer’s inability to respond can be reduced, your level of protection is increased.