Three into one doesn’t go
Of all the corporate manoeuvres in recent times, the consolidation of three life insurance subsidiaries – Great-West, London Life and Canada Life – has to rank among the more foolish. The three companies have long been part of Power Financial but that, apparently, has not been sufficient for the kind of synergies needed in this day and age, according to company officials.
In Canada Life, they certainly have chosen the most storied of the three names for continuing use. Canada Life, founded in 1847, was the first Canadian life insurance company. Great-West acquired Canada Life in 2003, London Life in 1997, and continued to use all three corporate names. As the names Great-West and London Life disappear, company officials claim there will be no new job losses because all possible back-room efficiencies have already been achieved.
Proponents of this new merger will excuse me if I am skeptical. After all, employment promises made when London Life was bought were not kept. Moreover, Great-West showed an inordinate stubborn streak when it sought to buy the beleaguered Confederation Life in 1994. An insurance industry consortium that had agreed to help rescue Confed along with Great-West – the lone potential buyer – watched with growing ire as Great-West kept raising the amount of other people’s money necessary for a deal. Finally, the private sector bailed and the federal government seized Confed.
For individual clients there will be fewer choices under the new regime, a situation that drives up prices and premiums. There is also the question of differing corporate cultures. Life insurers have unique qualities that don’t always fare well under new rulers. Those making the announcement say that the unifying process will take two-to-three years. That certainly sounds like an honest claim, so far out into the future. By then, we’ll all have forgotten what was said in the beginning. Sometimes success can arrive by advance definition rather than actual accomplishment.