(The Canadian Press circulated the following story on May 8.)
CALGARY — Canadian Pacific Railway has signed a letter of intent for Manulife Financial to administer all the rail company’s insurance and benefits claims work that’s currently handled by several other companies.
Financial terms of the three-year agreement, expected to go into effect Jan. 1 of next year, weren’t disclosed.
“Consolidating benefits under a single insurance carrier will streamline the administration of our extensive benefits plan,” Rob Ritchie, CP Rail’s president and chief executive, said in a release.
“In addition, the three-year agreement provides an extended period of coverage and price stability that is not generally available in the insurance industry.”
The agreement covers health, dental and vision care, life and accident insurance, and disability benefits for CP Rail employees.
Manulife, which hadn’t been involved previously, will take on work currently done by rivals Canada Life, Great-West Life, Sun Life, National Life and ACE-INA, CP Rail spokesman Len Cocolicchio said in an interview.
“There’s a possibility this could lead to a few job reductions at CPR in the areas related to administration of our insurance benefits. But if that’s the case, it will likely be just a few,” Cocolicchio said.
CP Rail currently employees 15,500 people in total.
Canadian Pacific (TSX: CP) said its move to a single carrier for the various benefits covered by the agreement is a departure from the norm for large employers which often have a mix of insurance carriers to provide different components of their benefits package.
“We believe Manulife is setting the benchmark for the insurance industry with the launch of a competitively priced full business solution for employee benefits,” said Dominic D’Alessandro, Manulife’s president and CEO.
Manulife Financial (TSX: MFC), a Canadian-based company operating in 15 countries and territories, had $141.6 billion in assets under management as of March 31.