September 28, 2008

The Top Life Insurers: Is Bigger Better Or Best?

I love to freak out salespeople. They ask me if they can help me, and I say, "Have you got anything I'd like?" Then they ask me what size I need, and I say, "Extra medium." --- Stephen Wright

Can you imagine 20,000 employees in a head office? That's what we had at Metropolitan Life in New York City the late 1980s --- then the second largest life insurer in North America. Later at National Life, we had less than 400 employees across Canada.

Does biggest mean best? Does bigger mean better?

When Bigger Meant Best
If size did matter, the dinosaurs would still be alive.
--- Wendelin Wiedeking
Years ago, size mattered. The largest organizations were seen as prestigious, desirable, and the places with the best job security. That was then. Now big means compromise. Big means boring. Wal-Mart dwarfs every company in the Fortune Global 500 for the second year. Now size becomes a hurdle because speed matters more than the brakes of legacy. GM dwarfs BMW, yet nimble BMW ranks as Fortune's most admired car company.  

The Exception: Financial Services
For financial services, scale can benefit you because of the hefty outlays for a sound and thriving operations. Here are the main advantages of size for life insurance
  • greater financial strength (to meet promises, grow and weather economic typhoons)
  • lower unit costs (major investments in costly technology spread over more volume)
  • more security mechanisms (privacy, record keeping, redundancy, disaster recovery)
Because regulations and tax rules vary by country, ownership by a super-sized foreign parent doesn't mean much. The Canadian operations are typically subsidiaries that can easily be discarded with minimal impact on the parent. As protection, regulators require that insurers (both foreign and domestic) keep enough assets in Canada to meet the promises made to you.

The Top Five Insurers
The Financial Post 500 ranks the top insurers in Canada each year. Here are the results for 2007, published in June 2008. Here are the top five by revenue
  1. Manulife
  2. Great-West Life
  3. Sun Life
  4. Industrial Alliance
  5. Desjardins
Here is the top 20 (click to enlarge).

You may be surprised at how small some of the big names are. While biggest doesn't mean best for you, bigger often means better. And more peace of mind.

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September 21, 2008

The Dangers Of Visiting OSFI's Website

While writing Oblivion: What Happens If My Life Insurance Company Dies?, I found a potentially harmful website from an unlikely source: OSFI. The Office of the Superintendent of Financial Institutions (OSFI), regulates banks and most life insurance companies in Canada. You'd expect their website to be very safe. Maybe it is. 

The Risks
The new Google Chrome web browser spots problems that other browsers miss and explains their concerns:
Of the 1092 pages we tested on the site over the past 90 days, 304 page(s) resulted in malicious software being downloaded and installed without user consent. The last time Google visited this site was on 09/21/2008, and the last time suspicious content was found on this site was on 09/21/2008. 

Malicious software includes 934 scripting exploit(s). Successful infection resulted in an average of 2 new processes on the target machine.
--- Google 
Here is the screenshot.

Protecting Yourself
You can protect yourself by taking precautions
  • up-to-date antivirus software with Internet security
  • up-to-date web browsers other than Internet Explorer (e.g., FireFox, Chrome, Opera)
  • visiting safe sites
Perhaps there are no risks on the OSFI website. Google may be over-reacting, as when this blog was temporarily blocked as spam. 
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