The consolidation craze

The changing pension and benefits carriers landscape and how it affects employers
By Susan Singh
|Canadian HR Reporter|Last Updated: 05/28/2002

Demutualization, mergers and acquisitions, even bankruptcy — the insurance industry has been through many changes in recent years. Employers going to the market for benefits and pension plans will find fewer vendors and a greater reluctance by carriers to take on high-risk clients.

“Where formerly there were 14 or 15 carriers for a line of business, now there are eight to 10,” says Ken Cooke, a consultant with Aon Consulting. “We find carriers are selective in their bidding depending on their business strategy. Companies that quote aggressively to increase volumes, may hold back on subsequent business.”

“Companies that have gone through demutualization are now accountable to shareholders,” says Rick Holinshead, managing partner, Ontario Group Practice at Morneau Sobeco. “Non-stock companies, while in the minority, have followed the lead of the stock companies. In general, the insurance industry is more selective and more cautious in their pricing models.”