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Eastern quake highlights several areas of concerns
The 5.2-magnitude earthquake that occurred near Ottawa-Gatineau earlier this month should serve as a reminder that Eastern Canada is a very active quake zone with implications for government, citizens and the insurance industry, the Institute for Catastrophic Loss Reduction says.
The May 17 quake was felt as far away as Pennsylvania and a 4.1-magnitude aftershock struck ten minutes later. It was the largest event to strike the area since the 5.0-magnitude event in June, 2010.
Insurers cannot control assessment bias, IBC says
The Insurance Bureau of Canada says comments made by an accident victims lobby group regarding medical assessments for auto accident injuries fail to recognize that the issue of bias is out of the hands of insurers and lawyers alike.
The chair of FAIR, the Association of Victims for Accident Insurance Reform, said auto accident benefits are too low and present an obstacle to recovery and that the government needs to tread carefully on rate reductions.
WFG takes ownership of Coast Capital Insurance Services
Western Financial Group is assuming ownership of the p&c insurance division of Coast Capital Savings Credit Union — but don’t call it a takeover or even a purchase.
“It’s a transfer of ownership,” WFG president and ceo Scott Tannas told Thompson’s.
Flood insurance scheme considered for Manitoba
The Manitoba government is looking into “the possibility of a flood insurance scheme “involving the private sector.”
Lori King, newly installed president of the Insurance Brokers Association of Manitoba, said government representatives approached the organization to see if we can help move forward some sort of an insurance package for flood protection in Manitoba with the co-operation and involvement of insurance companies.
Desjardins launches usage-based program
Desjardins Insurance has launched a new usage-based auto program in Ontario and Quebec.
Ajusto is the first widely-available auto insurance program in Ontario to offer savings centered on usage-based (also referred to as Pay As You Drive) insurance technology.
The insurer says customers could save up to 25% on their car insurance based on their driving habits.
Study reveals need for better mitigation
Companies recognize potential risks posed by natural catastrophes yet have insufficient mitigation plans in place, according to a study conducted by the EcThe research polled 170 executives from medium-sized and large companies around the worldonomist Intelligence Unit and sponsored by Zurich.
Insurers seek quick passage for auto reforms
Ontario’s minority Liberal government has pledged in its 2013 budget to go ahead with legislative amendments that would commit to an average auto insurance premium rate reduction of 15% “within a period of time to be prescribed by regulation.”
Along with other measures outlined in Thompson’s last week, the government said in its May 2 official budget announcement that it will also create a “transparency and accountability mechanism” featuring an independent annual report by outside experts on the impact of auto insurance reforms introduced to date.
Grain adopts Wynward as new identity
Grain Insurance & Guarantee has launched an all-encompassing rebranding with a new name and new logo that it says better reflects its evolution into more product lines and its plans for the future.
Wynward Insurance Group is now being rolled out as the company’s new identity in a national advertising campaign that includes customer events across the country and a new website — wynward.com.
Argo-terrorism cited as latest security risk
Agro-Terrorism is a rising threat to food security, in addition to the better-known risks of climate change, commodity speculation and the rise in meat and dairy consumption which regularly grab headlines, Lloyd’s says in a new report.
‘Feast or Famine: business and insurance implications of food safety and security’ looks at issues as diverse as globalization, water security and land availability and suggests the food sector is increasingly vulnerable to attack.
New strategy enhances regulatory powers
The Ontario government outlined its proposed plan to reduce auto insurance premiums by an average of 15% last week, with further details expected in the budget announcement after we went to press.
The new strategy would require insurers to offer lower premiums to customers with safe driving records.
IBAA president aims to capitalize on technology
Greater use of technology, recruiting young people and encouraging brokers to set aside time for planning are among priorities for the incoming president of the Insurance Brokers Association of Alberta.
Gord Enders, who operates Edmonton-based Direct-Line Insurance with his wife, Carol Romain-Enders, takes the reins from outgoing president Scott Treasure at the IBAA’s annual general meeting and convention in Banff.
Insurer refutes CBC write-off accusations
Saskatchewan Government Insurance is defending itself against accusations that it plays rough with customers whose vehicles are totalled in accidents.
CBC News quoted a motorist and an independent appraiser who accused the Crown insurer of undervaluing write-offs and withholding information about the arbitration process available to customers who don’t want to accept the price they are offered.
Pipeline presents unique risks
If the Northern Gateway pipeline goes ahead, it would mean a big chunk of business for insurers — but probably not in Canada.
After environmental groups and the B.C. government raised fears about the potential for spills from the proposed pipeline from Alberta to Kitimat, B.C., the National Energy Board ruled the project must have liability coverage of almost $1bn for cleanup and remediation.
Postal code based rating trend emerging
Fine-tuning property damage risks and premiums by postal code is not a practical strategy for smaller insurers — yet. But the trend is heading that way, according to John Mitchell, president and ceo of Portage Mutual.
“Getting down to a finite level for wind and hail challenges — we’re not moving in that direction at this point,” he told Thompson’s. “We’ll do it more on a regional scale.”
Ontario auto plan due to be revealed this week
The Ontario government is due to lay out its plan this week for making auto insurance cheaper in the province.
In a bid to avert an election, the minority Liberals passed a motion earlier this month to gradually reduce rates and appease NDP demands with details coming in the budget set to be released May 2.
Brokers call for responsible rate action
Ontario’s brokers association continued its push for implementation of Anti-Fraud Task Force Report recommendations during its presentation last week at hearings held by the province’s Standing Committee on General Government.
They also addressed the need for protection of the independence of insurance brokers.
F1 changes present new risks for insurers
IT’S A GRRR-eat day for motor car racing! The legendary call from Sir Jackie Stewart is indicative of significant safety gains in Formula 1 auto racing today but insurers are facing new risks around every corner.
Territory elimination implications outlined
The Ontario regulator says eliminating territories as a rating criteria for auto insurance would significantly increase rates for drivers residing outside of the Great Toronto Area. The Financial Services Commission of Ontario told the province’s Standing Committee on General Government last week that territorial rating enhances the ability of insurance companies to underwrite and price risk more accurately by linking premiums to claims experience in the different territories.
Insurers urged to make better use of data
P&C insurers should be looking to gain a competitive advantage by harnessing the rapidly-expanding volume of data they’re collecting, an Ernst & Young analyst says in a new outlook report on the industry in Canada.
Author Doug McPhie says data from transactions, claim histories, social media connections, Internet searches and GPS-based devices are valuable sources for insurers looking to improve underwriting capabilities, customer service and claims experiences.
OSFI planning more risk-sensitive rules for p&c insurers
The implementation of more risk sensitive capital rules for p&c insurers is among priorities listed by Canada’s federal regulator for 2013-2016.
The Office of the Superintendent of Financial Institution said in its latest Plan and Priorities report that it will “actively participate, where appropriate, in the development of global insurance standards and monitor the implementation of insurance reforms in other jurisdictions and assess their implications for insurance companies operating in Canada.”
Inexperience found to be a factor in Manitoba floods
Unprecedented flood conditions, inexperienced forecasters and inadequate infrastructure combined to wreak devastation on Manitoba during the record 2011 floods, a provincially mandated independent task force has concluded.
The 2011 Flood Review Task Force was struck last year to investigate floods that destroyed or damaged homes, businesses, roads and bridges across the province. The repair bill so far is $1.2bn and rising.
Brokers call for action on home cover issues
The insurance industry risks attracting more regulation if it can’t find a way to keep home insurance affordable, the president of Alberta’s brokers association has warned.
Scott Treasure, who is also president of Treasures Insurance in Edmonton, told Thompson’s he recently wrapped up a tour of the province and heard concerns about rates and deductibles from brokers in every region.
Reinsurance market still healthy in B.C.
B.C. property owners are grappling with the retail cost and availability of earthquake coverage but those who provide it are still finding reinsurance, a survey by the province’s Financial Institutions Commission shows.
Reinsurance reform key for Olympic risks, IAU chief says
The success of the Rio 2016 Olympics may be economically linked to reform of the Brazilian reinsurance industry, the chief executive of the International Underwriting Association said.
Addressing delegates at the Reactions 5th Anniversary Brazilian Reinsurance Conference recently, Dave Matcham called for an end to trade barriers that limit the amount of reinsurance capacity available to local markets in the country.
Mutuals aiming to continue momentum
The members of the Ontario Mutual Insurance Association posted their best collective results ever in 2012 but their president has cautioned that the rosy numbers must be considered in context.
“The underwriting profit and net profit results are by far the best results in mutual history,” John Taylor said at the association’s 131st annual convention in Toronto in March.
Regulators’ review yields surprises
Ontario may be the 900-pound gorilla in the room when it comes to federally regulated p&c insurers, but for provincially chartered companies it’s all about Quebec.
That’s the picture that emerges from the latest survey by the Canadian Council of Insurance Regulators, the umbrella group for provincial authorities.
According to federal Finance Department figures, there are 230 p&c companies in Canada, and the biggest part of the industry — by number of federally regulated companies, assets and policyholders — lies in Ontario.
Spring showers bring renewed attention to water damages
The Insurance Bureau of Canada is reminding consumers of precautions that can help protect homes and property from water damage as spring finally arrives.
“Based on estimates, the Canadian insurance industry paid $1.7bn in claims in recent years due to water damage,” IBC Ontario vp Ralph Palumbo said.
West Coast quake loss potential quantified
The inevitable major earthquake and tsunami off the West Coast will inflict up to 10,000 deaths and US$32bn in property damage from northern California to B.C., a new study predicts.
The sobering estimates were included in a report submitted last week to Oregon lawmakers by the Oregon Seismic Safety Policy Advisory Commission.
Insurer settles leaky condo case out of court
A leaky condo lawsuit that was expected to go at least as high as the B.C. Court of Appeal has instead been settled out of court.
Travelers Guarantee Co. of Canada and the strata council for the 13-storey ‘The Q’ building in North Vancouver settled their seven-year dispute just before the trial was to begin in B.C. Supreme Court earlier this month.
Saskatchewan caps motorcycle cover hike
Saskatchewan motorcyclists won’t be facing massive insurance hikes after all.
Donna Harpauer, the provincial minister responsible for Saskatchewan Government Insurance, has instructed the Crown corporation to amend its rate application to cap increases for two-wheelers at 15%.
Communication key for mutuals’ success
Customer contact. Communication.Adaptation. These ingredients are at the heartof the considerable success achieved by mutual insurers in Canada — particularly in Ontario.
“The structure of the mutuals is extremelystraightforward and transparent for policyholders,”said John Taylor, president of the Ontario Mutual Insurance Association, which is holding its annual convention this week in Toronto.
P&C profitability on the rise, early 2012 results show
Profitability for Canadian p&c insurers is on the rise, early year-end results for 2012 indicate.
As reported earlier in Thompson’s, Intact, Co-operators, Economical and RSA all posted net after-tax net income gains in 2012 compared to the year before.
Unhappy customers need attention: report
Insurance consumer experience needs to be addressed, the latest World Insurance Report concludes — with only 30% of those surveyed reporting positive interaction with their insurers.
The report, released recently by consulting firm Capgemini and the global not-for-profit organization Efma, also found that mobile and social media channels are gaining traction with insurers in terms of early adoption rates.
Tribunal upholds use of age as rating factor
The Ontario Human Rights Tribunal has ruled that insurers have the right to discriminate with respect to goods and services because of age.
A complaint was launched last November by 92-year-old Denis Olorenshaw, who found that when he and his live-in daughter — who had an identical vehicle to his — received quotes for insurance coverage, hers was $250 lower
Taxis facing coverage crisis in Ontario
Thousands of Ontario cab and limo drivers have been left without voluntary market coverage after a major specialty insurer decided to pull out of that business in Canada.
Last fall Arch Insurance notified the Taxi and Limousine Drivers Association — which has roughly 10,000 members — that due to changes in underwriting guidelines it would not be in a position to provide coverage for renewals in 2013.
Residual market still stable, FA chair reports
The residual market mechanisms administered by Facility Association have been relatively stable with low volumes over the past year but the industry has been urged to remain vigilant.
“2012 has again seen relatively stable residual markets across Canada within an external auto insurance environment that, while not volatile, was not entirely uneventful,” FA chair Gary Quon, Northbridge chief corporate development officer, told members at the association’s annual general meeting in Toronto.
Black box privacy concerns raised
Event data recorders in vehicles will become mandatory south of the border next year, raising privacy concerns here in Canada.
“In Canada there are no specific regulations that stipulate how data can be used but I would suggest that those regulations will be forthcoming,” Insurance Brokers Association of Ontario ceo Randy Carroll said.
“The question of who owns the data is an interesting topic. “Not just who owns it but also who has access to it. I would suggest that the data should belong specifically to the consumer and can be shared and or used by a third-party with the consumers’ informed consent.”
NDP continues to press government on auto rate issue
Ontario’s New Democratic Party has continued to hammer away at the minority Liberal government over auto insurance rates in the province.
NDP leader Andrea Horwath resumed her protest in the legislature late last month claiming Liberal policy changes have resulted in $2bn in extra profits for insurance companies — a figure disputed by the Insurance Bureau of Canada.
Appeal judge rules carjacking doesn’t qualify as ‘accident’
A Toronto man who was carjacked and beaten is not entitled to damages from his auto insurer under Statutory Accident Benefit Schedule, according to the Ontario Court of Appeal.
The unanimous decision by three appellate judges overturned a 2011 ruling by Superior Court Justice Douglas Gray that audio technician Paul Martin was injured as the result of an ‘accident’ as defined under SABS.
Adjuster urges thorough investigation
Adjusters need to make sure they don’t jump to conclusions if they want to avoid bad faith claims, a presenter warned at a Toronto conference this month.
“You must think,” Granite Claims Solutions senior adjuster Steve Scullion said at the joint conference held by the Canadian Insurance Claims Managers Association and the Canadian Insurance Adjusters Association.
ICLR calling for code changes
The Institute for Catastrophic Loss Reduction has released a new study that calls for improved building codes regarding backwater plumbing values.
The institute has recommended that certain sentences in the National Plumbing Code and provincial building and plumbing codes be reworded or clarified so they are clearly and consistently interpreted and applied.
Aviva still sees value in UBI
Aviva’s piloting of usage-based auto insurance ended in 2010 without a formal launch but the insurer still believes the basic idea is one the industry should seriously consider.
“We felt that the idea was certainly worth exploring,” Aviva Canada senior marketing vp Paul Fletcher said.
Insurers consider usage-based coverage
The Financial Services Commission of Ontario is preparing for usage-based auto insurance and says companies need to consider several key issues if they hope to offer it soon.
“We need to look at the long-term impact of usage-based insurance on rate adequacy,” FSCO senior manager Bruce Green said last week at a symposium in Toronto held by the Insurance Bureau of Canada.
Transition expected to continue
The Canadian insurance market began to transition from soft to stable in 2012, and the authors of a new report on the sector say they expect this will continue throughout 2013.
Aon Risk Solutions’ 2013 Canadian Insurance Market Report notes the combined ratio of the Canadian insurance industry improved to 99% in 2011 from 101% in 2010 to 99%. But insurer investment returns are still depressed because of current low interest rates.
East coast MGAs facing fierce competition
The weather may be wintery but the battle for p&c business is hotter than ever on the east coast so far this year and MGAs there are feeling the pinch.
“Competition for MGAs in the commercial segment is fierce and the recent acquisition of Huestis Commercial by Hub International (Thompson’s, Nov. 12, 2012) will certainly put more focus on the Maritimes,” said Grant Kimball, president of Saint John-based Angus Miller Ltd.
Police crack down as driver cellphone use issue resurfaces
This month marks the third anniversary of B.C.’s ban on the use of hand-held electronic devices while driving, and RCMP and city police forces are marking the occasion with a crackdown on offenders.
And police in Calgary are doing the same.
Faltering economy leading to ‘new normal’
The faltering economy has left insurers facing low interest rates, lagging investment returns and a surplus of capital, and the ceo of Lloyd’s says this could lead to the traditional ‘market turning’ event being consigned to the history books.
“The new normal is an environment where growth is subdued and investment returns are low,” Richard Ward said earlier this month.
Ontario proceeding with amendments
The Ontario government is going ahead with regulatory amendments to the province’s statutory accident benefits schedule which it has been seeking stakeholder input on.
The amendments implement a number of the recommendations made by the Auto Insurance Anti-Fraud Task Force and will take effect June 1.
Pipeline projects lack proper cover, opponents warn
Opponents of proposed pipeline projects on the West Coast say the companies involved do not carry enough insurance to pay for damages in the event of a catastrophic spill.
Instead, critics say, in at least one case the company behind a proposed pipeline has structured itself to limit liability.
Organized auto thieves plague urban areas
Insurers are dealing with an influx of organized criminals involved in auto theft rings in urban centres.
“In Montreal and Toronto, and to some extent Vancouver and Halifax, we see organized crime involved in shipping and chopping,” said Charles Rabbat, Quebec and Atlantic investigative services vp for the Insurance Bureau of Canada.
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