Draft:Standard Life in Canada

president of the Bank of Montreal; David Davidson, manager of the British bank of North America; and William Walker, president of the board of trade in Canada.[3] A local board was set up in Montreal with the ability to accept risks up to £2,000 equivalent,[4] and local directors included the same Peter McGill and David Davidson, as well as Alexander Simpson, cashier at the Bank of Montreal; Christopher Dunkin, advocate and secretary of state of Canada East; and Hew Ramsay of Armour & Ramsay. Additionally, John Rose was appointed solicitor, and Dr G.W. Campbell became Medical Officer.[5]

Under the management of Alexander Davidson Parker (manager 1846-1857), the Canadian office was opened 25 February 1847 at Great St James Street in Quebec. The Commercial Life Assurance Company was acquired by Standard Life in 1846, and afforded Colonial Life their established local board at St John's, New Brunswick. This presence was quickly expanded upon across Canada with further boards in Toronto, Quebec, Halifax, Nova Scotia, and St John's Newfoundland.[6]

Despite early expansion there was a decline in business in 1855, which was compounded by tension between Edinburgh manager William Thomas Thomson and Alexander Parker. In 1856 the Canadian business was visited by Edinburgh staff to investigate business prospects, which led to the Toronto branch being given its own local board. At the same time, Alexander Parker and his clerk Henry White were asked to resign.[7] James Gilchrist Dixon and William Miller Ramsay (inspector of agencies), took over the Canadian business, and expanded the company's reach, including agents appointed at Galt, Napance, and Collingwood, and local boards at Hamilton, Kingston, London, Quebec, and Ottawa.[8] Upon Dixon's retirement in 1860, William Miller Ramsay (manager 1860-1901) became manager, and worked closely with John O'Hagan to further expand the Canadian business.[9]

Under the overarching management of Spencer Campbell Thomson (Edinburgh manager 1874-1904) Canada was given greater autonomy from the main business in Edinburgh, although Thomson travelled to all overseas offices regularly to experience local conditions first hand.[10] The early 1870s saw a downturn of Canadian business, largely due to domestic competition.[11] William Ramsay, Canadian inspector of agencies, suggested that canvassing should be used to stand against the competition,[12] but this technique was not employed until it was encouraged by Canadian chairman Sir Alexander Galt in 1877. Also under the encouragement of Galt, district agents were established across Ontario, as well as in Nova Scotia and the newly added province of Manitoba, and the Canadian rates tables were re-worked to be more in line with local companies.[13]

While the Canadian business was able to maintain their presence, economic depression, local competition, and the implementation of legislation that favoured domestic companies provided a challenging backdrop for business across the decade.[14][15]

While both William Ramsay and David McGoun had attempted to expand the business as Canadian confederation expanded westward, it was not until the early 1910s that the company's westward expansion was implemented more successfully. To counter Standard Life's withdrawal from Europe in the early 1900s, the company saw Canada and the rest of North America as the ideal market for both new business, and also investment opportunities. In 1909 Leonard Walter Dixon (manager, Edinburgh) visited Canada and travelled westward across the country to assess possibilities for expansion.[22] The board was especially interested in western Canada for the possibility of investing in farm mortgages, as well as continuing to expand ordinary business,[23] and during his visit Leonard Dixon visited farms that held Standard Life mortgages in Saskatchewan, and implemented an inspection system under T. Dick Peat, Investment Clerk.[24]

In 1911, William Hew Clark Kennedy was promoted to assistant manager, from the position of secretary. As assistant manager, he was tasked with the expansion of business into the west, with particular focus on Manitoba, Saskatchewan and Alberta – all of which were benefiting from bountiful wheat crops. At the same time, William Mackenzie was promoted to chief agent, based out of Winnipeg, Manitoba, and was responsible for placing inspectors for larger towns throughout the three provinces[25] At the outset of World War One, Canadian secretary William Hew Clark Kennedy joined the Canadian Infantry Brigade, becoming a highly decorated soldier. Following his safe return from the war, he became manager for Canada, succeeding McGoun in 1918.[26]

Through threats of nationalisation of industrial assurance companies and continued competition from local companies,[36] Standard Life broke through the competition in 1951 when they agreed four large schemes—about 500 people each. This led to a new pension plan where premium costs could be met through investment profits which then, in turn, led to the doubling of the sales force.[37] By 1955 there were 302 group plans in place, assuring 44,000 employees, and the business continued to grow, quickly outperforming competitors in the Canadian market. Alongside pensions, ordinary business shifted focus away from whole-life towards term assurance, largely in relation to mortgages.[38]

When the Parti Quebecois and the threat of Quebec independence rose in the late 1960s, Standard Life began to make plans for a future francophone environment. The Foreign Investment Review Act (1974) was a strong indication of the potential for economic nationalism in Canada, particularly prominent within Quebec.[52] Following changes to the Canadian and British Insurance Companies Act (1977) and continued threat of Quebecois nationalism, chairman Thomas Risk, directors Sir Thomas Waterlow and John Trott, and manager David William Donald visited Canada in 1977 to consider whether or not they ought to remain within Montreal, or even within Canada as a whole.[53]

In 1978 Alex Shedden (assistant general manager and actuary) travelled to Canada to negotiate with Manufacturers Life for the possible sale of the branch, which had begun the previous year.[54] Despite a deal having been agreed, however, the proposed selling of the business was not well received by either the people of Quebec or the Canadian Standard Life board, neither of whom had been made aware of the negotiations.[55] While the board initially still intended to proceed, plans were ultimately halted due to contingent liability on existing policies.[56] In the period directly following these events, the Canadian branch saw a complete restructuring of the reporting structure, removing the local board and putting a direct reporting line between the president of the Canadian business and the general manager in Edinburgh.[57] Additionally, all policy documents were to be made available to Edinburgh management. After removing the Canadian board, four former members were offered places on the Edinburgh board - Lucien Rolland, Harry Macdonell QC (lawyer in Toronto), Bill Mulholland (president of the Bank of Montreal), and Drummond Birks.[58]

In 1980 Alastair Fernie, one of Burns’ deputies, was appointed President of Canadian Operations. As there were still concerns among staff about another possible merger, his appointment as an internal hire successfully soothed fears, and under Fernie's management the Canadian business continued to grow.[58] In the same year the branch contributed 40% of Standard Life's new insured premium income, prompting UK manager George Gwilt to remove the actuarial requirement to balance the business, thereby allowing Canada to sign profitable annuity contracts via brokers.[59] The company began the Standard Life marathon in 1983, marking the 150th anniversary of Standard Life's presence in Canada.[60]

In 1983, the Standard Life Alliance Services (SAS) was formed with Alliance Mutual, providing group life, accident and health insurance policies.[61] In 1986 Alliance mutual and Industrial Life merged, and SAS was renamed Standard Industrielle Alliance Services (SIAS).[61] Canadian assets were primarily fixed-interest securities, although equity and property holdings were steadily growing. Through the 1980s there were several large property developments, including the Standard Life Centre in Hamilton (1983), and the Standard Life Centre in Toronto (1986).[62] Under a return of confidence in investment-linked products in the mid-1980s, the Canadian products of Registered Retirement Income Funds (RRIF) and Ideal Capital Accumulator (ICA) plans allowed Standard Life to remain buoyant, despite challenges caused by new monetary policies from the Bank of Canada in 1989.[63] In 1988 the joint venture with Industrial Alliance was ended, and the balance of shares was acquired, affording an influx of clients with group life, accident health insurance products.[64]

Following the election in 1984, the incoming conservative government began to refocus pensions to give the consumer a wider choice and greater flexibility, which necessarily shifted Standard Life's focus towards personal pensions, particularly through Registered Retirement Income Funds (RRIF), allowing either guaranteed or variable returns. These products proved popular once the process had been simplified.[65] In 1988, the Canadian structure was once again reorganised under Alastiar Fernie, resulting in Operations, under Claude Garcia, and Corporate, under Roy Naudie, with all three men serving on the executive team in Edinburgh.[66] When Naudie retired three years later, Garcia became chief operating officer and executive vice-president.[67]

In 1993 an agreement was reached with Calgary-based company Sovereign Life for Standard Life to acquire first their sales force, and then their portfolio of life and annuity funds.[68] In the same year Alastair Fernie retired, and was succeeded by Claude Garcia. During the first years of Garcia's presidency, in response to changes in the property market, the company's property holdings were reduced, with a greater focus on corporate bonds and private placements,[69] as well as an increase in mutual funds.[70]

During the mid- to late-1990s Standard Life's Canadian business in group pensions plans grew from $250 million in 1995 to over $1.1 billion in 1999,[71] a success spurred on by the implementation of Client Communication and Education Services (CCES) in 1995. CCES's capitalised on the shift in focus for pension responsibilities from the employer to the employee, and gave individuals educational tools, seminars, and telephone services.[71]

A strategic review in 1997 highlighted two key areas of business: wealth management and managed care. To align to this, the operating structure was once again reorganised, resulting in the splitting of marketing into sales, and product development; and finance into property portfolio and the stock and bond portfolio.[72] Simultaneously, a regional system was implemented in an attempt to decentralise following revived separatist debates in Quebec.[73]

Also in 1997, Standard Life Portfolio Management (SLPM), the Canadian precursor to Standard Life Investments,[74] was given some autonomy to establish itself as an independent fund manager before later becoming a major subsidiary of Standard Life Investments.[75] By 1999 regional offices were established in Montreal, Ottawa, Toronto, Hamilton, Calgary, and Vancouver, and in addition to general advice on products and quotations, a new range of sales support products were offered via telephone, including life insurance applications—Tel Insurance— and money business applications—Tel Invest.[76] This proved incredibly successful, as in the same year the Canadian business surpassed its targets, and boasted responsibility for a quarter of the Standard Life group's new premium income for the year.[76]