New Insurer Omega Formed to Fill Market “Gaps”

Canada’s newest insurer, Omega General Insurance Co., which received its federal license earlier this month, was established to fill gaps in the market which became apparent to Omega Insurance Holdings CEO Phil Cook through his work consulting with insurers. Omega was created to perform two roles: to allow for the portfolio transfer of branches exiting the Canadian market, and to offer customized products for corporate clients facing challenges in the regular market. The company, Cook says, “hasn’t been set up to compete with the rest of the industry – it is to complement what the rest of the industry is doing.”

The portfolio transfer operation will allow foreign parents of branch operations, which are required by regulators to keep capital in the country to cover all future liabilities, to take surplus out of Canada but still protect policyholders. Omega General CEO Ken Rayner says, “with the viable exit strategy Omega provides, it could attract more capital in Canada and provide more underwriting capacity.”

Cook says the company was also established because of a problem he witnessed corporations having as they faced higher deductibles or self-insured retentions during the hard market. Contractors, for example, are required to have certain deductible levels in order to bid for contracts – Omega will allow such companies to transfer that deductible to the insurer so that proof of liability cover can be granted. This kind of niche program could be offered in a variety of situations, or modified to fit different circumstances, Rayner notes.