Protecting benefits and supporting Canadians: How life and health insurers have responded to the Coronavirus

Stephen Frank, President and CEO, Canadian Life and Health Insurance Association

Like most Canadians, those working in the life and health insurance industry experienced the COVID-19 crisis as a sudden shock that completely changed our work. Within days, client centres began receiving an unprecedented number of calls about a wide range of products and concerns. At the same time, most of the 156,000 people who deliver health and drug benefit plans across Canada suddenly had to leave their offices and find a way to do their jobs at home, just like so many other Canadian families.

It is a testament to the strength of the industry and its preparation that our people made it work and are continuing to today. They know that what they do is vitally important to millions of Canadians.

Implementing business continuity plans

Within days of the crisis starting, as provincial governments began declaring states of emergency, insurers took necessary steps so that benefit payments, retirement income supports, annuities and other coverage could flow without disruption for Canadians. We at the CLHIA quickly reached out to all governments, both federal and provincial, to make sure the insurance industry was designated an essential service so our companies would have the flexibility they needed to keep those payments flowing even while other businesses were being shut-down.

Helping Canadians return home

As the disease spread to more parts of the globe, our industry’s efforts shifted to a huge effort in support of travel cancellation insurance. Insurers monitor the Government of Canada's international travel advisories because for many policies, cancellation is linked to Global Affairs’ “avoid unnecessary travel” or “avoid travel” notices. At these higher risk levels, trip cancellation with a refund becomes available for any reason. From mid-February, insurers had been acting on cancellations in regions where the virus was spreading rapidly and where the federal government had issued a travel notice.

However, the scope of this work changed enormously when in March the government advised Canadians to avoid all travel outside Canada. Many thousands were suddenly told to return from overseas. And in an instant, our industry had a unique contribution to make to a massive repatriation Insurers worked closely with Global Affairs’ officials and consular staff to get in touch with policyholders and help tens of thousands of Canadians return home on commercial or special flights.

Protecting essential services

In March, the Canada-U.S. border closed to tourists but stayed open for trade. This created an unanticipated problem for truckers whose job it is to keep supply chains moving. Many group and individual travel insurance plans specifically referred to Government of Canada travel advisories as a limitation for out-of-country medical coverage. Cross border truckers who rely on those plans were left wondering whether they would be covered for COVID-19-related illnesses in the U.S. Our industry stepped up to make sure these truckers, who every Canadian was still relying on to bring food, medicines and other supplies across the border, could continue to count on their travel health coverage. Working together, life and health insurers clarified that out-of-country medical coverage would continue uninterrupted for commercial truckers covered by individual or group insurance policies.

Supported Canadian employers, workers and their families

It is critical that Canadians not lose their health benefits during what is, at its core, a health crisis. To help employers sustain benefits, Canada’s life and health insurers have proactively provided premium refunds and other forms of premium deferrals to reduce costs and help them and their employees get through this unprecedented economic crisis.

Thousands of Canadians have also needed income while recovering from COVID-19. To help, insurers waived the usual waiting period for short-term disability benefits so that COVID-19 patients could access needed income supports from day one. And we made it as easy as possible for patients to access their benefits – waiving requirements for doctor’s notes and lab tests in favour of self-declarations.

While insurers are continuing to watch trends closely and are prepared to take additional measures, it is because of a combination of our industry’s actions, government supports and prudent steps by employers, that the vast majority of Canadians have not had any disruption to their workplace health benefits even in this period of heightened uncertainty.

Ongoing financial strength

Some have asked how insurers will emerge financially at the end of this crisis. While it is early days still, the life and health industry is emerging as one of the more resilient and strong in Canada. Initial indications from the largest insurers show that capital ratios have not significantly decreased from the last quarter of 2019 and, in fact, some have increased. With over $700 billion in investments in long term, stable assets like bonds and infrastructure, life and health insurers are a huge stabilizing force in the economy. The industry will be in a strong financial position and will be well placed to contribute to the economic recovery.

Working together, and with governments and employers, our industry has stepped up to meet this challenge.

It is still too early to know what society and business will look like once this crisis is past. But I feel entirely comfortable saying that Canada’s life and health insurers will be there for Canadians – providing financial security when they need it.