C A N A D A’ S I N S U R A N C E A N D R I S K M A G A Z I N E . C A N A D I A N U N D E R W R I T E R . C A
A P R IL 2 0 1 2 A Business Information Group Publication #40069240
Changing Face of the Broker BY DAVID GAMBRILL
How B.C. is Different BY MAURICE POULIN
KISS-ing the Taxman BY BRENDA ROSE
WE’RE BIG ON TAKING THE WHEEL
After spotting a problem with a client’s fleet safety record, our Risk Consultant knew he could do more to help. For both his client and himself, downtime wasn’t an option. Neither was putting the fleet’s drivers in danger. Without a moment to spare, they put an action plan in place to improve the company’s safety program, keeping their products, and their business, clear of trouble and moving forward. With over 300 years of experience, RSA is an established ‘A+’ rated insurer offering a complete suite of insurance solutions from small business to multi-nationals through a network of independent brokers.
IF YOU’RE BIG ON MANAGING RISK, PARTNER WITH RSA.
LARGE COMMERCIAL & SPECIALITY INSURANCE ©2012. RSA is a registered trade name of Royal & Sun Alliance Insurance Company of Canada. “RSA” and the RSA logo are trademarks used under license from RSA Insurance Group plc. ‘A+’ rated by Standard & Poor’s. ‘A’ rated by Moody’s and AM Best.
| rsabroker.ca
Contents Apr (12)_DG_v3.qxp
4/8/12
10:39 AM
Page 3
VOL. 79, NO. 4, APRIL 2012 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP
www.canadianunderwriter.ca
COVER STORY
Changing Face of the Broker
28
Brokers are reconsidering their business model based on changing consumer expectations. Brokers are using new technologies, addressing the online sales of insurance, reviewing membership in light of consolidation trends and working with regulators in support of best ways to do their work. Change is in the air and brokers are adapting to suit their new business environment. BY DAVID GAMBRILL
FEATURE
12
40
16 Different in B.C.
52 Summary Judgment
The insurance ramifications of strata properties on the West Coast is of utmost concern for B.C. brokers.
Ontario and B.C. have tweaked their rules on summary judgment, allowing judges more discretion in the interests of making justice quicker and more affordable.
BY MAURICE POULIN
Broker Succession
Broker E&O
24 Ontario Brokers
How do bright young brokers become new owners, principals and senior managers?
Recent E&O statistics suggest new business is proving to be a new problem for insurance brokers.
Ontario brokers are calling for a re-alignment of the theory and practice of group rated insurance plans.
BY DAVID GAMBRILL
BY HUGH FARDY
BY RANDY CARROLL
56 20 Tax Update
iClarify Commercial
Canadian brokers have successfully worked with the Canada Revenue Agency to help “keep it simple” with regard to the Federal Excise Tax.
iClarify Commercial is rolling out across Canada, promising fast, efficient and simple validation of commercial property data.
BY BRENDA ROSE
BY GREG McCUTCHEON
44 P&C Trends
BY ALBERT WALLRAP
58 Incurred Expenses When Ontario reformed its auto insurance product in 2011, it opened up a whole new world for lawyers to debate how benefits expenses are “incurred” and “minor” injuries are defined.
Canadian property and casualty insurers have some reasons to BY DONNA FORD be optimistic in 2011, including an underwriting profit and 62 Letter to the Editor improved Ontario auto results, but murky waters remain ahead. An author identifies discrepanBY GREGOR ROBINSON cies between his original article submission regarding the Kus48 Cloud Cover nierz decision and the edited Applied Systems expects to open version published in Canadian Underwriter. a new data management centre BY NEIL P. WHEELER in Canada in 2012 Q3, helping Canadian brokers transport their operations into the cloud. BY DAVID GAMBRILL
April 2012 Canadian Underwriter
3
Contents Apr (12)_DG_v3.qxp
4/8/12
10:39 AM
Page 4
VOL. 79, NO. 4, APRIL 2012
PROFILE
Editor David Gambrill david@canadianunderwriter.ca (416) 510-6796 Senior Publisher Steve Wilson steve@canadianunderwriter.ca (416) 510-6800
10 Leadership Glenn T. Gibson, recipient of The Insurance Institute of Canada’s 2011 Established Leader Award, reflects on what makes Canadian P&C leaders ‘outliers’ in the leadership theories of author Malcolm Gladwell. BY DAVID GAMBRILL
SPECIAL FOCUS
6
Editorial
8
Marketplace
Associate Publisher Paul Aquino paul@canadianunderwriter.ca (416) 510-6788 Account Manager Michael Wells michael@canadianunderwriter.ca (416) 510-5122 Account Manager Christine Giovis christine@canadianunderwriter.ca (416) 510-5114
Art Consultation Sascha Hass Production Manager Gary White (416) 510-6760 Subscriptions/Customer Service Gail Page gpage@bizinfogroup.ca (416) 442-5600 ext 3549 Circulation Manager Mary Garufi mgarufi@bizinfogroup.ca (416) 442-5600 ext 3545 Print Production Manager Phyllis Wright President Bruce Creighton Vice President Alex Papanou
Art Director Gerald Heydens
Connect with Canadian Underwriter
64 Moves & Views
twitter.com/CdnUnderwriter
facebook.com/CanadianUnderwriter
66 Gallery
linkd.in/CanadianUnderwriter
instouch.com/group/CanadianUnderwriter
www.CanadianUnderwriter.ca/MediaGroup Canadian Underwriter is published thirteen times yearly (monthly + the Annual Statistical Issue) by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd., a leading Canadian information company with interests in daily and community newspapers and business-to-business information services. Business Information Group is located at 80 Valleybrook Drive, Toronto, Ontario, M3B 2S9 Phone: (416) 442-5600. All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent. © Published monthly as a source of news, technical information and comment, and as a link between all segments of the insurance industry including brokers, agents, insurance and reinsurance companies, adjusters, risk managers and consultants. Privacy Notice From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374 Fax: 416-442-2191 E-mail: jhunter@businessinformationgroup.ca Mail to: Privacy Officer, 80 Valleybrook Drive, Toronto, Ontario, M3B 2S9 Subscription Rates: 2011 Canada 1 Year $49.95 plus applicable taxes 2 Years $73.95 plus applicable taxes
GST Registration number 890939689RT0001 Second Class Mail Registration Number: 08840 Publications Mail Agreement #40069240
Single Copies $10 plus applicable taxes
Return undeliverable Canadian addresses to: Circulation Dept. Canadian Underwriter 80 Valleybrook Drive, Toronto, Ontario M3B 2S9
Elsewhere 1 Year $73.95 Annual Statistical Issue (included with above subscription) or separately $38 plus applicable taxes Subscription Inquiries/Customer Service
We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities.
Gail Page (416) 442-5600 ext 3549 gpage@bizinfogroup.ca ISSN Print: 0008-5251 ISSN Digital: 1923-3426
4
Canadian Underwriter April 2012
UNITED AS ONE. WE ARE BURNS WILCOX CANADA: THE EVOLUTION OF CHESTERFIELD CANADA. What happens when Chesterfield Canada joins the largest independent wholesale broker in North America? The best gets better. Welcome to Burns Wilcox Canada, providing you with better service, faster turnaround, and enhanced market access to an even wider range of Canada’s top insurers and the international market including Lloyd’s of London. Plus with Burns Wilcox Canada, you get expertise that leads the specialty insurance marketplace. More importantly, no matter what the risk, your clients will be provided with the coverage they need.
burnsandwilcox.ca
OTTAWA Steve Kilrea or Tom Stanton Tel: 613.237.3939 • Fax: 613.233.4334 WATS: 1.866.268.7334 skilrea@burns-wilcox.ca • tstanton@burns-wilcox.ca
30391_BURNS_CanadaAd_FINAL.indd 1
TORONTO Paul Clarke or Tyson Peel Tel: 416.774.2477 • Fax: 416.497.7581 WATS: 1.888.591.9125 pclarke@burns-wilcox.ca • tpeel@burns-wilcox.ca
3/21/12 12:39 PM
Editorial (Apr12)_DG
4/8/12
10:42 AM
Page 8
EDITORIAL
Focus on Distraction
Distracted driving will not go away if we simply blame others for failing to do what we are incapable of doing ourselves. That is, turning off our mobile devices for the duration of a road trip. David Gambrill, Editor david@canadianunderwriter.ca
6
Canadian Underwriter April 2012
How do you stop distracted driving in a culture of distraction? The omnipresence of social networking and mobile technologies has changed consumers’ expectations about service delivery and personal communications. People want things immediately, and mobile technology makes it possible to communicate these desires instantaneously. Our fascination with the relatively new portability of our conversations has been to the detriment of many things that demand our focus elsewhere — driving being one of them. For people who speak fluent statistics, property and casualty insurers have a wealth of numbers indicating that mobile devices and driving don’t mix. Manitoba’s public auto insurer, Manitoba Public Insurance (MPI), notes the province’s police have already issued 500 tickets related to driving while using a cell phone thus far in 2012. In Saskatchewan, during a two-day blitz in November 2011, Saskatchewan Government Insurance (SGI), the province’s public insurer, noted police handed out 207 tickets specifically for cell phone use in the car. Quebec’s police force issued 9,000 tickets in 2011 for driving while using a cell phone, up from 7,000 in 2010. This is just a sampling of the numbers. I could go on and on.
Of course, cell phones are not the only things that distract us while driving. Eating, talking on hands-free devices, getting pets to sit still, getting your kids to stop beating each other up in the back seat, applying make-up, setting your GPS, fiddling with the CD player, consulting maps and yes, even reading the newspaper, all qualify. Many in the insurance and traffic safety research communities believe cell phones and movile devices have unjustly hi-jacked the issue of distracted driving. But from the politicians’ perspective, compared to legislating against car radios, GPS devices, passengers, lipstick, small children, pets and reading materials in the car, targeting mobile devices appears to be something that might be at least remotely enforceable. And yet, restricting the use of mobile devices in the car is proving to be tricky enough. The Insurance Bureau of Canada (IBC) presented a most telling stat in 2007, when it commissioned a poll on cell phone use and driving. The poll showed that even though 89% of 1,200 Canadians surveyed said they were concerned about driver distractions, 60% of drivers surveyed said they would not stop using their cell phones when driving. In other words, my own cell phone use is not the prob-
lem. It’s the other person’s cell phone use that is endangering me. As long as this is our core approach to the issue, people will not stop using their own cell phones while they drive. Somehow, we need to get across the idea that drivers are responsible for their own actions in the car. Distracted driving will not go away if we simply blame others for failing to do what we are incapable of doing ourselves. That is, turning off our mobile devices for the duration of a road trip. Toronto hosted the Driven to Distraction conference organized by the Canadian Automobile Association (CAA) and the Traffic Injury Research Foundation (TIRF) in March 2012. Several delegates there observed the insurance industry still has a long way to go before succeeding in changing the public’s driving behaviours. One noted it took about 20 years for the public to fully comprehend the safety benefits of seat belts. One can expect a similar lengthy road to convince people to hang up on their social lives for the time it takes for them to stop the car. In a culture of distraction, it’s not easy to get people to focus on something other than their mobile devices. Expect this to be more of a campaign than a single battle.
Marine
6/4/10
1:52 PM
Page 1
at 25.42°N 90.15°W, ACE insures progress
Property & Casualty | Accident & Health | Life
It takes the right people, a strong balance sheet, worldwide capabilities and a flexible approach to address the complexities of marine insurance. These are the strengths of ACE. We take on the responsibility of your risks so that you can take on the responsibility of making things happen. We call this insuring progress. Visit us at www.ace-ina-canada.com.
© 2010
Marketplace (Apr12)_DG
4/8/12
10:47 AM
Page 10
MARKETPLACE Sign-up to receive Canadian Underwriter’s free Insurance Headline News Email Alert: http://bit.ly/cuenews
Canadian Market CANADIAN COMPANIES RECORD TOTAL PROFIT OF $4.53 BILLION IN 2011: MSA RESEARCH Canadian property and casualty (P&C) companies reported a profit of $4.53 billion in 2011, according to figures released by MSA Research Inc. MSA Research’s aggregate industry totals are derived from the individual results of 220 Canadian property and casualty insurers. Overall, the industry wrote $48.5 billion in premiums in 2011 (up 7% from 2010), according to MSA. It paid out $32.04 billion in net incurred claims (up 6% from 2010). On the whole, the industry recorded an underwriting profit of $368.7 million in 2011. Its 2011 loss ratio of 71% remained the same as it was in 2010, and its combined ratio decreased to 99% in 2011 from 100% in 2010. Net investment income for the industry dropped 5% in 2011, down to $4.5 billion.
OSFI-REGULATED INSURERS REPORT INCREASED PROFITS, FLAT INVESTMENT INCOME Federally regulated Canadian property and casualty insurers saw their profits increase by just over $1 billion in 2011 despite static net investment income and claims
8 Canadian Underwriter April 2012
ratios in property lines that are up across the board. Canada’s federal solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), posted the property and casualty (P&C) insurance industry’s 2011 Q4 results on Mar. 20. P&C insurers reporting to OSFI made a collective profit of $3.55 billion as of the end of 2011 Q4. That’s up from a $2.44-billion result posted in 2010. The result seems to be driven by an increased premium volume between 2010 and 2011. Canadian P&C insurers reported net premiums written of $35.7 billion in 2011 Q4, up from $34.5 billion in 2010 Q4. Net investment income remained virtually static between 2010 and 2011. Canadian and foreign federally regulated insurers reported net investment income of $3.58 billion in 2010 Q4 and $3.55 billion in 2011 Q4.
Regulation ONTARIANS DON’T KNOW WHERE TO REPORT AUTO INSURANCE FRAUD: IBC SURVEY Ontario residents understand the frequency of insurance fraud, but don’t necessarily know how to blow the whistle on perpetrators, a consumer poll by the Insurance Bureau of Canada (IBC) shows. Conducted by Pollara, the survey found 83% of Ontari-
ans believe fraud occurs frequently or occasionally in the province. The vast majority (96%) make the connection between fraud and higher premiums for drivers. However, the survey also found most people (58%) did not know where to report fraudulent activity in a health clinic. Seventy-two per cent said they would likely report a person in the health industry who commits insurance fraud. Consumers indicated they would report fraud most commonly to police (68%), an insurance company/broker/agent (67%), Ontario’s insurance regulator (51%) and the province’s regulator of health practitioners (47%).
B.C. SMOKE ALARM CAMPAIGN PROPOSES LINKING INSURANCE RENEWALS TO FIRE ALARM TESTS B.C. has launched a smoke alarm campaign that includes a proposal linking annual insurance renewals to fire alarm tests. Initiated by Shirley Bond, B.C. attorney general and minister of justice, and Len Garis, president of the Fire Chiefs’ Association of B.C., the new campaign represents a sustained, coordinated approach to make sure B.C. homes have a functioning smoke alarm. Research done by Surrey Fire Services, in partnership with the University of the Fraser Valley, shows that almost 70% of houses that caught fire did not have a
functioning smoke alarm. One component of the campaign involves “exploring the potential to utilize the [B.C.] Insurance Act to compel annual testing of smoke alarms upon policy renewal,” according to a statement posted on the B.C. attorney general’s website. Further details about the campaign will be publicized as it rolls out during 2012. Information about the campaign will be available at: www.fcabc.ca.
Claims WATER LOSSES IN NEW BRUNSWICK QUADRUPLE OVER FOUR YEARS Insurance Bureau of Canada (IBC) took its message of climate change adaptation to New Brunswick, where data insured water damage losses have almost quadrupled in four years. Speaking to the Saint John Board of Trade on Feb. 22, IBC president and CEO Don Forgeron observed that water damage losses in New Brunswick escalated from $7 million in 2005 to $23 million in 2009. “That’s huge,” he said. “And when we compare this relative growth to losses from fire, water wins the race, hands down.” IBC commissioned a study by Dr. Gordon McBean, a professor at the University of Western Ontario, who found that Atlantic Canada
Marketplace (Apr12)_DG
4/8/12
10:47 AM
Page 11
MARKETPLACE
Sign-up to receive Canadian Underwriter’s free Insurance Headline News Email Alert: http://bit.ly/cuenews
was hit by 16 hurricanes between 1990 and 2005. Most recently, Hurricane Irene caused more than $130 million worth of wind and water damage in August 2011. “Here in Canada…home, car and business insurers have seen claims pay-outs from severe weather double every five to 10 years since the 1980s,” Forgeron said.
CANADIANS HAVE MISPLACED CONFIDENCE IN THEIR WATER INFRASTRUCTURE: RBC POLL Canadians have a misplaced confidence in the quality of their water infrastructure, according to the fifth annual RBC Canadian Water Attitudes Study. In a sample of more than 2,428 adult Canadians, about 80% of respondents reported feeling no need for major and immediate investment in their community's drinking water/wastewater facilities. These survey respondents believed their water infrastructure to be in good condition and in need of only minor investment for upkeep. And yet, more than a third (37%) of Canadians who use municipal water said they were not very aware of the condition of the water and sewage infrastructure serving their own home. “Canadians believe in the safety of their drinking water and assume that the infrastructure that provides it is efficient,” says Bob Sandford, chairman of the Cana-
dian Partnership Initiative of the UN Water for Life Decade. “This is a national 'pipe dream' because in many municipalities, water
distribution and sewage pipes can be up to 80 years old and have already reached the end of their service life. In fact, reports have shown
there is an $88-billion investment required to repair and build new water infrastructure in communities across Canada.”
Specialized claims adjusting takes specialized expertise and experience. Specialized losses are by their very nature intricate, complex and full of challenges. In the absence of strong leadership these losses can and frequently do take on a life of their own. At Cunningham Lindsey we provide this leadership.
MUNICIPAL LIABILITY
GENERAL LIABILITY
AUTO INJURY
BOILER & MACHINERY
BUILDERS RISK
WRAP UP LIABILITY
POLLUTION
TRANSPORTATION
COURSE OF CONSTRUCTION
FINE ARTS & JEWELLERS BLOCK
For more information: T: 905-896-8181 E: apoon@cl-na.com www.cunninghamlindsey.com
COMMERCIAL PROPERTY
MINING AND OIL & GAS
PROFESSIONAL LIABILITY
April 2012 Canadian Underwriter
9
Profile (Apr12)_DG.qxp
4/8/12
10:52 AM
Page 12
PROFILE
Canada’s P&C leadership David Gambrill Editor
Glenn T. Gibson, recipient of the 2011 Established Leader Award from the Insurance Institute of Canada, describes Canada’s P&C industry leaders as anomalies to the leadership theories of best-selling author Malcolm Gladwell. Glenn T. Gibson, recipient of the Insurance Institute of Canada’s 2011 Established Leader Award, has a thoughtful and well-researched perspective on leadership in Canada’s property and casualty insurance industry. When asked for his thoughts on the subject, he immediately launches into a discussion referencing Outliers, Malcolm Gladwell’s best-selling book about leadership. Gladwell’s book seeks to identify the characteristics of exceptional industry leaders. On his blog, Gladwell defines an “outlier” as “a scientific term to describe things or
10 Canadian Underwriter April 2012
phenomena that lie outside normal experience.” For example, temperatures reaching below zero on a summer day in August. “I'm interested in people who are outliers—in men and women who, for one reason or another, are so accomplished and so extraordinary and so outside of ordinary experience that they are as puzzling to the rest of us as a cold day in August,” Gladwell writes on his blog. Gibson, executive vice president of Crawford & Company International, is himself a recognized leader in Canada’s property and casualty insurance industry. Naturally, he was interested in what Gladwell had to say. But after reading the book, one aspect of Gladwell’s theory didn’t sit right with Gibson, who grew up in a low-income area of North Hamilton. Specifically, he questioned Gladwell’s characterization of exceptional leaders as coming predominantly from wealthy, university- educated family backgrounds. “I had a lot of misconceptions about the backgrounds of people who got to top jobs,” he says. “Sometimes when you’re sitting down in the food chain somewhere, you have a perception that the person sitting up there above you, wearing the chains of office,
has had this spectacular, gifted pathway to the top. And the reality is, it’s nothing like that. These are real people.” In Gibson’s situation, he grew up in northern Hamilton playing junior football. After graduating from high school, he needed to raise money to go to university, so he took summer jobs on an assembly line and working for a few days over an open hearth in a steel mill. Some insurance professors at Mohawk College convinced him to enter the
school’s insurance program, which he did. After graduating, he was hired as an adjuster in 1973 with the Fireman’s Fund Insurance Company. Seven years later, he was among a group of people who founded Adjusters Canada in 1980. Under the informal mentorship of Skip Sutherland, Gibson quickly rose in the management ranks of the company. In 1998, Crawford purchased Adjusters Canada. From 1998 to 2000, Gibson served as senior vice president
Profile (Apr12)_DG.qxp
4/8/12
10:52 AM
Page 13
PROFILE
of operations for Crawford Canada. He was appointed CEO in 2000. Six years later, he became CEO of the Americas for Crawford International. Recounting all of Gibson’s professional designations and achievements would be an article unto itself. Suffice to say, Gibson has parlayed his modest family economic circumstances into a leadership position within Canada’s property and casualty insurance industry. Gibson found out his modest background and path to the insurance industry was not as uncommon as he first thought. Inspired by Gladwell’s book, Gibson undertook his own personal survey of 25 property and casualty insurance industry CEOs in Canada. He found that 52% of the CEOs he surveyed came from middle-income economic backgrounds; 38% grew up in low-income economic circumstances. Twenty-five per cent came from farming backgrounds, 45% came from small towns and only 30% grew up in large cities. In terms of education, 17% of the CEOs had no more than a public school education. Fifty per cent graduated with no more than a high school diploma. Twelve per cent went to college and 20%
had a university education. What does this tell Gibson about leadership in the Canadian P&C insurance industry? “I’ve found that a lot of the CEOs I’m interviewing who are of my vintage — between the ages of 50 and 60, for example — became insurance professionals on the job,” he says. “How they entered the business was unusual for all of them. Everyone had a strange story. ‘I didn’t plan on getting here. I ended up here, I don’t know how.’ But once they got within the business, I think what differentiated them is that they became an insurance professional. That is a key thing in my mind.” For Gibson, professionalism involves a continuous path of learning while on the job. Such education takes a wide scope: “You can’t be insular and stay in a zone where if you are an underwriter, you don’t learn the claims business,” he says. “Or if you’re an adjuster, you don’t learn the underwriting business.” Gibson does see Canada’s P&C leadership falling comfortably within Gladwell’s observations about the importance of autonomous,
complex and meaningful work in the development of successful business professionals. To some degree, leaders are able to make their work meaningful by mastering those things that are within their control, Gibson believes. “I’m a big fan of some of the early Dale Carnegie stuff,” he says. “If you really look at the foundation of the Carnegie stuff, it’s really about control what you can control. So what
You control the attitude you bring to work every day, you control how hard you work every day, and you control your own personal education. can you control? My three things are: you control the attitude you bring to work every day. You control how hard you work every day. And you control your own personal education. If you take control of those three things, which are all within your control, you don’t have to worry about anything in Life. It will take care of you.” A person’s work ethic is central to a person’s reputation within the industry. And in Canada’s P&C insurance in-
dustry, a reputation spreads quickly. “What people do day to day, and how they work, it’s follows them around,” he says. A broad-based education is key to establishing one’s reputation as a leader and a professional, says Gibson, who was chairman of the board of governors at the Insurance Institute of Canada in 2002-03. The Insurance Institute is the educational arm of Canada’s property and casualty insurance industry. More than 16,000 of its 38,000 members across Canada are graduates who have earned the Chartered Insurance Professional (CIP) designation or Fellow Chartered Insurance Professional (FCIP) designation. “If you look at the last 15 years of people who have gone through [the Institute’s chain of command], you see the Institute recruits people at the senior executive ranks of the industry to join the board of directors,” Gibson says. “In doing that, they integrate you into the training and education of the industry in a broad base. They open your mind wide to everything that is going on. It’s like you get integrated into a club for life. Being chairman of the Insurance Institute of Canada was probably one of the highlights of my career. It was absolutely a door-opener to the CEO club of Canada.”
April 2012 Canadian Underwriter
11
Broker (Apr12)_DG
4/8/12
10:57 AM
Page 28
Heirs to the Throne Editor
How do bright young brokers climb the pyramid to become the new brokerage owners, principals and senior managers? Three years ago, the Insurance Institute of Canada published a demographic research study suggesting a looming leadership crisis in the property and casualty insurance industry. The report outlined an urgent need for succession planning in several key occupations, including the broker industry. Citing 2007 statistics, the report noted the number of workers in the Baby Boomer age category, people born between 1946 and 1963, is proportionally larger than in the Canadian labour force as a whole. And while almost a third of the broker force is in line to retire in the next 10 years, there aren’t enough people warming up in the on-deck circle to replace them. “Assuming that the under-45 age group is the immediate feeder group to management, there is less than one worker under the age of 45 for every man-
12 Canadian Underwriter April 2012
ager currently in the industry’s work force,” the report notes. Simply put: “There are not enough entrants to replace those exiting [the industry].” And so how do young, bright, upwardly mobile brokers go from storming the Bastille to becoming pinnacles of the establishment as broker owners and principals? Also, assuming a career path to ownership is necessary for maintaining the integrity of the broker channel, what do young brokers feel they need to take that daunting step into the upper echelons of broker ownership? Or to put it another way: How does the ‘Old Guard’ become the ‘New Guard’?
HANDING OVER THE KEYS TO THE FAMILY BROKERAGE Traditionally, the tried-and-true broker succession plan has been for the retiring senior principal to hand the reins over to the son or daughter.This type of ownership transition is still very much a factor today. “Certainly there are some advantages (to growing up in a family-owned brokerage business),” says Ryan Mitchell of Mitchell Sandham Insur-
Illustration by Remy Simard/www.i2iart.com
David Gambrill
ance Brokers in Ontario. “I had the instant trust of the owner of the brokerage, my father. He put a lot of trust in me and delegated a lot of different things to me that probably I wouldn’t have seen at such an early stage of my career.” Also, Mitchell observed, it was easier for him as a son to step forward and communicate to his father that he wanted to become an owner. “If I didn’t show that interest, or handle that network he gave me, it probably would have been a different outcome.” Victoria Stanhope, 26, credits her father, Victor Stanhope, 66, principal of Stanhope Simpson Insurance Ltd. in Nova Scotia, for getting her into the insurance business in the first place. She recalls having dinner with him after obtaining her undergraduate degree in Psychology. He asked her what she wanted to do, and when she said she wasn’t sure, he asked: “Why don’t you try insurance?” After starting her young career underwriting and quoting for an insurance company, she moved over to the brokerage side of the business. Victoria Stanhope said she and her father are now starting to discuss succession; the general plan is for her to assume some ownership of the business in the future. She finds the prospect somewhat daunting. “I’m 26, my father is 66, so there is a whole lifetime between us,” Victoria Stanhope says. “My weakness would be my lack of experience. I’m trying to do everything I can to close that gap…. I’ve been a sponge trying to soak up as much knowledge as quickly as possible.” Mitchell notes there is a lot to learn. “The biggest (thing you need to know) is just the general operations of a business,” he says. “And then when you break it down from that, it’s just having a good understanding of all aspects of a business — clientele, HR staff, finance and accounting. IT and technology is becoming a huge component of the brokerage, so you have to make sure you have an understanding of the implications of that.” In addition, broker
Certainly there are advantages to growing up in a family-owned brokerage business. I had the instant trust of the owner of the brokerage, my father. He delegated a lot of things to me that I probably wouldn’t have seen otherwise.
mmercial Surety • Developer Surety s’ and Officers’ Liability • Crime - 3D / Financial Institution Bonds • Credit Insurance GOLD® • Guarantee SUPERIOR
owners need to know the regulatory guidelines around running the business, including the rules on reporting and trust accounts. A key to any good succession plan is to allow young potential brokerage owners to learn all of this at a pace that facilitates a gradual transfer of ownership, as opposed to a sudden cliff-dive. “The biggest (thing to work out) is the phase-out,” Mitchell says. “You want to
Canada’s Leading speCiaLty insurer
The Guarantee Company of North America is the bond between you and your clients. We are a passionate supporter of the independent broker network.
140
For 140 years, The Guarantee Company of North America has taken pride in being the market leader in providing specialized products via the independent broker network.
TH
ANNIVERSARY
1872 — 2012
We have time for you! SINCE
1872
PRODUCTS WE OFFER
Proud Supporter of Brokers Displaying this Symbol
Surety
Corporate InSuranCe perSonal lIneS
• Contract Surety • Commercial Surety • Developer Surety
• D & O Liability • Crime - 3D / Financial • Institution Bonds • Credit Insurance
• Guarantee GOLD® • Guarantee SUPERIOR
gcna.com
April 2012 Canadian Underwriter
13
Broker (Apr12)_DG
4/8/12
10:57 AM
Page 30
be working into ownership slowly, so it’s not just a case of: Day 1, owner is here. Day 2, owner is not here.” Within companies, the issue becomes more complex, in part because talent is not necessarily selected and groomed in the same linear fashion as in a family business. Or to put it another way, there isn’t always a readily identifiable ‘heir to the throne.’ Gloria Corkum is a branch manager of Western Financial Group in Alberta. When she discusses succession planning, she sees it in terms of recruiting talent for management. And that is a fluid process, she notes. “For me, I think I might be like other people,” she says. “In my situation, you get connected to a group of people you work with. Essentially, you want to have someone come up and into the ranks to replace you within your company or within your branch. And I think sometimes you pick the best candidate you have within that group of people, but I’m not necessarily sure it’s the best per-
son for the job. Then again, if you go outside of that group of people, how do you recruit the talent that you need?” What happens, for example, if the person best suited for the managerial role is older than the manager they replace? Also, what happens, as in Corkum’s situation, when a company’s ownership has just changed hands after an acquisition? “The direction of our company is changing,” she notes. “So maybe the
14 Canadian Underwriter April 2012
person who might have been suited for a management role two years ago may not necessarily be suitable for the role for the next two years.”
LET’S MAKE A DEAL When brokers do not have any offspring willing or available to take over the ownership of the brokerage, one popular exit strategy is to sell the business. This approach is controversial. Publicly, brokers acknowledge owners of independent brokerages can do whatever they want with their business. And yet many believe the prospect of selling the brokerage to insurers or financial institutions, for example, dilutes the independence of the brokerage. This speaks to the importance of having a succession strategy in the first
Independent business people selling a brokerage need to ask themselves: ‘What do I want? Do I want to be part of the business, or do I just want a cheque and get out?’ Those are totally different approaches. place. “I think that’s why you see so many acquisitions and buyouts [of independent brokerages] by insurance companies,” Corkum says. “It’s a lack of succession planning.” Selling a brokerage to an insurer is not the only option, nor is it the most popular option. Brokers can of course sell their brokerages to other independent brokerages. When when this happens, one big question is how involved the selling owner plans to be within the buying brokerage’s operation, says John Hubbard, owner of Hubbard Insurance Brokers in Mississauga, Ontario. “Independent business people [selling a brokerage] need to ask themselves: ‘What do I want? Do I want to be part of the business, or do I just want a cheque and get out?’ Because those are totally different approaches.”
From the perspective of the buying brokerage, a number of practical questions arise, Hubbard says. “Ideally, that person [selling the brokerage] comes along with the book of business, so that’s something you want to establish up front,” he says. “There are key staff members you want to incorporate, to make sure that your retention [of new clients] is as good as possible.You want to look at their book and ask: ‘Will it retain? Will I keep it? And how do I keep it?’”
Hubbard and the other brokers interviewed for this story speak to the need for more structured mentorship programs around the issue of succession. Hubbard says people would be surprised at how often brokers simply “wing it,” essentially not having any formal structures or materials in place to help to train others involved in similar deals.With respect to closing a deal, a mentor would be able to engage in a detailed discussion about practical details, Hubbard says. “I’d love just to call up someone in that mentor-type role and say:‘How many introduction letters do you do? How do you provide your clients with information [about the sale]? Who gets a phone call introducing the new owners, versus just a mailout?’ Just to give you some tips on what’s been successful, how to maintain the retention rate of that book of business [the brokerage just bought].Those kinds of soft skills.”
“
By taking steps to simplif y help our work flow, Av connec ti iva’s vit y solu tions let o n w ha t u s focus we d o b est: custo ser vice. m er This t ype o f co m m is just on itment e more re confiden ason I’m t recomm ending A to our cu viva stomers.
”
Committed to connecting with you
oy Jeff R CEO & t n e . Pr e si d ers Inc
e B ro k suranc ce Group In y o R ran P. A . ur Insu Excalib ton, Ontario Clin
You’ve told us your priorities: meeting the needs of your customers and ease of doing business. At Aviva, we’re listening. And we’re ready to be a proactive, collaborative partner to help you compete and win. Improved connectivity between brokers and insurers is vital to the future of our distribution channel. That’s why we’re stepping up our investment in tools and technology to support connectivity. Look to Aviva in the coming months for portfolio transfer, new business and policy change automation. Moving forward, we’re committed to enabling: 99 round trip policy transactions that begin and end in your Broker Management System 99 industry standards for data exchange, in real-time 99 a “once and done” broker workflow It’s time. Let’s work together to deliver the connectivity you need to stay competitive.
AvivaPartner.ca
*Aviva and the Aviva logo are trademarks of Aviva plc and used under license by Aviva Canada Inc. and its subsidiary companies.
CU-FullPgAd-Feb2012.indd 1
12-03-16 3:36 PM
BC (Apr12)_DG
4/8/12
11:00 AM
Page 28
B.C. Really is
Different
Dilemmas posed by insuring strata properties on the West Coast present an example of how things are different for brokers in B.C.
Maurice Poulin President, Insurance Brokers Association of B.C.
“But B.C. is different.” It’s a phrase we here on the Left Coast are accustomed to saying. And we’re used to people rolling their eyes as we insist, “No, really, it is different here.” So at the risk that you have heard it before, I’ll start by saying B.C. is different, especially when it comes to our strata properties and their insurance ramifications. This becomes evident as the consequences of urban density, high housing costs, the leaky condo crisis, jurisprudence, water damage claims and earthquake predictive modeling affect this residential sector. I’ll deal with each of these to provide a general overview of where we are today. There are about 28,000 strata corporations and 1 million strata units in B.C. Most of these are located in the major urban centres of Victoria, Kelowna and Metro Vancouver. The latter city now has the dubious distinction of being the most expensive place to live in North America. Strata-titled apartments and townhouses, sold with promises of “affordable luxury” and “carefree living,” represent the home ownership dream for many urban British Columbians, especially first-time buyers. Local news reports about
16 Canadian Underwriter April 2012
a new condo project selling out in two hours are common.These stories usually include footage of eager buyers (usually in their 20s and 30s) lined up to sign high-ratio mortgages at low interest rates to become homeowners. It is estimated that one-quarter of B.C.’s 4.5 million people live in strata properties. Between 1982 and 1999, California-style stucco applications became popular in B.C. But in the rush to take advantage of the lower construction costs associated with stucco, people forgot this is a coastal rainforest region. About 160,000 units were built during this period. The estimated number of units that suffered water ingress due to faulty “leaky condo” construction ranges from 65,000 (government’s estimate) to 87,500 (high end of independent consultants’ estimates). The legacies of the leaky condo crisis are: • Mandatory builders’ licensing and mandatory third-party warranties provided by the private insurer market, both managed by the Homeowner Protection Office; • Building code changes making proper rain screen technology mandatory; • Fifteen years worth of court decisions (one of
Client meetings. Presentations. Proposals. What you do as a Producer will never change. How you do it, though, will never be the same.
Introducing the
Policy Works Producer App for the iPad
policyworks.com/ipad
BC (Apr12)_DG
4/8/12
11:00 AM
Page 30
the more recent ones being Progressive Homes v. Lombard in 2010, in which the Supreme Court of Canada ruled that the insurer had a duty to defend legal actions for claims of water damage to suites in four Vancouver-area housing co-ops completed in 2004 and 2005); and • Mandatory reserve fund studies to encourage owners to make long-range plans for major repairs (so far, only about 30,000 “leaky condo” units have been remediated). The provincial government recognizes the looming problem related to the large number of strata properties that still face moisture-barrier retrofits — estimated at 40,000 units facing assessments anywhere from $30,000 to $120,000 each — and major maintenance upgrades. The issue is that strata corporations may have cash-starved contingency funds, because when it comes to their primary residences, people tend to buy up to their approved limit and then vote at strata annual general meetings to keep strata fees as low as possible. The government’s regulation calling for reserve fund studies is in effect now, but strata corporations have until the end of 2013 to comply with the new requirements. After that, they must undertake reserve-fund studies every three years. The Condominium Home Owners Association of B.C. estimates 22,000 strata corporations will require these studies. By regulation, the “qualified persons” who prepare them must disclose the existence of E&O coverage. When B.C.’s Strata Property Act (SPA) was substantially revised in 2000, it introduced insurance provisions that required strata corporations to obtain liability insurance – that is, a commercial policy for the building structure and common areas – and to review and report on insurance coverage annually. The act establishes building insurance deductibles as a common expense, but allows the strata to recover the deductible portion of a claim if the owner was “responsible.” A couple of landmark court decisions provided an interpretation for “responsi-
18 Canadian Underwriter April 2012
ble” that was lacking in the act, clarifying that the unit owner would have the same level of responsibility as he or she would have in a single-family detached home. Although the act allows the strata to recover the deductible from owners, a strata bylaw or rule is required. Many stratas have adopted bylaws that stipulate recovery of the deductible is on a “strictly liable” basis: this removes the
The province recognizes the looming problem related to the large number of strata properties that still face moisture-barrier retrofits. The issue is that strata corporations may have cash-starved contingency funds. onus for the strata to prove the owner’s negligence. This transfer of the deductible costs to owners has led owners to seek deductible coverage in their unit policies. Strata units built in the past 20 years usually have two bathrooms, laminate floors and five appliances. The shared laundry rooms of yesteryear with floors that slope to a drain are passé. These are prime ingredients for frequent interior water-damage claims that are expensive to remediate, especially when the water has spread to common areas and other units. Broken hoses and overflowing bathtubs happening in units is one thing. But when claims become frequent for damage arising from the piping in the walls, the consequence of owners collectively putting off needed upgrades, insurers send a message to the strata corporation by increasing the water damage deductible. Either way, you’re going to pay, so get busy on those upgrades. As these deductibles mount for some buildings (in some rare cases, they are hitting the six-figure mark), brokers have sometimes had difficulties finding a market for the building deductible protection owners need on their unit policies.
Given the downloading of deductible costs onto unit owners, you would think all condo owners would have their own policies with building deductible protection. But brokers who specialize in the strata market report that in the major building losses they’ve handled, only about half of the owners have had unit coverage. The earthquakes of the past few years in Chile, New Zealand and Japan, which have building codes similar to Canada’s, have brought B.C.’s strata coverage risk into sharper focus. B.C.’s coastline is part of the so-called ‘Pacific Ring of Fire.’ In 2009, RMS, which provides predictive modeling statistics to the insurance industry, increased its estimates of Vancouver’s probable maximum loss from an earthquake.The density of multi-family buildings in southwest B.C. means that when — it’s no longer a case of if — the area suffers major seismic activity, the damage will be on a large scale. Strata building policies are usually for full replacement cost. Earthquake deductibles are at least 10% of the value of the building. Assuming a building has an appraised value of $2 million, and that half of its owners don’t have unit coverage or deductible coverage, restoration would not be able to start until those owners came up with their share of the deductible. Clearly strata owners need to be made more aware of the need for unit coverage and deductible coverage. Also, they need to be mindful of other considerations related to protecting their condo and contents.To that end, the Insurance Bureau of Canada has formed a working group chaired by Graham Haigh, vicepresident for B.C.,Wawanesa Mutual Insurance Company, and the Insurance Brokers Association of B.C. (IBABC).We at the IBABC have been pleased to be included in this consultative role. Mike Valiquette, president of HUB International Coastal Insurance, which specializes in strata insurance, will be moderating the Readiness, Response & Recovery Symposium on May 11 at the IBABC Conference & Trade Show in Kelowna. At that event and beyond, we look forward to some productive dialogue on these strata issues.
Ad template copy
3/27/12
7:13 PM
Page 53
Northbridge Insurance™ Your new insurance partner with a 200-year old family tree. Pleased to meet you! Three leading insurance companies—Commonwealth Insurance Company, Markel Insurance Company of Canada and Lombard General Insurance Company of Canada—are now operating under one new, united brand: Northbridge Insurance*. Leveraging our combined expertise and resources, we’re ready to provide you with a broad range of specialized products and services. Find out how we can create greater success for you and your customers. Welcome to Northbridge InsuranceTM. Welcome to the power of together. To learn more about Northbridge Insurance, please visit us at www.nbfc.com.
TM
Northbridge Insurance and the power of together are trademarks used under licence from Northbridge Financial Corporation. [3132-001-ed01E]
* Policies underwritten by Northbridge Indemnity Insurance Corporation, Northbridge Commercial Insurance Corporation, and Northbridge General Insurance Corporation, depending on the type of coverage. Prior to March 1, 2012, these companies were named Commonwealth Insurance Company, Markel Insurance Company of Canada, and Lombard General Insurance Company of Canada, respectively.
™
Tax (Apr12)_DG
4/8/12
11:02 AM
Page 28
KISS-ing the Taxman
Vice President, Firstbrook Cassie & Anderson
Our instinctive prejudice against taxation runs deep, the age-old entrenched umbrage persisting despite the logic behind its collective benefit. George Harrison set our resentment to music: Let me tell you how it will be There's one for you, nineteen for me 'Cause I'm the taxman, yeah, I'm the taxman Should five per cent appear too small Be thankful I don't take it all 'Cause I'm the taxman, yeah I'm the taxman If you drive a car, I'll tax the street, If you try to sit, I'll tax your seat. If you get too cold, I'll tax the heat, If you take a walk, I'll tax your feet. Don't ask me what I want it for
20 Canadian Underwriter April 2012
If you don't want to pay some more 'Cause I'm the taxman, yeah, I'm the taxman … (Parlophone Records, 1966)
Nevertheless, representatives from the insurance industry and the Canada Revenue Agency have been working to break down some of the barriers, building a more fair and respectful framework in which to conduct business. Taxes, on many levels, are intrinsic to insurance. The merits of particular levies may be debatable, but overall the various assessments provide a basis of measurement, stability and protection — for both consumers and the domestic industry — twinned with the ministrations of regulators. All countries regulate and assess financial transactions within their own borders, protecting their public and various stakeholders, while supplementing government income. Canada, of course, is no exception to this worldwide practice. The ease (or difficulty) of navigating through a nation’s tax system is frequently seen as a measure of that nation’s support for international commerce. In Canada, insurance taxes are
Illustration by Remy Simard/www.i2iart.com
Brenda Rose
Canada’s brokers have successfully worked with Canada Revenue Agency to help “keep it simple” when brokers are involved in complex, multi-jurisdictional commercial insurance transactions.
most often built into premiums and are remitted automatically to governments by insurers, without specific client awareness. Exceptions, however, can lead to administrative complications and frustrations — and even to unintended impressions of obstructionism. Canadian brokers, in their role representing Canadian businesses as well as individuals, naturally favour tax systems that are fair, user-friendly and practical. Broker resources can be devoted less to red tape around taxes and more to clients’ needs. Business consumers can get on with their businesses. Broker associations emphatically have no interest in assisting anyone to avoid legitimate taxes or in encouraging unlicensed placements. Having said that, the Toronto Insurance Conference (TIC) and the Insurance Brokers Association of Canada (IBAC) are dedicated advocates of eliminating unnecessary administrative burdens. Similarly, the Canada Revenue Agency (CRA) is following the
In Canada, insurance taxes are most often built into premiums and are remitted automatically to governments by insurers, without specific client awareness. Exceptions, however, can lead to administrative complications and frustrations. mandate of ‘fairness’ introduced in 2007 and reinforced over the last several budget years.The CRA has a natural reason to seek out efficiencies benefiting both taxpayers and also CRA staff. Both the TIC and IBAC have met periodically with CRA representatives over the past several years to foster open communication, clarify tax application and simplify the associated administration. When premium taxes are not collected in usual manner through licensed insur-
ers, governments generally levy other “excise” taxes. Each province has its own regulations; federally, these situations fall within the scope of the Excise Tax Act.This legislation outlines both the requirement that insurance be placed with a Canadian-licensed insurer, and also that brokers through whom insurance is placed must be Canadian-licensed. It specifies that: “The contract shall, for the purposes of (the act), be deemed to have been entered into or renewed, as the case may be, through the broker or agent directly retained or instructed by the insured and not through any other broker or agent.” For some time, CRA auditors looking at cross-border placements focused little on the broker portion of these criteria. More recently, as public emphasis on strict compliance grew, a trend developed toward an increasingly literal interpretation of the excise tax legislation. Auditors examining corporate insurance files were directed to seek
D ECE M B E R 2 N D, 3:52 P. M .
An insurance broker, Sophia Reynolds,
THE R IGHT REL ATIONSHIP MAK ES ALL OF THE DIFFERENCE
contacted CNA about an account that
I N A N I N S TA N T, SOPHIA REYNOLDS K N E W S H E CO U L D DO MORE FOR HER CLIENT
didn’t fit the standard risk profile. After Sophia went over the details with her CNA underwriter, she was happy to deliver a customized coverage package to her client — which ultimately helped her retain an important relationship. Way to put together a winning team, Sophia.
To learn more about our comprehensive portfolio of insurance products and services, and the industries we serve, visit www.cnacanada.ca.
CNA is a registered trademark of CNA Financial Corporation. Copyright © 2011 Continental Casualty Company. All rights reserved.
April 2012 Canadian Underwriter CNA-BR-073CanadaAd_7x4875.indd 1
21
9/30/11 2:13 PM
Tax (Apr12)_DG
4/8/12
11:02 AM
Page 30
specific demonstrations of “direct retention and instruction (of the Canadian broker) by the insured.” Unfortunately, business is not always so linear. For CRA staff, the challenge of sorting through multi-directional emails, conference call notes and records of simultaneous discussions was confusing at best, as well as disproportionately timeconsuming and inefficient. Given that multiple insurers and brokers were involved, and despite businesses’ genuine intention to work with properly licensed Canadians, the expectation of specific paths of communication often worked against practicalities; meeting this expectation created redundancies and obstacles. At worst, the obligation for redundant instruction increased potential for contradictions and errors, to the business consumer’s disadvantage. Some companies working in Canada felt that as international organizations they were in fact being penalized. Raising the issue on behalf of business consumers during a meeting with the tax authorities, brokers found a receptive audience. CRA staff, also frustrated with the existing practice, met internally. Ultimately, they were able to agree that the narrow interpretation of the Excise Tax Act did more harm than benefit to business consumers, the insurance industry and the CRA’s own objectives. Therefore, in late 2011, the CRA’s interpretation of the Excise Tax legislation was adjusted to recognize the business realities of complex placements. In a letter from Pierre Bertrand, directorgeneral of the excise & GST/HST rulings directorate at the CRA (posted with permission on the TIC website at www.ticonf.com), the amended position was confirmed. An official rulings bulletin is also expected later this year. The essentials have not changed. Coverage must be placed with licensed insurers. If a broker is involved, there must be a licensed Canadian broker. Now, however, auditors will simply look for primary evidence of that licensed broker’s involvement in the name of the brokerage appearing on the policy documents. These are, of course, only the mini-
22 Canadian Underwriter April 2012
mum requirements to avoid the application of excise tax. A broker’s ultimate duty is still fully owed to the client and is still subject to the requirements of provincial regulators. In order to best serve the customer’s interests, the broker on record still needs substantive involvement and interaction with the client, however that communication occurs.
Coverage must be placed with licensed insurers. If a broker is involved, there must be a licensed Canadian broker. Now, auditors will look for primary evidence of a broker’s involvement in the name of the brokerage appearing on the policy documents. Even where additional international intermediaries are involved, the advice and advocacy of the local broker is still invaluable to the client. The Canadian broker has ‘boots on the ground’ for inspections, personal contact with client’s local people and, as needed, can speak the local language.Then, allied with the international broker and armed with local market knowledge, the Canadian broker can offer the client more leverage to negotiate with insurers, ensuring that coverage is consistent, meets local standards and is reasonably priced. This is only one instance of a suc-
cessful dialogue between broker associations and the CRA. The CRA has been open to other suggestions for reducing unnecessary administrative work related to unlicensed placements. Despite the disadvantages of unlicensed cover, and reiterating that broker associations in no way encourage such arrangements, occasionally business reasons may force companies to obtain coverage from an insurer not licensed in Canada. When this happens, the client must also pay the Federal Excise Tax (FET), as well as other parallel provincial taxes. Clients may apply for an exemption from the FET in specific circumstances, when licensed coverage is simply unavailable. Canadian broker associations have been working with the CRA for some time to streamline the exemption-request process, sharing information about current market availability to eliminate unnecessary work and duplicated documentation. As a first step, a project to develop export lists such as those used in the United States has been launched, with input from brokers and insurers across Canada. Currently used as a reference for CRA auditors, the lists categorize types of insurance exposures for which no licensed coverage is available in Canada, or for which there is only limited capacity. The lists are subject to an annual review process.They are open to amendment proposals from any quarter. It is hoped that with additional years’ practice and verification, CRA will ultimately accept the export lists as official confirmation of lack of market availability. Looking at the complicated tangle of insurance taxes in other jurisdictions, and the enormous costs incurred to administer and interpret the snarl, there is a lesson to motivate all parties in our Canadian industry to keep talking. The old adage tells us that it is unlikely in the extreme that insurance taxes will ever go away. But with initiatives to improve communication and mutual understanding between business and tax authorities continuing to flourish, at the very least we can alleviate some of the associated pain.
Ontario (Apr12)_DG_v4
4/8/12
11:04 AM
Page 28
Group Together as a
The Insurance Brokers Association of Ontario (IBAO) is calling on the industry to re-align the theory and practice of group rated insurance programs. Randy Carroll
CEO, Insurance Brokers Association of Ontario (IBAO)
When approached to write this column, I was asked to discuss our association’s “top priorities.” I began to jot down everything I could think of that was still relevant and that the association considered to be a current issue. I was amazed with how big that list was. I was also concerned about how many issues appeared to be lost in the maze. I am not inferring that we aren’t working on them, but with all the press and noise we make on certain topics, some issues appear to be overshadowed when in fact they remain quite important to us. I thought it was time well spent to delve into a few of those issues.
GROUP RATED INSURANCE PROGRAMS Group Rated insurance programs are top of mind for the Insurance Brokers Association of Ontario (IBAO). It used to be that certain pock-
24 Canadian Underwriter April 2012
ets of Ontario were more concerned about group insurance then others. However, it is clear that concerns about group insurance are becoming more widespread. In our opinion, the industry has created a bit of a paradox. On the one hand, people are quick to point out the need for rate increases to offset an “unprofitable” sector. On the other, many seek opportunities to deviate from filed rates for what we would define as synthetic groups. We have always understood the intent of a group rated plan is to allow for discounts in situations in which a group of 100 individuals share common characteristics. Discounts should reflect more favourable experience than standard risks on the street. The regulation defines these groups to be members, spouses and children of employee groups, credit union members, trade unions, professional associations, alumni groups and not-for-profits. We understand such groups must be approved by FSCO and group marketing plans must be submitted in these instances. Over time, however, group business has become a lucrative endeavour for some, and competitive pressures have cast doubt on the legitimacy of many. One common example rests with
iCLARIFY COMMERCIAL is the only desktop tool that provides access to an easy-to-use interface and risk-relevant property information in seconds.
❚
2,600,000
claims records
❚ Information available for over
750,000
❚
❚
2,000,000
unique occupant records
100 years’
worth of environmental site maps
unique properties across Canada
❚
❚ iLookabout site photographs:
50,000
GEO-CODED FIRE HYDRANTS
1,000,000 +
4000
❚ Over address verified Fire Stations
images with geo-coded address accuracy
700,000
❚ Over commercial inspections completed across Canada
17,000
❚ Plus commercial inspections completed annually
GET SUPERIOR
RESULTS
❚ IMPROVED RELATIONSHIPS ❚ ACCURATE SUBMISSIONS ❚ REDUCED TIME TO QUOTE ❚ LOWER COSTS Developed entirely by Canadians for Canadian Insurers & Brokers
SEEING IS BELIEVING. Get Superior Results. www.iclarify.ca
Ontario (Apr12)_DG_v4
4/8/12
11:04 AM
Chamber plans (referring to Chambers of Commerce). Business owners are “members” of these Chambers, and group rates are offered not only to members (owners), but also employees, spouses, etc. These group rates are offered despite the fact that these individuals share no common characteristic other than the fact that their employer pays a membership fee to the Chamber in order to belong. The problem does not appear to be limited to Chambers. We would argue the problem is more systemic than specific to one particular sector. In most
Over time, group business has become a lucrative endeavour for some, and competitive pressures have cast doubt on the legitimacy of many. cases, the common denominator appears to be the existence of Group Health & Dental Plan. Ironically, Ontario regulation specifically prohibits insurers from using the existence of medical, surgical and dental plans in their risk classification systems. We all know, however, that in many cases, these types of existing coverages are a fundamental reason for the existence of these group programs. Most of these existing coverages will become first payor of benefits, which reduces exposure and in the long term will reduce claims expenses for those in the group plans. As an industry, we should not take issue with rates based on performance. But we should concern ourselves with the significant disconnect that has created an obvious loophole benefiting one group of consumers at the expense of another. When I look at Wikipedia, the free online encyclopedia, “group insurance” is defined as an insurance that covers a group of people, usually members of societies, employees of a common employer or professionals in a common group. Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance that belong to the
26 Canadian Underwriter April 2012
Page 30
group for reasons other than for the purposes of obtaining insurance. In other words, people belong to the group not because they possess some high-risk factor that makes them more apt to purchase insurance (thus increasing adverse selection); instead they are in the group for reasons unrelated to insurance, such as all working for a particular employer. So what do we see as the problem and what is the solution? Again, we believe the problems are systemic. However, we also believe complacency at the regulatory level has also allowed group rated plans to expand well beyond their original intent. As of yet, we do not have a formal position on a solution. But we believe that, at the very least, first and foremost, FSCO needs to take a serious look at the definition of group in comparison to some of the basic principles of rate filing and rate classification systems. A few other solutions might warrant consideration if and when group reform takes place. One might be changing who qualifies for a group-rated program — for example, increasing the number of individuals in a group or demanding a specific percentage of penetration. Another option might be mandating that, when offered to not-forprofit groups, group members must share common or similar characteristics other than just membership on its own. Making the auto policy the first to pay for injuries arising from auto accidents might be another way to eliminate the attractiveness of group rated insurance programs for those looking to skirt intent versus write legitimate groups. Regardless of where this goes, clearly an in-depth conversation around group rated plans is long overdue. Going forward, we need to elevate this as one of our key messages with our regulators and our MPPs.
IN PRAISE OF TEAMWORK Over the past few months, the Insurance Brokers Association of Ontario, the Insurance Brokers Association of Alberta and the Insurance Brokers Association of New Brunswick have worked in concert with the Insurer Advisory Committee,
IBC and CGI to address our collective members’ concerns regarding the insurer-mandated Broker Sublicense Agreement. Put very generically, the agreement spells out ownership of information passing between insurers and brokers. In the original wording of this agreement, the allowable uses of the information were much too restrictive, and the hold harmless provisions were too broad.We identified 15 issues, but there were two major concerns. CGI acquiesced to 13 of the 15 almost immediately; the real work involved agreeing to appropriate wording for the two specific issues. CGI has now improved the language on the permitted uses clause, allowing brokers to have more leeway within the brokerage.The hold harmless provision is now much fairer than previously written.We are very pleased that we have been able to work with the insurers and CGI to produce this revised
A few solutions might warrant consideration if and when group reform takes place. One might be changing who qualifies for a group-rated program — for example, increasing the number of individuals in a group or demanding a specific percentage penetration. agreement.They have been open to our input and have worked with our associations through each of the identified concerns. Without all parties working together to achieve a common goal, this would not have been possible. In March, our member brokers received a notice from CGI that the new revised agreement was now finalized. This new agreement was presented to our brokers to sign. Accordingly, we advised our members that we were comfortable the revised agreement was fair and reasonable. As always, however, we suggest brokers seek their own independent counsel on any contract they sign on behalf of their brokerage.
Changing Face of the Broker Changes in consumer expectations are causing the Canadian property and casualty insurance industry to re-consider its traditional way of selling products. In turn, this is causing brokers to re-think their business model. But while some may be quick to proclaim: “It’s the end of the world as we know it,” brokers generally feel fine about how it will all turn out. DAVID GAMBRILL
28 Canadian Underwriter April 2012
I
nsurance consumers are changing. Thanks to the expansion of electronic and mobile communications, they know more about insurance and expect to buy their insurance products immediately. Historically, brokers have represented the proverbial “middlemen” — the intermediaries — between insurance companies and consumers, providing advice to the consumer about the suitability of insurance products. But as consumers become more savvy about the product, and as technology allows them to access insurance providers directly, brokers are under pressure to change their traditional business model to conform to the expectations of consumers. Brokers are not the only ones in the industry facing these changing consumer dynamics. Insurance companies, regulators and financial institutions eager to enter the insurance business are re-examining — if not re-inventing — how insurance is sold in Canada. Insurers are consolidating to amass market share. In addition, they are offering new means of communication by which to transact business with their brokers and consumers. Likewise, direct writers, competing for market share with brokers, have expanded their online offerings, using technological innovation to encourage direct contact between insurers and consumers. Regulators, in the meantime, are looking at ways to accommodate these online marketplace trends while at the same time making sure consumers are protected. As Canada’s property and casualty insurance industry transforms, so, too, will the business model of Canadian brokers. As the following survey of broker associations across Canada illustrates, brokers are changing the way they do business. And while some may be quick to proclaim “it’s the end of the world as we know it,” many brokers clearly feel fine about how it will all turn out.
April 2012 Canadian Underwriter 29
COVER STORY
Changing Face of the Broker NATIONAL PERSPECTIVE Celebrating the final passage of the Bank Act, consolidation between brokerages and financial institutions are on the radar screen right now for the Insurance Brokers Association of Canada (IBAC). IBAC is a national organization bringing together 11 regional and provincial associations of property and casualty insurance brokers from across Canada. One of its main initiatives over the past two years has been to represent the interests of brokers during the federal government’s mandatory five-year review of the Bank Act. This resulted in the Canadian finance minister calling for Bank Act regulations prohibiting banks from selling insurance products on their Web sites. The Bank Act already prohibits banks from selling insurance in their physical branches. Responding to concerns raised by IBAC, the finance minister indicated banks ought not to be able to do on their Web sites what they cannot do in their branches. The new Bank Act regulations passed just before press time. Now brokers appear to have set their sites on the effects of consolidation. Specifically, brokers have always argued that financial institutions such as banks or credit unions should not be able to sell insurance at the point of granting credit. For this reason, they are mindful of the recent acquisition of Western Financial Group by Desjardins Financial Group. Desjardins made a $443-million, all-cash offer in January 2011 to buy Western Financial Group, the largest insurance and financial services retailer in Western Canada. Western Financial has 121 offices in British Columbia, Alberta, Saskatchewan and Manitoba, and its business units include The Network, the largest property and casualty brokerage in Western Canada. Having observed Desjardins expanding its operations into multiple provinces in Canada, IBAC believes the organization should be subject to the federal, as opposed to the provincial, licensing regime. 30 Canadian Underwriter April 2012
“Federally, you have a regime underlining that, on the issue of distribution, there should be a separation between credit granting and insurance,” Masnyk says. “On paper, Desjardins is registered provincially in all of the provinces in which they operate. So this is a bit of an anomaly. However, it comes back to the constitutional principle: If you are a federal undertaking, which means if you operate under more than one province, generally speaking, constitutionally you would fall under federal jurisdiction. That would be our position.”
You look at the landscape of insurance, and the purchases that are happening and the ownership changes, and it’s getting to the point where we have to look into the future five years from now and see what our membership is going to look like. BRITISH COLUMBIA B.C. brokers are looking forward to ushering in a new era of the province’s Insurance Act on July 1, when new regulations are due to take effect. The province’s brokers have been working on the file since 2004, shortly after the Supreme Court of Canada found B. C.’s Insurance Act was “outmoded” and in need of a re-write. The legislation had been shelved in 2009, and then reintroduced in December 2011.
Among other things, the new act eliminates the difference between fire and multi-peril policies (the subject of the Supreme Court case in 2003). It also: mandates coverage for all fire losses except those to be excluded by regulation; clarifies the definition of a “vacancy;” standardizes the maximum limit for issuing lawsuits against insurers to two years; introduces mandatory alternative dispute resolution; and includes protections for “innocent co-insured” against intentional, criminal acts committed by people with whom they share a policy. “We were particularly pleased with the way the B.C. legislature handled this whole process,” Insurance Brokers Association of B.C. president Maurice Poulin said of the Insurance Act review. “Both sides of the House, the opposition and the governing party, took a very strong position that this is good for the consumer. One of the highlights of this process for us was that it was done in such a constructive, bipartisan manner.” Poulin also noted the province’s brokers are now working diligently on the earthquake insurance file. Public take-up of earthquake insurance in B.C. is between 40% to 50%, and brokerages are looking for ways to increase these rates. Adding a wrinkle to this file, the catastrophe models measuring the potential damage of a quake have changed, causing some insurers to increase their earthquake insurance rates. “With the shift in the modeling in B.C., the companies have had to adjust rates and it has now become part of a conversation brokers have with their clients, Poulin noted. For some areas north of the mainland, the impact of earthquake model changes on personal property rates hasn’t been quite as pronounced, Poulin observed, but “we’ve noticed it here on the commercial side.”
ALBERTA Alberta brokers are working with the province’s regulator to help re-define the licensing requirements for Level 1 brokers in the province.
12-CAN-0521_2.20.12_jod.indd 1
2/21/12 8:06 AM
COVER STORY
Changing Face of the Broker Brokers have four licensing categories, each bearing different levels of responsibility. New applicants for a broker license would start with a Level 1 General Insurance Agent certificate and require supervision. Under the province’s current licensing requirements, an applicant must qualify for a Level 2 general insurance agent certificate by passing an exam within 36 months of receiving his or her Level 1 certificate. Failing to advance to Level 2 within 36 months results in the cancellation of the Level 1 certificate and a six-month waiting period before an applicant can re-take the General level 2 test. “Part of the problem is that people just aren’t good at taking exams,” observes Dean Bailey, president of the Insurance Brokers Association of Alberta. “And so the requirement within 36 months to move up to a Level 2 was causing people to leave the industry.” Addressing this concern, the province’s broker regulator, the Alberta Insurance Council, is proposing to do away with the 36-month requirement to progress to a Level 2, so long as Level 1 brokers are properly supervised. “There are some people that are happy at a Level 1, and are quite happy to stay there for their career,” Bailey observes. “This would facilitate them being able to do that.” However, the trick is in having a common understanding with the supervisor about what constitutes adequate “supervision.” Noting a similar issue in New Brunswick [please see Page 36], Bailey said Alberta’s brokers are looking for a definition that is “definitive without being restrictive,” more like a guideline than a statutory or regulatory definition. “There’s a wording group put together from the superintendent’s office, the Alberta Insurance Council, ourselves and CADRI, which is the direct writers’ association,” Bailey says. “The working group is reviewing the proposal and then can hopefully put forward a recommendation. With any luck, it will be done by the end of the year.” 32 Canadian Underwriter April 2012
SASKATCHEWAN Technology and brokerage ownership are leading the way in discussions among brokers in Saskatchewan. Regarding technology, the Insurance Brokers Association of Saskatchewan (IBAS) is discussing with the province’s public auto insurer, Saskatchewan General Insurance (SGI), what the auto insurance landscape will look like following SGI’s extension of online service to the government’s Auto Pak product. Currently, Saskatchewan’s consumers can purchase mandatory basic auto insurance online, coverage that includes a $700 deductible and a $200,000 liability. SGI is now extending its online
Insurance is still a complex product, and you still need to have the advice of a professional at the point of sale. We don’t want to venture off into an online world where advice has been overlooked. service to Auto Pak products as well. Auto Pak offers consumers the option to change their auto insurance deductible levels and their liability coverage online. The public in Saskatchewan still must buy mandatory auto insurance through a broker, but the extension of SGI’s online services has brokers re-assessing
their role in the online insurance-buying process. SGI agreed to take responsibility for errors and omissions claims made against brokers for one year after the introduction of its online services. But will the brokers’ commission levels have to change? And who owns the client in the online purchase of mandatory auto insurance? Saskatchewan insurance brokers are also in the throes of re-considering their identity in light of the acquisition of the Western Financial by Desjardins in early 2011. Desjardins is predominantly known as a credit union originating out of Quebec.. Currently, Western Financial is a full member of the Insurance Brokers Association of Saskatchewan (IBAS). IBAS also has an affiliate membership category for brokerages owned by financial institutions such as credit unions or banks. Unlike full members, affiliate members cannot attend or vote at the broker association’s annual general meeting, nor can they use ‘the BIP,’ a brand name identifying independent brokerages throughout the country. IBAS has struck a committee to re-examine its affiliate membership in light of Desjardins’ ownership of Western Financial. “You look at the landscape of insurance, and the purchases that are happening and the ownership changes, and it’s getting to the point where we have to look into the future five years from now and see what our membership is going to look like,” says IBAS president Barry Seaborn. “And maybe we have to adjust our affiliate membership and see where they fit.”
MANITOBA Manitoba brokers are working to iron out some of the creases that have emerged in the broker compensation model established in agreement with Manitoba Public Insurance (MPI), the province’s public auto insurer. The compensation model was established in 2008 as a result of MPI’s desire to offer Manitoba drivers a multi-year auto insurance renewal plan.
Every file is different
From city to city, shore to shore – no two insurance claims and litigation files are ever the same. In addition to natural case differences, regional rules and nuances often come to bear and shape outcomes. ARC Group Canada is a national network of independent law firms providing legal and risk-related services to Canada’s insurance and risk management communities. Each member firm within ARC Group intimately understands and is connected with its local market – providing you with national expertise at a regional level.
Alexander Holburn Beaudin & Lang LLP Barry Spalding Burchells LLP Gasco Goodhue St-Germain LLP Hughes Amys LLP McLennan Ross LLP Martin Whalen Hennebury Stamp Robertson Stromberg Pedersen LLP European and International Affiliation: ARC Group Canada is proud to be formally associated with Insuralex Global Insurance Lawyers Group an international affiliation of independent law firms whose members provide high quality legal and risk related services to clients throughout and beyond Europe.
Telephone: 416-581-8082 Toll-Free: 1-866-981-8082 thearcgroup.ca
ARC GROUP NEW AD.indd 1
14/06/11 4:39 PM
COVER STORY
Changing Face of the Broker The multi-year renewal program means Manitoba drivers are required to visit their auto insurance Autopac broker only once every five years, unless they want to make a change to their policy. In their renewal year, customers have to attend their Autopac insurance broker to renew their driver’s licence, insurance policies and identification cards. Customers still pay for their licence and insurance annually. In between renewal years, customers continue to be insured through additional payment options such as online payments. “The 2008 accord [establishing the broker compensation model] was essentially premised upon two main criteria or foundations,” says David Schioler, executive director of the Insurance Brokers Association of Manitoba (IBAM). “They were: premiums would go up over time. And secondly, because of the five-year renewal, it would be anticipated that there would be some reduction of labour in brokers’ offices. Those two things haven’t happened so far.” For one thing, MPI most recently asked for an auto insurance rate decrease of 6.8% and the province’s Public Utilities Board in fact ordered an 8% reduction. That effectively reduced the premium available for the broker’s commission-based compensation. In addition, the province’s auto insurance product is no less complicated than it was before, meaning brokers are still putting in the same amount, if not more, work with clients. “MPI has recognized that these are issues that have to be fixed,” Schioler says. “And there are fixes on the table. For example, we agreed with MPI to freeze the commission rate at 4% on the basic auto. It was to drop down to 3% and ultimately to 2.5% and stay there. But we put a freeze in effect until the end of June while we try to resolve what it should end up being.” Schioler adds brokers are confident they will arrive at a mutual agreement with MPI on the issue of compensation. One matter for discussion is introducing 34 Canadian Underwriter April 2012
some flexibility into the model, so that the compensation agreement doesn’t have to be renegotiated every time there is a change of circumstances.
ONTARIO Embracing new technology and adapting to changing consumer expectations are key areas of broker activity in Ontario. The province’s brokers are applauding the recent introduction of an XML standard for Electronic Document Transfer (E-Docs) by the Centre for Studies in Insurance Operations (CSIO). The de-
There are certain areas of the province where there is actually no competition left. If you think about Gaspésie and in the area of our province north of Montreal, in the Laurentians, it is all Intact now. Brokers in those areas are going to have to come up with some kind of solution. velopment of E-Docs means brokers can see electronic copies of insurance policies automatically attached to their files. This is opposed to the current practice, in which brokers have to pull copies of polices from individual insurance company portals into their broker management systems (BMS).
“On the technology side, it just seems like since October, when we got E-Docs, somebody’s lit a fire under everybody on technology, and that’s a good thing,” says Randy Carroll, CEO of the Insurance Brokers Association of Ontario. “E-Docs is huge. The broker workflow will actually be able to get itself back to where it was relating to the management of that [policy] document. I’m pleased that CSIO has released an XML standard that will allow the companies to build to the standard, to cut the expense [of paper policies], but not to the detriment of increasing the workflow cost to the broker.” The IBAO is also submitting a paper on the topic of online insurance sales as part of a public consultation process initiated by the Canadian Council of Insurance Regulators (CCIR). “Insurance is still a complex product, and you still need to have the advice of a professional at the point of sale,” Carroll says. “So anything we put forward will fully support and hopefully get the support of the regulators to make sure that is part and parcel of any online activity. We don’t want to venture off into a world where advice has been overlooked.” This paper is timely, Carroll says, because consumers’ buying habits are changing, and brokers need to adapt to a new way of doing business. “This is our next biggest challenge,” he says. “You’ve got consumers who want to deal with almost everything that they buy the way they want, when they want and how they want. We really need to take a look at reaching out to new consumers, and allowing consumers to reach out to us differently than we have in the past, embracing technology and social networking to the advantage of both [brokers and consumers].”
QUEBEC Consolidation in Canada’s property and casualty industry last year particularly affected brokers in Quebec, significantly shrinking the pool of insurance carriers available to brokers and consumers. “Things have changed a lot over the past year, especially in Quebec, considering
D&O ad
6/4/10
1:51 PM
Page 1
From Predecessor to Successor,
ACE insures progress
Property & Casualty | Accident & Health | Life
To address the complexities of D&O insurance, it takes the right people, a strong balance sheet, worldwide capabilities and a flexible approach. These are the strengths of ACE. We take on the responsibility of your risks so that you can take on the responsibility of making things happen. We call this insuring progress. Visit us at www.ace-ina-canada.com.
Š 2010
COVER STORY
Changing Face of the Broker the buyout of AXA Canada by Intact Insurance,” says Catherine Mainguy, chairwoman of the Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ). “That’s an issue we are going to keep an eye on because it affects brokers here in this province more than it does in the other provinces. For the broker industry in Quebec, 50% of our market in personal lines and just a little bit below 50% in commercial lines, is now business transacted with Intact, which is really a lot.” Mainguy points out that AXA Canada and Intact Insurance were the two biggest insurance markets in Quebec before Intact bought AXA for $2.6 billion in 2011. With the two companies now merging, brokers in some parts of Quebec have very few markets left to offer to their clients. “There are certain areas of the province where there is actually no competition left,” Mainguy says. “If you think about Gaspésie and in the area of our province north of Montreal, in the Laurentians, it is all Intact now. Brokers in those areas are going to have to come up with some kind of solution.” Like its sister association in Ontario, RCCAQ is submitting a paper to the CCIR on the topic of online insurance sales. “We want to keep somewhere in this distribution [of insurance products] over the Internet the notion of giving advice about insurance,” Mainguy says. “It’s great to buy insurance online, but at what point do we give advice? If you want to protect the consumer, which is the raison d’etre of a regulator, you protect the consumer best by permitting him or her to get advice.”
NEW BRUNSWICK The Insurance Brokers Association of New Brunswick (IBANB) says it is “floored” by how the province’s current superintendent of insurance is interpreting regulations related to the licensing and supervision of Level 1 brokers in the province. “There are two particular areas that are of great concern to us, and these seem to be the two areas on which the 36 Canadian Underwriter April 2012
current office of the superintendent is focusing,” says Terry Gaudet, president of IBANB. “One is the supervision, which in the act is not clearly defined. It says that if you are an owner or a manager of a brokerage, you must supervise.
In today’s world, I think you would agree that, with a BlackBerry or laptop, you could pretty much supervise anyone from anywhere with the proper measures in place. But the current office of the superintendent says the supervision of a Level 1 broker needs to be physical. “In today’s world, I think you would agree that, with a BlackBerry or laptop, you could pretty much supervise anyone from anywhere with the proper measures in place. But the current office of the superintendent says the supervision needs to be physical. “In other words, owners or managers must be physically present in the offices they are supervising. So if you have multiple locations, if you are an owner of three offices, let’s say, they are expecting you to be in all three at the same time or have staff who are properly certified to do so.”
Second, Gaudet says, there is a discrepancy between what brokers and the superintendent think Level 1 brokers should be allowed to do. “A Class 1 broker, as far as we are concerned, since 1995, has been able to sell and service personal lines insurance, be it for home or auto, travel, trailers, motorcycles and snowmobiles. These are personal lines insurance policies, and it says in the act that a [Level 1 broker] can do that. “And yet the superintendent is saying, ‘No, the act may say that, but because it says something different somewhere else in the act, it negates that.’ It means that if you have a Class 1 broker in your office, they technically cannot sell personal lines of insurance.” Brokers are resolved to continue negotiating with the superintendent on this issue, but it hasn’t been easy. “Brokers have gained a lot of respect in New Brunswick and in Canada, and we’ve worked so hard to get what we have, and to have one office singlehandedly change that relationship, it just floors us,” Gaudet says.
NOVA SCOTIA The provincial brokers’ association will be front and centre in making sure their clients know about the province’s recent changes to the auto insurance product. But the messages to be communicated were still up in the air as of press deadline in late March. The government was cutting it close: Apr. 1 was the scheduled implementation date for the first phase of the reforms. Nova Scotia unveiled its proposed auto insurance reforms in November 2011. The reforms are to be implemented in two phases over the next two years. Key aspects of the reforms include enhanced no-fault, mandatory medrehab limits of up to $50,000; a new minor injury treatment protocol based on Alberta’s current model; and an optional tort product for minor injuries. The first phase of the reforms, to be implemented this April, include the enhanced benefits; a prohibition on insurers increasing premiums when drivers
Helping brokers with insurance solutions since 1966
Montreal Office Tel: (514) 849-4992 Toll Free: (877) 771-1211
Commercial General Liability Directors & Officers Liability Environmental Impairment Liability Marine Program Professional Liability Property & Inland Marine Security & Protection Industry Umbrella & Excess Liability
Toronto Office Tel: (416) 601-1133 Toll Free: (800) 223-8858
Elliott 3 revised Apr 5 2012.indd 1
Calgary Office Tel: (403) 313-8987 Toll Free: (855) 313-8987 Vancouver Office Tel. (604) 738-1033 Toll Free: (888) 744-1033
www.elliottsr.com
05/04/12 1:15 PM
COVER STORY
Changing Face of the Broker
We recognize that bank or credit union ownership of a brokerage could happen in the future. Rather than wait for this to happen, we are taking the proactive step of creating the proper bylaws to avoid the possibility of having a bank-owned or credit union-owned broker member. report collisions that do not result in a claim (even if the driver was at fault); and a new levy that insurers will pay to help volunteer fire departments cover the cost of responding to auto collisions. The second phase of the reforms will be effective Apr. 1, 2013. These include a direct compensation framework allowing insured drivers to be compensated by their own insurer for property damage resulting from an automobile collision with a different party (based on the New Brunswick model); limited liability for rental companies; the new minor injury treatment protocol; and an optional tort product. The province’s brokers have been in touch with Nova Scotia Premier Graham Steele’s office regarding the content of the reforms and what clients should know. As per their understanding with the government, brokers were waiting for the province to develop communications tools to help brokers explain the reforms to clients. But as of press time in late March, the Insurance Brokers Association of Nova Scotia (IBANS) was still awaiting 38 Canadian Underwriter April 2012
word from the province about the communications strategy, reports IBANS executive director Karen Slaunwhite. All the same, Slaunwhite noted the general environment around the Nova Scotia auto reforms has been good. “Thank heavens it’s not 2003-04,” said Slaunwhite, referring to a time of escalating insurance rates and public dissatisfaction that precipitated a revamp of the province’s auto product at that time.
NEWFOUNDLAND The Insurance Brokers Association of Newfoundland (IBAN) is proposing to draw a line in the sand when it comes to credit-union ownership of independent brokerages. “In our association, we’ve got a [proposed] bylaw amendment going to our members that says essentially no bank or credit union-owned organization can become a member,” says Basil Crosbie, president of IBAN. “The bylaw is to make sure that if it happens here in Newfoundland, because consolidation is a fact of life, there’s no ambiguity.”
Crosbie said the bylaw amendment was prompted by Desjardins’ purchase of Western Financial in 2011. He says Desjardins is not a factor in the local insurance market; however, the acquisition did cause brokers in the province to think about the broader question of independent brokerage ownership. Currently, the association has “associate” memberships for insurance industry partners such as managing general agents (MGAs), but this category is not intended for non-insurance owners. “Right now, we recognize that [bank or credit union ownership of a broker] could happen in the future. Rather than wait for that to happen, we are taking the proactive step of creating the proper bylaws to avoid the possibility of having a bank-owned or credit-union owned broker member,” Crosbie says. “We don’t want that.” Crosbie says ownership of a brokerage by a financial institution runs counter to the notion that banks and credit unions ought not to be able to influence an insurance sale at the point of credit.
E&O (Apr12)_DG
4/8/12
11:07 AM
Page 28
A look at broker E&O claims trends demonstrates the importance of broker-client communication during the new business process. Hugh Fardy
Senior Vice President, CG&B Group Inc.
The role of the insurance broker is becoming more complex all the time. We need to perform our job at a speed that will match client demand and still take the time necessary to fulfill our duty as a professional. This dichotomy of purpose may be the leading cause of a stunning increase in broker errors and omissions claims surrounding the new business process. Statistics based on the Swiss Re/CG&B book of business show that over half the claims against brokers in 2010 involved the writing of new business.This by no means the only area of concern, but it will be the focus of this article.To understand the issue properly, we need to look at a series of statistics that play a part in developing the focus on new business. Traditionally, brokers benefited from having a large percentage of their portfolio in personal lines. However, we see the claims percentages growing closer to an even split between personal
40 Canadian Underwriter April 2012
(43%) and commercial business (54%). One area of concern is this: commercial business written on a Claim Made form is producing 3% of claims, on a book that may be a little as 2% or 3% of all commercial business. Over time, homeowners (22%), commercial property (22%), general liability (18%) and automobile (18%) lines have been the leaders in the types of coverage producing claims. By way of explanation, rates in homeowner and commercial property lines are on the increase due mainly it seems to water damage, insurance-tovalue and co-insurance issues, respectively. General liability has remained constant and auto is down a couple of points.The activity in the auto book has not resulted in a reduction of claims; rather, the claims percentage for auto looks better as a percentage as the number of claims in other areas go up. Professional liability as a class has increased once again, albeit to only 4%, but this is still an area on which to keep an eye. Here is where we see numbers of great concern.The transaction related to the alleged error or omission is key: new business for truly new clients accounts for 35% of claims; new business for existing clients covers another 22% of claims. That produces a shocking 57% of claims in the new business process.These claims relate to the point in the
Illustration by RĂŠmy Simard/www.i2iart.com
New Business, New Issues
E&O (Apr12)_DG
4/8/12
11:07 AM
Page 30
broker-client relationship at which all the necessary investigative work is to be done by the broker. This is when brokers determine their clients’ exposures and needs. Brokers at this point should be making recommendations on the best insurance to take care of those exposures and needs. The renewal process is not to be ignored. It has grown to 18% of claims and should continue to grow in light of changing renewal processes in the industry. It is difficult to keep pace with changes in clients’ exposures and needs if brokers are not communicating with their clients on a regular basis. The process step leading in claim percentage is risk assessment. Poor assessment of client exposure is alleged to be the cause of 18% of claims. That is followed closely and logically by 17% of claims alleged to be a result of coverage recommendation. Last in this series of statistics relates to the actual error alleged, the failure to procure coverage.This broad phrase really just means the client didn’t have the coverage necessary when a claim occurred.This represents 36% of the claims. In short, a failure to assess exposure and obtain coverage on new business opportunities is leading the pack by a long way when it comes to Broker E&O claims. As of the time of this writing, I don’t have final 2011 numbers. But some trends that are showing include an increase in the number of auto-related claims, a rise in the allegations of failing to procure coverage, a rise in the number of claims in suit and a rise in the number of claims that show an indemnity payment or reserve. The number of claims with alleged damages in excess of $500,000 rose by 46% in 2011. We need to be concerned about all of these numbers as we go forward. Many leading factors go into addressing these claim issues. They include complete and accurate gathering of information about the client, complete and accurate assessment of exposures, as well as meticulous coverage recommendations and reviews. Effective communication to clients and documentation
42 Canadian Underwriter April 2012
of the broker files are required in order to be sure “the story is told.” Changes in technology, products and broker authority are all items to be addressed. These require an increase in the training and mentoring of all employees and, in particular, those new to the industry or just a position in the firm. All broker offices need to have standards of practice for all transactions and processes.These clearly need to be communicated to staff.
A shocking 57% of claims relate to the new business process. This is the point in the broker-client relationship when all of the necessary investigative work is to be done by the broker. Production pressures may have the greatest impact on claims issues surrounding new business.These pressures are common to the entire industry. Insurance companies want to grow. As a result, they will often be more aggressive on new opportunities than on their existing book, for which the acquisition cost has already been paid. Insurance brokerages look to add business to make up for what is lost on the renewal book, and in fact seek to grow beyond that. A brokerage’s production staff is compensated based on what it sells. In a
market of reduced commercial rates, there is a need to sell more to balance things. In many lines of business, we have an over-capitalized market, with much of that capital being new capacity. In such an aggressive market, the playing field is falsely evened out. Brokers with little or no experience in a class of business are often able to get the same quotes and terms as the more experienced broker, often from insurance companies that are also at a loss for experience. Anxious underwriters may make it too easy to get quotes and terms, requiring minimum information on the risk. Given plenty of available capacity, there is a rush to place the business before the other guy. Be careful: too much business with a market based on price may lead to a huge remarketing job when that market changes its tune or perhaps even withdraws. Everyone is looking for ways to do more, faster.That condition may be creating a serious reduction in the quality of the work being done. Although this is not just a broker issue, brokers are definitely the front-line contact with clients. It must be remembered that increased competition for the business requires a greater attention to the quality of the work.We cannot sacrifice quality for quantity. Any gains acquired through speed could be short-lived once clients learn that “they can get that anywhere,” and make claims against brokers to recover any shortfall in their insurance as a result of rushed or inattentive work. Although volume is important to maintain markets, the quality of the book should be what will keep that market in the long run. This is not always the case these days, I realize. However, the high-quality book will have an easier time replacing a lost market than a business featuring lots of bad volume. In summary, it seems the speed of business in today’s market may be the biggest factor leading to broker errors and omissions claims. Perhaps we need to just slow the pace and pay more attention to detail in order to do the quality work expected of an insurance broker. Each brokerage needs to take charge of what they do and how they do it.
TM
Reasons to Relay
Unite with friends
Contribute
Powerful experience
Fundraising
Exercise
Reflection
Show caring
Give back
Remember those who have passed
Make cancer history Set the foundation for years to come
WICC = 100% to cancer research Team spirit
Support WICC’s biggest event Celebrate survivors
Inspirational Commemorate
Fight back
Network
Team Bonding
Remember
Build community
Celebrate
Be part of something big Motivate Have Fun Make a difference Crusade
WICC + Relay For Life = a moving experience Sign up your teams through WICC and help us reach our goal of $378,000 • The Canadian Cancer Society’s North York Relay For Life at Esther Shiner Stadium is now one of the biggest industry events in the GTA. • This year it takes place on Friday, June 22. Save the date! • RFL celebrates cancer survival and commemorates lost friends and family members from 7:00 pm -7:00 am. Walk or run round the track in a non-competitive relay.
WICC at Relay For Life For more information and to register your team(s) go to wicc.ca
Design compliments of
Trends (Apr12)_DG 3
4/8/12
11:11 AM
Page 28
Keeping a
Steady Hand on the Tiller
Gregor M. Robinson
Senior Vice President, Chief Economist, Insurance Bureau of Canada
Canadian property and casualty insurers have some reasons to be optimistic in 2011, including an underwriting profit and improved Ontario auto results, but murky waters remain ahead. The property and casualty (P&C) insurance industry financial results for 2011 show modest improvement in underwriting and profitability in an environment that continues to be very challenging. The bright spot is lower auto claims costs in Ontario due to the recent SABS reforms. But these gains were offset by a steep increase in property claims costs and lower investment yields. As a result, the industry’s return on equity (ROE) rose slightly in 2011 to 8.0%, a modest improvement over 2010’s ROE of 7.5%. (2011 ROE has been adjusted to reflect merger and acquisition activity during the year.) Here is a detailed analysis of 2011 results preceded by an overview of larger trends — in the
44 Canadian Underwriter April 2012
economy, the environment and regulation — that are shaping the near future for the P&C insurance industry.
TREND OVERVIEW
On the economy The slowdown in GDP growth that began a few years ago is not abating and continues play a role in dampening demand for insurance products. As noted in the December 2011 Swiss Re Global Insurance Outlook report: “Macroeconomic growth in Europe and North America is expected to slow or possibly even turn negative in 2012.Therefore, the non-life insurance industry in these regions will probably face weak demand next year.” Other factors in the global economy, especially continuing low interest rates and volatile financial markets, have hurt investment income again. We expect this to continue for the next while. The U.S. Federal Reserve plans to keep interest rates low for the next two years and Canada’s rate changes are also expected to be moderate. Moreover, as long as equities markets remain volatile and comparatively lower than their post-recession peak in early 2011, there will be ongoing pressure on industry investment returns. In the chart Low Investment Environment & UW Pressure (Please see Figure 1 on Page 46), we see how, even with significantly lower average combined ratios since the 1975-2007 period, the recent
Trends (Apr12)_DG 3
4/8/12
11:11 AM
Page 29
weaker investment environment since 2008 has driven down ROE.This is why a combined ratio of 95% is sometimes referred to as the new 100%.
On the environment The last few years have been the worst ever for catastrophic events around the world and in Canada. Recently, IBC commissioned a report by one of the world’s leading climatologists, which documents that Canada has been warming at an average of .24 degrees Celsius per decade over the past six decades. Because Canada is a northern country, it is warming twice as fast as the global average. Higher temperatures mean increased frequency and intensity of precipitation and other forms of extreme weather. For insurers, that means more property claims, including more expensive property claims. The chart CAT & Property Losses, 2006-11 (Please see Figure 2 on Page 46) shows total claims for property
insurance lines for the last six years. Clearly, CAT losses are a major force driving rising property claims costs. As temperatures continue to rise, this trend is expected to continue.
2008–09 and its ability to meet obligations to policyholders has never been questioned.
On regulation PricewaterhouseCoopers’ annual survey of top risks facing the insurance industry placed regulation as the Number 1 risk in 2011. Although it is difficult to cost the effect of regulation on industry performance, we do have estimates of the impacts of some of the changes. As just one example, the increased cost from changes to the Minimum Capital Test in 2012 and 2013 is likely to be in the hundreds of millions of dollars. Yet despite regulators’ concerns, the industry is strong and growing stronger as shown by our capital strength.The industry-wide MCT ratio rose again last year to 237%. It is worth emphasizing that the Canadian P&C industry played no part in the economic turmoil of
On the underwriting side Direct premiums written increased, but at a slower pace than in 2010 — 4.4% compared to 5.5% — which is not surprising given the economic environment. Claims increased by 3.6%, which is less than the premium increase noted above.We can attribute this to the significant decline in auto claims following the reforms introduced in late 2010. On the other hand, property claims costs took a big jump, by 19.3% in personal property and 32.6% in commercial property, driven by severe weather and natural catastrophic events. Overall, the industry reported positive underwriting income of $587 million compared to a loss of $89 million in 2010.About 46% of companies reported an increase in underwriting income year over year.
2011 DETAILED ANALYSIS
CAPTION CONTEST Submit your idea for the caption to Debby Matz at debbymatz@winmar.ca Winmar owners and employees are not eligible. Prize: Gift Certificate to The Keg Steakhouse. Winner to be announced in the next issue.
Winmar Property Restoration Specialists with over 60 locations across Canada www.winmar.ca
)+ ?FLI 8JJ@>ED<EK&<D<I><E:P I<JGFEJ< KFCC =I<< ($/--$+$N@ED8I +0+$--). April 2012 Canadian Underwriter
45
Trends (Apr12)_DG 3
4/8/12
11:11 AM
Page 30
Figure 1
Low Investment Enviroment & UW Pressure ROE, ROI 14%
CR 104%
CR 104.6%
100%
10.8%
12%
ROE
96%
CR 99.5%
ROI 9.0%
92%
10% 8% 7.1% 6%
88%
4%
ROI 4.1%
84%
2%
1
80%
0% 2008-2011
1975-2007 Source: IBC with data Facts Book, MSA
Figure 2
At year end, the combined ratio stood at 98.6%, which is slightly improved from the previous year. The loss ratio for Ontario auto showed the largest overall improvement, dropping to 81% from 99.5% a year ago. However, for the major lines other than auto, underwriting performance was worse in 2011 than in 2010. As discussed above, investment yields dropped. But combined with the improved underwriting results, the 2011 ROE was 8.0% compared to 7.5% in 2010. (Again, 2011 ROE has been adjusted to reflect merger and acquisition activity during the year.) The industry-wide numbers mask wide diversity in individual company performance. Measured by the ROE, about 49% of companies had better results last year, while 51% had weaker results. The chart Consolidated Results (Please see Figure 3) compares 2011 to 2010 results.
CAT & Property Losses Insured Cat C Losses
Total Insured Property Loss
10.0000
Total Insured Losses ($, Billions)
Total Insured Losses ($, Billions)
I 1 7.5390
5.0779
2.6169
0.1559 2006
2007
2008
2009
2010
2011*
*Estimated catastrophic insured loss Source: IBC with data Facts Book, MSA, PCS, Swiss Re, Munich Re & Deloitte
Figure 3
Consolidated Results 2011
Reporting adjustment for M&A activity: ROE is 8.0% Comp ROE is 8.7%
2010
DPW ($millions)
$43,609
$41,753
NCI ($ millions)
$27,806
$26,838
Combined Ratio
98.6%
99.7%
Loss Ratio
68.4%
69.6%
Expense Ratio
30.2%
30.1%
4.2%
4.6%
*ROE
10.8%
7.5%
*Comp ROE
11.5%
8.8%
8.7%
**7.6%
237.3
235.5
ROI
Change in equity MCT
*Excludes Lloydâ&#x20AC;&#x2122;s **Calculated on a non-consolidated basis
46 Canadian Underwriter April 2012
Reporting adjustment for M&A activity: Change in equity is 5.7%
Source: IBC with data from MSA
On the horizon The Canadian P&C industry remains highly competitive with more than 220 companies offering insurance products to Canadians. Although consolidation in the industry now appears to be gaining momentum, the market share of the Top 10 insurers is about 64%. This compares with the life insurance sector, where three companies occupy 65% of the market, and banking, where the Top 5 banks represent 85% of the market share. A perennial issue for the industry is Ontario auto, which remains a challenge despite some recent improvements. Between 1995 and 2010, the average loss ratio for Ontario auto was 82%. The market has been as hard on consumers as it has on insurers. In the five years beginning 2007, average premiums rose nearly 21% to $1,582, which is more than 47% higher than in the province with the next highest premiums. Further in the future While ROE remains below levels of the past, there are reasons for optimism. The last three years have seen slow but steady improvements in underwriting performance, ROE and capital. Looking two to three years out, most forecasters expect economic growth in North America to improve. Eventually interest rates will rise. The skills that firms have developed over the past few years in managing in a lowinterest rate environment and improving underwriting should stand them in good stead in the years ahead.
You might say â&#x20AC;&#x153;seamless integration.â&#x20AC;? We just call it a good fit. At CARSTAR we are dedicated to making the transition from claim to repair as seamless and simple as possible for you and your clients. We are working with many insurance companies to significantly reduce their claim-processing times and find solutions to their common challenges. We have also implemented various programs through our CARSTAR Care Centre to facilitate the claims process such as our cross-province and cross-border claim support. With 150 locations in 10 provinces, just think of us as your Vehicle Repair Management Company.
Cloud (Apr12)_DG
4/8/12
11:14 AM
Page 28
Cloud Cover in Canada
David Gambrill Editor
Applied Systems expects to open a new data management centre in Canada in 2012 Q3, helping Canadian brokers transport their operations into the cloud. Digital cloud cover is forecast for the Canadian brokerage marketplace. Applied Systems, which develops, sells and supports insurance broker management systems in the United States and Canada, expects to be opening a data management centre in Canada sometime during 2012 Q3. The company currently has two data centres in the United States — one in Colorado and one in Virginia — that support the transfer of TAM agency management applications into the cloud. In Canada, more than 130,000 users in 11,000 insurance-selling organizations use Applied’s TAM agency management system and other broker management software. Applied estimates the Canadian market represents approximately 20% of its revenue.
48 Canadian Underwriter April 2012
“Many brokerages don’t want to be in the business of managing their own data centre, because a lot of these businesses are modestlysized,” says Applied Systems president Reid French. He cited statistics showing that, on average, a smaller insurance brokerage in the United States has an IT support staff amounting to only half a person. “You have larger brokerages of course, like HUB or Western Financial, but many brokerages are smallish in terms of users on the system — five, 10,15 or 20 people. These people [in smaller brokerages] are saying: ‘Why am I buying servers and managing a data centre with half a person?’ Instead what they’ve been doing is moving their applications to the cloud.” Applied has been moving U.S. and Canadian companies to the cloud for more than five years. This means brokers use their TAM agency managers over the Internet. Data storage centres not only store the TAM application itself, but also policy data, customer data and broker commission data. Currently, 55% of the company’s customers use Applied’s two data centres located in the United States.
Where Today’s Risks Meet Tomorrow’s Solutions September 9 - 12, 2012 Saskatoon, Saskatchewan
Co-Chairs Doug Brown: dbrown@regina.ca Lisa Brost: lisa_brost@cameco.ca
Contact Charlene Roth-Diddams: charlene@pophasemail.com
PRESENTED BY
RIMS CANADA
TM
Cloud (Apr12)_DG
4/8/12
11:14 AM
Page 30
When you move your system to a ruggedized, bunker-style data centre, with two accessible power grids and multiple Internet connectivity, you enable brokers to access the information for the policyholder at the policyholder’s time of need, rather than saying: ‘Oops, I’m sorry, my office is down, too. I have to get back to you in a week and a half.’”
“The reason why a Canadian data centre would be advantageous to our customers is that when you transfer Internet protocol across countries, there’s a little bit of an overhead associated with that,” French says. “It’s not bad, but having a Canadian data centre will ultimately give [Canadian brokers] better performance. Secondly, and frankly more importantly, Canadian customers would rather have the data and the application in the country of Canada. We are able to say: ‘Hey look, your application, all of your data, is in the Canadian marketplace in a ruggedized, professional data centre.” The exact location of the proposed data centre in Canada is still unknown. French says it will likely be housed somewhere in Ontario. An official announcement about the specific location is expected at the end of 2012 Q1 or at the beginning of 2012, Q2, French said. There are other advantages to using the cloud. These relate to the efficient use of personnel in small brokerages. A June 2011 Statistics Canada survey shows that small business — defined as having between 20 and 99 employees and a revenue of at least $250,000 — makes up 98% of all employer business in Canada. It employs 48% of the country’s total private sector labour force. French observes that if smaller brokerages indeed have an average of between zero and one IT person, that person is likely involved primarily in desktop support. In other words, they won’t have a lot of time to maintain the infra-
50 Canadian Underwriter April 2012
structure required for running TAM. Moving the TAM application to the cloud takes that responsibility off their hands. Also, with TAM in the cloud, Applied looks after updates rather than brokerage IT staff. “As with any software application, ultimately new versions come out and you have to have someone who manages that upgrade path,” French says. “If you personally at your home manage the process going from Vista to Windows 7, that’s a gigantic pain in the neck. It takes many hours and it’s not a lot of fun. At the cloud centre, we ultimately do that for you.” French says the cloud has become a more popular location for data storage as people have become more accustomed to using it in their own business and personal lives. “If you went back five or six years ago, I think people were very concerned about, ‘What does this mean about having my data application in the hands of some other person?’Today, I think people have got comfortable with that because so many other applications that they use are provided in this way. Five years ago, you didn’t nearly have the adoption of Gmail. Five years go, you didn’t nearly have the adoption of amazon.com as a core shopping platform. As people get more comfortable with the fact that companies really do have their best interests at heart; that they do understand the requirements for these applications; that they understand the data privacy issues and the protection that’s going to be put in place; and that their reputations
are completely riding on making sure all of that happens, people are a lot more comfortable with buying an application in that way.” In one way, French adds, data is actually more secure on the cloud than it is in the broker’s office — particularly during times of crisis, when a policyholder needs his or her information most. “Something we all forget about at times, or we don’t talk about it enough, is that you really need these systems — and policyholders really need insurance — when something very bad has happened,” French says. “We have a number of customers who have said: ‘I went to the cloud because it made sense and it saved me money and ultimately I got a better service at a lower cost. But I never thought that when the hurricane landed or the tornado hit, my office was going to be incapacitated. When you move your system to a ruggedized, bunkerstyle data centre, with two accessible power grids and multiple Internet connectivity, you enable [brokers] to access the information for the policyholder at the policyholder’s time of need, rather than saying: ‘Oops, I’m sorry, my office is down, too. I have to get back to you in a week and a half.’We have great customer case studies in which people, because they had an iPad, laptop or a cellular card, have been able to access the Internet and hit our online system. And it was as if they were in their office, even though their office was destroyed.”
GOLF FORE THE CURE
13th Annual
WICC Ontario Golf Tournament on July 9th, 2012 Held at the prestigious Angus Glen Golf Club For entry and sponsorship opportunities,
go to www.wicc.ca to register Design donated by
Judgement (Apr12)_DG
4/8/12
11:18 AM
Page 28
Seeking Summary
Judgment Albert Wallrap Associate, Dutton Brock LLP
Ontario has changed its Rules of Civil Procedure, providing judges with expanded powers to decide issues summarily, thus making justice quicker and more affordable in some cases. Insurance companies have provided coverage Ontario has changed its Rules of Civil Procedure governing summary judgment, with the intention of making justice quicker and more affordable in suitable cases. Rule 20 Summary Judgment of the Rules of Civil Procedure was changed in Ontario effective Jan. 1, 2010. In Combined Air Mechanical Services v. Flesch, the Ontario Court of Appeal held that the amended Rule 20 provides judges with expanded powers to summarily decide issues by weighing evidence, evaluating credibility and drawing inferences. At the heart of these changes is the touchstone of proportionality, requiring courts to make orders and give directions that are proportionate to the importance and complexity of the issues and the amount involved.
52 Canadian Underwriter April 2012
In theory, Combined Air provides a â&#x20AC;&#x153;middle of the roadâ&#x20AC;? approach and much needed clarity. For the insurance industry, the new summary judgment affects risk assessment and reserves for legal expenses. Insurers are directly affected by these motions in defence, subrogation and coverage matters. If suitably brought, these motions facilitate the efficient and earlier resolution of disputes. If improperly brought, however, these motions may increase costs and delay litigation. The 2010 changes in Ontario emerged following widespread calls for legal reform and the recommendations of The Honourable Coulter Osborne in his 2007 Civil Justice Reform Project: Summary of Findings & Recommendations. Osborne recommended, among other things, the adoption of a new summary trial mechanism similar to the former Rule 18A in British Columbia.The intent was to provide judges with the authority to convert an unsuccessful summary judgment motion to a summary trial application in appropriate cases. After the 2010 changes came into effect, however, Ontario trial courts struggled with the interpretation of the summary judgment rule. Approaches ranged from broad to more restrictive. These trial decisions came to a head in Combined
Judgement (Apr12)_DG
4/8/12
11:18 AM
Page 29
In Ontario, the “full appreciation” test is the new threshold to be reached before judges can exercise their expanded powers related to summary judgments. This new threshold requires “total familiarity” with the evidence and the issues so that the judge can safely determine the matter on the motion record. Air, in which the five-member panel of the Ontario Court of Appeal reached a tipping point similar to the experience in British Columbia several decades ago. In Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), the British Columbia Court of Appeal interpreted the former — and then new — Rule 18A, holding that motion judges should fully consider all of the evidence and summarily decide the issues if they could fairly and justly find the facts necessary to do so. More recently, British Columbia revised its civil procedure, effective July 1, 2010, restructuring the former Rules 18 and 18A and renaming them to become Rules 9-6 and 9-7.
ONTARIO’S “FULL APPRECIATION” TEST In Combined Air, the Ontario Court of Appeal heard appeals in five different matters as well as submissions on Rule 20 by a number of interveners, including the Attorney General of Ontario, the Ontario Bar Association, Ontario Trial Lawyers’ Association and the Advocate’s Society. The court describes its own decision as a “new departure and a fresh approach” to summary judgment, and distinguishes between three types of cases in which summary judgment might be granted.The first type is when the parties agree to the motion and the judge has no reason to deny the same. The second type of case is when the claims or defences are without merit and have no chance of success by proceeding to trial.
The third type of case is the most controversial. Judges can now summarily dispose of cases on the merits, but only if the trial process is not required in the interests of justice. For this third type of case, the “full appreciation” test is the new threshold to be reached before judges can exercise their expanded powers. This new threshold requires “total familiarity” with the evidence and issues so that the judge can safely determine the matter on the motion record. To meet this threshold, judges should consider whether they can accurately weigh the evidence and draw inferences without the benefit of the “trial narrative,” particularly without directly hearing witnesses or having the guidance of counsel while weighing the evidence. The court raises an “important caveat” to the principle: the parties in summary judgment motions must put their best foot forward and lead trump, or risk losing. Responding parties in complicated actions must first have the opportunity to benefit from document production and discoveries, which are the most efficient means of developing a complete evidentiary record. When faced with a premature record, the responding party may seek preliminary directions from a motions judge and even dismiss or stay the motion. In many cases, the nature and complexity of issues will require document production and discoveries before full appreciation can be achieved. In this regard, the court found that the mini-trial
provision within Rule 20 allows oral evidence in limited cases at the discretion of judges only, and not as a means for parties to introduce further evidence. The court took further efforts to describe the hallmarks of cases not appropriate for summary judgment: • A voluminous motion record. • Many witnesses providing evidence. • Different theories of liability advanced against each of the defendants. • Numerous findings of fact required to decide the motion. • Credibility determinations that lie at the heart of the dispute. • An absence of reliable documentation to assess the credibility of witnesses. Summary judgment might be suitable when the issues are narrow and discrete, and when the parties have produced their relevant documents and have had the opportunity of examinations for discovery of adverse parties. Judges should have a high degree of confidence that the evidence in the motion record is complete and reliable, and that a trial is unnecessary in the interests of justice. Returning to the five cases in Combined Air, the Court of Appeal upheld the trial judge’s dismissal of the action by summary judgment in Flesch, in which the action was based upon a restrictive covenant in an acquisition agreement. The trial judge was correct to order oral evidence so as to assess a bid document and confirm the defendant was not competing against the plaintiff. In Misek, the Court of Appeal upheld the trial judge’s dismissal of the plaintiff’s ac-
April 2012 Canadian Underwriter
53
CU Seminar ad April 2012
3/19/12
12:33 PM
Page 1
Putting the pieces together.
Events and Seminars Calendar You work hard to protect your clients’ property. Now, it’s time to ensure that you apply the same kind of energy and commitment to your own success. CIP Society Events and Seminars give you the opportunity to learn, to network, to catch up on industry developments and to think about your career.
CIP Society Events:
CIP Society PROedge Seminar
Toronto – CIP Society Symposium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 26
Toronto – Advanced Investigation of Slips, Trips & Falls and Personal Injury Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 1
Webinar – Interactive Q&A “Is the FCIP the next step in your career?” Register now at www.insuranceinstitute.ca/newFCIP . . . . . . . . . . . . May 16
Vancouver – Leading Insurance Coverage & Liability Cases . . . . . . . . . . . . . . . . . . May 2
Vancouver – CIP Society 10th Annual Golf Tournament & Dinner . . . . . . . . . . . . June 7
Kitchener – Meet the Risk Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 14
Toronto – CIP Society Annual Fellows’Golf Tournament . . . . . . . . . . . . . . . . . . . June 11
Brandon – Oil & Gas – Upstream Service Company Business An Insurance Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . .May 23 & May 24
Victoria – CIP Society 6th Annual Golf Tournament & Dinner . . . . . . . . . . . . . . . June 22 Halifax – CIP Society 14th Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . . . July 10
Ottawa – PROedge Spring Luncheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 21
Keeping you at the forefront of the P&C industry. The CIP Society. MEMBERS BENEFIT. www.insuranceinstitute.ca/cipsociety
Judgement (Apr12)_DG
4/8/12
11:18 AM
Page 30
tion, in which the action was based upon a prescriptive easement over the defendant’s property. The court emphasized the absence of direct evidence of the property use over the years. In Bruno, the Court of Appeal overturned the trial judge’s decision granting summary judgment against the defendant Hryniak in a fraud action to recover investment funds. The Court of Appeal found that a trial was required, noting the extensive evidence, the number of witnesses and complex legal issues. The trial judge had also erred in failing to consider an element required
In B.C., courts may pronounce judgment or dismiss a claim or counter-claim where there is no genuine issue for trial. The rules require affidavit material or other evidence showing there is no genuine issue for trial. for fraud. In the related case of Mauldin, the Court of Appeal upheld the trial judge’s summary judgment as against the same defendant, noting the interests of justice and the clear findings of fact against the defendant. In Parker, the Court of Appeal upheld the trial judge’s dismissal of the summary judgment motion in a Rule 76 simplified procedure action involving a construction project and damage to neighbouring properties. This type of procedure, which applies to claims of $100,000 or lower, is considered timely and efficient by its very nature.
BRITISH COLUMBIA’S APPROACH Under the former Rule 18A of the Supreme Court Rules, summary judgment was allowed if the issues were not too complex, did not involve credibility issues so as to require a trial or if such motions were not brought too close to the trial date. Courts would not be expected to decide the matter summarily unless they could fairly and justly find the facts necessary to decide the issue.
Under Rule 9-6 Summary Judgment of the British Columbia Civil Rules, restructured and renamed in 2010, courts may pronounce judgment or dismiss a claim or cross-claim where there is no genuine issue for trial. Rule 9-6(3)(b) requires affidavit material or other evidence showing there is no genuine issue for trial.The courts also have discretion to award special costs when a party acted in bad faith or primarily for the purpose of delay. Where matters may not be appropriate for summary judgment, they may be appropriate for summary trial. Rule 9-7 provides for a summary trial and allows the tendering of evidence by affidavit evidence, responses to interrogatories, discoveries, admissions or expert reports. A summary trial must be heard at least 42 days before the scheduled trial. Under this rule, the court may grant judgment in favour of any party, either upon an issue or generally, unless the court is unable on the whole of the evidence to find the facts necessary to decide the issues of fact or law, or if the court is of the opinion that it would be unjust to decide the issues on the application.
IMPACT ON THE INSURANCE INDUSTRY Summary judgment motions directly affect litigation in areas of insurance in Ontario and British Columbia. Insurers will wish to adapt to these new trends and consider summary judgment motions as an important tool by which, for example, they can reduce the risk of exposure in defence cases or increase the likelihood of recovery in subrogation. Insurers may wish to account for the cost of these motions in reserving for legal expenses. These motions directly affect insurers in situations in which they have become parties to litigation and seek to dismiss claims brought against them or their agents — for example, in matters of coverage or reaching policy limits. Case law in Ontario and British Columbia indicates that summary judgment may be
amenable to issues relating to expiry of limitation periods and the interpretation of contracts or insurance policies. On the other hand, issues of misrepresentation, fraud, and bad faith typically raise credibility issues and require the forensic machinery of a trial. To benefit practically from summary judgment, insurers will wish to gather key evidence from the insured at an early stage, including documents and witness statements. In some cases, summary judgment may be brought before the considerable expense of discoveries. In most cases, however, these motions should not be brought until after discoveries. Insurers should also consider the effect of cross-claims and third party claims for contribution and indemnity, which can be broader than those in the main actions. The expiration of the limitation period is another consideration, especially if responding parties can circumvent a summary judgment by issuing new claims. In
Insurers will wish to consider summary judgment motions as an important tool by which they can reduce the risk of exposure in defence cases or increase the likelihood of recovery in subrogation. cases in which the stakes are high, summary judgment motions have an inherent value in fleshing out the opposing party’s position. The downside is disclosing one’s own case and exposing witnesses to cross-examination on their affidavits. Summary judgment plays an increasingly important role in the efficient disposition of litigation. In Ontario and British Columbia, for example, judges have expanded powers and authority to summarily decide issues in the interests of justice and in light of proportionality. In Ontario, the new threshold of “full appreciation” guides litigants who contemplate a motion for summary judgment.
April 2012 Canadian Underwriter
55
iClarify (Apr12)_DG
4/8/12
11:21 AM
Page 28
iClarify Commercial is rolling out across Canada, promising fast, efficient and simple validation of commercial property data. Greg McCutcheon President, SCM Risk Management Services
The P&C insurance industry has been rapidly evolving through its use of technology, market selection and pricing techniques for personal property insurance, including developing rating-by-peril pricing models. Whereas organizations traditionally rated property risk and pricing from a broad-based perspective, leading underwriting organizations have developed extremely sophisticated and analytically predictive rating-by-peril models that consider many more â&#x20AC;&#x153;perilâ&#x20AC;? factors related to a specific risk. Key to this underwriting evolution is locationbased, geo-pinpoint (GIS) technology combined with information and data analytics. Through the lens of accurate, easily accessible and risk-relevant information, iClarify Residential, a residential property validation tool, was deployed and is now used by the vast majority of the personal insurance market.
56 Canadian Underwriter April 2012
Now, given the marketâ&#x20AC;&#x2122;s focus on commercial insurance, iClarify is again playing a significant role. iClarify Commercial, a validation tool for commercial properties, was conceived as a result of a single broker phone call in the early days of the personal property launch of iClarify in 2010.The call was an inquiry about when RMS planned to launch a commercial version of the service.This prompted an early staged alpha test of the information RMS held related to construction, occupancy, adjacent occupancies, distance to these premises, fire protection, claims history, satellite and streetscape imagery, environmental hazard potential and benchmark commercial rating for a particular address. We were able to gather proprietary data from RMS sources quickly. Once again, we leveraged our exclusive relationship with iLookabout to obtain streetscape imagery unattainable through other Internet sources. We thus saved the broker a two-hour drive by providing immediate access to the information required to make quick, intelligent decisions. Inspired, we immediately began development of the iClarify Commercial platform.
Illustration by Remy Simard/www.i2iart.com
Commercial Properties at a Glance
iClarify (Apr12)_DG
4/8/12
11:21 AM
Page 29
In advance of SCM Risk Management Services’ launch of our recently deployed iClarify Commercial services portal, our organization engaged several leading commercial brokers and insurers across Canada to gauge industry perception and guidance.Through an independent third party consulting firm, industry stakeholders brought forward key challenges, playing a vital role in the continual development and evolution of the platform. Crucial findings focused on three core messages: • Reduce the time it currently takes a broker to provide an accurate commercial policy submission. • Receive an immediate and accurate quote for mercantile new business. • Develop a workflow that allows underwriters and brokers to quickly bind business and manage the renewal process.
A clear outcome of the stakeholder sessions was that actionable information is king.The more information available in the risk assessment process, the better brokers and insurers can identify risk, fully understand a client’s needs, impress them with their level of knowledge and make the most salient recommendations. In effect, business portfolios and clients are better protected. Stakeholders expressed that it could take anywhere from a couple of hours to a couple of days to research and gather preliminary client information from various sources. Our sources stressed the challenges involved in obtaining accurate construction and claims details from clients.They saw real value in a single tool providing access to the most essential commercial intelligence in real-time, and all in one place. The efficiencies driven through iClar-
iClarify Commercial offers access to an unprecedented level of data related to more than 600,000 commercial properties in Canada. It allows brokers more time to identify risks that meet their insurer’s appetite. Insurers save time and costs through the ability to pinpoint and make rapid decisions on properties requiring inspection. ify in broker offices allows for more accurate, in-depth submissions with a quicker response time. This ultimately enhances the broker-underwriter relationship, making it more productive. The reduced time spent searching for data allowed brokers more time to identify risks that meet their insurer’s appetite. Insurers save time and costs through the ability to pinpoint and make rapid decisions on properties requiring inspection, allowing them to manage their inspection budget more efficiently. With access to an unprecedented level of data related to more than 600,000 commercial properties in Canada, iClarify Commercial users gain a tremendous competitive advantage in attracting new business with a confident, sophisticated approach involving a detailed risk assessment of their business and
knowledgeable risk management strategies. iClarify allows users to distinguish themselves by educating new leads and existing customers on the most comprehensive, suitable commercial insurance coverage to meet their needs, ultimately
building a confident, trusting and loyal client base. iClarify Commercial provides structured data information that aligns directly with the data necessary to provide an accurate and detailed business submission. Given that our industry is currently evaluating the use of social media data in the underwriting process, our focus groups were loud and clear about the need to accelerate the commercial process — not slow it down by providing data that currently does not align to any underwriting guideline. Simply put, with iClarify, brokers and underwriters benefit from efficiency, accuracy and simplicity. Today, the service continues to evolve. The vision remains focused on future data enhancements, company and broker integration strategy and accumulation services. iClarify is the technological platform that will deliver all of SCM Risk Management Services to commercial, personal lines and risk managers across Canada.
As insurance companies adopt nextgeneration policy management systems, and as brokers enhance their broker management systems to store and exchange information with various insurance companies, undoubtedly there will be a tremendous amount of information integration within the underwriting process. The question will ultimately come down to: “Can we as an industry automate commercial processes to deliver greater efficiencies and streamline underwriting without creating more risk within a company portfolio?” Based on the response we have received from customers with whom we consulted across Canada, the answer is an overwhelming “yes we can.”
April 2012 Canadian Underwriter
57
Auto Law (Apr12)_DG_v3
4/8/12
2012 Oatley McLeish Guide to Motor Vehicle Litigation, Law Society of Upper Canada (Toronto)
Donna Ford Freelance Writer
11:24 AM
Page 28
How Expenses are
“Incurred” When Ontario reformed its auto insurance product in 2011, it opened up a whole new world for lawyers to debate how benefits expenses are “incurred’ and “minor” injuries are defined. New definitions of “incurred” and “minor injury” in Ontario’s new Minor Injury Guideline (MIG) are the hottest issues in the new Statutory Accident Benefit Schedule (SABS) according to plaintiffs’ personal injury lawyer, Stephen E. Firestone. Firestone of Lackman, Firestone Law Offices was a speaker and panel moderator on the topic of the new SABS at the tenth annual Oatley-McLeish Guide to Motor Vehicle Litigation, which took place in January at the Law Society of Upper Canada. There is no question that the new SABS, which took effect on Sept. 1, 2010, reduced the accident benefits available in non-catastrophic cases, Firestone said. FSCO cases have not yet inter-
58 Canadian Underwriter April 2012
preted these various provisions, but “the changes aren’t as restrictive as they first appear,” he said.
New definition of “incurred” expenses Firestone offered some suggestions when dealing with the definition of “incurred,” which applies to med-rehab benefits, caregiver benefits, attendant care benefits, housekeeping-home maintenance and case management services. A posting on law firm Thomson Rogers Lawyers’s website notes that between 1991 and 1994, “the definition of incurred expense for the purposes of obtaining attendant care required families to retain professional caregivers in order to qualify for reimbursement under the SABS.” In subsequent years, the law firm says, “the requirement to use professional caregivers was removed and the courts interpreted the word ‘incurred’ in a manner that was more favourable to the insured.” Some trial lawyers say the new definition of “incurred” as of Sept. 1, 2010 swings the pendulum back to the period of 1991-94.
Section 3(7)(e)(iii)(B) of the new SABS says an insured person has not “incurred” expenses for goods and services unless people providing the goods and services have “sustained an economic loss as a result of providing the good or services to the injured person.” Referring to this section, Firestone said: “If it was to be restricted to loss of income, it would have said ‘loss of income.’ I say economic loss is much broader.” For example, Firestone said: “What about a homemaker or a grandparent who sustains an out-of-pocket expense in providing the service to their family members? Surely, I say, the SABS were not meant to restrict and exclude the very family members who are in the best position to provide the goods and services as they did before—grandparents, homemakers, etc.” Section 3(7)(e)(iii)(A) says an insured person has not incurred expenses for goods and services unless the person who provided the goods or services “did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident.” Firestone said it is important that the section says “but for the accident,” and not “before the accident.” In a paper related to his speech topic, Firestone writes it is important to note s. 3(7)(e)(ii) states the insured person need not have actually paid the expense. “It is sufficient that only a ‘promise to pay the expense’ [has happened] … or that he/she is ‘otherwise legally obligated to pay the expense,’” he writes. Firestone says cases like Monks and ING, McMichael and Belair and Smith and Wawanesa clearly held that a broad and liberal meaning of incurred has to be applied to legislative provisions contra proferentem (this refers to the doctrine of contractual interpretation, according to which any ambiguity about a term is resolved against the party that imposes the provision in the contract). “In fact, in Monks, the Court of Appeal specifically said that the phrase ‘incurred’ does not require the insured to finance, pledge or credit to be incurred
Surely, plaintiffs’ counsel say, the SABS is not meant to restrict and exclude from the costs “incurred” definition the very family members who are in the best position to provide the goods and services as they did before the reforms.
or actually have received the goods and services to be incurred as defined,” Firestone said. “It was sufficient that the necessity of the service and cost be determined with some certainty.This legislation is really the government’s attempt to go beyond that and basically nullify what was said in the Monks case.”
New definition of minor injury The new definition of “minor injury” in the SABS “means one or more of a
2012
Canadian Association of Insurance Women
46th Annual Convention
Hosted by: Edmonton Insurance Association
June 6, 2012 to June 10, 2012 Theme: Come Join Our Party Location: Mayfield Inn & Suites Hotel 16615 - 109 Avenue Edmonton, Alberta T5P 4K8 Telephone:1-800-661-9804
EDUCATION DAY - June 8, 2012 Time:
8:30 am - 4:30 pm Registration opens at 8:00 am
Location: Mayfield Inn, 16615 - 109 Avenue, Edmonton, AB Cost:
$150, includes lunch and coffee breaks
Register: visit www.edmontoninsuranceassociation.com or contact Sharon Stefanyk at 780-423-7684 or sstefanyk@fieldlaw.com TOPIC
SPEAKER
Persuasion - The Key to Getting what you want
Scott Burton
Cyber Liability – Civil and Criminal Liability
Dan Carroll
Lunch and keynote speaker Safe and Sound - (A Dynamic Presentation on Personal Safety)
Debra de Waal
The Olympic Experience
Cheryl Bernard
Internet Sleuthing & Preservation of Evidence
Iain Kenny
Established in 1966, the Canadian Association of Insurance Women (CAIW) is a national association made up of 10 member associations located in cities from across Canada. Members are professional women and men who work in the insurance industry. CAIW’s objective is to provide educational programs, a chance to network with like minded professionals and provide opportunities for personal development. For more information or to become a member, visit the CAIW website: www.caiw-acfa.com April 2012 Canadian Underwriter
59
pg60 Internet
4/8/12
11:27 AM
Page 40
INSURANCE INTERNET DIRECTORY ASSOCIATIONS Canadian Independent Adjusters' Association (CIAA) "The voice of Independent Adjusters in Canada" www.ciaa-adjusters.ca Honourable Order of the Blue Goose—Ontario Pond Our fraternal organization has been dedicated to fellowship and charity since 1908. www.bluegooseontario.org The Insurance Institute of Canada The professional educational arm of the industry. www.insuranceinstitute.ca Risk & Insurance Management Society Inc. Dedicated to advancing the practice of effective risk management. www.rims.org
CLAIMS ADJUSTING FIRMS ClaimsPro Inc. Committed to providing leading-edge claims management services. www.scm.ca Crawford & Company (Canada) Inc. Enhancing the customer experience, every day. www.crawfordandcompany.com
PCA Adjusters Limited Adjusting to Meet your needs™ www.pca-adj.com
GRAPHIC COMMUNICATIONS Quelmec Loss Adjusters Identifying, Investigating, Resolving... for over a quarter century! www.quelmec.ca
Cameron & Associates Insurance Consultants Ltd. Insurance & Risk Management Consultants. www.cameronassociates.com Keal Technologies Complete technology solutions for insurance brokers. www.keal.com
CONSTRUCTION CONSULTANTS MKA Canada, Inc. Providing creative solutions to the Construction, Legal and Insurance Industries. www.mkainc.ca
DAMAGE COST CONSULTANTS SPECS Ltd. (Specialized Property Evaluation Control Services) Providing Innovative Solutions to Control Property Claim Costs www.specs.ca
EMPLOYMENT ONLINE I-HIRE.CA Canada's Insurance Career Destination. www.i-hire.ca
Cunningham Lindsey International independent claims services. www.cunninghamlindsey.com
ENGINEERING SERVICES
McLarens Canada International Loss Adjusters and Surveyors. www.mclarens.ca
60
Canadian Underwriter April 2012
Informco Inc. Integrated Graphic Communications Specialists. www.informco.com
INSURANCE SOFTWARE APPLICATIONS Kanetix Ltd. - SAAS Division We provide corporate clients with fast & reliable insurance quoting systems, web services, web systems and hosting. www.kanetix.ca/about_dev_services
INSURANCE COMPANIES CONSULTING FIRMS
CRU Adjusters Calm in the face of a storm. www.cruadjusters.com
Kernaghan Adjusters Doing What Is Right®. www.kernaghan.com
complex engineering incidents. www.waltersforensic.com
Giffin Koerth Forensic Engineering and Science Investigate Understand Communicate www.giffinkoerth.com Rochon Engineering Inc. Forensic Consulting Engineers & Code Consultants. www.rochons.com Walters Forensic Engineering Inc. Providing scientific answers to
Aviva Canada Inc. Home Auto and Business Assurance. www.avivacanada.com Catlin Canada Underwriting Ambition. www.catlincanada.com Chartis Insurance Company of Canada Your world, insured. www.chartisinsurance.com FM Global The leader in property loss prevention. www.fmglobal.com Grain Insurance and Guarantee Company Commercial Lines Underwriters www.graininsurance.com RSA Leading car, home and business insurer. www.rsagroup.ca Sovereign General Insurance Company of Canada Since 1953 www.sovereigngeneral.com The Guarantee Company of North America “Specialized insurance products...professional service” www.gcna.com
Keal Technologies Complete technology solutions for insurance brokers. www.keal.com
REINSURANCE Guy Carpenter & Company The world’s leading reinsurance intermediary. www.guycarp.com Munich Reinsurance Company of Canada Complete reinsurance coverage from Canada’s largest reinsurer. www.mroc.com Swiss Reinsurance Company Canada The leading P&C reinsurer in Canada. www.swissre.com Transatlantic Reinsurance Company For all your reinsurance needs. www.transre.com
RESTORATION SERVICES Winmar Property Restoration Specialists Coming Through For You! www.winmar.on.ca
RISK MANAGEMENT
Wawanesa Insurance Earning your trust since 1896. www.wawanesa.com
The ARC Group Canada Inc. Your Partner in Insurance Law and Risk Management. www.thearcgroup.ca
INSURANCE LAW
SPECIALTY INSURANCE
The ARC Group Canada Inc. Your Partner in Insurance Law & Risk Management. www.thearcgroup.ca
William J. Sutton & Co. Ltd. Insuring Special Risks since 1978 www.wjsutton.com
Auto Law (Apr12)_DG_v3
4/8/12
11:24 AM
Page 30
An accident victim has one injury in a group of injuries that doesn’t count as “minor.” In this instance, are you out of the Minor Injury Guideline (MIG) for all of the injuries, or are you in the MIG for some and out for the ones that by themselves are not MIG injuries?
sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and includes any clinically associated sequelae to such an injury.” This definition clearly refers to a grouping or class of impairments, Firestone says. For example, if one or more of a specific listed group falls within it, it is a minor injury. “The group together is a minor injury,” he said. The $3,500 cap on auto insurance payments for minor injuries applies if the impairment, as defined in the minor injury definition, is “predominantly” a minor injury, Firestone said. “It’s a very confusing section,” he said. “If a person has four impairments that fall within the minor injury definition, but one that clearly doesn’t — say a serious fracture with hardware and scarring — do you count the number of injuries? Or do you look at which single impairment is the most restrictive and is that the ‘predominant’ injury?” Firestone then outlined the following scenario: an accident victim has one injury in a group of injuries that doesn’t count as “minor.” In this instance, “are you out [of the MIG] for all of the injuries, like the case in tort Meyer and Bright, which clearly held that if you have one injury that crosses the threshold, you’re out for all injuries, even though they themselves are not threshold crossing injuries?” Firestone asked. “Or are you in MIG for some and out for the ones that by themselves are not MIG injuries?”
Firestone believes insurers’ counsel have adopted the latter approach in many of his files. And this approach is “dead wrong,” he says. Adds Dale Orlando, a plaintiffs’ personal injury lawyer with McLeish Orlando LLP: “How can you argue that the other injuries would be limited to the $3,500 if you’re still dealing with ‘one accident’?” Insurers’ lawyer Eric Grossman of Zarek Taylor Grossman Hanrahan LLP suggested the director of arbitrations at the Financial Services Commission of Ontario (FSCO) should state a case to the Ontario Divisional Court before a three-judge panel and get the court’s guidance on how we should be dealing with the MIG and the definition of incurred. Plaintiff and defence lawyers agreed the one-year mediation backlog at FSCO was unacceptable, but disagreed on possible solutions. Orlando suggested looking at both section 280(3) of the Insurance Act and Rule 13 of the Dispute Resolution Practice Code. The Rule provides that mediation must be concluded within 60 days of filing the application for mediation. He said standard practice is that FSCO sends counsel a form and the mediation is adjourned on consent, whether counsel responds to the form or not. If counsel doesn’t agree to an adjournment of the mediation, “you can take the position that the mediation has failed if it hasn’t been conducted within 60 days and then simply file your Statement of Claim and let the judge decide whether
or not you needed to wait the additional 10 months to have your mediation heard,” Orlando said. “I personally think that the FSCO mediation process is dead, thank God,” said seminar co-chair and plaintiffs’ personal injury lawyer Roger Oatley of Oatley Vigmond LLP. It was one of the worst “failures that’s screwed up insurers and insureds alike and the government and FSCO did nothing about it despite us pleading with them,” Oatley said. “And now that there’s this 60-day process pretty much accepted, we just issue a Statement of Claim in the Superior Court on an issue or you can arbitrate if you want. But we don’t arbitrate anything in our office.” Grossman said insurers’ lawyers are governed by their clients’ instructions on this issue. He did not agree the approach proposed by Orlando and Oatley is universally accepted. The Insurance Act provides that mediation is a mandatory step to be taken, Grossman said. It’s within the insured’s rights to seek a mandatory order if they want to get a mediation happening, compelling FSCO to appoint a mediator within the time frames, although those remedies haven’t been widely pursued, Grossman said. “There are cases when you actually put the parties together, they can get the issues resolved,” Grossman said. Oatley agreed, and added, “Justice delayed is justice denied.” Who says that plaintiff and defence lawyers can’t agree on anything?
April 2012 Canadian Underwriter
61
Letter (Apr12)_DG
4/8/12
11:29 AM
Page 28
Creating Confusion around Kusnierz Letter to the Editor
An author writes to Canadian Underwriter outlining how editorial revisions resulted in inaccuracies and omissions in his article about Kusnierz. I have read the article published under my byline in Canadian Underwriter regarding the Kusnierz Ontario Court of Appeal decision. (Neil P. Wheeler, ‘Clarifying Catastrophe,’ February 2012). I was pleased to provide comment regarding this important case. I note that you made a number of edits to the article I submitted. While I appreciate your intention was undoubtedly to assist your readers, there are now a few inaccuracies and omissions in the published article that I wish to bring to your attention. I have outlined them below. First, the subheading under the article's title refers to “a catastrophic injury.”This should read “a catastrophic impairment.” Of the two terms, the latter is the relevant defined legal term in Ontario's motor vehicle legislation. Second, in the article's published form, some readers may find it difficult to understand what catastrophic impairment means and why it is important. In the article I submitted, I included two paragraphs under a section called ‘Back-
62 Canadian Underwriter April 2012
ground’ that explained the meaning of catastrophic impairment and why it is important. I also included the two relevant definitions of catastrophic impairment.Those paragraphs were not included in the published version of the article. Regarding the meaning and importance of catastrophic impairment, the following comment from my original article may assist: “In Ontario, an injured person’s entitlement to apply for statutory accident benefits (often called “nofault” benefits) is greatly expanded if he or she is able to satisfy at least one of several legislated definitions of catastrophic impairment. In tort lawsuits arising from car accidents occurring between Nov. 1, 1996 and Sept. 30, 2003, an injured person must establish a catastrophic impairment to recover health care expenses. While a catastrophically impaired person must still prove entitlement to benefits or expenses, the determination of catastrophic impairment dramatically affects that person's potential entitlement. It also frequently affects the extent to which an injured person regains pre-accident functioning and quality of life.” Regarding the definitions of catastrophic impairment, the definition initially referred to in the second paragraph of the first page of the published article — the published version uses the short form ‘55% per cent definition’ — is as follows: “an impairment or combination of
impairments that, in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55% or more impairment of the whole person.” The second definition initially mentioned in the second paragraph of the first page of the published article, using the short form “mental/behavioural definition,” refers to an impairment that, in accordance with the Guides , “results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder.” Third, in the fourth paragraph on the first page, the phrase “the province's insurance regulator,” used to describe the Financial Services Commission of Ontario (FSCO), was inserted in the published version. A preferable description would be “the province's accident benefits regulator.”The editor also inserted text in this paragraph indicating that FSCO created an expert panel in December 2010. My original article did not address how or when the panel was created, and stated only that the panel had been directed by FSCO to consider the definitions of catastrophic impairment, and that the panel had issued its report in April 2011. Fourth, in the fourth full paragraph on the second page, Mr. Desbiens’ first name was inserted in the final version. His first name should read “Phillipe.” Fifth, in the first full paragraph in the third column on the second page, when describing the relevant text, the phrase “American Medical Association's…” should not be italicized. The title of the text is Guides to the Evaluation of Permanent Impairment, and only the title should be italicized. Also, a phrase was added in the published version indicating that this text was “used to define impairments under SABs.” More accurately, the text is used to consider the 55% and mental/behavioural definitions of catastrophic impairment. I trust that the above will assist your readers. Thank you. Neil. P Wheeler, Lerners LLP (Toronto).
APOLOGY Canadian Underwriter did in fact make the editorial amendments as indicated in the author’s letter. Canadian Underwriter wishes to make it clear the responsibility for the errors and omissions appearing in the published version of the article under Neil P. Wheeler’s byline lies with the magazine’s editor and not with the author.We sincerely apologize to Neil Wheeler for introducing these editorial inaccuracies.We regret that they may have contributed to misunderstandings about the subject matter, rather than assisting our readers, as was our intent.
BROKERS – looking for markets for your specialty, niche and non-standard risks? Find them in the Insurance Marketer! www.insurancemarketer.com
Published annually in July by Canadian Underwriter magazine, the extremely popular Insurance Marketer is used daily by brokers across Canada. Both in-print and online at InsuranceMarketer.com, the Insurance Marketer is The Source to assist you in finding a market for even the most unique risk!
MARKETS – Your 2012 edition renewal listing forms will be sent soon. For new company listings email: cathy@canadianunderwriter.ca or call 1-800-268-7742 Ext. 6842
We’ve got you covered in the…
Published by:
April 2012 Canadian Underwriter
63
M&V (Apr12)_DG
4/8/12
11:31 AM
Page 60
MOVES & VIEWS
UPCOMING EVENTS: FOR A COMPLETE LIST VISIT
www.canadianunderwriter.ca
AND CLICK ‘MY EVENTS CALENDAR” ON THE HOME PAGE
1
ACE Canada, the Canadian-based operating division of the ACE Group, has appointed Andrew Lawrence [1] as assistant vice president of its commercial risk segment. In this newly created role, Lawrence will be responsible for managing ACE Canada’s relationships in the middle market sector. Lawrence will report to Steven Lucas, vice president of marketing-national accounts. Lawrence previously served as vice president and client executive for a Canadian brokerage firm. He holds a Bachelor of Arts Honours degree in Applied Economics from Queen’s University, a CIP designation, and is currently working towards a FCIP designation.
2
Risk inspection company SCM Risk Management Services (RMS) has completed its acquisition of Syntech Associates, an independent risk inspection company based out of Calgary, Alberta. Syntech Associates has been delivering residential inspections to Western Canadian clients for more than 25 years. The addition of Syntech’s professionals enhances RMS’s presence in British Columbia, Alberta, Saskatchewan and Manitoba,
64
Canadian Underwriter April 2012
RMS says in a press release. As part of RMS, Syntech employees will receive the support of RMS’s national and corporate resources, as well as opportunities for professional development within RMS’s commercial inspections, Fire Underwriters Survey and post loss divisions. Syntech Associates co-founder Cam Schultz will join RMS as a leader for the Western region.
3
Burns & Wilcox Canada is opening a new office in St. John’s, Newfoundland, as the first step in the company’s plans to build a strong presence in Atlantic Canada. Burns & Wilcox Canada offers more than 300 products to the Canadian brokerage community. It was recently created through the acquisition of the Chesterfield Group. Steve McQueen [3a] will lead the St. John’s office. He joins Burns & Wilcox Canada with more than 17 years of experience in the Atlantic Canada broker community. McQueen will oversee operations for all of Atlantic Canada and is responsible for growing and building the business in the Atlantic region from the regional office headquarters in St. John’s. Donna Payne [3b] also joins the St. John’s office as an underwriter. The St.
1 John’s office is located at 40 Commonwealth Ave., Suites 119 & 120, Mount Pearl, NL, A1N 1W6.
4
CEP Forensic Engineering Inc. has formed an alliance with hydrocarbon fuel expert J.A. Roberts & Associates, based in Oshawa, Ontario. In this strategic alliance, the companies will share resources and expertise to expand services offered at Canada’s “one-stop-shop” of forensic engineering services. “In addition to our traditional services, we are proud to announce our newest field of expertise in fuel gas fire and explosion accidents and regulatory support with a specific focus on propane, natural gas and fuel oil which will be headed by Jim Roberts,” said Jean-François Joubert, president and CEO of CEP Forensic Engineering Inc. Roberts, president of J.A. Roberts & Associates, has more than 40
3a years of professional experience in the energy production industry. He has served as a government inspector and investigator in the hydrocarbon fuels sector.
5
Westland Insurance (AB) Inc. and Alpine Insurance & Financial Inc. have merged and will operate under the Alpine name. Alpine has five offices, located in Canmore, Lethbridge, Red Deer, Edmonton and Calgary. Westland’s office in Calgary will become the new head office for the new entity. Cam Clay and Cathy Clay started Westland in 2004. Ken Hughes and Denise Hughes started Alpine Insurance a decade ago. Alpine Insurance & Financial has a sales volume of more than $35 million in personal and commercial lines insurance. It’s ranked as one of Alberta’s 10-largest insurance brokerages
M&V (Apr12)_DG
4/8/12
11:31 AM
Page 61
MOVES & VIEWS
3b
6
Paul Davis Systems Canada, Ltd. (PDSC) has announced the appointment of Emmanuel Robitaille as business development director of the company’s Quebec region. In his role, Robitaille will be responsible for new business initiatives in the insurance and commercial-corporate market sectors, as well as overseeing marketing and account management at the regional level. He has more than 20 years of experience in the areas of business development, business relations and business management and administration. As well, he has experience with construction and risk management.
7
SCM Risk Management Services (RMS) has appointed Colin Smith to the position of senior vice president of operations, information and analytics. He has
7 more than 18 years of experience in business planning, execution, operations and information technology in continuously progressive management positions. Most recently, he was the senior strategic business/technology leader as the CIO at The Economical Insurance Group. During his career, he has held the positions of CEO, chief operating officer, and chief information officer at several insurance related corporations, integrating and managing businesses that served the industry.
8
Marsh Canada, in collaboration with Guy Carpenter and Northbridge General Insurance Corporation, is launching a Whole Farm Cost of Production Insurance solution for crop and livestock producers called AGRI-PLUS. AGRI-PLUS protects producers from insured events that might cause their annual revenues to fall below their individual historic cost of production levels. The insurance policy is triggered
when a producer’s annual revenue falls below a predetermined level, based on the producer’s tax information. It is available to producers in Manitoba, Saskatchewan, and Alberta. The program provides additional protection over and above the various private and public sector insurance programs already available. It addresses the negative effects that drought, excess moisture and high interest rates can have on a producer’s cash flow. Cost of production expenses can range from commodity purchases and veterinary fees to machinery and freight costs.
9
Brokers looking to measure their performance and growth against their peers will soon have a benchmark. Applied Systems recently announced a survey intended to identify common brokerage attributes that create efficient, effective and sustainable business operations. The insurance software company said survey findings will be shared first with participants and then with the broader insurance industry. “Until now, there hasn’t been a way for brokers to measure the effectiveness of their operations and use of technology relatively to their sustainable growth and profitability,” said Doug Johnston, vice president of partner relations and product innova-
tion for Applied Systems. “This study supports (our) mission to continuously improve the business of insurance.”
10
Elliott Special Risks LP (ESR), a Markel International company, has appointed Andre Paradis as vice president and branch manager of the Montreal office. Paradis has more than 25 years of experience in the insurance industry. He began his career in 1985 at Travelers working both in personal and commercial lines. From 1989-2002, he held various senior roles at Zurich, including key management roles in Quebec and the eastern region. He joined Markel Insurance Company of Canada (now Northbridge) in 2002 as branch manager and was responsible for all of eastern Canada. ESR is a specialist insurer with offices in Montreal, Toronto, Calgary and Vancouver. It was purchased in 2009 by Markel International Insurance Company Limited (MIICL), a Londonbased specialty property and casualty insurer.
Follow @CdnUnderwriter on
http://twitter.com/CdnUnderwriter
April 2012 Canadian Underwriter
65
Gallery (Apr12)_DG
4/8/12
11:42 AM
GALLERY
The Toronto Insurance Women's Association (TIWA) Wine and Cheese Reception was held at The Hyatt Regency in Toronto on Feb 16. More than 1,200 guests attended the association's annual signature event.
66
Canadian Underwriter April 2012
Page 64
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 65
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
April 2012 Canadian Underwriter
67
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 66
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
WINMARâ&#x20AC;&#x2122;s Burlington/ Hamilton, Markham/ Toronto East, Newmarket, Oakville/Mississauga and Guelph/Orangeville locations graciously hosted nearly 100 industry guests on Feb. 23 to celebrate the closing of the holiday season at Real Sports Bar & Grill. The evening of food, drink and networking occurred while watching the hometown Toronto Maple Leafs take on the Philadelphia Flyers. Donations were collected in support of the Starlight Childrenâ&#x20AC;&#x2122;s Foundation.
68
Canadian Underwriter April 2012
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 67
APPOINTMENT
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
McCauge Borlack LLP hosted its sixth annual ski day event at the beautiful Alpine Ski Club in Collingwood, Ontario. Raffle proceeds were donated to Darearts, a charity devoted to empowering “at risk” children through access to the arts.
Andrew Lawrence ACE Canada,the Canadian-based operating division of the ACE Group has announced the appointment of Andrew Lawrence as Assistant Vice President, Commercial Risk Segment. In this newly created role, Mr. Lawrence will be responsible for managing ACE Canada’s relationships in the middle market sector. Mr. Lawrence will report to Steven Lucas, Vice President, Marketing National Accounts. With approximately 10 years of experience in the financial services sector and a significant concentration in the insurance industry, Mr. Lawrence previously served as vice president and client executive for a leading Canadian brokerage firm. Mr. Lawrence holds a Bachelor of Arts Honours degree in Applied Economics from Queen’s University; a CIP designation; and is currently working towards a FCIP designation. ACE Canada® refers to ACE INA Insurance and ACE INA Life Insurance, subsidiaries of the ACE Group, and is rated AA- (Very Strong) by Standard & Poor’s and A+ (Stable) by A.M. Best Company. ACE Canada, through its underwriting companies, provides insurance products and services throughout Canada. Additional information on ACE Canada and its products and services can be found at www. ace-ina-canada.com. The ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the S&P 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acegroup.com.
April 2012 Canadian Underwriter
69
Gallery (Apr12)_DG
4/9/12
1:10 PM
Page 68
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
AGRAQ (Quebec's RIMS Chapter) held a halfday seminar on Feb. 16 at St-James Club in Montreal. More than 60 risk managers and industry partners heard presentations about natural catastrophes and their effects on supply chain management. Mayor Gerard Dutil of Saint-Paul-del’Île-aux-Noix spoke candidly about the hardships his community suffered following the flooding of the Richelieu River. Other
ADVERTISERS’ INDEX ACE INA Insurance
7, 35, 69
Arc Group Canada
33
Aviva Canada Inc.
15
Burns & Wilcox Canada Ltd. C.A.I.W.
5 59
CNA Canada Compu-Quote, Inc. Cunningham Lindsey Canada Elliott Special Risks The Guarantee Company of North America Insurance Institute of Canada
21 75 (IBC) 9 37 13 39, 41, 54
Insurance Internet Directory
60
Insurance Marketer
63
Keal Technology
23
Northbridge Insurance
19
PolicyWorks
17
RIMS Canada Conference - Saskatoon
49
Risk Management Services – An SCM Company RSA – Royal & Sun Alliance Insurance Company of Canada
25 2 (IFC)
Sovereign General Insurance Company
27
Travelers
31
Wawanesa Insurance WICC WINMAR
70
76 43, 51 45
Canadian Underwriter April 2012
speakers included Gaétan Deaudelin of Environment Canada, Frank Cappozolo of Zurich Canada, Jacques Mathieu of FM Global and Michel Rodrigue of Cirque du Soleil. Supply chain risk is recognized as a major threat to business continuity. This seminar reinforced the need for business and community-based continuity planning to avoid undue hardships presented by natural catastrophes.
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 69
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
SUM Insurance (Strategic Underwriting Managers Inc.) held its One Year Anniversary Cocktail Party on Mar 1. Belly dancers regaled guests at Torontoâ&#x20AC;&#x2122;s Sultans Tent restaurant, where SUM management handed out tokens of appreciation to key suppliers and customers. Approximately 100 key suppliers, insurers and reinsurers, and broker customers attended.
April 2012 Canadian Underwriter
71
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 70
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
AGRAQ (Quebec's RIMS Chapter) held a Luncheon Seminar on Mar. 15 at the St-James Club in Montreal. Daniel Desjardins, senior director of global risk management and insurance for Bombardier, gave a presentation on the evolution of risk management within his company over the past 20 years. More than 70 risk managers and industry partners from Toronto and Montreal attended the sold-out event.
72
Canadian Underwriter April 2012
S
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 71
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
More than 400 attendees partied with a purpose at an all-industry 3rd Annual St. Patrick's Day Charity Social on Mar. 15 at Grace O'Malley's Irish Pub in Toronto. The event's sponsors were SCM Insurance Services, ClaimsPro, RMS, Forensic Investigations Canada, Riverfront Medical Services and Medisys IMA. A raffle raised more than $5,000 for The Sunshine Foundation and Juvenile Diabetes Research Foundation.
April 2012 Canadian Underwriter
73
Gallery (Apr12)_DG
4/8/12
11:42 AM
Page 72
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The fifth annual St Baldrick's event was held on Mar. 15 at the Duke of Westminster Pub in Toronto. St Baldrick's started in the United States in 2000 when three reinsurance executives turned their annual St. Patrick's Day party into a fundraiser for Childhood Cancer. Participants raise money by shaving their heads in solidarity with kids with cancer. In Canada, St Baldrick's has partnered with Childhood Cancer Canada so that all money raised stays in Canada. Proceeds go towards funding the most promising research projects for Childhood Cancer. Twelve people volunteered to have their heads shaved this year. Participating P&C teams included Beach & Associates; Creechurch International; Guy Carp for Kids; John Kartechner; Liberty International Underwriters; and Marsh. The ultimate figure has yet to be finalized, but the teamâ&#x20AC;&#x2122;s efforts raised more than $69,600.
74
Canadian Underwriter April 2012
CQ Canadian Underwriter Feb Ad copy.pdf
1
12-01-20
10:14 AM
Energize your sales C
M
Y
CM
MY
CY
CMY
K
Identify • Track • Sell New Sales Focused Broker tool
1- 800 -265- 0808
Oilfield Select Insurance Policy A package to help you grow your business.
Oilfield Select Insurance Policy highlights: •D esigned specifically for the oil and gas industry • Limited Pollution Liability included in base liability coverage package • F ull suite of commercial coverages also available.
www.wawanesa.com Auto – Home – Business – Farm – Life and Group