Positioned for the long term

Sometimes a little helicopter parenting can help propel you to the top – just ask Kathy Bardswick, president and CEO of The Co-operators Group.

“My mother actually applied to The Co-operators on my behalf but unbeknownst to me.”

How did this happen? In the late 1970’s, Bardswick was finishing up her MBA, which she undertook directly after doing an undergrad degree in mathematics. She had significant student loans at the time and was looking for a job.

“I guess my mother figured out that if I didn’t find a job she would be stuck having to help me financially, so she started applying to roles.” In an unquestionable case of mother knows best, Bardswick’s mom applied for a job for her daughter at The Co-operators Group. “They phoned her and she pretended to be me on the phone and they phone interviewed her,” recalls Bardswick with a laugh.

The Co-operators requested a face-to-face interview, so her mother called up Bardswick who was living in Hamilton at the time and informed her of the opportunity. “I said ‘Mom, an insurance company! Really!’”

Bardswick started at The Co-operators in 1978 in an underwriting role in Sault Ste. Marie on the property and casualty side of the business.

In preparation for this position, she had a six-month training period. As part of this training, she worked with a number of agents in Sudbury. The most interesting part of this, “what captured my heart, was that I was fortunate to go out on a life claim delivery.” The agent involved told Bardswick that he wanted her to see how important the work was that they were doing. He also explained he wanted her to see what happened when he did not do his job well enough.


We’re in a different world in the life business. This long-term, low-interest environment has had all of us in the life insurance industry rethinking why we exist and how we’re going to continue to exist and it has brought changes in the industry as a result.

“The claim cheque was quite small and he had been at that home trying to convince them to buy more and was unsuccessful. It was a very impactful learning experience for me early in my career.”

Bardswick has stayed with The Co-operators throughout her entire career but has moved around the organization in a great diversity of roles. “You name it, I’ve done it.” These roles gave her experience in underwriting, sales, complex claims and information systems management.

She was eventually transferred to Calgary to run The Sovereign General, a subsidiary company. After its acquisition, she also took charge of operations for L’Union Canadienne. From 1998-2002 she was chief operating officer of these companies under the umbrella of The Co-operators Group.

In March 2002, she was appointed to her current position of president and CEO of The Co-operators Group, a highly diverse organization – which includes life insurance, property and casualty insurance companies, as well as an institutional investment management firm, Addenda Capital Inc.

Democratic ownership

What has kept Bardswick with The Co-operators for her entire career? The organization is owned in a democratic way by the cooperative system with owners who see the business as very long term, she explains. “Because of this, there is no immediate upside for these owners in terms of share price, or substantial dividends that they might receive. “When decisions are being made, they are not for the next quarter or the next year. They’re really positioned in the context of maintaining a healthy, long-term presence.”

The owners’ long-term view enables Bardswick to create a similar internal culture at The Co-operators, which she says is particularly important in today’s post-crisis business environment.

“We’re in a different world in the life business. This long-term, low-interest environment has had all of us in the life insurance industry rethinking why we exist and how we’re going to continue to exist and it has brought changes in the industry as a result. Well, my ownership is saying ‘Canadians need life insurance, so how are we going to ensure that we do this in a long-term, profitable way?’”

The result is that The Co-operators has stayed more significantly in the individual life market than some of its counterparts, Bardswick says. “We’re still growing quite aggressively even though in the short term it’s hurting our bottom line.”

With the individual life business The Co-operators has been outpacing the rate of growth in the industry for the last three or four years. “That’s putting strain on our income statement but we’ve got the financial health to maintain the course,” she adds. “We haven’t pulled a lot of the product feature out of the market. We’re more focused on can we be more efficient? Can we drive some of the complexity out of the industry and benefit more from a streamlined perspective?”

She gives the example of segregated funds and the industry trend to pull back on some of the guarantees. “We haven’t moved at this point. We still think at this stage we’ve got to be careful about the level of risk that we’re transferring back to the consumer.”

She underlines that while The Co-operators has not had the same pressure to de-risk quickly like some of its competitors, the company is still pursuing a strategy that makes sense from a long-term earnings perspective.

“What I’m not suggesting is that we can be mediocre or cavalier about the (business) environment. We need to recognize that we’re in this kind of environment for the long haul. What we do over the long term needs to also provide us with financial health and stability.”

Transferring risk

Bardswick adds that de-risking – which means transferring risk back to the consumer – has stirred much reflection and debate. “We’ve really had internal battles associated with what is the right balance in moving risk now back to the consumer? How far should we go? We’re an insurance company. We’re supposed to help people manage their risks and the amount they don’t want to manage, they transfer to us. So we need to be more deliberate in thinking where is that right balance associated with our de-risking?”

First and foremost, what will guide the company’s decision-making is the reality that Canadians are still underinsured when it comes to life insurance protection, she says.

“There is a significant role that the insurance industry must play in assuming risk associated with that insurance need...”

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