On May 1, RBC Insurance and The Edge Benefits decided not to renew the contract between them that made RBC the insurer behind the managing general agent’s disability product. This has put an end to a relationship that had lasted several years. The Edge has found a new partner in The Co-operators and RBC has in turn launched a similar product.On May 1, RBC Insurance stopped issuing new coverage for the disability and business overhead insurance developed and marketed by the The Edge Benefits Inc. The insurer will accept applications signed no later than April 30 so long as they are received by July 31. However, the insurer said it would continue to deal with claims for in force policies.
As for policies that need to be modified or amended because of an exclusion or for other reasons, the new underwriting period may be extended until June 30.
After discussing the matter with RBC, Edge’s CEO Neil Paton said he was dissatisfied with the insurer’s renewal conditions. He told The Insurance and Investment Journal that the terms proposed by RBC would have required them to give up more control over the administration and marketing of policies, and they would also have been obliged to raise prices. As a result, he decided to look for new offers and eventually signed an agreement with
The new agreement, which is renewable, came into force as of May 1 and has The Co-operators administering all claims for Edge Benefits as well as underwriting risks related to the health component of the product.
Representatives across Canada have a tall order to meet: Co-operators aims for a “double-digit” performance target in all its product lines. However, the novelty of the niche Edge product calls for a certain transition period.
“There will be adjustments and a transition since RBC agents won’t sell that product anymore,” says John Dark, actuary and head of business opportunities at Co-operators. “On the other hand, the one hundred of our agents selling Edge Benefits will progressively grow. We believe we’ll be back to double-digits in 2014.” Mr. Dark notes that Co-operators has 1000 agents.
He does not doubt that the insurer will meet its objectives. “We already have a lot of expertise due to our creditor product and the new agreement brings us access to about 22,500 advisors across Canada currently. They are independent agents, MGAs and AGAs, P&C brokerages, group consultants, and wealth advisors,” he says. As for advisors who are connected with insurers that already have a distribution agreement for The Edge (such as national accounts), Mr. Dark says they will also help extend Co-operators’ reach.
New RBC Product
To fill the void left by Edge Benefits, RBC launched its own product on May 1. It is the Fundamental Series, a disability product very similar to The Edge.
Kiara Famularo, communications advisor at RBC Insurance, says that the new RBC product consists of an instant issue injury policy as well as optional illness coverage that is available on a simplified underwriting basis. Additional features include the Best Doctors service, hospital coverage for stays of more than 24 hours, and a $10,000 accidental medical reimbursement benefit.
“This product will be available to all MGAs, national accounts, inter-corporate partners, and independent advisors who choose to offer this product,” says Ms. Famularo. “This product will also be available to our RBC insurance field sales representatives.”
The product is aimed at self-employed people in the blue and grey collar market. Since it is a short-term contract, the insurer says it is not exposed to long-term interest rate risks.