(April 12 – 15:45 ET) – Clarica is confident it will sustain profitable growth in the future, Bob Astley, President and CEO, told the Toronto Society of Financial Analysts.

He said Clarica’s confidence in future growth stems from four key areas: expected growth in its wealth management business, expansion in the U.S. through steady growth in the reinsurance market, especially the retrocession business, continuing innovation in the traditional protection business and improving operating efficiencies.

Astley said he agrees with those who say the individual life insurance business in Canada is maturing. However, he noted that “premiums generated from this business will continue to provide Clarica with a steady and predictable stream of income and, secondly, Clarica has a diversified revenue stream.”

Astley told his audience that “Today, 26% of Clarica’s earnings are generated from the wealth management business. Growth in this business has been fuelled by strong gains in assets under management and investment returns. Going forward, our status as the Number 2 ranked player in the defined contribution pension business as a result of the Royal Trust acquisition in January of this year, provides Clarica with economies of scale that will allow us to improve systems and offerings and expand our capabilities globally.” The acquisition increased Clarica’s assets under administration by 50% and added 175,000 additional plan members.

Astley said “we believe we can increase Clarica’s share of the investor’s wallet by expanding the penetration of our current retail customer base. Leveraging our existing relationships with customers particularly those in the mid-income segment — people who need and want financial advice and are most amenable to buying financial products — is key to sustaining growth.”

Only 14% of Clarica’s two million retail clients have both life and wealth management products. “That’s a tremendous opportunity to cross-sell to people with whom we already have a strong relationship,” said Astley.


Another key factor in sustaining growth will be continuing innovation in the traditional protection business, Astley said. “For example, only 1% of our three million retail and group customers have a health product such as long-term care or critical illness. There is also an opportunity to sell individual protection products to Clarica’s one million group insurance and pension customers.”

Astley said Clarica is committed to improving operating efficiency as an important means to enhance profitability. “In the Group insurance area, ongoing changes in price structure and implementation of cost reductions continue to move Clarica towards its target of industry-leading expense levels. Further cost savings have resulted from consolidation of administrative and overhead expenses, reflecting Clarica’s history of integrating acquired business in a timely and cost effective manner. At the same time, we continue to effectively deploy technology, particularly e- business capabilities to improve productivity and enhance service to customers” Astley said.