See you in September
    Thompson’s is now on its annual summer break. The July 14 issue was the final issue of our weekly print issue until September.
    The next one will be published Sept. 8.
     ...More

Update — July 23: Vice-president ‘no longer employed’ over repair facility allegations seeks punitive damages from ICBC for wrongful dismissal
    Former ICBC vp Mark Withenshaw says in an action filed in B.C. Supreme Court he was “made a scapegoat” for the scandal surrounding the insurer’s research facility (see story below).
    He was dismissed March 20, 2008, with 18 months’ pay, or about $284,300.
     ...More

Update — July 18: Kingsway cuts debt; gets rating downgrades from Best same day
    By the end of July, Kingsway Financial intends to repay a total of US$109.8m of its debt, the company announced.
    The money will come from its existing surplus capital resources held in its reinsurance subsidiaries.
     ...More

Update — July 18: Report says managers who condoned ‘unacceptable practices’ at ICBC repair facility no longer employed: RCMP launches criminal investigation
    ICBC is putting the brakes on release of detailed information about disciplinary actions taken following what it now deems unacceptable practices at its research and repair facility.
    These include managers having repair work done on their own vehicles by employees with no evidence of the costs being recovered.
     ...More

Update — July 18: Now easier in B.C. for disgruntled shareholders to sue directors and officers responsible for misinformation
    New legislation in B.C. makes it easier for disgruntled shareholders to sue corporate directors and officers responsible for misinformation in the marketplace.
    And that could mean more claims under directors and officers insurance policies.
     ...More

Insurer ordered to pay out for blackout loss
    An insurer has been ordered to cover a food company’s losses caused by the massive blackout that struck Eastern Canada and parts of the U.S. in 2003.
    The Ontario Court of Appeal decision upheld a lower court ruling on the case, but reversed another decision on a related case.
     ...More

Actuaries urged to develop strategies to meet emerging risks
    Actuaries need to develop mitigation and financing strategies for the management of risks emanating from the environmental and social justice areas, a U.S. professor said at the Casualty Actuaries Society Spring Meeting in Quebec.
    Dan Anderson said these are the most critical emerging risks areas of the 21st century.
     ...More

Follow-up: Insurers see benefits from employee retention initiatives
    This report concludes our coverage that began in last week’s issue of the labour market challenges facing the p&c industry.
    The brewing battle for talent is only going to get more intense as more companies find it difficult to replace lost talent.
     ...More

Industry adapting to challenging demographics
    There is plenty of competition out there in Canada’s p&c industry, and not just for market share.
    Insurers are also battling for the most qualified people.
     ...More

Competition panel calls for corporate tax cut
    The final report from the federal Competition Policy Review Panel has delighted the insurance industry with its recommendation for reducing corporate taxes.
    “This paper is as significant as the findings of the MacDonald Commission which spawned free trade,” said Dennis Prouse, government relations director for the Insurance Bureau of Canada.
     ...More

Bid to extend cap in Alberta denied
    A second and more senior level Alberta judge has rejected a bid to keep the province’s minor injury cap in place until an appeal is heard.
    Court of Appeal Justice Patricia Rowbotham rejected State Farm’s argument that scrapping the cap will cause it irreparable harm.
     ...More

New reciprocal nears launch
    Saskatchewan’s urban centres will have a new place to find insurance this fall — with each other.
    Five years in the making, the Saskatchewan Urban Municipalities Association’s self-insurance plan opens for business Oct. 1 with upwards of 120 of its 450 member municipalities ready to sign on, said SUMA executive director Laurent Mougeot.
     ...More

Industry warned of impending tightening
    Results in Ontario auto are bad and slowly getting worse, a top federal regulator said at an industry briefing in Toronto held by Standard & Poor’s.
    Bruce Thompson, director of monitoring and analytics support division at the Office of the Superintendent of Financial Institutions, said there is an incremental decline in profitability. Accident benefits are abysmal.
     ...More

Insurers back call for Alberta auto hikes
    Some insurance companies appearing at public hearings of Alberta’s Auto Insurance Rate Board have called for a steep and swift increase in basic auto premiums.
    But some recommended staggered increases to ease the blow while others suggested the board dispense with industry-wide rate setting altogether.
     ...More

MPI applies for Autopac rate reduction for 2009
    Citing declining auto theft claims, Manitoba Public Insurance is seeking a 1% overall reduction in Autopac rates for 2009-2010.
    Most premiums would rise or fall by less than $20, with an average passenger vehicle premium of $853.
     ...More

Alta. rate impact estimates vary wildly
    Alberta’s Auto Insurance Rate Board has heard wildly contrasting advice on rates from its actuarial consultants and the industry’s lobby group.
    The Insurance Bureau of Canada said the repeal of the province’s cap on minor injury damages necessitates a basic auto premium hike of 36.9%. Even if the cap is restored an increase of 3% is in order, it said.
     ...More

Special feature: Brokers face challenging future, industry veteran says
    With independent brokers fighting off direct writers, banks and takeovers by insurers, Thompson’s asked industry veteran John McArthur for his views on their future.
    The chairman of AMAC Consultants is a former president and ceo of the Canadian subsidiaries of two U.S.-based insurers. He now specializes in mergers and acquisitions and senior level executive searches.
     ...More

Licensing key in debate over incidental sales
    The issue of licensing is emerging as a main focal point in the incidental sales debate, with brokers arguing ‘insurance is insurance.’
    In its response to a working group set up by the Canadian Council of Insurance Regulators to study the subject, the Insurance Brokers Association of Ontario said it finds the whole idea of incidental insurance sales troubling.
     ...More

Reinsurers focusing on economic risks
    An economic slowdown resulting from the credit crisis and continuing financial market volatility top of the list of perceived short-term risks for reinsurers.
    The International Association for the Study of Insurance Economics, also known as The Geneva Association, surveyed chief executives of leading reinsurance companies at its general assembly in Bermuda, hosted by XL Group, ACE, Partner Re and Axis.
     ...More

RBC Insurance partners with broker Aon
    RBC Insurance has made Aon its exclusive broker for commercial p&c and trade credit insurance solutions for Canadian business owners.
    “This is the first time a Canadian bank has entered into such an arrangement,” said ceo Neil Skelding.
     ...More

Many unknowns remain for Alta. auto rates
    By itself, the end of Alberta’s cap on soft tissue injury awards points to an increase of almost 11% in basic auto premiums, according a report prepared for the Auto Insurance Rate Board.
    The annual actuarial analysis from consultants Oliver Wyman does not recommend a specific percentage change in the province’s basic auto rates.
     ...More

Reserving practices could use improvement: sigma
    Swiss Re’s latest sigma study focuses on how the insurance sector can improve its non-life reserving practices.
    The study explains reserving methodologies and also suggests that improvements in reserving will be beneficial for the industry and also for its clients and shareholders.
     ...More

Bureau shifts community outreach programs into high gear
    A growing body of research shows that a distracted driver is a dangerous driver, new Insurance Bureau of Canada Ontario vp Don Forgeron said.
    He was speaking at the Toronto launch of the bureau’s The Drive to Survive Tour in the province.
     ...More

Alberta Council probes possible insurance fraud
    The Insurance Council of Alberta is urging caution in the wake of a notice from Pembridge Insurance Co. that auto policies in its name may have been fraudulently sold to consumers in the province.
    A news release from the insurer said a company called Bell Insurance Services had improperly sold a Pembridge auto policy.
     ...More

Biker claims rising as gas prices drive two-wheel popularity
    With the price of gasoline heading for the stratosphere, it’s no surprise that sales of motorcycles, mopeds and electric bicycles are following suit.
    But will the rush to two-wheelers bring a corresponding jump in insurance claims costs?
     ...More

Regulator questions ‘uneconomical commercial pricing’
    Canada’s federal financial institutions regulator says the p&c industry is facing numerous stresses and wonders why players are apparently having trouble learning from the past.
    Superintendent Julie Dickson said the p&c cycle repeats itself over and over again and the highs can be pretty high and the lows pretty low.
     ...More

Regulatory paper draws diverse views
    Risk-based market conduct regulation appears to be highly-favoured by some sectors of the insurance industry — but not all.
    The general consensus emerging from submissions to the Canadian Council of Insurance Regulators in response to its consultation paper on the issue seems to be that risk-based regulation is admirable but not always appropriate.
     ...More

Recruitment tops agenda for IBAM president
    Recruitment is a priority for the Insurance Brokers Association of Manitoba and new president Wade Garriock is well equipped to address it.
    At 32, he is the third Garriock to be named president of IBAM, following the lead of grandfather Doug (1965) and father David (1985).
     ...More

Survey exposes ‘green’ shortcomings
    Insurers are sorely missing out by failing to promote their ‘green’ credentials according to the latest Professional Broking sentiment survey which offers insight into the mindset of brokers in the UK.
    Respondents to the bi-annual survey, sponsored by Groupama Insurances, were asked ‘who is the greenest insurer?’
     ...More

Private insurers ‘fighting hard’ to gain more ground in B.C.
    ING Insurance is “patiently optimistic” about the likelihood of greater competition in B.C.’s auto insurance market, president Derek Iles told B.C. brokers at their annual convention.
    “Consumers are looking to be treated fairly and with respect, but they’re also looking for choice, and that’s not widely available in B.C.,” he said.
     ...More

Report from forum on mobility planned
    Driving is a privilege. Mobility is a right.
    This was the message coming out of the first Aging Driver Mobility Forum, held in Toronto.
     ...More

Board member resigns over failed IT system
    Former Manitoba cabinet minister Brian Ransom has resigned from Wawanesa’s board after 19 years over a failed IT system that cost the mutual $70m.
    He told the Winnipeg Free Press that “no-one seems to feel beyond myself that there is something here that required some accountability.”
     ...More

B.C., Alberta update Insurance Acts in tandem
    The B.C. and Alberta finance ministries have unveiled updated Insurance Acts in tandem — underlining the provinces’ commitment to harmonization in commercial law.
    A statement from B.C. Finance Minister Carole Taylor said the laws were reworked “in the spirit of the Trade, Investment and Labour Mobility Agreement,” the provincial free trade pact between the two provinces that came into effect a year ago.
     ...More

Demographic report reveals big challenges
    The p&c industry is facing an uphill battle to attract enough workers to replace outgoing personnel, a report on demographics released last week by The Insurance Institute shows.
    “Compared to the overall labour force and to the minimal standard that there should be one entering the work force for every worker who can retire, the industry’s entry to exit ratios are very low,” the researchers say.
     ...More

Follow-up: Verbal threshold has to go, bar association says
    Working groups at the Ontario Bar Association’s auto insurance summit (Thompson’s, May 5) were “virtually unanimous” that the verbal threshold has got to go, said Richard Halpern.
    The Bar Association president said a monetary threshold was suggested to replace it.
     ...More

FA finds small signs of market hardening
    Despite low application counts for Facility Association in 2007 there are small signs that the market is beginning to harden — particularly in Ontario — moving into 2008, president and ceo David Simpson said.
    Reviewing the residual market at the association annual meeting, he said its market share across the country in 2007 was 0.8%.
     ...More

Cap challenge leaves Alta. insurers in ‘difficult situation’
    Alberta could face pressure for publicly owned auto insurance or a no-fault system if the government cannot restore some sort of limit on damage claims, according to Baron Insurance Services principal Barb Addie.
    Stressing that she was speaking only for herself, Ms. Addie said the industry faces “truly a difficult situation” in designing strategies and appropriate reserves while waiting for legal appeals to take their course.
     ...More

Auto debate heating up with review due
    Ontario’s auto insurance award deductible and verbal threshold are direct barriers to justice in the province, the former Associate Chief Justice of Ontario says.
    Coulter Osborne told industry professionals gathered at the Ontario Bar Association’s Better Auto Insurance conference in Toronto the deductible and threshold are there to keep people out of the system.
     ...More

Investigation into activities at ICBC research facility widens
    The Insurance Corp. of B.C.’s Burnaby research plant not only rebuilt damaged cars but also did paint jobs on managers’ cars — including at least one that was painted twice, it has been reported.
    The Province newspaper quoted Bruce Keller, who worked at the body shop first as a paint company rep and later as a contract employee, as saying it was “just normal” for ICBC brass to bring personal vehicles in for paint jobs when he worked there between 1997 and 2000.
     ...More

Newfoundland nixes sales tax on premiums
    The announcement in Newfoundland that the 15% retail sales tax on insurance premiums there is being eliminated has taken a delighted p&c industry by surprise.
    “We would have treated a phasing out as a victory of sorts, but we are overjoyed that it’s been completely wiped out,” Insurance brokers Association of Newfoundland President Bob Dunne said.
     ...More

Climate change cited as top challenge
    P&C analysts rank climate change and other environmental issues as the industry’s top challenge in a global survey by Accenture of 100 leading insurance equity analysts across 14 of the world’s largest insurance markets, including Canada.
    They expect a significant increase in p&c mergers and acquisitions this year, the survey also found.
     ...More

Report explores Maplex failure
    Management and corporate governance deficiencies were at the root of the 1995 insolvency of Maplex General Insurance, said a report released at the Property and Casualty Insurance Compensation Corp. agm.
    “Had Maplex’s ceo been ‘fit and proper’ for the job, and/or had the Board of Directors taken appropriate action when alleged financial improprieties emerged, it is possible that insolvency might have been averted,” it said.
     ...More

Insurer offering money-back p&c guarantee
    One of Canada’s largest p&c insurers is now promising to send customers who are not satisfied with its entire claims process a cheque equal to the value of their premium.
    It is part of Aviva Canada’s new ‘Let’s Change Insurance’ marketing campaign.
     ...More

Extensive recovery measures proposed
    The B.C. government has introduced legislation designed to recover millions in medical costs through the courts each year.
    Bill 22, the Health Care Costs Recovery Act, would make the government a party to individual or class action suits involving bodily injury so that insurers of liable parties would have to reimburse the health ministry for plaintiffs’ treatment.
     ...More

ICBC ceo leaving for private sector post
    Insurance Corp. of B.C. ceo Paul Taylor will step out of the fire and into the wind next month, leaving the embattled insurer to become president and director of NaiKun Wind Development Inc.
     The ICBC chief’s departure comes amid a growing outcry over the selling of rebuilt write-offs not labelled as such and the purchase of some of those cars by ICBC managers and employees through rigged auctions.
     ...More

Ontario regulator pushing for coordinated national approach
    Ontario’s financial services regulator said it is pushing for a coordinated national approach to regulatory issues.
    The Financial Services Commission of Ontario said in its latest draft Statement of Priorities that it supports the development of harmonized regulatory solutions through participation in the Joint Forum of Financial Market Regulators.
     ...More

Insurers fighting for auto affordability
    The Insurance Bureau of Canada is holding talks with plaintiff lawyers in Ontario to drive home the need for auto insurance affordability in the wake of the challenge to the injury award cap in Alberta.
    IBC ceo Mark Yakabuski said insurers have a very strong case if the plaintiffs’ bar attempts to overturn the threshold for catastrophic claims in Ontario, with auto results deteriorating for most companies.
     ...More

Managers leave ICBC in wake of internal probe
    Several managers have left the Insurance Corp. of B.C. following irregularities in the selling of rebuilt vehicles from the insurer’s research facility.
    The insurer announced in February it was tracking all 174 write-offs rebuilt at its Burnaby research facility in the past 10 years and sold at auction.
     ...More

Long-time OMIA ceo stepping down next year
    One of the toughest challenges lying ahead for the Ontario Mutual Insurance Association will be finding a replacement for longtime president and ceo Glen Johnson.
    He has announced plans to step down next year after 31 years with the company.
     ...More

Allstate suit could affect hundreds of agents
    In a case which could affect hundreds of Allstate agents across the country, an Ontario court has temporarily ruled against a bid by the insurer to restrict a former agent’s sales of insurance and use of his former Allstate location.
    Superior Court Justice John Kane made the ruling late last month on an issue involving Rod Laroque, of Sudbury.
     ...More