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(October 17, 2008) While Canada may be heading into a recession, with job losses in manufacturing mounting, there is one industry that seems to struggle to fill its ranks: insurance.

“The recruiting pyramid has been flipped upside down,” says Donald Givelos, founder of DGA Careers, which specializes in recruiting for the insurance industry. “Years ago, there were 10 candidates for one open position; today there is only one or two good candidates for ten positions.”

Firms hoping to attract the most talented applicants need to develop a continuous formalized recruitment process, rather than simply conducting ad hoc hiring as vacancies arise.

“Although much has changed in the human capital arena over the years, one thing still remains the same,” says Givelos. “Great people are always in demand, but now much more difficult to find — especially in insurance.”

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Consumer confidence drops like a stone

(October 17, 2008) Following the trend in the United States, Canadian consumer confidence took a nosedive recently, according to the Conference Board of Canada.

The reading taken in early October — after dramatic stock market plunges in September — was the lowest in more than 25 years. The index fell 11.9 points to 73.9, with the sentiment reading from 2002 being the 100-point benchmark. To find a worse mood, you would have to look all the way back to the recession of 1982.

“The global credit crunch and major stock market declines clearly had an effect on consumer confidence in October,” said Pedro Antunes, director, national and provincial forecast at the Conference Board. “In addition, consumers felt that they would be worse off in six months, indicating concerns that the financial crisis would not be resolved quickly.”

Since wrapping up the survey on October 8, there have been some signs of recovery, but the Conference Board points out that it will be several months before global credit markets start to loosen.

Sentiment took the hardest hit in Ontario, where the reading fell from 84.5 in September to 67.9 in October.

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Accounting change allows reclassification

(October 17, 2008) Canada’s Accounting Standards Board (AcSB) has announced amendments to its rules regarding the pricing of financial assets, which will bring Canadian standards in line with International Financial Reporting Standards (IFRS).

Under the new accounting rules, financial assets may be reclassified in specified circumstances.

“The amendments allow entities to move financial assets out of categories that require fair value changes to be recognized immediately in net income,” said Paul Cherry, chair of the AcSB. “However, it must be stressed that assets will remain subject to impairment testing, and the amendments involve extensive disclosure requirements. Transparency will remain for investors.”

The staff of the AcSB is now considering additional guidance to cover a wider range of investments, as well as possible enhancements to disclosures about liquidity risk and fair value measurements.

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IFB offers members LOMA training

(October 17, 2008) Independent Financial Brokers (IFB) has teamed up with insurance and financial services education provider LOMA, to deliver online training to its members.

LOMA will provide access to more than 20 different courses required for Life License Continuing Education in most jurisdictions, covering topics like life, disability and critical illness insurance, investment and underwriting concepts, annuities, sales skills and customer service.

” E-learning is the perfect complement to the one-on-one style of education offered at IFB Summits,” said IFB education committee chairman Doug Vanderburgh. “LOMA is the ideal partner to meet the needs of the association and provide outstanding benefits to its members.”

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Canadian pension plans rocked by credit crisis

(October 17, 2008) The value of Canadian pension plans suffered the largest quarterly decline in a decade as the credit crisis caused equity markets around the world to drop.

RBC Dexia Investor Services says the value of plans tumbled 8.6% during the third quarter of 2008.

“Year-to-date, Canadian pensions are down 10.1%,” says Don McDougall, RBC Dexia’s director of advisory services. “It hasn’t been pretty—and judging by the performance in October so far, the situation is not getting any better.”

The hardest-hit equity class was Canadian equity, which plunged 18.2% as weakening commodity prices sent the S&P/TSX composite index lower. Materials stocks fell 33.6%, while energy stocks dropped 28.3% in Q3.

“Fortunately, most Canadian funds had already trimmed their exposure to resources,” McDougall explains. “By locking in gains earlier in the year, pensions deftly outperformed the index by 1.7%.”

Global equities fell 11.2%, matching the MSCI World Index in the latest quarter. Ironically, American stocks and a stronger U.S. dollar helped cushion the blow. In Canadian dollar terms, the MSCI EAFE index slumped by 16.8% over the quarter, an 18-year record decline.

In domestic bonds, Canadian pensions slipped 1.5% in the quarter—far below the 0.4% dip in the DEX Universe broad market benchmark. Spreads varied considerably: longer maturity bonds dropped 3.1%, while real return bonds lost 9%—their worst quarter in 14 years.

(10/17/08)