Opinion: Alberta solutions for diversification, energy transition 

Article content

Alberta’s strongest competitive advantage is its willingness to adapt and innovate. With an energy sector in transition, and a need to diversify its economy to provide diverse opportunities for its investors and workforce, Alberta continues to reinvent and recover. Policymakers have a crucial role to play that can help facilitate a low cost and innovative financial services without impairing investor protection and financial stability. Combined with the entrepreneurial spirit of Albertans, the province creates fertile ground and support for agile regulatory solutions geared towards sustainable solutions for a diversified economy.  

Advertisement 2

Article content

This is beginning to happen. The Alberta government registered in August its first captive insurance company, Great Pacific Financial Ltd. Captives are self-insurance vehicles for companies that cannot find suitable insurance, historically popular in Bermuda or the Cayman Islands. This is the start of a potentially multibillion-dollar industry here in our province. 

Article content

Historically, Alberta always felt the Central and Eastern Canadian financial services have been insufficiently sensitive to the needs of a resource-based economy in the West. Back then, banks were especially resented for closing mortgages on local farmers. For this reason, the Alberta Treasury Branch was created in the 1930s so that Alberta would be less dependent on financial decisions made by banks in Central Canada. Alberta’s own bank is not a chartered bank and is regulated by the government of Alberta, not the federal government under the Bank Act.  

Advertisement 3

Article content

Fast forward to 2022, new developments have taken place: an unprovoked invasion by Russia in Ukraine and energy disruptions leading to sky-high European prices for natural gas and oil. Climate change concerns combined with a worldwide energy crisis have forced governments to weigh short-term energy requirements against long-term energy transition goals.  

The insurance industry has an important role to play in energy security and transition. Capital and insurance are required for companies to develop new sources of traditional and renewable energy to cope with unpredictable contingencies that impact safety in the production and distribution of energy. With Europe requiring more energy from a variety of sources both in the medium and long term, insurance will be critical to the development of economical, reliable and environmentally safe energy. 

Advertisement 4

Article content

In the spring of 2022, Alberta government introduced amendments to the Insurance Act (Alberta) and the Captive Insurance Companies Act (Alberta) that have become law as of July 1, 2022. These insurance reforms are designed to provide additional insurance capacity to businesses, particularly in the energy sector, while creating new opportunities for new insurers to co-insure alongside the captives and reinsurers.  

In addition to Great Pacific Financial, there are already several other insurance initiatives being set up under the new legislation along with an initiative to build a large, dedicated reinsurer based in Alberta by my company Transformation Re. In the simplest term, reinsurance is insurance for insurance companies. It enables insurance companies to protect themselves in the same way that car, home and life insurance offer financial protection to individuals in times of need. The most famous examples of reinsurers are Lloyds, London or Swiss Re. 

Advertisement 5

Article content

Transformation Re initiative emerged from a grassroots voluntary task force working with the government of Alberta to create economic opportunities within the province and establish Alberta as a globally competitive insurance destination. The intent is for Alberta to become a hub to consolidate, transfer, exchange, share, and package diversified risks from multiple industries and sectors across a variety of global jurisdictions via the development of new asset classes. 

A newly created insurance industry in Alberta has an opportunity to develop new products and new ways of sharing risk to help businesses navigate the uncertain landscape, providing more autonomy for the province’s financial sector and supporting further economic diversification. It will lead to lower-cost financial services, economic diversification and a more competitive Alberta economy. 

Kasha Piquette is the chief sustainability officer and co-founder of Transformation Re. 


    Advertisement 1


Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Leave a comment

SMM Panel PDF Kitap indir