Here are some of the stories that caught our eye this week:
CIBC focuses on financial advice for travelers
On Monday, July 24, CIBC will introduce a feature called Travel Tools to its banking app, in partnership with VISA and National Australia Bank. The feature will tap into your phone’s GPS to show you local exchange rates and applicable fees to show travelers what they can expect to pay when completing a transaction. This will be available in 152 currencies around the world.
Millennials most likely to travel uninsured
A new study by Allianz Global Assistance found that millennials are the demographic of Canadians who are most likely to leave the country without travel insurance. The study found that millennials (ages 18-34) make up 43.4 per cent of Canadians who say they do not purchase travel insurance every time they leave the country.
Millennials cite a number of reasons for forgoing travel insurance. Many believe it’s unnecessary (15.8 %) and expensive (15.3 %), while others believe their trips are too short to warrant purchasing insurance (14.9 %).
Allianz compared their study figures with internal claims data and found that millennials are also responsible for 32 % of all claims submitted in a given year. Looks like millennials are living up to their risk-taking reputation!
More stringent stress tests coming
BNN spoke to CIBC Deputy Chief Economist Benjamin Tal this week about the potential new rules coming down from Canada’s banking regulator OFSI regarding stress tests for uninsured mortgages.
Last fall, the Canadian government introduced a stress test on insured mortgages: those with less than 20% down would need to qualify at the Bank of Canada’s posted rate (currently at 4.64%), but borrowers with 20% down or more would qualify at the contract rate, which is typically around 2% less. If OFSI extends the stress test to conventional, uninsured mortgages, it could really have an impact on the purchasing power of all Canadians.
Ontario’s auto insurance rates rise again
This week it was announced that approved auto insurance rates in Ontario rose in the second quarter of 2017 an average of 0.76%.
This, despite a promise by the Liberal government in 2013 to reduce car insurance quotes by an average 15% by August 2015 (deadline was extended), and the fact that a report last fall showed Ontario’s premiums are the highest in the country despite having one of the lowest levels of accidents and fatalities.
Strong retail sales could mean another rate hike in October
Statscan reported this week that the annual inflation slowed to 1% last month…far below the Bank of Canada’s target 2%.
However, Canadian retail sales posted a third healthy increase in May, which some analysts say could still be reason enough to expect another rate hike this year, expected in October.