The mortgage industry is in the midst of a transition in Canada, and Manulife is ready to evolve with it.

In recent years, the adoption of cutting-edge technologies has streamlined operations, affording brokers the luxury of spending more time nurturing client relationships while expediting approval and other processes on the back end.

And this transformation couldn’t have come at a better time, just as the country is bracing for an impending deluge of mortgage renewals slated for 2024 and 2025. An astonishing 2.2 million mortgage holders, representing nearly 45% of the nation’s total outstanding mortgages, are poised to renew their mortgages in the midst of the current challenging rate environment.

Manulife’s head of creditor insurance and 25-year industry veteran, Mario Cloutier, recently sat down to discuss how the institution is preparing for the upcoming challenges and opportunities.

What is the latest on Manulife’s position in Canada?

There have been a lot of changes at Manulife to retain and consolidate our position as market leaders in the individual insurance space in Canada.

We’ve identified a few key market segments where we can continue to be a market leader, and one of them is mortgage creditor insurance. Manulife is now super dedicated to the broker distribution channel, and we’re doing quite well on the bank side; we’ve grown our market share considerably in recent years, and we’re looking to replicate that success in the mortgage creditor business as well. There, we’re number one and are looking to double that business in the next 36 months.

Why delve deeper into the mortgage creditor side of the business now?

We think there could not be a more perfect time to do that, for a couple of reasons. Number one, one of the largest refinance markets in history is coming up in the next two to three years. Options are limited because of the high-rate environment and the challenges customers face when switching from their original institution.

According to the Canadian Life and Health Insurance Association, one in three people will be disabled for 90 days or more at least once before the age of 65, and we’re offering a range of new solutions to ensure they’re covered.

What are some of the primary challenges Canadians face as their renewal date approaches?

The size of mortgages in Canada has grown quite substantially in the last few years. In 2016, the average mortgage size was somewhere around $400,000 to $500,000, and now in many parts of the country average mortgage sizes are flirting with the $1 million mark, and that creates an affordability problem for Canadians.

What makes Manulife’s Mortgage Protection Plan Insurance better suited to help Canadians face this upcoming wave of renewals?

Most of the creditor insurance products that are available through the major financial institutions are not transferrable with your mortgage, and because of the number of mortgages that are going to need renewal, the proper solution might not be with their existing institution.

Manulife’s Mortgage Protection Insurance lets them port their coverage, so it follows the customer wherever they go, no matter what their mortgage product is.

How else is Manulife helping them overcome those challenges?

As Canadians face renewal, they’re increasingly looking for flexibility and affordability. That’s why we launched partial coverage in March, which provides a more affordable option for those with properties over $400,000. Customers can choose to get coverage for half, three quarters or all their total mortgage financing amount.

That means if something were to happen to one borrower on the account, you can cover whatever percentage of the mortgage payment they’re responsible for. That coverage is also portable to a new financial institution.

One of the other key features that’s unique to us is pre-funding underwriting. So, it’s not a financial underwriting, like a typical mortgage that looks at the customer’s TDS/GDS. Instead, we look at your housing situation as of today, and find you coverage for the remainder of the financial life of your mortgage.

So, if you got a mortgage with another provider three years ago and had Manulife Mortgage Protection Plan coverage on that, and you decide to switch to Manulife Bank, the pre-funding underwriting from three years ago will still be eligible, so you don’t need to pay extra to move your mortgage over.

How are you preparing for this wave of renewals internally?

We’re looking to automate a lot more of the process to make it more seamless for the client. Historically, creditor insurance requires a lot of back and forth with an advisor. Because of our distribution channels, clients can discuss their mortgage financial needs and creditor insurance needs at the same time with their brokers.

What we’re looking to do as a financial institution is to grow our capacity to provide automated creditor insurance proposals at the same time as the mortgage commitment. Mortgages are the biggest financial decision of most people’s lives, and we’re making it easier to help protect that purchase by doing it both at the same time.

Obviously, they’ll be able to benefit from the weight of an institution like Manulife, which is known to be a subject matter expert in individual insurance in Canada.

Speaking of, Manulife is rapidly growing beyond Canada’s borders. How does that affect your clients and operations back home?

In order to know where you’re going you need to know where you came from. Manulife is a Canadian company that’s proud of its origins, and I think the Canadian financial system has always kept its end users, the customer, top of mind. Manulife is proud of that culture.

Canadian institutions have since brought that mindset and approach to the rest of the world. Manulife has become a powerhouse throughout the world because of that position in Canada, and because we respect and partner with our customers. That’s why we’ve implemented a strategy called “Winning at Home,” which seeks to establish Manulife as a market leader across all of our business units here in Canada.