Monday, December 31, 2012

(No.224) "Heads in Beds": hotels & travel reality

"HEADS IN BEDS": an insider's expert advice for travellers about hotels

by Alastair Rickard

Jacob Tomsky, a university graduate with a philosophy degree and no prospects of employment, found a job working in a large new hotel. He has now worked for more than a decade in various hotel jobs particularly in front office roles.

Tomsky has now written a recently published book entitled "Heads in Beds: A Reckless Memoir of Hotels. Hustles, and so-called Hospitality" (Doubleday, 2012). It is partly the story of his life working in the hotel business and partly the giving of an insider's expert advice about hotels and the hotel business.

From reading this book the hotel client will learn far more about the reality of being a hotel guest, using a hotel, taking advantage of a hotel and being taken advantage of than from a decade of reading the weekly Travel Sections of, say, the Globe and Mail and the Toronto Star combined. Having read both papers for many years I can't recall either publishing a Travel Section hotel review that wasn't positive, certainly not one that was frankly and negatively critical. The reasons for this I will deal with elsewhere, including why this is the standard in newspaper travel articles with too rare exceptions.

Tomsky's hotel experience has all been in the U.S., mainly in a major New York City hotel. However the Canadian reader will still learn a great deal about booking a hotel room effectively, checking in, being a guest who enjoys her stay, and so on.

As a longtime traveller for both business and pleasure I think Tomsky's comments and advice offer verisimilitude. They not only reflect my own experience and lessons learned (plus a great deal more I didn't know) but provide an insider's explanation of why.

I have long preferred whenever possible and practical to deal directly myself -- when booking --  with travel providers, whether they are airlines or hotels or cruise lines. Tomsky's comments about the way in which Internet  travel agencies like Expedia, Travelocity, et al operate vis-a-vis hotels reinforce my own preferences and will be an eye opener for many travellers. They explain much.

For example, Tomsky explains that in a hotel "the worst rooms are given to very specific guests for very specific reasons. There are larger factors, such as being part of a huge faceless group, that make a guest more likely to receive one of the poorer rooms. Reservations made through Internet discount sites are almost always slated for our worst rooms. ... why? ... we cull the least amount of profit from these reservations. ...  The guest pays the Internet site a specific rate and then the hotel charges the Internet company an even lower rate. ... So less profit [for the hotel] equals less priority. ...

"So, since we have no reason to assume Internet guests will ever book with us again, unless our discount is presented to them, it truly makes business sense to save our best rooms for guests who book here [directly] of their own volition. And there is always, always a better room."

Based  on my experience over the years, particularly if I am booking a room in a hotel with which I am unfamiliar, I try to talk to a staffer in that hotel unless I have access to a highly knowlegeable concierge service like the one provided by Fairmont Hotels. I have been stung by assurances provided by a hotel chain reservation call centre on some point I have raised only to discover on arrival at the hotel that what I was told was wrong or misguided.

Tomsky explains why this can happen: "Outside [Internet travel] agencies know absolutely nothing about specific properties. In fact, even if it's a large [hotel] chain, it will have 'central reservations' which is some remote desk in India or Canada, and the agents there generate reservations for more than five hundred properties ... they will never, ever see. Certainly the [reservations computer] system lists the features ... but it is fallible. If you  truly want to know what you booked and what that means, you have to call the property itself."

When was the last time you read a really useful and candid review of a hotel in a newspaper or a 'travel' magazine? Probably not for a long time unless you read the New York Times.


A major reason is that the 'travel' articles about hotels and resorts (among other aspects of travel) are often if not mainly written by people whose stays have been paid for by the hotels or city tourist offices or other financially interested parties. Such logrolling by travel article writing freelancers and even publications' own journalistic staff is prohibited by the New York Times in its code of ethics, but by few others.

Sometimes a newspaper will allude to the inherent bias of such perks and payments to article writers by inserting a cryptic word or two at the end of a travel article relying on euphemisms like 'assistance' or 'subsidy' -- but often not. For the newspaper the bonus from such a 'journalistic' arrangement is clear -- lower costs. But such articles are too often little more than thinly disguised promotional pieces, and why not? What hotel or resort or airline  or tourist office or other interested party is going to pay someone's travel expenses to write other than positive articles?

Even major newspapers are so anxious to cut their costs and attract and please travel advertisers that the reader is most unlikely to read anything in them in the form of useful warnings that this or that hotel or resort is over-priced or inadequate or a place to avoid -- and why. The glossy travel magazines which populate newstands are in the main little more than uncritical platforms for ads from various travel-related interests.

Such realities make the candid and informed commentary provided in "Heads in Beds" by hotel business insider Jacob Tomsky a welcome and helpful bit of counterbalance to the usual gushing of the travel media.




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Thursday, December 13, 2012

(No.223) Frida Kahlo & Diego Rivera at the AGO

Frida Kahlo and Diego Rivera at the AGO:
a wonderful exhibition

by Alastair Rickard

The first time Pat and I saw an exhibition of paintings by the Mexican artist Frida Kahlo they were a part of a three person show that ended its 2002 North American tour at the Vancouver Art Gallery. It was billed as "Carr, O'Keeffe and Kahlo: Places of their own". Kahlo shared the stage with the Canadian Emily Carr and the American Georgia O'Keeffe. The exhibition had come to Vancouver from Washington's National Museum of Women in the Arts.

By the 1990s 'Fridamania' had begun to elevate Kahlo to feminist heroine complete with the moustache and unibrow Kahlo had made sure to include in her many self-portraits. Indeed, of the 150 or so of her paintings that survived her death in 1954 (age 47) most are self-portraits of one sort or another.

A major influence on Kahlo's life and her art was a near fatal bus accident when she was a young woman. It inflicted gruesome injuries on her, the effects of which were with her the rest of her life.

While the focus on Kahlo's life in recent decades has tended to omit inconvenient facts that are at odds with her current image as a long-suffering artist and wife or to which her enthusiasts might today object, it has reinforced the elevation of Frida Kahlo the artist over her art.

Pat and I were sufficiently interested by Kahlo and her work to make a point of attending the new exhibition brought to Toronto by the Art Gallery of Ontario (AGO), one of the several organizing institutions, of "Frida & Diego: Passion, Politics and Painting". (It runs at the AGO through Jan. 20, 2013.)

It is a fascinating exhibition on several levels and for several reasons, not all of them relating to the quality of the works on display. It brings together brilliantly a significant display of some of Kahlo's work with a selection of those painted by Diego Rivera, the Mexican muralist 20 years her senior, her husband (twice), philanderer and a self-described political revolutionary who shared with Kahlo a profound political naivete. They were both longtime Communists who came to admire Joseph Stalin and latterly dedicated themselves to him and his version of Communism and did so after the millions of deaths for which he was responsible had become more widely known.

During their often stormy lives together Rivera (who died at age 70 three years after Kahlo) achieved a fame as an artist not only in Mexico but internationally that far exceeded Kahlo's. Today it is the opposite. The beginning of the reversal dates from the publication of a 1983 biography by Hayden Herrera: "Frida: A Biography of Frida Kahlo (2003).

This book helped prompt and was followed by the taking up of Kahlo's work by celebrities like Madonna as well as by various American feminists -- indeed Kahlo has been called "Gender Studies' emblematic victim". The growing public recognition culminated in the making of the 2002 Hollywoood movie "Frida" starring Spanish actress Salma Hayek as Kahlo (but minus the moustache and unibrow) with the marvellous English actor Alfred Molina playing Rivera.

The effectiveness of the AGO exhibition has been enhanced by a wonderful collection of photographs (and even one silent video) of Kahlo and Rivera, together and separately, up to and including Kahlo on her "funeral bed".

When it came to his own life Rivera was not just a notorious womanizer (Kahlo had her share of extra-marital affairs) but an inventor of the narrative of his own life story. But he was certainly one of what were termed Mexico's leading "revolutionary painters". While he was perhaps most famous for the  murals he painted in Mexico and also in the U.S., often depciting aspects of the Mexican revolution or of workers rallying for various causes, Rivera also was known within Mexican political circles for betraying allies and political causes.

For example: Rivera and Kahlo helped get asylum for the Russian exile Leon Trotsky in Mexico in 1936. Trotsky and his wife stayed in Kahlo's family home where Kahlo seduced him as well as worshipped politically for a time at his feet.

However it seems that both Rivera and Kahlo decided to turn against Trotsky. Rivera is even suspected of assisting in a minor way Stalin's NKVD assassin of Trotsky in 1940. After Trotsky's murder both Kahlo and Rivera came out publicly against Trotsky apparently because (typical of the political  naives they were) they had become devout Stalinists.

You will not read such unflattering details in the notes and explanations accompanying the works in the exhibition at the AGO -- hardly surprising. But the art speaks for itself, even Frida's sometimes grotesque self-portraits like "Self-portrait with brace" (1941), "Without Hope" (1945) or the small paintings inspired by Mexican folk art like "My nurse and I" (1937).

The range of Rivera's talent can be measured by viewing not merely photographs of his murals but his paintings in this exhibiton such as "Portrait of Natasha Gelman"(1943) and "The Hammock" (1956).

The AGO exhibition puts on display the lives as well as the art of two people whose lives were not only joined and stormy but absorbed with each other and themselves in a  way that was obsessive.

For information on the Art gallery of Ontario exhibition "Frida & Diego: Passion, Politics and Painting" visit the AGO website:




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Sunday, December 9, 2012

(No.222) CISRO, the AMF & a new LLQP: cui bono?

CISRO, the AMF and a new LLQP life insurance licensing regime:
to whose benefit?

by Alastair Rickard

In early October I wrote a column (No.216) "CISRO's 'harmonizing': life insurance licensing revisited", expressing my scepticism about the wisdom of the proposal from the life insurance regulators who comprise CISRO (the Canadian Insurance Services Regulatory Organizations) to introduce a new modular regime (exams and content) to be developed by Quebec's AMF (the Autorite des marches financiers) for use in both Quebec and the common law provinces.

It has been dubbed "the Harmonized Life Insurance Licensing Qualification  Program". It would replace the existing content and exam of the LLQP program (the Life Licensing Qualification Program).

Regulators like those in CISRO know, both through instinct and experience, that it is easier to win an argument when you get to frame it yourself. Following the presentation by CISRO of this plan to industry and other stakeholders in July as an implied fait accompli it seems to have taken a while for those affected to focus and push back.

This too is one of the several parallels with what occurred when the regulators came down from the mountain more than a decade ago with their initial approach to the original LLQP.  I was a somewhat reluctant participant in the lengthy process involving regulators and industry reps which followed.

Among the 14 approved LLQP course providers I am aware of only one which seems in favour of the new CISRO plan for an AMF-designed 'LLQP mark II'. In comparison with the July tabling by CISRO of their holy tablet, an October letter to all 14 LLQP providers from Saskatchewan's Ron Fullan, the lead regulator on this file, was considerably less peremptory in tone and worked at appearing somewhat conciliatory.

The opposition to the proposed new approach seems to range from serious doubt to vigorous opposition. My guess is that most would welcome enhancement of the existing LLQP content but oppose a new AMF-designed modular regime on the exiting Quebec model to be imposed on the common law provinces. This all the more so because the existing AMF life insurance licensing regime in Quebec has not produced results superior to the LLQP, i.e., results to which LLQP course providers might at least have cause to aspire.

In a nutshell many of these providers and stakeholders wonder: why complicate and make it more expensive and difficult for those in the common law provinces who might seek to become licensed to sell life insurance when a proven licensing regime (the LLQP) already functions and is in place, one which followed a lengthy process in which stakeholders were directly and materially involved? Cui bono? To whose benefit?

As I pointed out in my previous column on this subject, a core element of the answer involves more money and funding from applicants and stakeholders to provincial government licensing programs and agencies -- not improved licensing standards.

I speculated previously and continue to be interested by Quebec's "involvement with a supposed 'harmonization' of the Quebec [licensing] system with those of other provinces" and that this deal with the common law provinces on a new national licensing regime "may well run afoul of the recently elected PQ minority government (including ... the removal of Quebec's unique CGEP requirement as part of the 'harmonization' deal with CISRO). This separatist government, including its Finance Minister Nicolas Marceau, may not be all that keen on any 'harmonization' of a unique Quebec system with that in the common law provinces ...."

Minister Marceau is a former university professor and a committed sovereignist. The AMF exists within Revenu Quebec -- his ministry. Because of the new PQ government's minority status in the Quebec legislature the minister and his premier Madame Pauline Marois have had to abandon or dilute several of their separatist-related election positions.

I find it interesting that Quebec's Finance Minister Marceau (if indeed he is even aware as yet of the deal the AMF has negotiated with provincial insurance regulators outside Quebec) would allow the replacement of a licensing regime developed by and unique to Quebec by one that will necessarily have to accommodate and be diluted by at least some of the needs and desires of English-Canadian regulators.

The intention is that development and implementation of this new process is to stretch over a three year period. I think it is a fair bet that at some point sooner rather than later Minister Marceau may well be asked about this action and policy change vis-a-vis the PQ government's approach to the other provinces of Canada; also to clarify the muddy water around its lack of harmony with the commitment he and his PQ cabinet colleagues have made to enhancing, not diminishing Quebec's approach to sovereignty.




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Monday, November 26, 2012

(No.221) Pt 2 -- Las Vegas nocturne: Monet & Cirque du Soleil

"Las Vegas nocturne: Monet and the Cirque du Soleil

(Part 2 0f some advice for visitors to Las Vegas)"

by Alastair Rickard

In the first part of this series (column No. 220, posted Nov.22, 2012) I wrote about the actual role -- as distinct from Hollywood movie myth -- of the mobster Bugsy Siegel in the origins of the Las Vegas Strip of hotels and casinos.

When Steve Wynn, the most creative and sophisticated entrepreneur in the history of modern Las Vegas, built the Mirage Hotel in 1989, then the magnificent $1.6 billion Bellagio Hotel (centrally located on the Strip) in 1998 followed by Wynn Las Vegas in 2005 and its sister establishment Encore in 2008, he set the upscale standard for Strip resort hotels.

In the Bellagio Wynn included an art gallery where he displayed his own extensive collection. A major work in Wynn's personal collection was Picasso's Le Reve which he had bought in 1997 for $48 nillion. In 2006 he had arranged to sell it for $139 million to hedge fund player Steve Cohen. However, while showing the painting to some guests including ABC broadcaster Barbara Walters, Wynn (who has degenerative eye disease and is now legally blind) turned and put his elbow through the painting. No surprise, the sale was cancelled. The painting was repaired for $90,000 but is considered to have lost considerable market value.

After Wynn sold the Bellagio to the MGM chain the art gallery was maintained as a space for special exhibitions and is now called the Bellagio Gallery of Fine Art. It is not a particularly large space compared to a major public gallery but it does bring in interesting special exhibitions which change periodically. These are arranged with various galleries, especially the Museum of Fine Arts in Boston (the MFA). To some extent the presence of the Bellagio Gallery as a public attraction on the Las Vegas Strip seems almost as odd as would be a string quartet as featured entertainment at the Palomino Club on Las Vegas Boulevard North..

Last year Pat and I attended "A Sense of Place: Landscapes From Monet to Hockney" at the Bellagio  and it was worthwhile viewing. Currently and until Jan. 6, 2013 the Bellagio Gallery is devoted to a special exhibiton called "Claude Monet: Impressions of Light". I would not be surprised if the exhibition's time at the Bellagio was extended a bit.

The current Monet exhibition is presented in partnership with the MFA Boston from whose large collection of Monet paintings came this exhibition of 20 of his works (although none of his Giverny 'water lillies') plus eight works by French painters Corot, Signac, Pissarro and Boudin.

Here's a trivia question: who was the only French Impressionist to have exhibited work in all eight Impressionist Exhibitions in Paris? Answer --- not Monet, which might well be the most common answer but Camille Pissarro.

The works in the exhibition at the Bellagio are particularly good at showing the evolution in Monet's style and subjects from the 1870s through the 1890s. Monet remains a much admired painter for very good reason as these paintings demonstrate. He remains Pat's favourite painter and he is a painter I, because of her, have come to appreciate much more than I once did.

If you are in Las Vegas and have an interest in art, don't miss the Monet exhibition at the Bellagio.


The Montreal-based Cirque du Soleil entertainment empire has become the leading supplier of big name 'permanent' shows to the major hotels on the Las Vegas Strip. So successful have Cirque shows been (Cirque's first Vegas show "Mystere" opened in 1993 and is still playing at Treasure Island Hotel) that big hotels have had huge theatres designed to house the new and highly engineered Cirque shows like "O" at the Bellagio, "KA" at the MGM Grand and "Love" at the Mirage.

There are seven Cirque shows playing in hotels on the Strip --  the official name of which is Las Vegas Boulevard and is not actually located in the City of Las Vegas per se. For the opening more than two years ago of the new Aria Hotel in the massive City Centre development Cirque came up with an Elvis Presley themed show called "Viva Elvis".  After various teething problems the Elvis show opened officially on Feb 19, 2010. Pat and I saw it when it opened in preview in between attempts to 'fix' it. (see our review of this show on, column No. 72: "Elvis: stumbling back to Vegas", posted Jan.7, 2010).

We did not like the show much and it was no surprise to us that this Cirque "Viva Elvis" show was a bit of a failure, never coming close to reaching 'permanent ' status and, after having audiences that declined to 30% of capacity, was closed on Aug. 31, 2012.  Trying to combine less than faithful versions of Elvis' hits as background for glorified Cirque acts did not work well: not enough Elvis for aging Presley fans. I daresay an elaborate Elvis Presley tribute show at the Aria or even the Hilton (where he had performed in Vegas) would have been greeted with more sustained enthusiasm at much less cost.

The Aria Hotel had demanded from Cirque du Soleil a show to replace "Viva Elvis" to present in their large new theatre. Cirque du Soleil complied. It has now replaced its Elvis show with a show it claims has already toured and played to audiences exceeding 1.5 million: "Zarkana". It opened officially on Nov.1, 2012 and seems to have been well received by audiences so far -- although it is still early days to try to gauge its staying power. The show was indeed fairly well received by the audience members with whom we attended it in early Nov.

"Zarkana" is essentially a series of tradtionial circus acts (e.g., juggling, trapeze, balancing, acrobatic et al) presented within the very loose framework of a tissue thin 'plot' backed by music and lyrics based on a created language ( a dialogue approach used in "O" and "KA", although it should be noted that dialogue in any of these Cirque shows is irrelevant to the show itself). I find occasional speaking indistinctly in the 'words' of a non-existent language both risible and irritating; Pat does not.

The circus performers are superb. Pat, who is a Cirque du Soleil fan of the first order, gives "Zarkana" a rating of 8.5 out of 10. By comparison she gives "KA" and "O" (each of which she has seen twice) ratings of 10 and 9, respectively. She gives Cirque special credit for the stage design of "Zarkana" as well as its movements and visual special effects.


There are so many shows (big and small) on and off the Strip available to the Las Vegas visitor that virtually no live entertainment taste, no matter how exalted or pedestrian, will search in vain for satisfaction (check out the various sites listing entertainment like

However anyone considering a first visit to Las Vegas, if that visit is motivated solely or mainly by the entertainment on offer, should understand this: the cost of good seats for major Cirque or similar shows or for taking in big name celebrities doing a couple of shows over a weekend can be substantial. On our recent trip, for example, we took in a Friday night show at the Mirage by comedian Lewis Black. In our view he was excellent and worth the tariff -- but then like many standup comics he's an acquired taste.

If you are a Cirque du Soleil fan consider joining (at no cost) the Cirque Club. You will receive not just news of Cirque activities in Vegas and around the world, you will be informed directly of special offers and information about shows. This can be financially advantageous. For example: we saved $60 a seat on premier seats buying tickets to "KA" online direct from  Cirque compared with the price on offer for the same category of seats for the same day from the theatre box office at the MGM Grand where "KA" plays.

One can join Cirque du Soleil at:

Another tip: consider joining  the 'points' program called Total Rewards (no fee) available from the Caesars Entertainment/Harrah's chain of hotels/casinos. It operates several of the hotels on the Strip including Caesars Palace, the Flamingo, Harrah's, the Imperial Palace, Paris, and Bally's  as well as casinos and hotels elsewhere.

As I said in Part 1 of this column (No.220) we regard the Flamingo Hotel -- among the hotels actually located on the Strip (many hotels in Las Vegas are not) -- the one which best combines price, value, central location on the Strip (an important consideration) and Monorail access.

The volume of Total Rewards points one earns from spending in the hotels is fairly unimpressive unless one gambles a good deal. The points also seem to expire relatively quickly. But you will get offered room rate discounts as a Total Rewards member. Also: merely holding a Total Rewards membership qualifies one for a 5% discount with the Norwegian Cruise Line, a significant saving.

For Total rewards, visit

The other major hotel chain on the Strip, MGM, also has a program that parallels Total Rewards. It is called M life. The website is




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Thursday, November 22, 2012

(No.220) Las Vegas nocturne: Bugsy & the Flamingo Hotel

"Las Vegas nocturne: Bugsy and the Flamingo Hotel

(Part 1 of some tips for visitors) "

by Alastair Rickard

On Dec.26, 1946 Benjamin Siegel (aka Bugsy), a member of New York's Genovese Mafia crime family and longtime associate of Meyer Lansky, opened the Flamingo Hotel and Casino on a stretch of desert 7 miles from downtown Las Vegas. The opening was a flop but it marked the beginning of what is today universally known as the Las Vegas Strip, or more commonly as "The Strip".

Contrary to the story in Warren Beatty's movie "Bugsy" the building of the Flamingo out in the desert was not Siegel's idea but rather that of a Las Angeles businessman named William Wickerson who owned The Hollywood Reporter trade paper and several LA nightclubs. Siegel, who disliked both the desert and Nevada, became involved at the insistence of his friend Meyer Lansky with Wickerson's project after construction had begun and later, using the threat of death, forced Wickerson out.

The Flamingo's original cost was large for its day, all the more so once Siegel's inexperience in directing such a project began costing big bucks: $6 million or $62 million+ in today's dollars. Siegel was more psychopath than entrepreneur.

The money invested by Siegel's mob associates appeared to have no prospect of profit for some time and this was too long for them. Bugsy was shot on June 20,1947 as he sat reading the paper in the Beverly Hills mansion he shared with actress Virginia Hill (who had been skimming money from the Vegas project -- and the mob knew it).

The Flamingo came under various ownership over the decades, some connected to organized crime, some not. Today it is owned by Caesars Entertainment (formerly called Harrah's) and, like the other casino hotels on The Strip today, has no connection to the mob and the old days.

When it was built the Flamingo, located on 33 acres, had about 100 rooms. The last part of of the resort that dated back to Bugsy's days was demolished in 1993.

Today the Flamingo has 3,626 rooms looking out over a very pleasant garden area featuring not only pink flamingos and other wildlife but a modest bust of Bugsy Siegel.  It is not nearly as plush and upscale as Strip hotels like the Bellagio or Wynn's or Caesar's. But in our view the Flamingo offers the best combination of price, value, central Strip location and monorail access.

Since both the mob and Howard Hughes left Las Vegas gambling has become a steadily decreasing share of total activity and revenue on The Strip (38% vs 46% from rooms, food and booze) although annual betting revenue exceeds $6 billion with 77% of Vegas visitors doing at least a little gambling.

Over time Las Vegas became a vacation destination for couples, singles and families. This was a wise reorientation by the major corporate players which now run most of the Strip hotels ( the MGM and Caesars Entertainment chains) because legalized gambling has spread to so many locations throughout the U.S. that being able to gamble legally becomes a lesser reason for visits to Vegas.

Entertainment and night life has become a major draw of Las Vegas. The Strip's hotels feature sophisticated, purpose-built theatres as well as an explosion in the number and the variety of both shows and restaurants and clubs. On several levels Las Vegas has become a monument to excess and flash, one  which draws almost 40 million visitors a year, 16% of whom come from outside the U.S.

Once upon a time it seemed to me that when it came to going to Las Vegas visitors were often thought of as falling mainly into three categories: those who scorned Vegas as a trashy destination for mostly degenerate gamblers, those who went there to gamble and those attracted by the sinful reputation of Vegas ( you know the marketing slogan: "What happens in Vegas, stays in Vegas"). For a long time Pat and I were in the first group -- until I had to go to a business convention there.

What we discovered and have been returning regularly to enjoy is the entertainment. There are multiple offerings for almost every taste: from more than a half dozen different Cirque du Soleil shows to broadway shows; from 'tribute' shows where groups and individuals imitate famous singers and groups (mostly deceased) plus regular appearances by celebrity singers and comedians -- and on and on. By 2008 72% of Las Vegas visitors attended at least one show while in town.

Frequently one sees promotional articles about Vegas, little more than thinly disguised ads that masquerade as real journalism in newspapers and magazines  Many are of marginal value to a prospective visitor looking for useful, hard information about the city. In fact what Las Vegas has become in recent yeas seems lost on some travel writers.

I recall the travel editor of one Canadian newspaper writing about Vegas based on little more than  what he admitted was his first visit. He was apparently taken round to a couple of the major hotels in one chain plus a show and not alot more and proceeded to provide some not particularly useful 'advice' to his readers.

Pat and I have offered some views (based on multiple visits to Las Vegas) tied to our particular interests. These do not include gambling [see the listing of several Vegas-related columns on at the end of this one].

As with many travel guides to various destinations too much of the content in the Vegas guides we have reviewed is not particularly candid and is unhelpful to the planning of a trip. They often do little more than shill for certain hotels and attractions which may well have 'subsidized' the guides' writers' Vegas activity.

This sort of thing is also a fairly common practice involving the writers of newspaper travel section articles; sometimes this financial 'relationship' is acknowledged with the use of various euphemisms at the end of the articles, sometimes not. It is the rare newspaper these days which, like the New York Times, prohibits in its code for its jounalists the acceptance of such 'subsidies'.

The  website is a useful source of critical reviews by travellers themselves about almost any destination, hotel, attraction, et al. But remember: the best way to approach reviews on Trip Advisor of a particular hotel, for example, is to pay attention to the predominant view. Do not be guided solely or even mainly by the very best or worst opinions of visitors in their posted reviews.

Some travellers will always complain about something that many or most travellers will consider trivial while others will provide a rave review if the taps work and a hotel staffer smiles at them on their arrival. Also remember that hotel insiders or competitors may plant favourable or negative reviews on the site.

The best published guide to Las Vegas in terms of candid comment and useful information about hotels, entertainment and restaurants (among other things) is the annual edition of The Unoffical Guide to Las Vegas published by Wiley. It is put together by a team led by Bob Sehlinger. It is the most usefully critical of the several Las Vegas guides I have looked at and it provides current, reliable and comprehensive information. Be sure to obtain the latest edition; currently this is the 2013 edition published in August 2012.

Pat and I recently revisited Las Vegas and in the next RickardsRead column (Part 2 of this column) we will offer comments some readers may find interesting and helpful.



1. website:

2. The Unofficial Guide to Las Vegas, 2013 edition (published by John Wiley, Aug.2012)

3. Las Vegas-related columns on

     Nos. 12, 72, 144, 145, & 146




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Tuesday, November 13, 2012

(No.219) U.S. election coverage: entertainment vs information

"The American presidential election of 2012:
entertainment versus information"

by Alastair Rickard

The 2012 U.S. presidential election campaign is over, something for which many Americans will give thanks.

The very long presidential campaign (in reality firmly under way before 2012) featured, more than ever before, not only the expenditure of ridiculous amounts of money (an estimated $6 billion) and the use of tens of thousands of almost entirely negative televison ads, many of which were not just distortions of the truth but clearly mendacious. It also featured journalism hardly worthy of the name, the focus of which was overwhelmingly the latest results of the presidential 'horse race' as revealed by a multiplicity of weekly opinion polls.

The forecasts were all over the map but poll results were customarily presented as if they were reliable predictions to be taken seriously about the results of the election between President Barak Obama and Republican nominee Mitt Romney. For more than the last month before Nov.6 news media were especially absorbed with reporting the supposed 'statistical dead heat' between the two candidates. Right up to election eve the race was said repeatedly, ad nauseam really, to be "too close to call".

Clearly the 'experts' in the media were wrong.With 270 electoral college votes needed to win the presidency Barak Obama took 352 to Mitt Romney's 206. As for the popular vote, the president outdistanced Mr. Romney by 3.3 million, i.e., more than half the total vote ( and there were third party presidential candidates on the ballot is some states). Some dead heat.

Nate Silver, the New York Times' expert on political polls, was a voice in the journalistic wilderness during the presidential campaign. Wisdom after the fact is, of course, as plentiful in the media as among corporate executives. Silver was wise before the fact.

In Silver's "FiveThirtyEight: Political Calculus" column in the Times he repeatedly made use of well-founded statistical analysis to swim against the tide of pack journalism's use of supposedly reliable weekly political polling results to animate their 'news' coverage of the presidential campaign.

The week before the presidential election Silver stated that Obama's chances of winning the election were 83.7% based on his ongoing analysis of all the weekly polls, their strengths and weaknesses. He pointed out that even the best political opinion polls these days have a response rate of no better than 10% [sic]: "The pollsters are making a leap of faith that the 10% of voters they can get on the phone and get to agree to participate are representative of the whole population."

As for the U.S. presidential election result, as the media consensus had it, being too close to call, Silver declared to his jounalistic colleagues "It isn't ....[Obama] will win the Electoral College. If you can't acknowledge that ... then [ you] should abandon the pretense that your goal is to inform rather than entertain the public." Of course "entertainment" was (and is) mainly what cable news election coverage in particular was all about during the presidential campaign.

However we have arrived at a sad time if what seems to count to most 'news' providers is not the unreliability of political polling in the forecasting of election results (in Canada this has been recently emphasized by the unreliable polling prior to the provincial elections in Alberta and Quebec).

The reality is that even in Canada, although less so than in tthe U.S., offering 'horse race' election coverage instead of meaningful analysis is the prevailing method.'Political news' media are so easily distracted with facile coverage of the trivial like candidates gaffes or references to Big Bird. Of course it has its advantages: it facilitates the replacing of more difficult and 'non-entertaining' coverage of substantive issues.


In the U.S. one reason contributing to this sort of development was recently articulated by American media analyst Jack Lessenberg:  the shrinking retentiveness of the average American voter, he says, is that of a "six-week pld puppy". Indeed the average news sound bite on American television has actually decreased fom 43 seconds in 1968 to 7 seconds today.

But many will respond: what of the new digital age when information is everywhere at hand? Surely the great information explosion of the past two decades involving online information, news sites and social media mean that American citizens, especially younger ones, are better informed than ever about politics and current affairs.

That's all very trendy. One might even characterize it as a media view well on its way to becoming fashionable conventional wisdom. It is neither my impression nor experience.

I have never believed the propaganda so beloved by the legions of digital/social media groupies about the positive impact of the information age on public knowledge of news and current affairs and the political process. I was interested therefore to run across the results of a Pew Research Study in the U.S. that found that American knowledge of current affairs did not change significantly over  two decades. And the least informed age group, the study found, was also the most technically adept and the most avid users of social media: the 18-29 year old group.

Poll addicts among journalists, of whom there seem to be many, may privately acknowledge the profound unreliability as well as the thin gruel of so-called news derived from predictions of future election results based on political polling.  But it is to expect too much to see the popular media depart from their continually increasing reliance on polls on all sorts of subjects to give them something to hang their story hats on.

Consider that the business media, even in the wake of the 2008 Wall Street meltdown which went unpredicted publicly by virtually all the 'experts' in the business media and investment communities, continues in the main to treat 'expert' opinions as the basis of much of their coverage.

The experts in business are on the whole no more reliable on, for example,  the subject of the market place in future, than the media's 'talking heads', their third party experts. For example: a Duke University study of 11,600 forecasts by corporate chief financial officers about how the Standard & Poor's 500-stock index would perform over the next year found the correlation between their estimates and the actual index was less than zero.

What might one conclude from all this? At the very least that information is not equivalent to knowledge, all the more so in an age when one can drown in information -- accurate and inaccurate -- but end up understanding less and less about more and more.




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Sunday, November 4, 2012

(No.218) Sun Life & Economical Insurance: updates

"Updates: one on Sun Life and the other on Economical Insurance and its ongoing distribution of heifer dust"

by Alastair Rickard

In late October Bloomberg News reported that Morgan Stanley had been retained by Sun Life Financial to solicit bids for its U.S. annuities business. While Sun Life has refused to confirm that a sale is in the works it is almost certainly the case that it is.

New Sun Life CEO Dean Connor said late in 2011 that Sun was getting out of the individual insurance and variable annuity business in the U.S. It is a wise decision for reasons I have touched upon previously.

In May 2001 Sun bought the U.S. company Keyport Life Insurance Company ( it was and is an annuity company rather than a life insurance company per se) for $2.6 billion Can. In Dec. 2001 Sun Life announced the acquisition of the large Canadian life insurance company Clarica Life (the recently demutualized Mutual Life of Canada, founded 1870) tied to an exchange of 1.5 Sun common shares for each Clarica share.

The Clarica purchase was a good one for Sun; Keyport has not turned out so well. As a key part of the Clarica deal Sun acquired Canada's largest and best career agency distribution system; individual product distribution (principally via this now proprietary sales force) is still growing as a core strength of Sun's Canadian operation.

Keyport's (then) annual variable annuity sales in the U.S. of $1.1 billion Can. jacked up Sun's exposure to variable annuity business  measured by annual sales to $7 billion Can. Before all that long the insurance industry reality turned out to be that variable annuities were not so much the key to the vault as to a financial crypt.

The timing of the Keyport acquisition by Sun was unfortunate on several levels including the American variable annuity market given what's happened in and to that market, post-2007 especially -- quite apart from whether Keyport as a company was really all that attractive. I have been told (reliably I think) that the senior management of the Sun Life U.S. operation had de facto committed the company to the purchase of Keyport before Sun Corporate in Toronto had even completed due diligence on the deal.

In terms of an analogy I would liken Sun's purchase of Keyport Life and its timing to the purchase of shares in the White Star Line while the Titanic was still under construction in Belfast.

If Sun realizes $1 billion+ for its American annuity business it will be fortunate. However a sale would certainly help Connor realize his announced corporate goal of $2 billion in annual operating income by 2015 based largely on Sun's Canadian operations -- the reliable golden goose of company profitability, certainly since the takeover of Mutual/Clarica -- as well as Sun Life's Asian operation (although its ownership interests in India and China are distinctly minority ones) plus Sun's U.S. mutual fund business MFS Investment Management.

The market appears at the moment to like Sun's direction. Sun shares closed up again on Friday at $25.22. I hasten to add the caveat that the 'market' and most of its 'experts' have an abysmally poor understanding of the reality of the life insurance business in Canada and in the overseas fields in which Canadian companies are operating. So up or down, don't assume that either the buying or selling of Sun Life shares is based on solid understanding.


Back in June this year I agreed to an interview by journalist Kate McCaffery about the future of the Canadian life insurance business. It was for the anniversary issue of The Insurance & Investment Journal, a Canadian magazine based in Montreal and published monthly in French and English.

I understand that an article based on that lengthy interview will appear in the magazine's end-of-the-year anniversary issue ( q.v.,

Not long after the interview I decided I might as well put down some of what I had said in a column for (q.v., "What's been wrong with the life insurance business?", column No.202, posted June 21, 2012).

After the column appeared on I was asked by The American College of Financial Services for permission to publish it as an article in their magazine The Wealth Channel. The issue of that magazine in which my article appears (Winter 2012) has now been published (q.v., www.The


I have devoted a number of columns posted to to:

(1) the proposed demutualization of Economical Mutual, a large Waterloo Ontario-based property & casualty insurance company, and

(2) a yet to be defined Canadian regulatory regime governing the demutualization of a federal p & c insurance company, a regime prompted by Economical's desire to demutualize.

( My most recent column (No.213) was posted on Sept.2,2012)

The whole affair has dragged on since 2010 and I see no obvious political upside for the federal Minister of Finance Jim Flaherty from the implementation of such a regime since it will inevitably result in there being some unhappy stakeholders, not least among them certain p & c company policyholders. Hence there appears to be no reason for Flaherty to want to push the process along any more quickly than he feels he must.

Still, the senior management of Economical Insurance (as its management now prefers the company, although still a mutual, to be known) recently indicated renewed confidence based, it claimed, on the fact that Flaherty had "recently reaffirmed to us that his department is following through with the development of regulations that are required to enable us to demutualize ... it is taking longer than we hoped and expected ...."

That at least is one statement from Economical's senior management that can be believed. One can wager that the comparatively small group of Economical Mutual insiders had expected to be able long since to divide the mutual p & c company's 'equity' among themselves -- either entirely or largely. I am betting that, at the very least, the intended magnitude of the screwing of the vast majority of Economical policyholders will not now be allowed.

In what looks to me like a part of a plan to enhance market interest in Economical Insurance as a stock company, 6% of the company's staff (145 people) have just been terminated. Of course management claims these firings of staff are unrelated to the planned demutualization.

That claim belongs in the same wagon full of heifer dust as the claim that the company is better off demutualizing -- the same sort of greed-related, crap argument that animated the unnecessary and undesirable demtualization of Canada's oldest and best mutual life insurance company, also Waterloo-based: The Mutual Life Assurance Company of Canada.

Stay tuned.




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Sunday, October 28, 2012

(No.217) The Globe and Mail's slobbering journalism

"The Globe and Mail's slobbering journalism"

by Alastair Rickard

Growing up in Ontario I saw my father and mother read the Globe and Mail daily newspaper published in Toronto ( its origin dated from 1844 and the founding of The Globe by George Brown). Wherever we lived it arrived by mail. When I began reading a daily newspaper it was, of course, the Globe. If my parents read that paper it must be (I thought) the best newspaper.

As years passed and I began reading other English language newspapers in Canada and later on from the U.K. and the U.S. I had decided for myself, before the Globe began vigorously promoting itself as "Canada's national newspaper", that it was our country's leading English language daily -- and it still is (although not as superior as its editors seem to believe).

Wherever I am in Canada the paper I always try to obtain first among the papers I like to review each day is the Globe. Having said that the Globe (like the CBC) often makes my teeth ache with its self-regard. As indispensable as the Globe is to me as both a Canadian nationalist and a news junkie, its precious correctness, self-righteous editorial posture and superior tone sometimes makes even a loyal reader like me gag.

Rick Salutin, one of my favourite columnists, for many years wrote a weekly column for the op-ed page of the Globe. He does the same thing now for Canada's largest circulation daily, the Toronto Star. [A personal point of disclosure: I've had op-ed pieces published in both papers.]

In a recent Star column (Oct. 26) Salutin described the Globe as having the New York Times as its "parental model". He also said it has a "curiously querulous" tone and is currently characterized by "an ambiguous mix of arrogance, self-doubt, insecurity and superiority". I think Salutin's view is perceptive.

In announcing recently the Globe's institution of a $20 a month 'paywall' for readers to climb in order to gain access to its digital content (following the lead of the New York Times) its editor-in-chief John Stackhouse referred to the paper's high standards. Not long before, in referring to Globe columnist Margaret Wente's occasional mistakes involving attribution of sources and quotes ( a matter that had been pursued obsessively by a University of Ottawa professor in her anonymous blog), Stackhouse indicated that Wente, because of her occasional lapses, had not met the Globe's high standards.

Wente, an excellent columnist, is one of the band of superior Globe columnists ( led by Jeffrey Simpson, Eric Reguly, Andre Picard and John Doyle) who form a core strength and competitive advantage for the Globe. If Wente, whose column disappeared for awhile as penance, wasn't thrown under the bus by the newspaper's editor-in-chief she was certainly marched to the  bus terminal for a long look.

Stackhouse's smarmy references to the Globe's high standards and his claim that having "the country's best journalism remains our daily standard" would be easier to swallow if they were rather less selective and did not co-exist with certain hypocrisies.

On Oct. 1, 2012 David Mirvish, a Toronto theatre owner and producer and major Toronto daily newspaper advertiser, made an announcement that was treated by the Toronto media (especially by the Globe and the Toronto Star) as if the second coming was about to occur on King Street in downtown Toronto.

Indeed the event seemed carefully prearranged with the media. Mr. Mirvish's big news was his plan to build three 80+ story condo towers in the heart of Toronto. To accomplish his grand vision:  among other things the Princess of Wales theatre would be demolished.

Downtown Toronto has seen population density increase steadily and by more than 400% in just the past five years. As anyone who lives or works or regularly visits downtown Toronto knows, it is approaching gridlock. Only the credulous or the foolish or the self-interested are likely to actually believe that the city needs the kind of additional high density in the heart of the city that would be imposed by such massive development and by similar proposals now emerging from developers like Oxford Properties.

Still, both the Globe and the Star dove with unseemly haste into the pro-Mirvish tank almost as if his announcement was the key to the kingdom they wished to inhabit. Both papers followed up their jounalistic slobbering over the Mirvish 'vision' for 'his' section of downtown Toronto by moving quickly to begin publishing articles and columns supporting both this massive sort of development and making the case for the desirability of still higher downtown density.

The two Toronto dailies' theatre critics helped lead their respective parades. They couldn't wait to support Mirvish's grand vision and the demolition of one of the city's leading theatres. Reinforcing my opinion of his independence as a critic only Robert Cushman of the National Post among the major theatre critics opposed the demolition of the Princess of Wales theatre to make way for the Frank Gehry-designed Toronto version (times three) of London's infamous 'gherkin' ( AKA the Swiss Re tower).

Cushman wrote (Oct.6) "I'm less shocked by the plan [for the towers] than by the cavalier reaction of some of my fellow theatre writers who claim that to shed tears over the loss of the Princess of Wales would be sentimental. My objections aren't sentimental; they're practical."

I welcomed the return in 2010 of control (and greater editorial independence) of the Globe and Mail to the family of Lord Thomson. It was a control that had been acquired in 1980 but one that had been submerged in the corporate entity Bell Globemedia in 2001.

I hope that the sort of journalistic boosterism by the Globe which has been the subject of this column does not reflect some misguided editorial impulse to curry favour. As for the Star's editorial motivation, perhaps Torstar board chair (and a leading Toronto booster) John Honderich whispered in the pear-shaped ear of the Star's publisher.

I expect to return to the subject of corporate media pretence in a future column.




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Monday, October 8, 2012

(No.216) CISRO's 'harmonizing' : life insurance licensing revisited

CISRO's 'harmonizing': the life insurance agent licensing regime of LLQP revisited

by Alastair Rickard

During my years in the Canadian life insurance business I spent a great deal of time, including sixteen years as chair of the Canadian Life and Health Insurance Association's (CLHIA) standing Committee on Distribution & Intermediaries, involved with insurance regulators and regulatory issues. Much of this activity dealt with the sale of life insurance and with those who sell the policies.

I met and worked with many interesting and knowledgeable people in the life insurance business as well as regulators. I also had to coexist with some people who were gormless prats and a waste of oxygen as well as meeting room space. My experience with insurance regulators was that there were probably fewer of them (proportionately) in this lackluster category than industry people.

Much of the subject matter was interesting. However some of it took up frustratingly long days of my life and it is a matter of regret that I cannot recover them -- which brings me to the subject of this column.

More than a decade ago provincial insurance regulators outside Quebec decided that the examination regime then in place as a requirement for someone to become licensed as a life insurance agent needed to be updated and upgraded. (Outside Quebec all such persons, whether or not they hold themselves out to the public as 'brokers', were then -- as now -- licensed as life insurance agents).

The regulators were right on both counts and I agreed with them although I had concerns about the particulars of their plan for a new Life Licensing Qualification Program (LLQP).

Nor did I care for the way in which certain insurance regulators came down from their bureaucratic mountains carrying a tablet on which had been inscribed their blueprint for a new regime and presented it to life insurance industry stakeholders as a virtual fait accompli. (Recently history has repeated itself; more about that shortly although I note that there is too much to be said for just one column.)

In fact the reality of what happened then was the onset of a somewhat belated urgency of focus which energized several elements in the life insurance business. They awakened to the potential problems of the LLQP regime as originally drafted. There was push back, discussion and joint effort. Over time a number of industry people including CLHIA staff spent many hours working together as well as with certain regulators to improve the LLQP -- with some success.

The modern history of life insurance licensing in Canada reminds me of the Japanese saying: 'By knowing one spot you know the whole leopard'. What that proverb does not embrace is the reality of how some people understand or even remember too little of the lessons and experience of industry history.

A particular aspect of Canadian insurance history is now being revisited. The inter-jurisdictional group of insurance regulators, the Canadian Insurance Services Regulatory Organizations (CISRO), having apparently consulted nobody outside regulatory ranks beforehand ( not even the four life insurance companies which are also registered LLQP course providers), has announced a replacement regime for the LLQP: the "Harmonized Life Insurance Licensing Qualification Program".

The regulators now say they are ready for discussion with industry stakeholders -- even if it's only about details on the margins of their grand plan. While pains have been taken to present it as if it will still be the LLQP, and while it may have that name once implemented, the proposal actually is for a new regime to be prepared by Quebec's financial services regulator the Autorite des marches financiers (AMF) and will follow the Quebec model including multiple exams based on separate study modules and manuals.

In fact the story is this: the LLQP requires neither replacement nor "harmonization"; the common law province insurance regulators see themselves facing a funding gap when it comes to the LLQP and related matters; Quebec regulators (as I know from my dealings with them) have operated a higher cost regime the expense of which they have long wished to spread by reaching some deal with the common law provinces. Voila! A deal to "harmonize" the LLQP with Quebec's AMF regime.

The reader may well say, so what?

The 'so what' is the prospect of replacing an LLQP regime into which much expertise and effort has been invested, one with a clear record, with another  regime approach whose results are not superior to those in the common law provinces. But its higher costs as a system as well as for exam writers combined with increased complexity, inconvenience, awkwardness and bureaucracy will (among other things) constitute yet another barrier to getting new people into the difficult business of providing Canadians with genuine opportunities to purchase life insurance.

This matters in terms of the life insurance consumer because, the imperfect understanding of certain 'expert' critics of the industry to the contrary notwithstanding, the bulk of new individual life insurance in North America continues to be sold by agents, i.e., people who are actively in the marketplace finding and advising people who will not initiate the purchase of this core product ( an important one to society as well as to most individuals' survivors) either at all or in appropriate types and amounts.

Another aspect of this whole exam regime, past and future, is the failure -- in some cases even the resistance -- of most regulators to the placing of far more emphasis on higher levels of continuing professional education required of licensed agents ( combined with vigorous supervision and enforcement) and to recognizing the importance to the consumer of the value of experience.

The reality is that most provincial insurance regulators could care less whether an agent, once licensed, ever sells a life insurance policy to anyone. Indeed the majority of those holding life insurance licenses in Canada, for reasons I will not go into here, do not sell life insurance -- either at all or do so only minimally.

The only real rationale advanced in the CISRO proposal for a new regime, i.e., for the replacement of the LLQP as we know it (for that is what is being proposed) is a self-constructed reality. This regime change, we are to believe, is actually required by inter-provincial agreements, especially as between Ontario and Quebec, specifically the Agreement on Internal Trade (AIT) and the Ontario-Quebec Trade and Cooperation Agreement.

There is nothing in them that requires CISRO's proposed approach to 'harmonization".

CISRO's case for the de facto replacement of the existing LLQP regime by an AMF-designed model has not been rendered penetrating, convincing or coherent by having member regulators cut down the current LLQP tree, climb up on its stump and declare the CISRO "harmonization" to be "need[ed] to align with provisions under the [AIT] and other jurisdictional agreements". More to the point, this proposed approach is both unnecessary and unjustified and carries with it the prospect of increased challenges for potential entrants to the business in the common law provinces in comparison with a continuation of the current LLQP regime.

While the Quebec licensing regime run by the AMF has not produced a systemic result superior to the LLQP in the common law provinces its involvement with a supposed "harmonization" of the Quebec system with those of other provinces may well run afoul of the recently elected PQ government (including, and perhaps particularly, the removal of Quebec's unique CGEP licensing requirement as part of the "harmonization" deal with CISRO). This separatist government, including its Finance Minister Nicolas Marceau, may not be all that keen on any "harmonization" of a uniquely Quebec system with that in the common law provinces once the Minister's political advisors bring this particular aspect of the proposed regime change to his attention.

Still this may not be a problem if the Quebec Finance Minister, who serves in a government which has already made the province's financial deficits even greater in the brief period since assuming office, comes to understand that the "harmonized" regime will inevitably cost exam takers in the common law provinces (who, of course, will have to bear the increased cost of the "harmonized" system) far more to acquire study manuals and write each of the multiple exams. After all the revenue generated to Quebec from the "harmonized" regime will likely be used to offset more of the costs (than is already the case) of its entire regulatory regime.

There has so far been rather too much passivity in response to the CISRO 'harmonization" proposal by insurance companies which ought to know better, having been down this road before. They have a direct, ongoing interest in bringing new people into agency systems. Of course one problem is that too few life insurance companies in Canada are actually doing this challenging job to any significant extent. It's easier for them to rely on attracting new individual life insurance business from experienced people, i.e., from those already licensed and in the marketplace.

As for the CLHIA committee dealing with agency matters which I once chaired, it could and should be an important vehicle for the industry to use in addressing the issues. However it is almost entirely populated not by agency people but by those who are in corporate compliance functions. Fine people to be sure but often not a company's best source of insight into agency and distribution matters nor best suited to agency-related push back.

It is time for people in the life insurance business who actually understand the reality of serious agency system issues to get involved in this episode of 'LLQP Revisited'. I am thinking especially of people like Kevin Dougherty, the President of Sun Life's Canadian operation and Vicken Kazazian who directs Sun's large, national career agency distribution system. Both have genuine insight into agency distribution and its issues. They need to whisper in the pear-shaped ears of those company and industry people who are supposedly representing the best interests of agents' and agency systems' in the councils of the industry.

Finally, it would be misleading and unfair regarding this subject to say of Canada's provincial insurance regulators, as Warren Buffet has of the financial world, that they would rather be wrong as a group than right on their own. There are senior and long experienced provincial regulators for whom I have considerable regard -- but not all.

If those industry stakeholders (like Sun Life) most directly concerned and involved with this proposed regime take a vigorous leadership role in discussions with insurance regulators, as was the case more than a decade ago, I do not see why reason and common sense should not again prevail over surrender to poorly thought out ex cathedra declarations from CISRO.




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Friday, September 21, 2012

(No. 215) Economical Insurance, Joe Belth & great art

"Economical Mutual Insurance Co.,  Joseph Belth and some great art exhibitions past, present and future"

by Alastair Rickard

For decades the American Joseph Belth has been, for me and many others in and out of the North American life insurance industry, a model for what a thoughtful and well informed critic of the business should be. For decades he has edited and published a leading insurance periodical in the U.S. -- the monthly INSURANCE FORUM "for the unfettered exchange of ideas about insurance".

I have known and admired Joe Belth for some years and have written for the INSURANCE FORUM previously. After I started doing columns on about the proposed demutualization of Economical Mutual Insurance, the Waterloo Ontario property and casualty company, Joe asked me to do an article for his readers on the subject.

I accepted the invitation and that article, one which Joe has entitled "The Shocking Terms of a Proposed Canadian Demutualization", appears in the October 2012 issue of the INSURANCE FORUM (Volume 39, No.10).

In an editor's note following my article Joe Belth said, referring to "the shocking ccnsorship details" about which I had written (i.e., the federal Dept of Finance's treatment of certain submissions to Finance on a proposed demutualization regime) that "I am incensed. I have submitted comments over the years to federal and state agencies in the U.S. and have never experienced censorship. I would welcome comments from readers on this matter."

Concerning the INSURANCE FORUM visit: www.the


The Canadian painter Homer Watson was born in 1855 in Doon, Ontario near what was then the town of Berlin (the name of which was changed to Kitchener during World War I). By the mid-1870s he had become a serious artist, by the mid-1880s his name was becoming well known.

In 1880 one of his paintings, "The Pioneer Mill", was purchased by the Canadian Governor-General the Marquis of Lorne and his wife Princess Louise as a gift for her mother Queen Victoria. The Queeen liked it so much she asked them to buy her another Watson painting. They did: "The Last of the Drought".

With two of his paintings in the Queen's art collection Watson's career took off. He travelled extensively and prospered (until the stock market crash in 1929) having settled in his home and gallery in Doon.

That property has been preserved and is a permanent space open to the public. Currently a special exhibition of Watson's work is on view ( it concludes Sept 30): "Reliving Royal History: A Homer Watson Exhibition".

This exhibition features the two Watson paintings acquired by Queen Victoria. They have been lent to the exhibition from the Royal Collection as have other works from the National Gallery of Canada and elsewhere.

If you enjoy (as I do) landscapes, especially ones that are dark in tone, you are likely to enjoy this Homer Watson exhibition.

For information visit


A 'heads up' for a major and rather unusual exhibition that will be at the Art Gallery of Ontario in Toronto from Oct.20, 2012 through Jan. 20, 2013: "Frida & Diego: Passion, Politics and Painting". It has been co-organized by the Museo Dolores Olmedo in Mexico City, the High Museum of Art, Atlanta and the Art Gallery of Ontario.

Today in Canada and the U.S. Frida Kahlo and Diego Rivera are likely the best known Mexican artists. In part this is the result of the 2002 Hollywood movie "Frida" starring Salma Hayak as Frida and Alfred Molina as Rivera.  I thought the performances were better than the movie itself (Hayak was nominated for a best actress Oscar for her performance) and the English actor Molina always delivers a superior performance.

Kahlo (b. 1907) and Rivera (b.1886) married in 1929 and had a turbulent, dysfunctional relationship which did not end until her premature death in 1954. Kahlo had a serious traffic accident at age 18, the physical effects of which blighted her life. Both were as passionate about politics as painting.

Pat and I attended a 2002 exhibition "Places of their own" at the Vancouver Art Gallery in which Kahlo was one of three featured female artists ( the other two were Georgia O'Keeffe and Emily Carr).

The upcoming exhibition at the AGO is unusual because it brings together for a non-Mexican audience the work of Kahlo and Rivera. It will feature 90 original works from three major Mexican collections as well as loans from North American museums and private collectors plus more than 60 photographs taken of the two artists during their lives.

For information on the exhibition "Frida & Diego: Passion, Politics and Painting" running from Oct. 20, 2012 to Jan. 20, 2013, visit


Earlier this summer I wrote columns about two noteworthy art exhibitions: the Van Gogh exhibition at the National Gallery in Ottawa ( column No. 204, posted June 29, 2012) and the Picasso exhibition at the Art Gallery of Ontario in Toronto (column No. 197, posted May 7, 2012).

Both exhibitions have ended and their success with the public was impressive.

The Picasso exhibiton at the AGO which ended Aug.26 was its fourth most attended exhibition ever drawing almost 309,000 visitors during its 17 week run.

The Van Gogh exhibition which opened May 25 and closed on Labour Day drew a 15% higher attendance than the National Gallery had projected (230,000). It was more than twice the 109,000 of the previous summer's Caravaggio exhibition and the best exhibition attendance at the National Gallery since 1997's "Renoir's Portraits".




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Saturday, September 8, 2012

(No.214) The new Barnes gallery in Philadelphia

"The new Barnes Foundation gallery in Philadelphia: a treasure trove of art"

by Alastair Rickard

It was the autumn of 1994 that my wife Pat and I first encountered the Barnes art collection, or rather a part of this amazing collection of art put together by the the Philadelphia businessman Dr. Albert Barnes in the years between 1912 and 1951.

During renovations in 1994-95 to the home of the Barnes collection in Merion Pennsylvania outside Philadelphia, a selection of works from the collection went on an international tour. The only Canadian stop was at the Art Gallery of Ontario in Toronto, an AGO special exhibition that drew almost 600,000 visitors from Sept. through Dec. 1994 among whom were Pat and me. The Barnes exhibition remains the second most attended exhibition in AGO history (the first was 1979's "King Tut").

By the time Barnes died in an auto accident in 1951 his art collection had grown beyond impressive to stunning in its breadth and quality. Today there can be little doubt that it was one of the most impressive and extensive fine art collections in private hands in the modern era and ranks with that of the late J.Paul Getty  and of Queen Elizabeth and the House of Windsor.

I am not making use of hyperbole in my description of the Barnes Foundation collection today. Just a few examples of the Barnes holdings: 181 paintings by Renoir, 69 Cezanne, 59 Matisse, 46 Picasso, 21 Soutine, 18 Rousseau, 16 Modigliani, 11 Degas, 7 Van Gogh and on it goes.

The Barnes collection has been called the finest concentration of French Impressionist and Post-Impressionist painting in the western world. In fact Albert Barnes was more interested in Post-Impressionists than the Impressionists.

He bought only four Monets while literally covering walls with Renoirs. One of his Monets, "The Studio Boat" (1876), is an interesting self-portrait (sort of): an obscure figure who is Monet seated in a small covered boat that Monet used on the Seine in order to be able to paint from a perspective on the river.

Albert Barnes (1872-1951) was financially very successful, a former physician who made a fortune based on an anti-gonorrhea drug called Agyrol. He became a collector of "avant-garde" art and was treated as an outsider by the Philadelphia art and social establishment.

He reacted by continuing to acquire more art scorned by many of the 'elite' of the day and by building in Lower Merion his own gallery to house his collection. So involved in and absorbed by his art was he that he personally decided on the precise positioning of each piece in the gallery which opened in 1925.

Barnes organized and ultimately directed his involvement with art and his collection through the Barnes Foundation and he directed that his collection must remain in its Merion home. Moreover it was a collection which was not open to the public per se. Access to it was strictly controlled by Barnes himself before his death, after which public access became the norm.

Skip ahead several decades. The pressure on the Foundation trustees had steadily mounted to make the Barnes collection far more accessible to a larger audience by moving it to Philadelphia, to the 'museum mile' along the Benjamin Franklin Parkway. By 2002 the Foundation board decided to relocate the collection.

Some people remained opposed; indeed some sued (unsuccessfully) to stop it. But in May this year the new Barnes Foundation home in Philadelphia opened its doors to great praise, even from some sceptics. To a great extent I think this applause for the new building housing the collection was both predictable and justified.

The building is a stone clad, box-like structure with impressive atria designed by the architects Billie Tsien and Tod Williams. It is strikingly modern and stark on the outside as well as the inside public spaces. Within the museum there has been an impressive replication of the 23 rooms in which Barnes arranged and hung his collection in its former Merion home.

As architecture the new gallery does not put a song in my heart but it has been warmly greeted in all the critics' reviews I have read, as indeed has been the relocation of the Barnes collection to Philadelphia.

The prospective visitor to the new Barnes Foundation location who is unfamiliar with the eccentric Albert Barnes needs to understand that he personally determined the hanging of every piece in his collection and grouped pieces in what he called "ensembles". He frequently revisited the arrangements and reordered them but following his death the "ensembles' have remained frozen, rather like bees in amber.

The grouping of Barnes' ensembles, with distances between frames and placements replicated to the last millimetre, are on view in the new gallery in Philadelphia. It's not the sort of arrangement of paintings that I prefer. Barnes' idiosyncratic approach to the display of art works better in some rooms of the gallery than in others.

A wall of Renoirs is one thing and easily admired. A wall of closely spaced small pictures can be too much like an artistic dog's breakfast. Nor do I feel the "creative flow" supposedly evident to Dr. Barnes in, say, a pair of medieval pliers two inches above a Degas painting or in the placement of a Joan Miro cheek by jowel with a 15th century German painting. However Pat found the "ensembles" arrangements interesting and the "flow" effectively elaborated by the recorded commentary.

So chock-a-block are the works on the walls of the galleries there is no room, even had Barnes permitted it and allowed for it, for traditional information cards posted adjacent to the works carrying for the visitor the usual information about each piece. In the new gallery Barnes' legacy approach is as unchanged from 1951 as was the wedding cake preserved by Miss Havisham in "Great Expectations".

Pat thought the use by visitors of iPod audioguides to the various rooms in the gallery was an effective way to make one's way through from work to work. I did make use of this form of support (there was no alternative on offer) but I did not care for it very much.

But these are quibbles. To view the Barnes Foundation collection is one of the world's great art experiences,  one enhanced by its relocation to its new home in Philadelphia.

Within walking distance of each other on Philadelphia's Benjamin Franklin Parkway are the Philadelphia Museum of Art and its expanded adjunct in the nearby Perelman Building (see column No.212), the Rodin Museum and the new Barnes Foundation gallery.

Anyone seriously interested in fine art can confidently justify a trip to Philadelphia that will be both rewarding and unique.

For information, see:





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Sunday, September 2, 2012

(No.213) Updates: Economical Insurance, Sun Life & Manulife

Updates on Economical Insurance, Sun Life and Manulife

by  Alastair Rickard

I have written in several columns about the demutualization (sought by the board, senior management and relative handful of policyholders eligible to vote) of Economical Mutual Insurance. the large Waterloo, Ontario property and casualty insurance company.

For the most recent columns about Economical and the Canadian government's 'consultation' process on a new regulatory regime for P & C company demutualizations, see column nos. 206, 208 and 209 on

On Aug, 23, 2012 Economical Insurance released its financial results for the second quarter. Its "total mutual policyholders' equity" increased by $81.6 million in the first 6 months of 2012 to $1.382 billion.

This equity is the value that the Economical Insurance insiders set out awhile back to allocate on a demutualization among fewer than 1000 policyholders of the company, themselves included of course, out of the company's several hundred thousand policyholders.

Economical Insurance is also the company whose current statement of "Missions and Values" declares, under the heading "Integrity", that "we have the courage to do the right thing". Sure, and Her Majesty The Queen will appoint me as the next Archbishop of Canterbury.

Meanwhile, in terms of the public consultation process announced in June 2011 by Canada's Finance Minister Jim Flaherty on a regulatory framework to govern the demutualization of P & C insurance companies, there is still nothing from Ottawa in the form of draft regulations for comment. Perhaps, as I have indicated previously, there are political considerations slowing the process, including the absence of any consensus among Canada's P & C mutuals on what the approach ought to be.

The fact that the corporate financial media have been largely silent on this attempted financial grab by the voting policyholders of Economical Mutual Insurance, i.e., about something that ought to be a stench in the nostrils of any fair-minded person, may also have had more than a little to do with Ottawa's glacial speed in dealing with both the Economical Insurance demutualization and its sine qua non: a regulatory regime applicable to any federally regulated P & C company wishing to demutualize.
In response to the columns about Economical I received an impassioned email from a P and C insurance broker who argued that "another interesting twist to this is that insurance brokers representing Economical contractually own the clients or client list; Economical transacts their insurance business.

" Should Economical insurance brokers at any time choose to move the entire business en masse or piecemeal there would be no need for economical to demutualize nor to sell the business to a prospective purchaser as all that would be left of Economical would be a shell containing equity/cash with no remaining insurance clients.

"Can the argument then not be made that the Economical insurance brokers are really the true owners of the business side of Economical Insurance and should they not also be lined up with the undeserving characters?"

An American reader wrote to say that he "read the well-informed submission of Mr. Gingras with great dismay [ column No. 209 posted July 31, 2012], knowing from your prefatory comments that it had not been posted by the Department of Finance [on its website]. As an American I have long admired the role that open, fact-based discussions play in Canadian public affairs.

"It is disheartening to learn that the bureaucrats in the Department of Finance don't have an understanding of or appreciation for the value that sunlight brings to a democracy."


I devoted a column [No. 211 on, " Sun Life, Manulife and the Kabuki Theatre of gerrymandered expectations"posted Aug.15, 2012] to the largely inadequate commentary in the financial media about major life insurance company financial results (specifically Sun Life's and Manulife's).

I said, in part, that "we hear endlessly about the negative impact of low interest rates, equity markets etc on a company's earnings. What does not get rehearsed or even mentioned most of the time is why this magnitude of negative financial impact came to be felt by the company, about its connection to how the core business was operated: i.e., how effectively does it operate the actual business of a life insurance company in Canada and elsewhere?"

As an update for readers of that column: there was a fine example of the facile analysis and predictability about which I wrote in my Aug. 15 column provided recently by The Globe and Mail's Report On Business on Aug. 28, 2012 in the 'VOX' column.

My Sun/Manu column prompted a number of responses. For example:

One correspondent of, a Canadian who held an agency role with The Mutual Life of Canada and is now an independent industry consultant, wrote to say that "Once again you put into erudite words what I've been saying for years. [Life insurance] companies and now their shareholders are paying the price for their stupidity earlier.

"I consider myself blessed to have worked with men like Ken MacGregor and John Panabaker [both former CEOs and chairmen of Mutual Life -- ed.] who would never have have allowed such nonsense and understood the sacred trust they had.

"Demutualization just didn't help anyone but greedy executives who are now mostly retired. I wonder when the re-mutualization process will begin?"

A longtime American life insurance industry participant weighed in with "a bit of history that I believe relates to the situations at Manu and Sun. Both of these companies used to have a reputation for educating their home office employees through LOMA, CLU and presumably other programs that gave their employees an understanding of the business they were in (in other words, before you play football you'd better know how to block and tackle and you'd better understand the plays when the quarterback calls them).

"At one point both Sun Life and Manulife even paid for employees to attend industry annual conferences in the year they earned [their industry-related] designation, presumably because the companies recognized that the cost of the incentive was far less that the value of the knowledge gained when applied over the employee's entire career.

"Sometime in the late 1980s -- early 1990s the old guard in Human Resources management changed hands and their replacements did not come from within the ranks. Rather, the people appointed to create employee development policies were interested in touchy feely programs and (not knowing anything about the life insurance business themselves) expressed the view that 'employees can learn that technical stuff on the job'. As a result, industry-focused education plummeted in both companies and the drain of knowledgeable midddle management and tech professionals began.

"In some ways the home office experience is similar to the treatment of the agency force, as you have described [in RickardsRead]. There was an assumption by top management that the magnificent store of human capital available to them would always be there. Executives are clueless as to how that human capital was developed and maintained, and some no doubt relished the impact that cutting expenses would have on their reputation and bonuses. After all, cutting education and training was an immediate, short-term impact on profits and future generations can deal with the eventual consequences in lost productivity.

"Apparently Manulife and Sun Life are paying the price -- and if you look around the life insurance industry you'll see they are not the only ones. As someone once said, 'If you think education is expensive, try ignorance!'  "


Finally an update involving a couple of recent columns on

The Wealth Channel, a U.S. magazine published by The American College (est.1927) asked permission to reprint my June 21, 2012 column (No.202) "What's been wrong with the Canadian life insurance business?" I agreed and it will appear in the fall 2012 issue.

My Aug. 6, 2012 column (No.210) on "Charles Willeford & Hoke Moseley" appeared as an article in the book review pages of the Aug. 18 editions of two southwestern Ontario daily newspapers: the Waterloo Region Record and the Guelph Mercury.




blog archive: to access back numbers of RickardsRead, go to the blog archive listing which appears beside every column on and use the links

to set a "Google alert" for new columns as they are posted on, go to: