CEO and Chairperson Interview

What issues or trends were top of mind for you in 2024?

Rob Wesseling (RW): Here in Canada, extreme weather events in 2024 resulted in a record-breaking $8.5 billion in insured losses across the industry, resulting mainly from just four events in the late summer. This does not account for uninsured losses, nor the immeasurable emotional and social impacts that follow from these events. I’m proud of how our claims teams showed up in their communities to respond quickly and with great care to ensure their financial needs were met. It’s increasingly imperative that as an insurer, we continue to expand our business models to help build greater resilience into Canadian households and communities, ensuring that our society can navigate this rising risk and recover with strength when catastrophic events do occur.

We’re also seeing rapid technological advancement of artificial intelligence (AI). As the momentum of this technology builds, we must ensure that we apply good governance and mindful consideration of AI that will enable us to use it in ways that align with our principles, are transparent, and that will benefit our members, clients and communities.

I’m also mindful of rising divisions and polarization in our society. These divisions – whether economic, ideological, or political – present headwinds to progress in solving for the increasingly complex challenges that we face. Complex challenges require co-operation across differences. Ensuring we have diversity of thought, backgrounds, expertise and experiences is paramount to our ability to develop impactful solutions for a resilient, sustainable future.

How has our co-operative identity helped us succeed?

John Harvie (JH): Our co-operative identity is a business structure that enables us to deal with opportunities and challenges as they occur. This identity is part of everything we do, and it helps us develop meaningful, collaborative, long-term solutions to the complex societal changes and trends we have faced and will continue to face in the future.

Our co-operative is made up of 46 member organizations, representing a wide regional and sectoral diversity that cuts across social, cultural and political spectrums. We embrace these differing philosophies and perspectives in our board, committees, and membership, which enables us to represent the interests of millions of Canadians in our decision making. As a co-operative, we explore how our decisions might impact the well-being and resilience of the communities we serve. We’re oriented to the needs of present and future generations of Canadians.

In what ways are we advancing how we fulfill our purpose of financial security for Canadians and our communities?

RW: We continue to enhance our products and services to ensure clients are covered for the risks they face today, while building greater resilience to future losses. With our recently launched TomorrowStrongTM home insurance endorsement, when a clients’ roof is damaged, claim payouts don’t just cover the cost of the old roof, they provide additional funds to install a roof that is wind, hail and fire resistant. This represents a reimagining of the traditional insurance model.

We served more Canadians than ever with our holistic financial and investment solutions and now have over $3.4 billion in retail wealth assets under management and administration through our range of mutual funds and other investment products that are designed to serve all clients regardless of their level of wealth.

As an asset manager, we are leveraging a significant proportion of our $13.5 billion in invested assets to catalyze a more resilient and sustainable society. At the end of 2024, we had invested 52.6% in climate transition and impact investments, equal to $7.1 billion. Through our resilience investing initiative, we’re working to develop opportunities to invest in innovative climate resilience and climate-adapted infrastructure projects across Canada.

JH: I’m proud of our reputation for supporting the resilience and sustainability of our communities through the partnerships we forge and the investments we make each year. In 2024, we contributed $13.3 million to charities, non-profits and co-operatives, which represents 3.8% of our pre-tax profit. Included in this amount is the $1.8 million contributed to co-operatives providing meaningful services to their local communities.

I’ll also highlight some new additions to our governance policies and procedures, which helps to ensure we can deliver on our purpose in a way that is sustainable over the long term. We approved a new Fair Treatment of Customers Policy, which codifies our commitment to concepts such as ethical behaviour, acting in good faith and the prohibition of abusive practices; and we launched the Democratic Succession Committee, which uses a democratic approach to identify the skills and capabilities needed to enhance future boards. Each year, our board evolves, welcoming new board members who strengthen our governance. Our IDEA in Governance policy will help to advance our overall approach to diversity on the board.

What were our greatest challenges in 2024?

RW: It was a challenging year in terms of financial impacts, as extreme weather events, auto theft, increased rates of insurance fraud, and higher cost of repairs due to elevated prices resulting from the high inflationary environment of recent years all coalesced as significant headwinds to our profitability.

Over the years, we’ve been working to evolve our business to focus more on building resilience to help minimize future losses in a world where we know the risks will increase. It’s imperative that we – our co-operative, our industry, our external partners and the people and communities we serve – shift our thinking on what insurance is and how it operates. Insurance needs to become a resilience business, not just an indemnity business. This shift won’t happen overnight, but Co-operators is committed to this transformation, and to catalyzing others to follow suit.

In the face of all the challenges we’re facing, our capital position remains strong. We ended 2024 with $463.3 million in net income before tax. Our continued capital strength is critical to our ability to deliver on our purpose, to ensure our clients and communities can recover from losses and maintain their financial security in a rapidly changing world.

JH: Our co-operative is growing and becoming more complex every year. Through our strong relationship with the CEO and executive leadership team, our strategic planning and oversight of operations, our co-operative is resilient and successful amidst the challenges Rob mentioned.

As a complex organization with over 75 entities, we must work to ensure effective and efficient governance, especially as legal and regulatory requirements and regulator expectations rapidly evolve. We’re focused on enhancing our oversight to identify risks and opportunities and improve reporting from all the businesses in our group of companies.

From a governance perspective, we see all our challenges as opportunities to better serve our communities. We firmly believe we are better positioned to face complex challenges and make decisions that will secure our future success when we have a broader range of experience and diversity in the room. We have further to go to embed diversity into our governance tables and processes, and our IDEA in governance policy will help us do that.

What inspires you, as you consider the future?

JH: This is my final year as Chairperson of Co-operators Board of Directors, a position I’ve been grateful to hold for the past decade. When I look back on my fourteen years as a member of our Board of Directors, I'm incredibly proud of this company, and the successes we have achieved together over the years. Our board works hard, and the collaborative nature of our business demands that we co-operate. This makes us stronger and more sustainable, but it isn’t always easy.

I am so heartened by the progress we continue to make in pursuit of our purpose, vision and values and in our ability to adapt and evolve to ensure we’re meeting the needs of our members, our clients and our communities. I’d like to acknowledge our Financial Advisors and staff, as they are crucial in our ability to deliver on our purpose. Because of the strong relationships they’ve built with the millions of people we serve, we’re able to develop the creative and collaborative solutions that are needed to tackle urgent and complex challenges. The cooperative spirit behind our work, I believe, will continue to be our greatest strength.

RW: With the future in mind, I turn to our vision, which is to be a catalyst for a resilient, sustainable society. This inspires me when I think of all that is possible, because there is great opportunity for us to lead and to act in ways that support those who are doing the work, and to encourage others to follow suit. If we remain grounded in our purpose and focused on our vision of the future, we can help to build the prosperity of current and future generations. In times of uncertainty, and in times of crisis, it is crucial that we work in co-operation with one another. This doesn’t mean we need agreement, alignment across all dimensions. It just means we are at the table, willing to collaborate, embracing our differences as strengths that enable us to explore all possible solutions and to consider the diversity of challenges in our midst. It may seem cliché, but to me it rings true. We are stronger and more resilient, together.