Omega created to fill market “gaps”: Cook

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 parent company CEO Phil Cook through his work consulting with insurers.
Cook heads up Omega Insurance Holdings Inc., parent of Omega General and recently acquired Focus Group Inc. Cook says the need for a company to fill certain niches became apparent three years ago. 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 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 rather than inducing companies to leave Canada, the program should make it more attractive for insurers to come to Canada knowing if they choose to exit at some point, they will not face capital being tied up for possibly many years. “With the viable exit strategy Omega provides, it could attract more capital in Canada and provide more underwriting capacity.” Cook adds that the program could offer some relief to regulators, who would not have to monitor the potentially lengthy run-off of these branches.
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 contracts Omega will allow such companies to transfer that deductible to the insurer so that proof of liability cover can be granted. The coverage would be fully-funded by the insured, and rated, Cook explains. This kind of niche program could be offered in a variety of situations, or modified to fit different circumstances, Rayner notes.
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.”
Funding for the new company and the acquisition of Focus Group was provided by Integrated Asset Management Corp. as well as the original shareholders of Focus Group.