Canadian Underwriter August 2012

Page 1

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 UG U S T 2 0 1 2 A Business Information Group Publication #40069240

Tracking Fracking BY ANGELA STELMAKOWICH

Olympic Perils BY ANDREW DUXBURY

“But For” Causation BY BELINDA BAIN AND JULIA VIZZACCARO


pg2,3 New FM Global Ads

3/7/11

4:35 PM

Page 53

Š2011 FM Global. All Rights Reserved.

UNDERSTANDING HOW FM GLOBAL IS DIFFERENT IS AKIN TO

To learn more, visit fmglobal.com/insuranceevolved/light


pg2,3 New FM Global Ads

3/7/11

4:35 PM

Page 54

SEEING THE

If you remember just one thing about FM Global, here it is: FM Global believes that most loss is preventable. That’s why we link underwriting to loss prevention engineering. A proactive approach that helps us identify, minimize and assume risk before disaster strikes — and only FM Global does it. With over 1,500 engineers around the world and a $100 million research campus, FM Global takes the time to learn about risk. So, our clients experience smaller and less frequent losses, ensuring business continuity. Maybe that confidence is why our client list includes one third of the top Fortune 1000. Underwriting through loss prevention engineering. Now, that’s insurance evolved.


Contents (Aug12)_DG_AS.qxp

8/15/12

9:21 AM

Page 3

VOL. 79, NO. 8, AUGUST 2012 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP

www.canadianunderwriter.ca

COVER STORY

Fracking

32 FEATURES

14

46

50 Industry Recruitment

Insurers and governments are using public-private partnerships (P3s) as a way to insure municipal infrastructure.

The P&C insurance industry, expected to lose a number of people through retirement in the future, can draw on an abundance of available talent in business insurance programs across the country.

Insuring Mines

Open Concept

26 Strategic Risk

Several challenges for mining insurers relate to the huge size, scope and equipment of the mining projects they cover.

Tearing down cubicle walls opens up office discussions about risks, promoting a multi-disciplinary approach to underwriting.

BY MARK McADAMS

BY CHRIS GUDGEON

Survey results show a gap between what the executives of companies want from their risk managers (more involvement in business strategy planning) and what risk managers believe is expected of them.

54 Approximate Cause

Staging the Olympics is a big business, with billions of dollars worth of exposure, and insurers must guard against myriad perils that could result in the cancellation of some or all of the Games.

The Supreme Court of Canada reinforces the notion that the “but for” test remains the test for proof of causation in negligence — and exceptions will be few.

BY ANDREW DUXBURY

JULIA VIZZACCARO

4 Canadian Underwriter August 2012

BY BELINDA BAIN AND

BY ERIC GAGNE

58 Online Brokerages The development of online brokerages shows how brokers are adapting to evolving consumer purchasing habits. BY DAVID GAMBRILL

BY ALAN GARNER

42 New Cat Definition Olympic-sized Risk

BY ANGELA STELMAKOWICH

18 P3s and Infrastructure

BY DAVID GRIGG AND CARL SPENSIERI

22

Fracking is hardly new, but the decades-old process to unlock energy reserves trapped in shale has found new life. Increased use of fracking has fuelled concern over possible risks, centred in the environmental realm, and identified a need for coverage to extend beyond sudden and accidental.

A report to the Ontario finance ministry suggests that evidence-based health care has taken centre stage in the province’s auto insurance system. BY DR. PIERRE CÔTÉ AND WILLIE HANDLER

63 CSIO CSIO is planning a proactive service delivery that includes enhanced communication with members and a strategic move beyond just standards. BY CATHERINE SMOLA


XL Group Insurance

From raw to refined, we’re with you If you’re unearthing raw materials, harnessing natural resources or dealing in precious gems, we have the global reach to cover you around the world. Property Casualty Marine Cargo Energy Environmental liability Fine Art & Specie Professional Indemnity Marine Risk Engineering XL GAPS Loss Prevention Services We cover all kinds of risks for all kinds of businesses – from the largest corporations to the smaller specialists. And with our mix of underwriting expertise, risk engineering and quick, fair claims handling, we’re here to support you every step of the way. We’re the perfect size. Big enough to protect you and small enough to stay flexible. Discover how we can help you to keep your business moving forward. xlgroup.com/insurance

MAKE YOUR WORLD GO and MAKE YOUR WORLD GO are trademarks of XL Group plc companies. XL Group is the global brand used by XL Group plc’s insurance subsidiaries. In Canada, coverages are underwritten by

XL Insurance Company Limited—Canadian Branch. Coverages not available in all jurisdictions.

CA_UW_rawto refined.indd 1

7/18/2012 4:48:16 PM


Contents (Aug12)_DG_AS.qxp

8/15/12

9:21 AM

Page 4

VOL. 79, NO. 8, AUGUST 2012

PROFILE

12 Profile RIMS president Deborah M. Luthi, once an art teacher, enjoys the creativity associated with risk management. BY DAVID GAMBRILL

Senior Editor David Gambrill david@canadianunderwriter.ca (416) 510-6796

Account Manager Elliot Ford eford@canadianunderwriter.ca (416) 510-5114

Editor Angela Stelmakowich astelmakowich@canadianunderwriter.ca (416) 510-6793

Art Director Gerald Heydens

Senior Publisher Steve Wilson steve@canadianunderwriter.ca (416) 510-6800 Associate Publisher Paul Aquino paul@canadianunderwriter.ca (416) 510-6788 Account Manager Michael Wells michael@canadianunderwriter.ca (416) 510-5122

SPECIAL FOCUS

8

Account Manager Christine Giovis christine@canadianunderwriter.ca (416) 510-5114

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

Editorial

10 Marketplace

Art Consultation Sascha Hass

Connect with Canadian Underwriter

66 Moves & Views 68 Gallery

twitter.com/CdnUnderwriter

facebook.com/CanadianUnderwriter

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. Š 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 Single Copies $10 plus applicable taxes Elsewhere 1 Year $73.95 Annual Statistical Issue (included with above subscription) or separately $38 plus applicable taxes Subscription Inquiries/Customer Service

GST Registration number 890939689RT0001 Second Class Mail Registration Number: 08840 Publications Mail Agreement #40069240 Return undeliverable Canadian addresses to: Circulation Dept. Canadian Underwriter 80 Valleybrook Drive, Toronto, Ontario M3B 2S9 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

6 Canadian Underwriter August 2012


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 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 Jun2011.indd 1

12-08-02 8:46 AM


Editorial (Aug12)_DG_AS.qxp

8/15/12

9:30 AM

Page 8

EDITORIAL

Insurance Mini-Cycles

It’s important not to overreact to these crisisand-response “mini-cycles,” which seem to be happening every two or three years. David Gambrill, Editor david@canadianunderwriter.ca

8

Canadian Underwriter August 2012

The Canadian property and casualty insurance industry works in cycles, as everyone knows, but the nature of the market cycles is quite amorphous, making those who can divine its mercurial ways very successful in business. Over the past seven years, Canadian P&C has gone through a number of what I would call crisis-and-response cycles, or “mini-cycles.” These are characterized by brief market contractions, followed by a response, followed by brief periods of recovery. For example, roughly seven years ago, in 2005, I came to Canadian Underwriter just after Hurricane Katrina swept through New Orleans, causing between $40 billion and $60 billion in damage. Hurricanes Wilma and Rita also pounded the United States, prompting dire predictions of a hard market, including reduced capacity and higher prices. Insurers responded by bringing new capacity to the market. Ten new reinsurers reportedly brought $7.5 billion more to the marketplace. Insurance-linked securities such as catastrophe bonds and other market-oriented instruments — reinsurance sidecars, as one example — came to the fore. And pricing firmed up. As luck would have it, the disasters abated in 2006-07. The decrease in claims globally, coupled with decent investment rates and the market response to Katrina, was enough to see a shift to a softer market. That is, until

the next crisis happened. The global financial meltdown in 2008-09, caused by investment bankers exuberantly embracing risky credit derivatives, essentially dried up available credit worldwide. In response, politicians lowered interest rates, regulators encouraged low-risk investments like bonds, and insurers saw investment money shrink along with their credit. Insurers responded by returning to the mantra of “underwriting discipline.” In other words, pricing the risk according to its potential damage costs and not as a way to steal business from competitors. Just when a global economic recovery (hesitantly) began to emerge, the next industry crisis hit in 2011 in the form of global catastrophes. Earthquakes in Japan and New Zealand, epic flooding in Thailand, a near-record year for tornado claims in the United States and a wildfire that swept through the Town of Slave Lake in Canada all conspired to eat up a lot of global and local capacity. Which brings us to the next response. Thus far, global catastrophes have subsided in 2012, as they did in 2006 following Katrina, Wilma and Rita. Only this time, insurers do not have the investment returns they did in 2006. The mantra of “underwriting discipline” suggests some price increases might be in line, particularly in commercial and personal property homeowner lines. But models today are

different than the modelling of yesteryear, and more sophisticated analytics today have led to more targeted pricing responses. Also, companies are starting to consolidate and get bigger, as predicted, which is certainly propping up their balance sheets. So it’s important not to overreact to these crisis-andresponse cycles, which seem to be happening every two or three years. These are “mini-cycles” in the sense that they aren’t changing the way business is done over the long term. All of these events are happening against the backdrop of a firm financial grounding. No Canadian insurer has gone bankrupt as a result of any of these events, and Canadian insurers appear to have a good working relationship with a very prudent federal solvency regulator. *** This is my last editorial for Canadian Underwriter, as I move on to pursue another opportunity. But as we all know, one never really “moves on” from the insurance industry. It is everywhere and affects us all, wherever we happen to live or work. Thank you, all of you, for allowing me a glimpse into the inner workings of this industry. It has been an honour to work here at Canadian Underwriter, which has a tremendous, hard-working and dedicated staff, and I wish all of you the best, and a happy and prosperous future.


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 (Aug12)_DG_AS.qxp

8/15/12

9:33 AM

Page 10

MARKETPLACE

Sign-up to receive Canadian Underwriter’s free Insurance Headline News Email Alert: http://bit.ly/cuenews

Regulation OSFI PROPOSES TO CHANGE BASIS FOR CALCULATING MINIMUM ASSESSMENTS Canada’s solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), is proposing to change the basis on which it calculates minimum and non-minimum assessments. OSFI has suggested using “required capital” as a proxy for the amount of time and resources it devotes to assessing insurers instead of “net premiums.” The regulator is also planning to raise its minimum assessment level from $10,000 to $15,000, which OSFI estimates would capture an additional 15 property and casualty insurers on top of the 79 currently assessed at the $10,000 minimum. The full consultation paper can be found at: http://www.osfi-bsif.gc.ca/ osfi/index_e.aspx?Article ID=5012

Claims CROP HAIL INSURANCE CLAIMS ON THE RISE IN THE PRAIRIES Crop hail claims are off to a brisk start in Saskatchewan based on the latest figures from the Canadian Crop Hail Association, published in the July 6, 2012 edition of the Hail Report.

10 Canadian Underwriter August 2012

Companies providing hail insurance to farmers reported about 2,200 claims filed by the middle of the week of July 2-6. “This is at least double the typical number for this date,” the Hail Report notes. “Claims continue to pour in from storms on July 1-3, so the number will continue to grow.” The Hail Report notes a significant number of hail claims in Alberta as well. “Although the claim total of 660 is not nearly as high as Saskatchewan, there have already been many hail events in Alberta, particularly in southern regions. Many of the early claims only had canola with enough damage for payouts.” Hail claims are also escalating quickly in Manitoba, the Hail Report notes. As of early July, the total number of claims approached 500.

HACKERS STEP UP THEIR ATTACKS AGAINST SMALL BUSINESSES Hackers are increasing their attacks on smaller enterprises with fewer than 250 employees, Symantec Corp. (Nasdaq: SYMC) announced in its June 2012 Symantec Intelligence Report (ISTR). The report shows that 36% of all targeted attacks (58 per day) during the last six months were directed at businesses with 250 or fewer employees. As noted in Symantec’s recent ISTR, this figure doubled from18%

at the end of December 2011. “During the first half of [2012], the total number of daily targeted attacks continued to increase at a minimum rate of 24%, with an average of 151 targeted attacks being blocked each day during May and June.” Large enterprises that consist of more than 2,500 employees are still receiving the greatest number of attacks, with an average of 69 being blocked daily.

Canadian Market ONTARIO, QUEBEC STORMS CAUSE $200 MILLION IN INSURED DAMAGES A wind and thunderstorm event that hit Ontario and Quebec in late May caused estimated insured damage of more than $200 million, notes the Insurance Bureau of Canada (IBC), citing data from Property Claim Services Canada (PCS-Canada). PCS-Canada tracks insured losses arising from catastrophic events in Canada. Data confirm thousands of claims have been filed for damage to homes, cars and businesses in the wake of a storm system that hit both Thunder Bay and Montreal over a span of four days (May 26-29, 2012). The storm unleashed torrents of water that over-

whelmed sewer systems and caused widespread flooding of streets, homes and buildings. There have been reports of flooded basements, flooded businesses and cars submerged under water.

TELEMATICS COULD GENERATE $60 BILLION IN PREMIUMS TO INSURERS GLOBALLY Telematics is expected to generate approximately $60 billion in premiums to insurers globally, notes a statement from Telematics Update, a reference centre and conference organizer that provides information about automotive telematics. Opportunities are expected to unfold once the usage-based insurance (UBI) market, which currently has more than 2 million customers, reaches its tipping point, notes the statement from Telematics Update. Despite widespread innovation in data collection, data management and devices, insurance carriers need to restructure some of their methods to truly embrace the benefits of UBI, the statement reads.

WESTERN FINANCIAL ACQUIRES B.C. YACHT Western Financial Group acquired B.C. Yacht Insurance Brokers Inc. (B.C. Yacht) in July. B.C. Yacht is headquartered in Sidney, British Columbia and is Sidney’s only specialized marine insurance


Marketplace (Aug12)_DG_AS.qxp

8/15/12

9:33 AM

Page 11

MARKETPLACE

Sign-up to receive Canadian Underwriter’s free Insurance Headline News Email Alert: http://bit.ly/cuenews

brokerage. The deal is Western Financial Group’s second acquisition on Vancouver Island this year. “We have developed specialized expertise and underwriting agreements with respect to watercraft and marine insurance, which we will now bring to Western's expanding network,” said Robert (Bob) Raymond, founder and owner of B.C. Yacht. “This allows us to continue strongly growing our business right here in Sidney, and it means we can offer our excellent products and services right across western Canada.”

21% OF ALBERTA AND B.C. HOMEOWNERS DO NOT HAVE RIGHT PROTECTION Albertan and British Columbian homeowners may not be getting the right home insurance protection, with many being offered named peril and broad-form policies in situations in which a comprehensive policy would be more appropriate. Square One Insurance Services Inc., which specializes in home insurance, talked to 2,800 residents in Alberta and B.C. over the past 10 months and found that a “shocking” 21% of them do not have the right home insurance protection. In some instances, home insurance providers are offering named perils (fire or

lightning, explosion, smoke, vandalism, theft, hail and some types of water damage) and broad-form policies

(which offer comprehensive protection on buildings and named perils protection on personal property).

Square One recommends a comprehensive policy to avoid being blindsided in the event of a claim.

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

August 2012 Canadian Underwriter

11


Profile (Aug12)_DG_AS.qxp

8/15/12

9:35 AM

Page 12

PROFILE

Creating New Approaches to Risk David Gambrill Senior Editor

Risk and Insurance Management Society (RIMS) president Deborah M. Luthi sees opportunity for creativity in risk management. Risk and Insurance Management Society (RIMS) president Deborah M. Luthi was an art teacher before she launched her longstanding risk management career, and she sees plenty of opportunity for creativity in risk management. “The thing I like about risk management is the creativity of it,” she says. “I like coming up with solutions, and the problem-solving you do to assist organizations to meet their goals. It could have been that I wasn’t supposed to be an art teacher to begin with — I was really supposed to be a risk manager.” Like an artist working on a masterpiece, Luthi sees the risk management canvas from two decidedly different perspectives. On the one hand, she sees the narrow, detailed perspective. In this picture, risk managers strive to understand and master all of the

12 Canadian Underwriter August 2012

details that make up an individual organization’s culture, structure and risk profile, with a view to determining the best possible way to protect an organization — including insurance product innovation. The other is a broad perspective, in which risk managers combine all of their knowledge to promote new, creative strategies that facilitate informed risk-taking, thereby creating value for organizations. Luthi certainly has a broad perspective on the practice of risk management, given her professional experience in each of the private, public and university sectors. As an art teacher looking to make a career move in the summer of 1979, she called the HR manager at a Fortune 500 company where she’d temped the previous summer. The HR manager of AMFAC, a diversified company that started as a sugar plantation business in Hawaii in 1849, called her back and said: “Well, we need to hire somebody with insurance expertise, but until we find that person, come and just sit at the desk in the risk management department,” he said. “My response was: ‘You have a mismanagement department?’” Luthi recalls. “And so a career was born.”

That career has spanned more than 30 years. After working for AMFAC for three and a half years, she moved on to another diversified Fortune 500 company, Natomas, that did business the fields of oil and gas drilling, shipping and real estate.

The thing I like about risk management is the creativity of it. I like problem-solving to help organizations meet their goals. Diamond Shamrock in Dallas, Texas acquired the company seven months later, offering Luthi a job in their risk management department. The catch? Luthi would have to move with her husband and son to Dallas. “I grew up in Kansas and once you’ve seen San Francisco, I don’t think you go back,” says Luthi. “So I did not accept that offer. Instead, I became the first risk manager for Sacramento Regional Transit.” This was Luthi’s first stint in public service. The transit authority was building a light rail line to supplement its bus network. After three and a half years, once the project had completed its first phase, Luthi sought a different form of challenge. She found one in academe.

Luthi joined the University of California Davis Campus as a risk manager in 1987. “The Davis Campus is the third-largest campus in the University of California system and the largest in terms of acreage,” she said. “The campus had a law school, a vet school, a school of medicine and teaching hospital, a school of engineering, a graduate school of management and about 35,000 students. If I thought working for a Fortune 500 had lots of risk, a leading research university had even more so.” The various challenges sustained Luthi for more than 21 years. After that, she got the bug to do risk management for a private enterprise once again. She moved to Matheson Inc., which offered trucking and environmental services, but the global financial crisis revealed the risk of working in private enterprise during economically challenging times. “I figured out then that the universe was really telling me that I needed to be in public service, and that’s when I became enterprise risk manager for the San Francisco Public Utilities Commission,” she says. The SFPUC provides retail drinking water and wastewater services to San Francisco, wholesale water to three Bay Area counties, including Silicon Valley, and


Profile (Aug12)_DG_AS.qxp

8/15/12

9:35 AM

Page 13

PROFILE

green hydroelectric and solar power to San Francisco’s municipal departments. Throughout her long professional career, Luthi volunteered for RIMS in a number of different capacities. Her mentor at AMFAC, Ralph Perry — whom Luthi describes as “one of the pioneers of risk management” — encouraged her to join RIMS. Luthi became a board member for the local San Francisco Golden Gate Chapter. Then she moved to Sacramento, where a local RIMS chapter didn’t exist at the time. “I thought, ‘Well, I want to start a RIMS Chapter here,’” she says. “It was kind of a challenge because at that point, Sacramento, as a state capital, was really a governmental town, so I waited a couple of years and began to make contacts with other risk managers who were with for-profits. One of those individuals posed the idea that we co-found a chapter. He was really helpful in that regard. So in 1991, we started a chapter there, the Sacramento Valley chapter.” At about that time, Luthi got a call from a colleague who was a chair of the RIMS membership and chapter services committee. Luthi joined the committee and after several years became the chair of that Society

committee. “From there, I was involved in being on the Society’s strategic planning task force and the board of directors nominating committee,” Luthi says. “One thing led to the other, then I was asked to join the board. I’ve been a member of RIMS for more than 30 years and I’ve been on the board of directors for 11 years. As someone who was not born and raised a risk manager, I can’t say enough about RIMS and how it has provided resources and networking opportunities for me.”

Now that Luthi is president of RIMS, she sees risk managers facing emerging issues as diverse and varied as her professional background. She notes a recent RIMS survey reveals the top emerging issues of concern to risk managers include: • the impact of economic stagnation on budget and earnings (top of the list, cited by 58% of respondents); • cyber risk; • regulatory preparedness; • bridging the organizational talent gap; and • failure to recognize the upside of risk. “I think the survey tells us

that the risks are all over the board and identifiable in all aspects of our business,” Luthi says. She believes that this speaks to the importance of risk managers taking a leadership role within their organizations. As an enterprise risk manager herself, Luthi encourages other risk managers to reach out to people within their organizations and to work with them to assist their businesses to first manage these risks in a holistic way. That means partnering with audit, compliance, IT security and HR departments, among others. And with this collaboration comes what the art teacher in Luthi loves — creativity. Once these internal consultants have facilitated the management of these risks, then risk managers can also partner with insurers to help drive innovation in insurance products that will address the remaining residual risk. “I think insurers are partnering with risk practitioners to get a better understanding of the risk so that [non-hazard risks] can in fact be underwritten; that an insurance product can be developed,” Luthi says. “One example is reputational risk: some carriers are now offering reputation insurance. That’s where that creativity piece is, working together to challenge ourselves and ask the question: ‘Can we create something new that hasn’t been there before?’”

August 2012 Canadian Underwriter 13


Mining (Aug12)_DG_AS

8/15/12

9:38 AM

Page 28

Mining: Big Risks, Big Rewards

Mining is a crucial component of the Canadian economy and the commercial property insurance industry plays an important role in keeping Mark McAdams this financial train on the tracks. Assistant Vice President, Canadian Prime Minister Stephen Harper unHigh-Hazard derscored the mining industry’s importance earOccupancy Specialist, lier this year during the Summit of the Americas FM Global in Cartagena, Colombia. “Resource development has vast power to change the way a nation lives,” he told the gathering. Harper noted that mining contributed $50 billion to Canada’s gross domestic product in 2011 and employs more than 300,000 Canadians. One out of every 50 jobs is associated with mining. Canada also has 19 of the world’s 100 top mining companies, two more than China and several more than any other nation. In fact, during the past two decades, minerals and metals have contributed between 2.7% and 4.5% of the nation’s GDP, notes the Mining Association of Canada. Mining produced an estimated $8.4 billion in taxes and royalties for federal, provincial

14 Canadian Underwriter August 2012

and territorial governments in 2010. With so much at stake, banks and lenders have intensified their scrutiny of the quality of insurance for mining companies — an industry that is rapidly advancing its use of sophisticated technologies, equipment and facilities to extract, process and transport minerals in mind-boggling quantities.Today, an advanced copper mine can extract hundreds of times more ore than the mines of a few decades ago. As the industry transforms, underwriters must adapt their policies and underwriting practices to reduce uncertainties and improve their portfolios.

UNIQUE CHALLENGES The challenges facing mining industry underwriters are complex, large-scale and unpredictable. A 2012 Mining Market Review released by Willis Group Holdings identified natural catastrophes, supply chain disruptions and resource nationalism as the three major risks facing mining companies. On top of that, underwriters must consider a tangle of unconventional details involving a mine’s geology, geography, equipment and processes. For example, every pit and underground mine is unique with diverse geotechnical exposures. Mine exposures can be spread

Illustration by Dave Whamond/www.threeinabox.com

Unique challenges for mining insurers relate to the huge size, complexity and equipment of the projects they cover.


A BUSINESS INSURANCE SPECIALIST THAT IS SWITCHED ON TO YOUR NEEDS

When it comes to performance and quality, you get more with an insurance company that is switched onto your needs. Whatever the business, we know what it takes to better manage and reduce risks. We find innovative solutions and support you with proactive services backed by in-depth understanding. For over 125 years, we’ve been insuring business and now we are one of the world’s leading insurers and reinsurers, operating out of 52 countries with the financial strength you can rely. For more information about our business insurance expertise, please visit www.QBECanada.com BUSINESS INSURANCE SPECIALISTS

Registered office: 199 Bay Street, Suite 2800, Commerce Court West, Toronto, Ontario, M5L 1A9, Canada. Registered in the Province of Ontario, Canada No. 002193827.

DOCKET #

287-005

CLIENT

JOB DESCRIPTION

DATE

TIME

DESIGNER

ACCOUNT REP

QBE

Canadian Underwriter Ad

July 26/12

11:00

MS

DC

SIZE

COLOUR

PRODUCTION NOTES

Full Page 8.125"w x 10.875"h + Bleed

CMYK

THE MARKETING DEPARTMENT

457 King Street London, Ontario, Canada N6B 1S8

VERSION

FNL REVISIONS

3 519.439.8080

866.439.8080

TMD.CA


Mining (Aug12)_DG_AS

8/15/12

9:38 AM

Page 30

over a vast area, raising the question of ownership and maintenance of roads, railway lines, electrical transmission lines or slurry pipelines — all of which can span hundreds of kilometres. Equipment sizes are startling: truck tires can be three metres high and grinding mills can be 12 metres in diameter. Add to that no two mining processes are exactly the same. In this environment, losses in the mining industry and to underwriters can be massive. If a pit wall in a copper mine fails, it could result in loss of life and destroy multiple pieces of equipment, such as shovels or drag lines.These machines are capable of lifting hundreds of tons of earth in one scoop, and they cost anywhere between $5 million and $175 million to replace. This is not to mention the business interruption associated with losing these machines: replacement can take one to five years and cost hundreds of millions of dollars. If an underground mine’s hoist rope fails (the cable that hauls personnel and ore from below in vertical mine shafts), time element exposures can run six months. Considering the remoteness of most mines, spare parts and equipment must be kept near the mine site in an appropriate environment. The challenges for mining underwriting are even more mercurial for companies seeking untapped resources in less industrialized, remote locations around the globe. Multinational companies face political risks such as the threat of resource nationalism. There are infrastructure issues to address — unreliable power grids, poor roads and lack of water — combined with indefinite and evolving regulations and practices that can affect production and supply chains. Lead times on replacement equipment can vary sharply, an issue that factors into obtaining replacements and restoring production after a loss. A ring gear that takes nine months to replace during the low part of the economic cycle can take 30 months on the other side of the cycle. Rectifier transformers for large electro-metallurgical smelters can take as much as two years to obtain.

16 Canadian Underwriter August 2012

OVERCOMING UNDERWRITING CHALLENGES Underwriting mining risks is not for the faint of heart, but the potential heartburn of financial loss can be soothed with effective underwriting. The success of properly underwriting this industry is tied to properly understanding and identifying the industry’s myriad complexities and exposures. With this understanding, underwriters can walk the tightrope of writing policies with realistic coverage, deductibles, pricing and capacity. Ask the right questions. Underwriters need to determine if a client is managing exposures appropriately. A policy form that clearly outlines uninsured

Underwriters must consider a tangle of unconventional details involving a mine’s geology, geography, equipment and processes. risks and property will help reduce uncertainty. For example, if a companyowned road fails, is your intent to restore the road or just the surface? Are you going to replace land that used to be under the road, or remove land that now sits on the road? A clear policy form is needed that provides a high level of contract certainty. Bring appropriate resources to the table. A client, wherever it is operating, is a better risk if the client is meeting

industry best practices. These standards are even more important if operations are located in places with less stringent regulations or enforcement. Evaluate the quality of a mine’s overall management. A sampling of items that should be part of the review process include equipment maintenance programs, operator quality and training, safety and emergency response programs, operating history, contingency plans for addressing equipment failure and supply chain disruptions. Can a company be up and running within a 15-day timeframe following the breakdown of a piece of equipment? Are contingency plans in place if a port is blocked or a product pipeline is disrupted? Is a pit wall being managed properly to assure its integrity? The quality of an insured’s management and operators heavily affects underwriting decisions. Last year’s damaging series of floods, tornadoes and earthquakes underscored the need for underwriters to avoid or minimize potential exposures within a client’s supply chain. Insurance losses from Canada’s mines weren’t as great as losses elsewhere last year, which was a particularly harsh period for underwriters. However, disasters in other parts of the world severely affected insurers. Natural disasters are inevitable, and insurers should be prepared for those losses. Understanding the impact of these scenarios is needed to adjust your terms and capacity appropriately. Consider, for example, how much floodwater found its way into a number of open pits in the last few years, and the issues related to pumping that vast quantity of potentially contaminated water back out into the rivers. Ultimately, underwriters can protect their portfolios by partnering with mining operators; combining expertise; and bringing resources to the table that provide information to help reduce risk to operations and supply chains. By applying this kind of due diligence, an underwriter suffering a loss should be able to look in the mirror afterwards and say with conviction that the insurer made the right decision to accept the risk.


7/31/12 Ad Name: AXIS Reinsurance Pub: Canadian Underwriter Insertion Date: Dimensions Bleed: 8.375 x 11.125 Trim: 8.125 x 10.875 Live: 7 x 10 Design: Chris Davey 908-508-4387

Do Not Print

AXIS offers customized insurance coverages backed by the financial strength and security of AXIS Reinsurance Company, rated “A+” (Strong) by Standard & Poor’s and “A” (Excellent) XV by A.M. Best. Our highly experienced underwriting and claims teams have a breadth and depth of knowledge that distinguishes us in the industry. You can count on us for expert underwriting, excellent service and skilled claims management. To learn more about AXIS, visit us at CRIMS Booth #71.

AXIS Reinsurance Company (Canadian Branch) 70 York Street, Suite 1010 • Toronto, ON M5J 1S9 Tel. 416.361.7200 • Fax. 416.361.7225 World-Class Insurance Solutions Property • Equipment Breakdown • Casualty • Professional Lines • Errors & Omissions • Cyber/Tech Liability Coverage is underwritten by AXIS Reinsurance Company (Canadian Branch), which is authorized and supervised by the Office of the Superintendent of Financial Institutions. AXIS Reinsurance Company (Canadian Branch) is licensed in all Canadian provinces and territories. AXIS Reinsurance Company is an admitted carrier in all 50 of the United States and the District of Columbia.

www.axiscapital.com/canada


P3s (Aug12)_DG_AS

8/15/12

9:45 AM

Page 28

Protecting

P3s David Grigg

Profit Center Head, Construction Professional Liability, XL Group (New York)

Carl Spensieri

Environmental Branch Manager, XL Group (Toronto)

Insurance is a central part of innovative government partnerships with private businesses, called P3s, which help get critical new infrastructure built. Hospitals, schools, hydro plants, wastewater treatment facilities, roads, tunnels and bridges — they are critical structures in our lives, providing our healthcare, educating our children, lighting houses, fuelling cars and providing routes to work or wherever else we want to go. State-ofthe-art infrastructure is essential for a nation’s overall prosperity. However, cash-strapped governments, from local municipalities to provincial agencies, are finding it more difficult to provide the capital necessary to maintain and build new infrastructure. These new infrastructure projects are necessary to maintain a healthy, competitive economy and drive economic growth. Consequently, governments around the world are employing unique partnerships with private businesses, called P3s, to get the projects built and to create revenue-producing opportunities as well.To keep P3 projects moving forward, strong partnerships with insurers are equally important to construct the right insurance protection.

18 Canadian Underwriter August 2012

P3 PROJECTS Public-private partnerships, or P3s for short, have been quite successful in Australia for years and are a very well-established trend in Europe. P3s have generated some interest in the United States as well. Here in Canada, P3 projects have created considerable momentum in the construction industry. Renew Canada, an infrastructure-focused magazine that lists the Top 100 infrastructure projects in Canada, reports that the 2012 tally of these infrastructure projects is valued at around $114.2 billion. This list includes 29 new projects that added an additional $30 billion in infrastructure investment in Canada this year alone. Supporters of the P3 approach cite benefits that include expedited completion, project cost savings and improved quality and performance. P3s also have detractors, who argue that the projects ultimately cost the taxpayers more than traditional public funding would. However, the Canadian government sees so much more potential in replacing aging infrastructure or developing new resources through P3 partnerships that it created the P3 Canada Fund to help improve the delivery of public infrastructure and increase the effectiveness of P3s. It is the first infrastructure funding program anywhere in Canada that directly targets P3 projects.



P3s (Aug12)_DG_AS

8/15/12

9:45 AM

Page 30

BUILDING A PARTNERSHIP How does a P3 work? A public entity partners with lenders and contractors willing to invest in a project — be it a toll road, hospital or a hydro-electric plant — and work together to develop, design, construct, operate and maintain the new infrastructure. Together, they form a concessionaire, a special-purpose entity specifically incorporated for the project. The concessionaire handles the various business aspects of the project, including contracts with a contractor and buying the insurance required for these projects. Once the project is completed, the concessionaire then operates or maintains the facility or structure for a given period of time. After that time, the project would revert back to public entity ownership. If all goes as planned, the private entity gets a nice profit and the public entity fulfills its responsibility to provide infrastructure for the public’s benefit. Proponents of P3s believe that because all involved parties are financially invested in the project, an incentive exists to keep the project on schedule, as well as to reduce risks that may stand in the way of completion or inflate project costs. Since contractors involved also stand to reap profits from the finished project, the workmanship and design is believed to be more effective and efficient. Hence, managing the risks of a P3 requires a much more integrated and coordinated effort between all parties because everyone has “some skin in the game.”

CONSTRUCTING COVERAGE Governments require P3s to buy project-specific insurance. While this is not unusually different from traditional construction risk issues, a P3’s insurance considerations are more complex because multiple entities are involved. Depending on the project, the parties determine their coverage requirements and design a specific insurance strategy that most likely would include: • Course of Construction (CoC) or Builder’s Risk, which provides property protection through the course of construction for

20 Canadian Underwriter August 2012

project delays, wind, flood and earthquake. Policies can be packaged to the initial phase of operational risk as well. Policy terms on these programs can run up to 10 years. • Professional Liability (PL) for Contractors to provide third-party professional liability. For P3 projects, the product can be designed to include excess indemnity, protective coverage, mitigation coverage, wrap-up coverage and any potential gaps in professional liability coverage

Although working with mutliple insurers can add to the complexity of a project, especially if a claim arises, most carriers are accustomed to working with their industry colleagues to help P3s develop a comprehensive combination of coverage. for individual contractors working on the project. For some projects, contractor’s pollution liability coverage can be packaged with PL coverage instead of having to purchase a standalone environmental policy. • Environmental or pollution insurance to address pollution conditions that arise from operations performed by or on behalf of the P3 project or its job site. To help control unexpected costs that might result in project overruns or decrease the project’s potential profits, this coverage also provides emergency remediation expenses to clean up a pollution incident at a jobsite. Some environmental insurers can package professional liability coverage together with pollution protection. In either case — be it professional with some pollution coverage, or pollution with some PL coverage — concern about adequate limits is prompting P3s to purchase standalone policies. One major pollution incident, for example, could eat away at shared limits of a project’s professional liability protection. Additionally, based on the large size of

many P3 projects, there is increasing interest in having dedicated coverage limits. This allows P3 participants to build towers of coverage using various layers of excess in different lines to address their risks more thoroughly. Standalone coverage carries the added advantage of being delivered by dedicated underwriters who specialize in that business line; also, it comes with dedicated risk control and claims handling. Other possible coverage pieces that can help build a project insurance program include construction wrap-ups, surety bonds and subcontractor default insurance, a fairly new coverage in the market that provides coverage for economic loss of a general contractor or construction manager caused by a subcontractor’s performance default (including direct and indirect costs). Sureties typically protect the public sector from contractor performance issues, but some sureties are also providing bond protection to the financial community. Especially for P3 participants that are always looking for ways to prevent possible delays and protect profit margins, construction-specific risk control or safety training offered by some construction insurers are value-added benefits of their insurance programs.These services might include helping to prequalify subcontractors, jobsite safety training and contract reviews. In Canada, only a few carriers are capable of addressing all of the construction coverage requirements of P3s. Although working with multiple insurers can add to the complexity of a project, especially if a claim arises, most carriers are accustomed to working with their industry colleagues to help P3s develop a comprehensive combination of coverage. However, special attention needs to be paid to potential coverage gaps and how each line of coverage interacts with each other. P3s projects are typically not finished quickly, and so the length of policy terms and insurer tenure is another factor widely considered in buying P3 coverage. P3 partnerships can last for some 30 years.


Crawford Risk Management Services

Customized claims management programs for risk managers Crawford Risk Management Services (RMS) is dedicated to creating claims programs that meet the specific needs of our commercial clients. Our team of dedicated and experienced account supervisors will effectively manage your program, providing a single point of contact and focusing on the details so you don’t have to. Contact us at info@crawco.ca for more information on RMS or any of our services.

www.crawfordandcompany.ca Crawford & Company (Canada) Inc. is an equal opportunity employer

CdnUnderwriterCrawford-RMS.indd 1

3/9/2012 12:06:16 PM


Olympics (Aug12)_DG_AS.qxp

8/15/12

9:58 AM

Page 28

Olympic-sized Risks

Andrew Duxbury Underwriting Manager, Munich Re (London, U.K.)

The Olympic Games feature 36 disciplines, 205 nations, 10,500 athletes, 33 competition venues and more than 170,000 staff (including 70,000 volunteers and 100,000 contractors). Nine million spectators will attend the games in person, while an audience of three to four billion will watch most of the events live on television. Staging the Olympics is a big business, with revenues generated through TV rights, sponsorship, ticket sales, corporate hospitality and souvenirs running into billions of dollars. Highly competent risk management efforts, often undertaken years in advance, are required to deal with such risks. Cancellation insurance can protect these financial interests from the moment when cities are awarded the Games until the Olympic flame is extinguished at the closing ceremony. Cancellation policy wordings vary as they are adjusted to individual requirements, but cover is fundamentally sought to protect against any unforeseen cancellation, abandonment, interruption or relocation of the Games — including the opening and closing ceremonies. Munich Re’s financial exposure to the complete cancellation

22 Canadian Underwriter August 2012

of the London Games this summer will be in the region of US$400 million. The major underwriting considerations involved in covering such large events include: • contractual commitments/liability of insured (TV/sponsorship/ticket conditions); • the political risk environment (war, internal unrest, terrorism exposure, etc.); • exposure to natural hazards (earthquake, windstorm, flooding); • host country’s experience in hosting large global events; • security arrangements; • host country’s infrastructure; and • organizer’s contingency plans. Remember the magnificent spectacle in Beijing four years ago? The events were meticulously executed, but the Chinese government spent an estimated US$42 billion to ensure smooth operation from start to finish. London must seek to emulate this in a very different economic, political and geographic environment, which has to be managed also from an insurance and reinsurance perspective.

Illustration by Dave Whamond/www.threeinabox.com

Staging the Olympics is a big business, with billions of dollars worth of revenue exposed. Insurers must guard against myriad perils that could result in cancellation of some or all of the Games.


Does your wholesaler have their hands in your pockets?

At Burns & Wilcox, we do not have a retail division. Why? Because we know that every time you acquire wholesale insurance from a company that also has retail offices, your competitor becomes stronger. As the largest independent wholesale broker and underwriting manager in North America, we do not compete against you, we partner with you. If you want a fair shake, call Burns & Wilcox, not your competitor. OTTAWA

TORONTO

ST. JOHN’S

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

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

Steve McQueen or Donna Payne Tel: 709.745.0871 Fax: 709.745.0630 smcqueen@burns-wilcox.ca dpayne@burns-wilcox.ca

burnsandwilcox.ca

• Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services

30982_BURNS_Canadian Underwriter_Pickpocket.indd 1

5/25/12 10:07 AM


Olympics (Aug12)_DG_AS.qxp

8/15/12

9:58 AM

PERILS OF THE OLYMPICS The obvious insurable perils include weather, natural catastrophes, acts of terror, communicable diseases, venue damage, power failure, satellite or transmission failure, riots, strikes, civil commotion and national mourning. Each type of sport has its own technical challenges, as does each venue. The lion’s share of exposed revenue is generated by the sale of television screening rights. Contracts are negotiated with the national television corporations.The sums of money involved are huge. In 2003, the International Olympic Committee sold the main TV rights to NBC for US$2.2 billion to cover Vancouver and London. Security threats cannot be ignored. This is well-known, certainly since the terrible incident that overshadowed the Munich Olympics in 1972, when 11 Israeli athletes were taken hostage and a total of 17 people lost their lives. London might look attractive to activists as

Page 30

a large multicultural city, but security will be at the forefront of the authorities’ minds. The U.K. government is committed to spending more than US$1.6 billion — or some 10% of the overall organization costs — on security measures at the Games. It is also highly experienced in counter-intelligence and policing such risks. Numerous test events were conducted successfully, including during the period of the London riots. In terms of assessing terrorist exposure, we will always use our own in-house and contracted third-party political risk expertise to understand local exposure. Global events can also import international issues into a territory. To assess these, security would include information such as: • The host’s experience in organizing such an event, including an analysis of

its police and security forces. • Main venues: are they built for the purpose of mitigating exposures? • Athletes’ transportation.

A large loss


Olympics (Aug12)_DG_AS.qxp

8/15/12

9:58 AM

• Employee and volunteer vetting procedures. • Contingency plans.

Page 31

Terror cover provided will generally be limited by time. Prescribed triggers will specify which authorities are able to cancel or suspend the event. Realistically, for such global sporting events, the government of the host nation decides such matters. However, considerable vested interests exist in ensuring that the event continues, as was the case with incidents in Munich and Atlanta. Additionally, individuals may seek to achieve a certain degree of notoriety, as was experienced on the Thames during the famous Oxford vs. Cambridge University Boat Race in April 2012, when one activist brought the race to a halt. Other similar irritations are possible related to the challenge of transporting thousands of spectators and athletes around London. Indeed, all businesses in London — including the Munich Re Group of-

fices — have specific contingency plans that include staggered work hours and working from home during the busiest time of the Games. Unique events such as the Games lend themselves to creating tailor-made coverage. Ground-up cover is common, but deductibles must be considered carefully. Usually, additional loss mitigation costs are included in the cover. These costs can be considerable, as the organizers of the last Winter Olympics in Vancouver learned. A combination of too little or too much snow at any one time or venue created huge challenges. We continue to see the very largest global risk managed events as a cornerstone of our contingency underwriting strategy, and after the successful Olympic Games in London, the focus will soon move to the upcoming events in Russia and Brazil for which Munich Re has already committed capacity.

requires a large response. The Commercial Division from FirstOnSite – the largest independent disaster recovery company in Canada. Our dedicated team has been serving the disaster needs of commercial clients and specialty markets nationwide for over 30 years. With more than 1,100 well-trained employees, the largest inventory of state-of-the-art equipment in the country and our proprietary tracking and billing system, we’re ready to mobilize at a moment’s notice. Headed by Barry J. Ross, a leading specialist in disaster recovery, our business is getting you back in business. Call Barry at 416-586-3532 or email bjross@firstonsite.ca for more information.


Strategic (Aug12)_DG_AS.qxp

8/15/12

10:13 AM

Page 28

Strategically

Thinking Alan Garner

President, CEO, Marsh Canada Limited

Survey results show a gap between what companies’ chief executives want from their risk managers — more involvement in business strategy planning — and what risk managers believe is expected of them. Financial market turmoil, natural disasters and frightening cyber attacks: recent events have raised the profile of and heightened the interest in risk management. Add in a thick layer of regulatory requirements, shareholder activism, corporate compliance needs and governance reform, and suddenly all eyes are on risk managers to demonstrate the value that they bring to their organizations. Consequently, many corporate leaders are taking a proactive, strategic approach to risk management by increasing their expectations of what the function can — and should — provide to an organization. The key question becomes: How

26 Canadian Underwriter August 2012

can risk managers contribute to a sustainable operation and help achieve business objectives? Marsh and the Risk and Insurance Management Society (RIMS) asked precisely this question when they gathered the views of 1,322 risk managers and C-Suite executives in the ninth annual Excellence in Risk Management survey. Survey results show the risk manager’s job profile is changing — and not everyone is on the same page. Nearly two-thirds of C-Suite respondents said they expected their risk managers to be more involved in their organization’s business strategic planning efforts. But most risk managers polled disagreed: they believed their priorities included integrating more deeply with operations and executing daily activities more efficiently. The C-Suite is clearly telling the risk manager to grab hold of strategic risk management. Risk managers not seizing this opportunity should assess the resources they need to help meet senior management expectations. With a disconnect as significant as this, how does an organization start on the path to a more strategic risk management approach? For those already heading that way, how can they continue to make progress?


Decemb er 2nD, 3:52 p. m .

the rIght rel atIonshIp makes all of the DIfference In an Ins tant,

So ph i a R e y n o l dS k n e w Sh e co u l d d o m o R e fo R h eR cl ien t

An insurance broker, Sophia Reynolds, contacted CNA about an account that 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.

Construction • Manufacturing • Oil & Gas • Life Science • Renewable Energy

Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all provinces and may be subject to change without notice. CNA is a registered trademark of CNA Financial Corporation. Copyright © 2012 Continental Casualty Company. All rights reserved.


Strategic (Aug12)_DG_AS.qxp

8/15/12

10:13 AM

MAKING PROGRESS Bridging the gap Before the gap turns into a crevasse, it is critical for risk managers to find out what senior management expects from the function. Is the role primarily defensive? Or should it be more anticipatory? Do risk managers need to be well-versed in the inner workings of their organizations and industry? Or should they possess a strategic view of risk and their role in driving the organization’s success? When asked to identify the two most important skill sets for a risk manager, the two groups were in lock step, agreeing that industry knowledge and a strategic view of risk were critically important. However, despite being ranked third by risk managers, “insurance knowledge” was not emphatically endorsed as a key competency by the C-Suite. In fact, 75% of C-Suite respondents did not say that insurance knowledge was a critical ability. The message is loud and clear: senior management are looking to move beyond the stereotypical role of insurance purchasers and towards a more strategic role that will help to define success within an organization. Addressing this disparity will bode well for future success. Risk committees One way to advance strategic risk management is through broad-based (crossfunctional) risk committees. By looking at existing and emerging risks through the wide lens of a risk committee, companies gain a deeper view of which risks are most likely to affect their success, and where they should be focusing their resources. According to the Excellence survey, more than 60% of companies now have such a committee, reflecting a steep rise between 2010 and 2011.The number is likely to keep growing: more than 40% of those that don’t have one said their organization should create one. Among the companies that had a risk committee, 90% of respondents said they are effective, with 35% saying they are “very effective.” According to one 28 Canadian Underwriter August 2012

Page 30

risk manager at a Fortune 500 technology firm, buy-in from top management was key: “People at a high level within the organization are committed to making it work.They take responsibility for the action items and are committed to doing the activities themselves — not delegating action items to junior people. They are personally involved.”

Data and analytics More than a third of respondents to the Marsh/RIMS survey said their firms’ risk committees could make better use of analytics — loss simulation, loss forecasting and risk tolerance — to become more effective. But simply providing more data is not the answer, especially since the challenge is to find relevant risk information in the first place.

Organizations are better served when risk managers engage in strategy planning and execution efforts, by developing a formal strategic risk management framework. A risk manager must understand his or her company’s goals, its industry and what senior management wishes to pursue in order to know what analytics to run and who should be involved in the interpretation. Data analysis is all about providing context and adding value. Almost half of CSuite respondents said they expect risk managers to provide improved analysis relating to the strategic goals of the organization. One statistic worth noting: more than half of C-Suite respondents said their organizations do not measure total cost of risk, yet 70% of risk managers surveyed said that they rely on Total Cost of Risk (TCOR).

Develop a value proposition As purse strings are tightened, the risk management function is being compressed and marginalized, forcing risk managers to do a more effective job of demonstrating

the strategic value that risk management brings to a company. For many, risk management is at a critical juncture. To avoid marginalization, risk managers need to find new and improved ways of demonstrating the value of the contribution that they make to the organization, describing results in a way that is better understood and sought after by senior management.

LOOKING FORWARD Organizations are better served when risk managers engage in strategy planning and strategy execution efforts by developing a formal strategic risk management framework. Whether it is through the creation of broad-based risk committees, the effective and innovative use of risk data and analytics or the application of a deep knowledge of the industry and the business, the message is clear: risk managers can be a fundamental strategic asset to an organization. But to earn a place at the strategy table, risk managers must demonstrate how their efforts translate into dollars and cents for the organization. A risk management approach aligned with short- and long-term business objectives is important to clients. Marsh, for example, has developed a “Marsh 3D” service philosophy — Define, Design, and Deliver. Taking a page out of the strategic risk manager’s playbook, the approach helps quantify an organization’s risk, design solutions that will drive value for the organization and enhance service by measuring results in terms of key performance indicators defined by the organization. In the nine years that Marsh and RIMS have tracked the thoughts of risk managers and their colleagues, the fundamental theme has stayed the same: a valuable connection exists between strategic thinking and true excellence in risk management. Yet, each year, we continue to uncover discover gaps between the views of the C-suite and the risk manager about the strategic role of risk management. Our message to risk managers? Bridge that gap. Be valuable and be strategic.


EXP ErT ISE.

You r cla ims take

We have the tools and the knowledge. Wherever your business operates, whatever your industry, you can expect the same seamless claims service from Chartis. Our medical management, litigations services, vendors and engineers are among the best in the industry, and our sophisticated tools and systems ensure that your claims are processed promptly. Learn more at www.chartisinsurance.com

Chartis Insurance Company of Canada is the licensed underwriter of Chartis insurance products in Canada. Coverage may not be available in all Provinces and Territories and is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain coverage may be provided by a surplus lines insurer. For additional information, please visit our website at www.chartisinsurance.com.


Supply (Aug12)_DG_AS.qxp

The

8/15/12

10:21 AM

Page 28

Right Tools for the Job

Catherine Bolgar Businesses can gain a Supply Chain Risk Insights, Zurich

competitive advantage by using the right tools to select and manage their supply chain risks. A business can gain competitive advantage by having the right risk tools to select and manage its strategic suppliers. However, assessing supply chain risk can result in too much data, but not enough relevant information. The vast scope of today’s supply chains can imply that it’s hard to get a simple answer to questions like: Where does this part come from? “Sometimes this is not simple to answer,” says Dr. Otto Kocsis, global head of technical centre business resilience and the principal engineer of business interruption/business resilience at Zurich Insurance Co. in Zurich. “If you’re looking at two sites, one supplying the other, it’s not always obvious how interconnected these two sites are, even if they are in the same group. It might be necessary to go into more detail.” For example, a Canadian business might buy a part from a British supplier with a factory in China that is supplied by components from other

30 Canadian Underwriter August 2012

countries. The complexity can be daunting. “It’s not often that organizations would look specifically at supply chain risk as a topic to audit and understand,” observes Tim Astley, regional practice leader for strategic risk and business resilience at Zurich, based in Birmingham, United Kingdom. A number of tools are available for helping businesses tame the data and draw a clear picture of their supply chain risks. For instance, business impact analysis takes an in-depth look at the consequences of losing a critical process or supplier, taking into account the severity and frequency of the potential exposure. Other tools might overlay risks on a map of the world; use flow charts to show tiers of interdependence; or illustrate degrees of risks with heat maps. Some insurers look at as many as 25 supply chain risk factors to understand the breadth of management control and the extent to which a business is exposed to each factor. Kocsis says customers, oftentimes high-end customers, are stepping up their demands for these tools. “They don’t have the tools or experience,” he says. “We [as insurers] are many times farther ahead on this than the customers, since we face these questions as part of our business.”


Supply (Aug12)_DG_AS.qxp

8/15/12

10:21 AM

MAPPING THE SUPPLY CHAIN Other proprietary tools exist to help map a customer’s risk, including a tool to model business interruptions and present the disruptions graphically so they are easier to understand and provide quantitative supply chain exposures. “We go through all the different scenarios,” from losing a major customer to fires, storms or strikes, Kocsis says. “We calculate the effect on the balance sheet not only to the site, but to the group. We provide the list of top exposures with respect to business interruption.” The first step is to model the value chain.The next step involves identifying risk scenarios with respect to both severity and impact. The last step is to analyze the effect of those scenarios on the balance sheet. Scenarios encompass many kinds of risks — including internal risks, such as fires or machinery breakdowns, and external risks such as geopolitical risk, natural catastrophes or economic problems like high inflation. One approach is to look at a wide

Page 29

range of country-level risks around the world and present them in a visual format to help make sense of layers of data and their connections. Models can be updated with live data from social media or real-time news feeds to assess instantly the consequences of an unfolding scenario and to act as

The vast scope of today’s supply chains can imply that it’s hard to get a simple answer to questions like: Where does this part come from? quickly as possible. “A business can gain a competitive advantage by getting to a supplier first and securing supplies that may soon be hard to get,” Astley says. A good quantity and quality of information can give sharper definition to risks. “Robust, comprehensive data capture is really key,” says Keesup Choe, chief executive of PI Benchmark, a

London-based company that develops risk tools and procurement decision support solutions. The data goes into models to assess risks and highlight exposures in the supply chain. Identifying and mapping all nodes of a supply chain, and decomposing each component into the most granular bits, can help to highlight concentrations of exposures. This would allow a company, for example, to see that its suppliers’ suppliers’ factories are mostly located in Thailand, where flooding recently led to the disrupted production of hard disks. Services exist to send alerts to companies when disasters like earthquakes occur anywhere in the world.The problem is, many of the alerts don’t take into account if the company or its suppliers even have a factory near the catastrophe zone, says Patrick Brennan, chief executive of Supply Risk Solutions, a Redwood City, California provider of supply chain risk solutions. That makes for a flood of useless alerts that can obscure truly significant events.

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

24 HOUR ASSIGNMENT/EMERGENCY RESPONSE • TOLL FREE 1-866-4-WINMAR (494-6627) August 2012 Canadian Underwriter

31


Shale Game Hydraulic fracturing (or “fracking�), a process used in natural gas extraction, is raising a lot of questions about long-term environmental risks. Among these questions is whether or not existing insurance programs are up to the task of covering the risk. Some view the area as full of potential for innovative approaches to covering this type of exposure. ANGELA STELMAKOWICH

32 Canadian Underwriter August 2012


H

ydraulic fracturing, widely known as fracking, is meant to promote accessibility, affordability and profitability in the dogged pursuit of energy sources that can be packaged and sold. But what are the risks of coaxing — some would say forcing — natural gas from shale deep underground to the surface? Does fracking fit comfortably within well-entrenched insurance products for the oil and gas sector, or will it require a new form of risk transfer? Identifying insurance products that respond to risks associated with fracking may be a mix of art and science, since there are still many outstanding questions about just what those risks are. Fracking, really, is an example of “What is old is new again.” In existence for well over a half-century, it involves injecting pressurized water containing chemical additives into geologic formations — in this case, shale — to create micro-fractures artificially. Adding sand (proppant) prevents fractures from closing, thereby allowing natural gas to escape when the pressure is released and fluids return to surface. Natural Resources Canada reports potential and producing shale gas resources in this country are found in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia, although most current drilling and production is in northeast British Columbia. “The extraction of natural gas at commercially viable rates has become possible only because of the recent combination of two techniques: horizontal drilling and multi-stage hydraulic fracturing,” the department notes. “The assessment of shale gas potential has led to a complete redrawing of the North American energy map.” Shale gas is still in its nascent stages here at home, but the United States has more than 40,000 producing wells. A recent investor presentation by Valero Energy Corp., one of the largest independent refiners south of the border, notes that abundant and growing U.S. shale oil and Canadian production will provide a feedstock cost advantage, which will increase in the future. “It’s remarkable how the industry has shifted in such a short time period and more change is expected to come with technological innovation as a key driver,” Scott Bolton, PwC’s Canadian energy leader, said in May 2011 following the release of the Canadian Annual Energy Survey report. “Now, we’re trying to deal with a wave of shale gas production that will be flowing to market for decades to come.” Joe Restoule, president and director of the William H. McGannon Foundation and vice president of strategic opportunities for NOVA Chemicals, appears equally bullish. “It’s as important as the oil sands,” Restoule says. “I don’t think we’ve discovered its potential.”

August 2012 Canadian Underwriter 33


COVER STORY

Shale Game FULL BORE Also not yet discovered is the full spectrum of risks associated with fracking and insurance coverage required to mitigate these exposures. As the use of fracking increases, its public profile has drawn some negative publicity. In the United States, in particular, fracking has been the subject of numerous studies, lawsuits and protest movements. Consequently, regulators are investigating the environmental and other risks of fracking. Natural Resources Canada reports that hydraulic fracturing is permitted only well below the deepest freshwater aquifers. But this does not seem to have eased concerns that fracking can foul water supplies. “When the treatment fluid returns to the surface, it is alleged that there is a serious risk of pollution, either from a blowout or from any storage pits in which the well fluid is stored,” notes Willis’ Energy Market Review, released in April 2012. “Contaminants of concern to drinking water include fracturing fluid chemicals and degradation products, and naturally occurring materials in the geologic formations (e.g. metals, radionuclides) that are mobilized and brought to the surface during the hydraulic fracturing process,” notes a fact sheet from the U.S. Environmental Protection Agency (EPA). The link between fracking and water contamination, if any, is currently being evaluated as part of an EPA study. The Energy Institute at the University of Texas at Austin conducted a review of available evidence and drew the following conclusions: • hydraulic fracturing of shale formations has no direct connection to reports of groundwater contamination; • overall, surface spills of fracturing fluids pose greater risks to groundwater sources than from hydraulic fracturing itself; and • the lack of baseline studies in areas of shale gas development makes it difficult to evaluate the long-term, cumulative effects and risks associated with hydraulic fracturing. 34 Canadian Underwriter August 2012

The outstanding questions relating to the environment have the insurance industry focusing on longer-term risk solutions. The Willis review notes that three keys areas of the insurance market are particularly affected by hydraulic fracking operations: • operator’s extra expense: indemnifies the assured’s costs of regaining control of a well following a blowout, including the re-drilling of the well and the cost of clean-up of any resulting seepage and pollution;

The extraction of natural gas at commercially viable rates has become possible only because of the recent combination of two techniques: horizontal drilling and multi-stage hydraulic fracturing. The assessment of shale gas potential has led to a complete redrawing of the North American energy map. • comprehensive general liability and excess umbrella liability cover: in essence, these cover the assured for damage to third-party property and bodily injury arising out of the assured’s operations; and • environmental impairment liability: covers the assured from legal liabilities related to pollution conditions arising out of the assured’s operations or general pollution conditions at the site itself.

MANAGING FRACKING RISKS Traditional insurance packages for oil and gas activities might focus on general liability and the protection against “sudden and accidental” events that it provides. Information from Chartis notes that basic elements of a comprehensive insurance program include: • insurance of property against named risks (to protect against such risks as fire, explosion, action of water and natural disaster); • insurance of machinery and equipment from damage (includes errors in equipment design or installation, overheating, power supply disruptions and human error); and • insurance against business interruption (financial loss caused by partial or full stoppage of the enterprise as a result of events insured under the previous two sections). Shale gas drilling essentially adds a new element to the mix: environmental impairment liability. Zurich reports that risks include potential chemical spills causing pollution of local pond and irrigation canals; natural gas or fracturing chemicals seeping into the water table because of an inadequate casing cementing; natural gas leaching into municipal drinking water; inappropriate disposal of fracturing mixture; and high water volume required for shale gas fracturing. Mary Ann Susavidge, managing executive underwriter for XL Group’s environmental insurance unit, says “both general liability and environmental impairment coverage are appropriate for oil and gas operators, as there are events that can occur on drill sites that clearly fall outside of the time element coverage provided by general liability.” Whereas general liability covers only sudden and accidental events, the following coverages can be used for both gradual as well as sudden and accidental pollution events. Contractor’s pollution liability, for example, offers coverage for both sudden and accidental and gradual pollution conditions resulting from trade contractors performing services at drilling sites (this includes risks


“We’re a growing company. And, with Zurich’s help, we’re already a global one.” Chip Bottone, President and CEO FuelCell Energy, Inc.

International insurance solutions for the global companies of today and tomorrow. FuelCell Energy is bringing renewable and ultraclean power generation to three continents—and counting Zurich’s ability to design a flexible insurance program in compliance with local and global regulations is helping them grow. And with a local contact, supported by a global network spanning more than 170 countries, Zurich is making it even easier for FuelCell to manage their overseas risks. It’s an example of how Zurich delivers the help businesses need when it matters most. Let FuelCell tell you more. Watch the video at www.zurichcanada.com/stories

Insurance is underwritten by insurance company subsidiaries within the Zurich Financial Services Group including, in Canada, Zurich Insurance Company Ltd. Insurance product obligations are the sole responsibility of each issuing insurance company. For example, only the assets of Zurich Insurance Company Ltd (and no other assets of the Zurich Financial Services Group) are available to meet its obligations for the performance of its products. For more complete financial information, audited annual statements of the Group and information on the ratings of the underwriting companies of Zurich in North America, access HYPERLINK “http://www.zurichcanada.com”www.zurichcanada.com. Zurich® is a registered trademarks of Zurich Insurance Company Ltd.

12-0331 CA ad_resize B.indd 1

2/14/12 2:31:08 PM


COVER STORY

Shale Game related to site infrastructure, hauling raw materials or hauling waste materials). Pollution legal liability provides sudden and accidental and gradual coverage for pollution conditions for site operators and non-working interests at both oil and gas well sites. “Regulators and the public would expect companies to be adequately insured in the event that something unforeseen occurs, either at the time or as a latent issue,” says Restoule.

a lot of claims that have gone from lawsuit to settlement. So it’s hard to gauge from a loss standpoint what a typical loss should cost.” That said, notes John O’Brien, president of Ironshore Environmental, “to date our losses don’t match with anything that people would look at and say, ‘Fracking causes this.’ So my losses don’t look like a Spike Lee movie at all.”

DEVELOPING PICTURE It’s tough to silence all “what ifs?” given the scant number of frackingrelated claims. “In Canada thus far, we have not seen any large or substantive claim that is uninsurable,” Restoule says. “What we’ve seen are small claims, and certainly we’ve not had any sort of frequency of loss in the fracturing arena. There haven’t been enough test points in the insurance industry to tell us whether it’s adequate or not.” Restoule says he’s not aware of any trends among reported claims. “The losses are similar to any other industry: it’s human error, it’s mechanical breakdown or failure and act of God.” Canada is not without incidents, of course. Last January 13, for example, hydraulic fracturing operations appear to have affected a nearby oil well, resulting in a release of fracturing fluids, notes Alberta’s Energy Resources Conservation Board. There were no injuries or any confirmed effects on wildlife, but both wells were shut down and a clean-up had to be done, the board reports. The United States has more claims experience, including through lawsuits. “If there’s any concern from the insurance market,” says Jeffrey Hanneman, director of Aon Environmental Services Group, it has been around the negative publicity associated with claims related to contaminated drinking water. “If this trend continues, do we see more claims?” he asks. “What’s the frequency of those claims? What is the severity of those claims? There really haven’t been 36 Canadian Underwriter August 2012

Contaminants of concern to drinking water include fracturing fluid chemicals and degradation products, and naturally occurring materials in the geologic formations (e.g. metals, radionuclides) that are mobilized and brought to the surface during the hydraulic fracturing process. NEW OPPORTUNITIES In the absence of an established claims history, the insurance industry has room to consider product opportunities, Restoule says. “What new products do they offer that’s unique to the fracking industry?” Susavidge adds: “Policy language is currently consistent with the potential exposures. However, a gap may exist

for emerging issues that have yet to be quantified. This has been true for many industries/exposures over the 25-year evolution of environmental insurance.” Hanneman suggests “the amount of coverage available for anything pollution-related from a casualty standpoint, from general liability and excess liability, is very narrow.” He takes the view that fracking-related gradual pollution coverage would best go it alone. “What we’ve seen from the large national, international insurance companies has been a mixed bag to date regarding who will offer standalone pollution coverage to owners and operators of wells where fracking is being done,” Hanneman says. Probably five or six carriers will “write that coverage on a primary basis,” he reports. “Some might be more comfortable writing it as an excess layer on top of another carrier writing the primary pollution. You have some markets that, while they write environmental coverage for energy risks, will not write it for anyone conducting hydraulic fracturing. It’s just a matter of appetite.” A pollution policy offering “gradual accidental coverage” that does not have defined reporting provisions can help to bridge the coverage gap created by shale gas exploration and production, notes information from Zurich. Sudden accidental coverage in a gas operator’s general liability insurance often has “a defined reporting and discovery period — sometimes as little as 72 hours for discovery and 30 days for reporting,” it adds. Environmental impairment opens the door to new issues. The matter of “location, location, location” may be a costly one should an incident occur, Restoule says, citing the example of a pipeline leak in a remote area. Response crews would need to be deployed, usually from large centres, equipment would need to be sent and people would need to be fed, housed and demobilized. Underwriters report the costs “are just huge in these remote areas,” Restoule says. One might


Are you looking for the right partner? Choose Travelers. When you partner with Travelers, you can be confident knowing that we’ll be there when things go wrong. When a claim is made, we respond with speed, compassion, integrity and professionalism. From taking control of complex issues to tailoring claim solutions and operating regional claims offices, we provide outstanding service to customers when they need us most. When looking for an insurance provider, choose Travelers for a partner who’s got your back, through good times and bad.

travelerscanada.ca St. Paul Fire and Marine Insurance Company and Travelers Insurance Company of Canada are the Canadian licensed insurers known as Travelers Canada. Š 2012 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries.


COVER STORY

Shale Game believe claims in remote areas “should be relatively benign and should not be significant, but I am told that that is not the case.” Another consideration is the cost of defending, a consideration distinguishable from whether or not an insured is ultimately held liable. An Aon Exposure Alert points to new environmental products that offer enhancements meant to fill in the gaps left by casualty and control of well insurance. One such product provides gradual pollution coverage (including defence and investigation costs), affirmative coverage for hydraulic fracturing fluids, coverage for evacuation expenses and image restoration expenses, and blanket insured contract definition for non-operating assets. Getting into the game in situations in which fracking plays a central role is not necessarily attractive to all. Some companies may choose to opt out completely, while others may wait for a clearer picture of risk to develop, both in the short- and long-terms. Asked if XL has seen insurers exclude fracturing from their policies, Susavidge answers yes, primarily in the Marcellus shale region in the United States. In the U.S., the Marcellus area runs through New York, northern and western Pennsylvania, eastern Ohio, western Maryland, and throughout most of West Virginia. In Canada, it can be found below Lake Erie, stretching into southern Ontario, including Port Stanley, Long Point and St. Thomas. “For various risks, carriers have considered and continue to consider the impact of potential adverse accumulations of risk in particular geographies,” Susavidge points out. Commenting on the environmental market, O’Brien says he is seeing insurance companies choosing not to “write any exposure in that space.” At the same time, a whole lot of new clients — some of whom were not previously involved in the environmental space — need or want cover. “The genesis, I think, of this becoming a market where people want to buy environmental insurance is really partially due 38 Canadian Underwriter August 2012

to the media,” O’Brien says. “But also, and I think even more importantly, due to Deep Water Horizon — even though Deep Water Horizon is not a frackingrelated loss.” The breadth of the liability spectrum for these types of losses may be spurring some organizations to consider: “What sort of things do we invest in that have these same patterns of liability?”

Both general liability and environmental impairment coverage are appropriate for oil and gas operators, as there are events that can occur on drill sites that clearly fall outside of the time element coverage provided by general liability. ALLOCATING RISK Given the potential for negative longterm environmental effects related to fracking, what is the next move for risk managers involved in this arena? Restoule expects this question will be among the issues discussed as part of an upcoming forum in Calgary on the myths and realities of fracking. “Do we understand the technical risks associated with the activity?” he asks. “Do we

understand what coverages are available and, more importantly, what coverages are not available? How is risk allocated between the driller, the operator and the owner?” Restoule advises companies needing fracking-related coverage to differentiate themselves through good practice. At Encana Corporation, for example, “every natural gas well has an engineered steel casing system that is cemented externally to prevent any fluids from moving from the well bore to groundwater aquifers,” notes an FAQ from the company. “The case design and cementing program conform to a written, engineered design which is specific to each well.” Canadian operators and drillers are trying to educate underwriters about the risk assessments that their operations are performing, in addition to “their technology, their techniques and, more importantly, the safety precautions they are implementing in terms of risk mitigation and risk control,” Restoule says. “To quantify whether or not prospects meet our underwriting criteria in the oil and gas arena, we analyze areas such as baseline screening processes, integrity management processes, emergency response programs, well construction protocol, pad site and pond construction, as well as vendor selection and contractual language,” Susavidge says. All of these factors are considered to address groundwater, soil and emission risk at a drill site, she adds. “Premiums are based on risk,” says Susavidge. “Simply stated, a marginal operator that does no hydraulic fracturing will still receive a higher premium than a solid operator that engages in hydraulic fracturing of wells.” Hanneman sees well count as a key factor influencing premium. “If you’re a very small operator, in U.S. dollars you might see a minimum premium of $25,000 to $50,000 if you have a handful of wells and you’re buying a low limit like $1 million,” he says. For clients with a large number of wells and buying $25 million, $50 million


ESR ad full page:Layout 1

10/5/12

10:38

Page 2

Elliott Special Risks LP. A Markel International company

Commercial general liability Directors and oďŹƒcers liability Environmental impairment liability Marine program Professional liability Property and inland marine Security and protection industry Umbrella and excess liability

Helping brokers with eective insurance solutions since 1966. Montreal Toronto Calgary Vancouver www.elliottsr.com


COVER STORY

Shale Game

Premiums are based on risk. Simply stated, a marginal operator that does no hydraulic fracturing will still receive a higher premium than a solid operator that engages in hydraulic fracturing of wells. or more in limits, premiums are “going to run $200,000 to $500,000 depending on the number of wells and ultimate limits purchased.” Best practices publications, historical claims/loss information and continuing technology improvements, among other things, offer sufficient “knowledge to identify oil and gas operators that are operating in a safe and prudent manner,” Susavidge says. “This information forms a basis for criteria to price this risk properly based on the analytics,” she notes. “What is difficult to quantify is the social and political risk in different geographies.” Still up in the air is the influence of the EPA study on fracking and water supplies, expected perhaps late this year or early next. “The social and legal reaction to the report may influence the availability of coverage,” Susavidge suggests. “We expect that will take some time to develop.” Plenty of market capacity is available right now, Hanneman reports. That said, “some markets are still definitely in a wait-and-see pattern as to whether or not they want to offer environmental coverage for this class of risk.” Although certain opportunities have been created, “I can tell you that there has been some contraction as of late,” O’Brien reports. “I think that really has to do more with fear of the unknown than anything else.”

PUBLIC DISPLAY Restoule believes that risks associated with fracking activities go beyond hazard and operational risk. “We’re tending to forget about the ERM [enterprise risk 40 Canadian Underwriter August 2012

management] process and that of reputation and brand, and how do you manage that as a driller and as an operator,” he says. “Is there a black swan event in there? I don’t know. It’s taking the risk management process across the enterprise and not just focus on operation and hazard.” Another issue to consider is how water resources may influence business viability. Restoule points to discussions in the U.S. about current drought conditions and a requirement that frackers reuse water. That is indeed an issue for frackers, he says, because the process may increase the costs of operations. The EPA reports the volume of water needed for hydraulic fracturing varies by site and type of formation: 50,000 to 350,000 gallons of water may be required to fracture one well in a coal bed formation, while two million to five million gallons of water may be necessary to fracture one horizontal well in a shale formation. “At the price of natural gas, could it impair the whole economics by introducing these closed waste water disposal and reuse systems?” Restoule asks. “In Canada, we haven’t faced that problem yet. But you can bet that the closed disposal system is something that is, in my opinion, probably a good risk mitigation measure and I could see it being imposed upon us.” Several provincial and state jurisdictions have opted not to jump on the hydraulic fracturing bandwagon at this time. For example, Quebec has said “No” so far. Meanwhile in Nova Scotia, hydraulic fracturing will have to wait until at least mid-2014 to enter that province

as it completes its review. Citing public concerns over drinking water integrity, Nova Scotia’s provincial energy minister, Charlie Parker, said last April: “We will take time to learn from jurisdictions with significantly more experience in this area than Nova Scotia.” Restoule views the moratorium in Quebec as based on the desire for disclosure of chemicals used in fracking fluids. “If we were able to achieve transparency and educate the public on the technologies and the chemicals used in fracking, I think they could dispel that,” he says. Hanneman agrees, suggesting that this sort of disclosure “erases uncertainty and mystery.” He expects that “you’re going to see a trend toward more eco-friendly constituents in the fluids, anyway, just as a best practice.” Encana reports that it prohibits the use of any hydraulic fracturing fluid products containing diesel, 2-Butoxyethanol or benzene. “Our Responsible Products Program helps ensure that the hydraulic fracturing fluid products we use in our operations are as safe, effective and as environmentally responsible as possible,” the company states. Despite the reviews, the concerns and the rhetoric, fracking may be here to stay, subject to prohibitions or elevated expenses. As claims currently stand, Restoule says that insurance is available and affordable. Asked if he thinks that could change, he replies that everything is subject to change based upon frequency and severity. “It’s really, truly supply and demand, isn’t it?”


Pick Any Letter. A to Z‌ If It Starts With E, Great American Knows It Front-To-Back, Top-To-Bottom

Executives, electronics, excavators and employment practices are just a few examples of why our specialty insurance is hard to top. We specialize in more categories and coverages than you might imagine. And that doesn’t just go for E. From A to Z, our strength of specialization allows us to serve you in letter-perfect fashion. Contact our Underwriting & Servicing Offices: Executive Liability: 416.368.8200 x 12 Property & Inland Marine: 905.831.9037 Great American Insurance Group I Scotia Plaza, Suite 2100 I 40 King Street West I Toronto, Canada M5H 3C2

Executive Liability Division Property & Inland Marine Division www.GAIG.com


New Cat (Aug12)_DG_AS

8/15/12

10:26 AM

Page 28

Coming of

Age

Dr. Pierre Côté

Associate Professor, Faculty of Health Sciences, University of Ontario Institute of Technology

Willie Handler Consultant, Willie Handler and Associates

FSCO’s recent report to the Ontario finance ministry suggests that evidence-based health care has taken centre stage in the province’s auto insurance system.

Evidence-based health care has existed in Ontario for years, but only until recently has the concept been introduced into Ontario’s auto insurance system. The recent recommendations made by the superintendent of the Financial Services Commission of Ontario (FSCO) regarding changes to the definition of “catastrophic impairment,” in addition to the soon-to-beannounced review of minor injury protocols, are examples of how evidence-based health care is slowly gaining acceptance. Evidence-based health care aims to apply the best scientific evidence to clinical decision-making. This helps clinicians understand whether treatment will benefit their patients or, as in some cases, do them harm. Professor Archie Cochrane, a Scottish epidemiologist, in his book Effectiveness and Efficiency: Random Reflections on Health Services (1972), helped develop a growing acceptance of the concepts behind evidence-based health care. The explicit methodologies used to determine “best evidence” were largely established by a McMaster University research group in 1990. Changing practices and incorporating the best available scientific evidence into one’s practice is often challenging for clinicians, insurers and policymakers alike. Barriers to the adoption of new evidence are grounded in one’s own preferences, beliefs, experiences, expertise and education. Improving the use of evidence-based

42 Canadian Underwriter August 2012

recommendations requires that stakeholders develop a better understanding of the benefits of evidence-based practice for patients and society. In Ontario, the evidence-based management of injuries is gaining acceptance. The Workplace Safety and Insurance Board developed a number of Programs of Care over the last 15 years; these evidence-based health care delivery plans describe treatments shown to be effective for workers diagnosed with specific types of injuries (eg., acute lower-back injuries, upper-extremity injuries). FSCO adopted the Program of Care concept when it released two Pre-Approved Framework Guidelines for Whiplash-Associated Disorders in 2003 and the Minor Injury Guideline in 2010.

CATASTROPHIC IMPAIRMENT EXPERT PANEL Ontario’s 2010 auto insurance reforms included a recommendation that the superintendent appoint a panel of medical experts to review the definition of “catastrophic impairment.” The superintendent appointed a panel in December 2010, asking it to identify ambiguities and gaps in the current Statutory Accident Benefits Schedule (SABS) definition in order to reflect emerging scientific knowledge and judgment. The panel submitted two reports to the superintendent in 2011, and the superintendent reported back to the Ontario minister of finance in December 2011. The superintendent’s report was made public on June 12, 2012.


LIU_.McIntyre.FINAL.2012:R2 12-08-14 10:35 PM Page 1

Delivers what he promises. Paul McIntyre, Asst. Vice President, Canadian Surety, Toronto office, LIU Canada

Yes, there’s a Surety Bond insurer as responsible as you are. Business moves at a rapid pace and a company’s bonding needs are often time sensitive. Liberty International Underwriters (LIU) offers surety bonds for publicly traded or privately held Canadian clients with domestic or international needs. From Bid bonds to Performance bonds to License and Permit, LIU has the products and capacity to meet any business goal. We have the expertise and quick response time to provide clients with the surety products they need. To obtain more information about our Surety Bond products, contact Paul McIntyre at 416.216.2043 or visit www.liucanada.com

Responsibility. What’s your policy?™

SPECIALT Y C A SUALT Y • ALTERNATIVE RISK MGMT • WORKERS’ COMP • PROPERT Y • ENERGY • CONSTRUCTION • MARINE • RISK SERVICES

™Liberty International Underwriters, a division of Liberty Mutual Insurance Company

100075 CA 08/2012


New Cat (Aug12)_DG_AS

8/15/12

10:26 AM

FSCO SUPERINTENDENT’S REPORT The superintendent accepted the panel’s recommendations regarding the use of clinical measurement tools to improve the accuracy, relevance, clarity, validity, reliability and predictive ability of catastrophic impairment determinations. The use of these tools will introduce more fairness into the system because catastrophic impairment determinations will be based on tools that will limit the amount of errors. Moreover, accident victims will not have to rely on the persuasiveness of their representatives that they are deserving of the designation. Figure 1 outlines the new proposed measurement tools and the evidence provided by the panel for adopting those tools. Panel members identified areas in which little scientific evidence supported a recommendation. In these instances, they relied on their collective clinical judgment. Their goal was to eliminate or reduce inconsistencies in the process for determining catastrophic impairments. In addition to calling for new measurement tools, the superintendent has recommended some further changes to the definition and the process for determining catastrophic impairments. Children — claimants under age 18 — with serious brain injuries who have been admitted to a major trauma centre will be automatically designated as catastrophic. No assessment will be necessary. As well, the superintendent recommends interim benefits be made available to certain claimants under circumstances in which, due to the nature of the injuries, it would not be possible to make an early catastrophic impairment determination. He proposes a $50,000 monetary cap so as to maximize the chances of achieving the fullest possible recovery. The superintendent recommends that interim benefits be made available to claimants with serious brain injuries and those awaiting a final determination using the American Medical Association’s Guides to the Evaluation of Permanent Impairment following a traumatic physical injury. Although the superintendent indicated that catastrophic impairment

44 Canadian Underwriter August 2012

Page 30

evaluators need specialized training — particularly in the use of the proposed measurement tools — he did not accept the panel’s recommendation that evaluators be required to complete university-based training.

In his report, the superintendent made it clear that moving ahead with changes concerning how catastrophic impairment is determined introduces evidence-based health care to the Ontario auto insurance system.

STAKEHOLDER CONSULTATIONS

CONCLUSION

The superintendent conducted stakeholder consultations in the spring of 2011 following the release of the panel’s first report. FSCO received 33 submissions, which are posted on its website.As is common when initially presented with evidence-based recommendations, not all stakeholders were supportive of the panel’s report.Again, this emphasizes the need for education about the merit of the recommendations.

If the government makes regulatory changes based on the superintendent’s report, it will usher in the adoption of evidence-based methodology — not only for the evaluation and treatment of minor auto accident injuries, but also in the evaluation of the most serious ones. It will be important to re-examine the definition periodically to ensure that it still reflects emerging scientific knowledge and judgment.

Figure 1 Impairment

Current Test

Proposed Test

Evidence

Paraplegia and tetraplegia (quadriplegia)

None

American Spinal Injury Association classification of spinal cord injuries

Standard in medical practices. Literature suggests classification system is valid and reliable.

Amputations

None

None

Clinical and scientific judgment of expert panel members.

Burn and crush injuries to limbs

Not covered in SABS

Spinal Cord Independence Measure (SCIM)

Clinical and scientific judgment of expert panel members. The scientific evidence supports the validity and reliability of the SCIM.

Blindness

None

Legal blindness

Traumatic brain injuries in adults

Glasgow Coma Scale. Glasgow Outcome Scale

Extended Glasgow Outcome Scale

Strong psychometric properties and reliable when used with a structured interview and standard scoring algorithm.

Other physical impairments

Whole-body impairment rating using American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th Edition

Whole-body impairment rating using American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th Edition, Chapters 3-13

Very little scientific literature supporting use for determining catastrophic impairment but expert panel found no alternative rating system.

Class of mental or behavioural disorder using American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th Edition, Chapter 14

Global Assessment of Functioning Scale

Literature suggests scale has adequate reliability and validity.

None, but the courts have been assigning whole-body impairment scores to impairments under Chapter 14 of AMA Guides to allow combining with scores under Chapters 3-13

No combining

No scientific literature to support combining physical and non-physical impairment ratings. The physical and mental/ behavioural impairment rating chapters were not developed to be combined.

None

King’s Outcome Scale for Children Head Injury

Little scientific evidence to support, so expert panel recommended a study be conducted.

Psychiatric impairments

Combining physical and non-physical impairments

Traumatic brain injuries in children



Open Concept (Aug12)_DG_AS

8/15/12

10:29 AM

Page 28

Breaking Down the (Cubicle) Walls

Chris Gudgeon

Business Development Manager, QBE Canada

When a specialist insurer created a truly open concept office, the funniest thing started to happen: Everyone began talking to each other, feeding a multi-disciplinary, collaborative approach to risk. Many of our offices look the same: a grey sea of cubicle walls, behind which industrious and hard-working brokers and account managers toil away preparing submissions, reviewing wordings and sending emails back and forth — likely to someone seated a mere 10 feet from their desks. When our heads drop below the cu-

46 Canadian Underwriter August 2012

bicle wall, it seems we forget that our business is based on relationships, better forged through face-to-face conversation than through a long string of email exchanges. It isn’t intentional, but we don’t talk to each other as much as we should. In most instances, our casualty, property, claims, professional liability and auto specialists all review the risk separately from each other, so each line is reviewed individually, not as a component of the whole. This condition is really a product of the space in which we work — resources divided by walls, a winding maze of walkways and hallways and offices that block out all natural light. As a result, this is something we can change. We’ve tried something different at QBE.We deliberately eliminated the cubicle — a primitive corporate workspace-in-a-box that has seen many a good broker reduced to a lonely, disconnected silo of expertise who never collaborates with his or her peers. We further challenged


Open Concept (Aug12)_DG_AS

8/15/12

10:29 AM

tradition and dared to seat casualty, property and auto specialists right beside each other, right there out in the open for the rest of the world to see.

STARTING THE DISCUSSION The strangest thing happened: we started to talk to each other. Unprompted. It was simply impossible to see the inquisitive faces of our colleagues and not want to chat about what we were working on. We began to collaborate more often.We started to notice the culture in our office was becoming more inclusive, more inquisitive and more comfortable with sharing ideas. We received immediate feedback on those ideas from our colleagues and peers. Idle, curiosity-driven conversation led to more specific inquiries about a clients’ risk. Before we knew it, we were sharing submissions and actively working together across product lines to resolve how we could collectively address a client’s risk.

Page 29

For example, we recently worked with a large North American contractor that, given the scope of its operation, truly required a holistic view toward its risk, which encompassed property, casualty auto and professional liability. “Knowing that my colleagues were going to help me ensure the property exposure was evaluated within the context of the entire opportunity was reassuring,” reflects Robert Tsai, QBE’s property underwriter. “We knew the casualty book looked pretty good, and as a result, we were able to compensate for the other lines and propose a premium that was not only competitive, but a pleasant surprise to the client,” said Alex Tarantino, QBE’s senior casualty underwriter. This holistic view can be especially helpful when professional liability is also included as part of the mix, adds Jamie Thompson, QBE’s senior professional liability underwriter. “Often left on its own, it is an important part

of the overall mix,” Thompson said of professional liability. “Our approach makes sure that we can contribute to a favourable outcome while closing many gaps in coverage between products.”

INTRODUCING THE ATRIUM After 18 months of working out in the open, unencumbered, we realized we had to extend the change in our physical space to benefit our relationships with our broking partners and clients. Everyone talks about being collaborative and about a commitment to open and transparent communication, but physical structures placed between people make it very difficult to deliver on the most basic aspect of communication. How can we communicate face-to-face if we can’t even see the faces of our colleagues and peers? We recognized we could truly profess to have a more comprehensive view of our clients’ risks than before: we could actually “see” the difference. Our objec-

August 2012 Canadian Underwriter 47


Open Concept (Aug12)_DG_AS

8/15/12

10:29 AM

Page 30

Our objective was to create an environment that fosters collaboration, inclusion and a 360-degree view of the clients we serve. We pressed ourselves into having a more holistic view of a client’s risk, across all lines of business, so that we found reasons to write the risk instead of reasons to decline it.

tive was to create an environment that fosters collaboration, inclusion and a 360-degree view of the clients we serve. We pressed ourselves into having a more holistic view of a client’s risk, across all lines of business, so that we found reasons to write the risk instead of reasons to decline it. “This is critical from a claims perspective,” says Darren Goldman, QBE’s claims manager. “Knowing all aspects of the risk enables a more proactive approach to managing claims.We can establish the claims service levels and strategy before we are on the risk, which is often very well-received by clients.” This brings us to The Atrium, an open concept meeting space. It is not a meeting room, but literally an open space in the middle of our office. It is intended to encourage open and frank discussion

48 Canadian Underwriter August 2012

about risk and the products and services we provide to mitigate it. Brokers are encouraged to come and see us, have a coffee and sit and chat with us about how we can help meet the needs of their clients. Even better, they can bring their clients with them so that we can collectively understand the risk through active discussion and analysis. Being a specialist insurer is more than simply an ability to bring expertise and experience to bear for both the broker and the client. It also represents an ongoing responsibility to improve the process of how we communicate and solve problems. The risk of doing business in today’s economy is greater than it has ever been. The insurance industry has been an effective provider of experts, prod-

ucts and tools to address those risks, but we also have to foster and promote the most effective way of moving through the details and communicating with each other. A specialty insurer is in partnership with the broker and the client. As a result of this dependent relationship, the dynamics of how we communicate with each other, share information and collaborate on solutions is critical. The value to clients is significant. They know that their brokers and insurers have a holistic understanding of their risk and the solutions to manage it. This insight is invaluable. It cannot be gained through email or over the phone. We need to meet risk face-toface. We’ve literally created the environment to help us do it more directly than ever before.


SERVICEMASTER.indd 1

08/05/12 3:49 PM


Recruitment (Aug12)_DG_AS.qxp

8/15/12

10:32 AM

Page 28

Homegrown Opinion/Analysis

Eric Gagne

Vice President, Industry Relations, Alpha Rho, Fanshawe College

Talent The P&C insurance industry, which is expected to lose a number of people through retirement, can draw on an abundance of available talent in business insurance programs across the country. A great deal of discussion in the insurance trade press recently has focused on the need for recruiting new workers to an industry that will lose many in its workforce through retirement. And yet, little mention is made regarding from where the new workers will come. As a current business insurance student and vice president of industry relations for Alpha Rho at Fanshawe College in London, Ontario, I feel compelled to remind readers about the abundance of available talent associated with students who attend business insurance programs in the colleges throughout Ontario. Colleges are improving their programs to meet the demands of industry employers.

50 Canadian Underwriter August 2012

BREEDING NEW TALENT Insurance programs vary from province to province, but Ontario continues to be a popular choice, offering programs in at least four colleges — Fanshawe (London), Seneca (Toronto), Conestoga (Kitchener) and Mohawk (Hamilton). Fanshawe offers four intakes of students and two graduating classes every year. Among the four colleges, the number of graduating students from the business insurance programs is estimated to be between 100 and 200 year. Of these, many have completed a number of the chartered insurance professional (CIP) designation courses at the same time they have been completing their respective college diplomas. Completing courses toward the CIP designation improves the professional credentials of students enrolled in the college programs. Students can attain up to nine of the 10 credits required for the designation while earning their diploma. Cyndi Hornby, program co-ordinator of Fanshawe's insurance program, says “there is a strong focus on students to obtain many of the CIP credits before leaving the program.�



Recruitment (Aug12)_DG_AS.qxp

8/15/12

10:32 AM

The foundation of insurance principles taught in the college programs, in addition to the professional skills learned in CIP courses, prepares students for entering the industry once they have completed their programs. Employers benefit from the knowledge students acquire in the program as well as from significant cost savings as a result of students coming to their new employers with a number of CIP credits already in hand. “The successful graduates in the insurance programs are eager, knowledgeable and have a head start on their insurance careers,” says Mary Lynn LaBerge, operations claims manager at The Cooperators. Rob Pearson, CEO of Town and Country Mutual, concurs. “Students leave the program and have a road map,” he says. “They know what they want and have chosen this profession rather than just stumbling into it.”

THE NEW RECRUITS Seneca college program coordinator Jeff Shnier and Fanshawe's Hornby have seen an increase in mature students enrolling in their programs as a result of second-career funding in the past and job losses in their regions. Students in the insurance program are an average of 24 years old. Students who are changing careers or have prior education in a different field offer life skills and extensive communication and interpersonal skills — necessary soft skills that employers in the industry require.

One benefit of business insurance programs is extracurricular events like career fairs and industry conferences. The programs have also seen more international students looking for a career in the insurance industry. As Canada grows more ethnically diverse, employers will need multicultural employees. The business insurance program at Seneca College has found there has been an increase in international students enrolled in the program. College insurance programs offer instruction by professionals who currently

52 Canadian Underwriter August 2012

Page 30

work in the industry or have recently worked in the industry. Program coordinators at the colleges recruit instructors with an extensive knowledge base, acquired after a number of years in the industry. Students benefit immensely from having loss adjusters, brokers, underwriters and managers as instructors: work experience is a valuable tool to aid students in their understanding of complex information. Colleges have an ongoing relationship with the Insurance Institute of Canada (IIC). The colleges coordinate with the Insurance Institute's respective provincial chapters to carry out CIP exams throughout the year, simplifying the process for the students. Since the IIC is regularly in contact with employers, feedback about the overall quality of students often makes its way back to the local chapters. “There is ample positive feedback regarding hiring students from the college's business insurance programs,” says Wendy Barbour, the IIC’s chapter manager for southwestern Ontario, says. “The students tend to stay in the industry, and many of them go on to mentor younger employees, educate other individuals about the industry and about choosing insurance as a career.”

EXTRACURRICULAR ACTIVITIES Another benefit of business insurance programs is extra-curricular events such as career fairs and industry conferences. In Ontario, students attend the annual conferences of the Ontario Mutual Insurance Association, Insurance Brokers Association of Ontario and the Ontario Independent Adjusters Association. Students are exposed to many different professionals at these events and the networking opportunity, coupled with the educational seminars at these events, improves the student's understanding of the industry. Fanshawe College takes it one step further with its insurance program.The college allows students to become members of Alpha Rho, a chapter of Gamma Iota Sigma, the International Risk Management, Insurance and Actuarial Science Fraternity. Alpha Rho is the only

chapter in Canada representing Gamma Iota Sigma.The students in the fraternity at Fanshawe College take part in international events that “promote, encourage, and sustain student interest in insurance, and risk management as professions,” as indicated in Gamma Iota Sigma's mission statement.The students take part in international conferences, symposiums and other industry events. Alpha Rho in London Ontario hosted one event in February 2012, called the Winter Classic, which was originated by Alpha Rho to include U.S. fraternity members. Events at the 2012 Winter Classic included a tour of the Labatt Brewery in London, dinner in a downtown restaurant and attending a London

Employers benefit from the knowledge students acquire in the program as well as cost savings from students coming to new employers with CIP credits already in hand. Knights hockey game at the John Labatt Centre. Relationships formed at these events have proven to be an immense benefit to students, who will carry these networking and relationship-building skills to their employer. Seneca College’s insurance program offers a unique opportunity in which insurers welcome students into their offices for a day. Specifically, two employers send buses to the college to take students to their offices. The students receive lunch from their prospective employers, enjoy time to network with staff and get an overall initial sense of the work environment in which they might find themselves one day. As the need increases to replace retiring workers, colleges will continue to enhance their programs, adapt to changes in the industry and provide a pool of future workers. Employers can continue to rely on these colleges to produce knowledgeable, well-rounded students who in turn will strengthen the workforce, leading to the continued success of the insurance industry.


McGannon Ad 31:Layout 1

7/19/12

12:08 PM

Education

Page 1

Work Experience

Research

THANKS TO ALL OF OUR PARTNERS FOR YOUR 10 YEARS OF DEDICATION AND SUPPORT

YOUR CONTINUED INTEREST AND SPONSORSHIP ALLOWS US TO CONTINUE OUR MISSION: “To provide funding for the advancement of Risk Management & Insurance to students, organizers & stakeholders”

To learn more: www.mcgannonfoundation.ca

Education

Work Experience

Research


Supreme (Aug12)_DG_AS

8/15/12

10:35 AM

Page 28

Belinda Bain

Partner, Gowlings (Toronto)

Julia Vizzaccaro Student at Law, Gowlings (Toronto)

The Supreme Court of Canada has reinforced the notion that the “but for” test remains the test for proof of causation in negligence — and exceptions will be few. The Supreme Court of Canada’s June 2012 decision in Clements v. Clements reinforces the notion that the “but for” test remains the test for proof of causation in negligence, and that exceptions to its application will be few. It also suggests the “material contribution” test ought to be applied only in cases involving multiple concurrent tortfeasors [i.e. wrongdoers], or in other very limited circumstances.

Canadian courts have long applied the “but for” test to the proof of causation.The test is applied to cases arising from both single-cause and multi-cause injuries and requires a plaintiff to demonstrate that “but for” the defendant’s negligent act, the injury would not have occurred. However, the Supreme Court has ruled in the past, in certain exceptional circumstances, a court may apply the “material contribution” test in place of the “but for” test. The “material contribution” test allows an injured party to avoid the need to prove “but for” causation and only requires proof that the negligent action materially contributed to the risk of harm. In Clements, the Supreme Court narrowed the application of the “material contribution” test. At the same time, in obiter1 comments, it suggested the test’s application could be expanded in the future.

BACKGROUND

THE CLEMENTS CASE

When seeking to recover damages in connection with harm resulting from another’s negligence, an injured party must establish on a balance of probabilities that the tortfeasor caused the injury in question. The requirement that an injured party establish a causal connection between the negligent act and the resultant harm anchors the law of negligence to one of its underlying purposes — corrective justice.

Joseph and Joan Clements were involved in a motorcycle accident, with Joseph Clements operating the motorcycle, and Joan Clements riding behind him as a passenger. The bike was about 100 pounds overloaded. Unknown to Joseph Clements, a nail had punctured the bike’s rear tire. As he accelerated to pass a car, the nail fell out causing the rear tire to deflate. Unable to bring the bike under control, he crashed the

54 Canadian Underwriter August 2012

Illustration by Stephane Denis/www.threeinabox.com

Testing Causation


Your Insurance Digital Newsstand is now Mobile: NO APP REQUIRED

1 of 68

iPad/iPhone users - go to the links below and tap the magazine of choice: Canadian Underwriter: http://bit.ly/CUarchives [case sensitive, capitalize CU only]

Publications with Digital Editions:

.ca

Claims Canada: http://bit.ly/CCarchives [case sensitive, capitalize CC only] To flip through the pages, simply swipe or tap at the right or left side of the screen. Scroll through multiple pages by ‘dragging the page number indicator’ at the bottom of the screen to the left or right. Via Computer: As always, everyone can view the Digital Edition of each issue of Canadian Underwriter magazine (including the Annual Statistical Issue and the Insurance Marketer) and Claims Canada magazine – simply visit the above links!

CU Digital Edition PROMO.indd 1

13/06/12 12:47 PM


Supreme (Aug12)_DG_AS

8/15/12

10:35 AM

bike. As a result, Joan Clements, the passenger, suffered a traumatic brain injury. She then sued Joseph Clements, claiming her injury was caused by his negligent operation of the bike. The trial judge found that Joseph Clements’ negligence had contributed to Joan Clements’ injury. In finding liability, he used a “material contribution to risk” test for causation instead of the usual “but for” test. He felt that on an evidentiary basis, Joan Clements could not establish that her injuries would not have occurred “but for” Joseph Clements’ negligence in overloading the motorcycle and driving too quickly. Since it was “through no fault of her own” that Joan Clements was unable meet the “but for” standard of proof, the trial judge felt that exceptional circumstances existed warranting the application of the “material contribution” test. Joan Clements was therefore successful at trial. The case was appealed to the British Columbia Court of Appeal, where the trial judge’s decision was set aside. The court held that the “but for” test to establish causation had not been satisfied and that the “material contribution to risk” test did not apply because the exceptional circumstances allowing its use were not present.The case was appealed to the Supreme Court.

THE SUPREME COURT’S DECISION The central issue before the Supreme Court was: In what type of exceptional circumstances might a court apply the “material contribution” test in place of the “but for” test of causation? This issue required some clarification, following previous cases in the highest court — including Resurfice Corp v. Hanke [2007], Athey v. Leonati [1996] and Snell v. Farrell [1990] — that dealt with various circumstances in which the courts might depart from traditional “but for” test for causation. In Clements, the Supreme Court was unanimous in concluding that a “material contribution to risk” test was not applicable on the facts. The court restated its finding in Resurfice that the use of a “material contribution to risk” test

56 Canadian Underwriter August 2012

Page 30

as a replacement for the “but for” test may be appropriate where: • it is “impossible” for the plaintiff to prove causation on the “but for” test; and • it is clear the defendant breached its duty of care (acted negligently) in a way that exposed the plaintiff to an unreasonable risk of injury. Using the foundation provided in Resurfice, the Supreme Court in Clements sought to define what is meant by “impossible to prove.” The court rejected the suggestion that the inability to provide factual proof sufficient for “but for” causation allows a court to apply the “material contribution to risk” test. Further, the Supreme Court clarified that

scientific precision is not necessary to establish “but for” causation. Instead, the “but for” test allows judges to make common sense inferences from the facts to determine that the defendant’s negligence probably caused the loss. The Supreme Court highlighted that to allow the “material contribution” test to apply in such circumstance would “fundamentally change the law of negligence” and diminish the underlying connection of causation to corrective justice. In Clements, the Supreme Court suggests the “impossibility of proof” required to trigger application of the “material contribution” test is the kind of logistical impossibility arising in cases involving multiple defendants, in which each contributed to the risk of harm, but it is impossible to know which of them, in fact, caused the loss. In such circumstances, the “but for”

test will break down when applied to any one individual defendant since it is impossible for the plaintiff to show whose actions actually caused the injury. The Supreme Court went so far as to say that the “material contribution” test generally ought not to be applied to straightforward negligence cases involving a single defendant (although its application to single-defendant cases was not completely ruled out). In making this statement, the Supreme Court appears to have limited the application of the “material contribution” test to cases of multiple, concurrent tortfeasors. Supreme Court of Canada Chief Justice Beverley McLachlin made an interesting obiter comment at paragraph 44 of the Clements decision: “This is not to say that new situations will not raise new considerations,” she wrote. “I leave for another day, for example, the scenario that might arise in mass toxic tort litigation with multiple plaintiffs, where it is established statistically that the defendant’s acts induced an injury on some members of the group, but it is impossible to know which ones.” This would appear to invite an expansion of exceptions to the general “but for” test, an invitation that the plaintiff side class action bar will no doubt take up with delight.

THE OUTCOME IN CLEMENTS The Supreme Court ultimately found the trial judge had erred in two respects. First, he should not have insisted that scientific reconstructive evidence was a necessary condition of finding “but for” causation. Second, he should not have applied the “material contribution to risk” test because the case did not fall within the exceptional circumstances that allow for its use. The Supreme Court ordered that the case proceed to a new trial, directing that Joseph Clements’ actions be assessed on the basis of the “but for” test for causation. 1 The word obiter comes from the Latin expression obiter dictum, which means “said in passing.” It refers to judicial remarks that are not directly related to the court’s final decision.


92 Annual Convention nd

Wednesday, October 17 — Friday, October 19, 2012

The Fairmont Royal York Hotel, Toronto, Ontario Thursday, October 18, 2012

IBAO’s Annual Convention is the biggest and most exciting insurance broker event on the Canadian insurance industry calendar.

There is simply no other event quite like it!

KEYNOTE SPEAKER:

Peter Sheahan, CEO, ChangeLabs™

FL!P: Creative Strategies for Turning Challenge into Opportunity, and Change into Competitive Advantage Are you looking to give your leaders a more cutting-edge perspective on the world? Are you looking to exploit the opportunity that change brings? Peter Sheahan’s “FL!P” presentation will help you to: • Embrace change and break free from thinking that made you successful in the past, but could undermine your success in the future • Re-think competitive advantage; leverage intangibles to manufacture tangible points of difference in the market • Improve your margins by driving non-sexy innovation and finding new and better ways to do what you do • Turn chaos into opportunity by leading the market in response to new regulation, customer expectations and technology • Be inspired to take the intelligent risks required to innovate and drive change

CSR SEMINAR: Creating Amazing Customer Experiences

Lisa Leitch, CSP, Teneo Results (RIBO CE - 3 Personal Skills Hours)

MEMBER’S SEMINAR: CEO PANEL (RIBO CE - 3 Management Hours) We have secured five high-profile company executives to participate in this year’s CEO Panel. This year’s line-up includes Alister Campbell, CEO, The Guarantee; George Cooke, President and CEO, The Dominion; Jean-Francois Blais, President of Intact Insurance; Karen Gavan, President and CEO, The Economical Insurance Group; and Maurice Tulloch, President and CEO, Aviva Canada. And, we’ve brought back two-time Gemini Award winning journalist, Evan Solomon to moderate the CEO Panel!

Friday, October 19, 2012 EDUCATION SEMINARS:

The 2012 IBAO Annual Convention is a tweet-friendly event and we are encouraging attendees to tweetaway!! The hashtag for the event is #IBAOConvention12. For complete program details and to register online, visit our website: ibao.org and click on Events.

IBAO 2012 AD.indd 1

Banquet & Ball

• Demystifying Social Media and Online Marketing Dan Belhassen, Neovation (RIBO CE - 3 Management Hours)

• Negotiation Preparation – What You Need to Know Now Linda Kern, CSP, Teneo Results (RIBO CE - 3 Personal Skills Hours)

• You’re Worth More Than You Think… the Biggest Mistake an Insurance Producer Can Make! Linda Kern, CSP, Teneo Results (RIBO CE - 3 Personal Skills Hours)

• Customer Connections – Are You Connected or Engaged? Bill Morris, BA, Navicom Inc. and Bryan Yetman, CIP, CRM, First Durham Insurance and Financial (RIBO CE - 3 Management Hours)

• Creating a Winning Sales Culture – Are You Managing or Leading Your Teams? Lisa Leitch, CSP, Teneo Results (RIBO CE - 3 Management Hours)

5th Annual Awards of Excellence Gala featuring entertainment performance by: Montreal Rhapsody Orchestra IBAO will be hosting its 5th Annual Awards of Excellence Gala where we acknowledge brokers for their contributions to the industry and community. Categories are: • Broker of the Year • Brokerage of the Year • Young Broker of the Year • Affiliate Achievement This is the only “official” function recognizing the merits and qualities of general insurance brokers, brokerages and affiliates. Be one of more than 400 guests who will be on hand to support the nominees, cheer for the winners and celebrate their peers!

Magenta Sponsors:

12-08-14 12:48 PM


Online Brokerage (Aug12)_DG_AS.qxp

8/15/12

10:39 AM

Page 28

Building it so They Will Come David Gambrill Senior Editor

Responding to consumers who want to buy their insurance online, the independent broker channel is building online brokerages to offer customers convenience and advice. Brokers have been exhorting themselves to engage the cyber world for some time, and now the idea of an online brokerage is starting to turn into a virtual reality. Having watched their direct channel competitors launch websites allowing customers to obtain quotes and insurance at their convenience, brokers have been pondering ways to offer the same online services in a way that the broker’s advisory role remains an important part of the process. The answer is evolving in the form of “online brokerages.” In a way, the term “online brokerage” is a misnomer, in the sense that the service is offered by an actual, physical brokerage and staffed by real, licensed brokers. But the term applies to at least three different types of electronic insurance offerings: • The consumer starts the insurance transaction

58 Canadian Underwriter August 2012

online — by manually typing in information onto a brokerage website, for example — and then physically visits a brokerage to finalize the transaction. • The consumer starts the transaction online and then finishes the transaction with the help of the brokerage’s telephone call centre or online chat service. • The consumer starts and finishes the entire process online, from A to Z. So far, the third method mentioned above — that seamless, 100% online offering — has been elusive for brokers, but that seems poised to change. Steven White, president of Henry White Insurance Ltd. in New Brunswick, says that his brokerage is planning the official launch of an online brokerage sometime during the fall of 2012. The website is gotoinsure.ca. “I think we’re the only one in the country that’s doing this, where you can have your cake and eat it, too,” White says. “You can purchase your insurance online, go through the whole process from start to finish — the quote, the binding, the printing off of your print cards and making a payment.” Consumers start the process by inputting their information on the brokerage’s website. They will be asked to submit their postal code, claims history, insurance history, the make and history


iHire-MC7584-CUnew.qxd

8/13/12

8:44 AM

Page 1

YOUR JOB POSTING GOES 3X FURTHER WITH i-hire.ca EMPLOYERS AND RECRUITERS

FREE Job Postings at i-hire.ca!

All job postings at i-hire.ca are absolutely FREE! Unlimited number of free postings! Just login as an employer (or register) today - and post your positions!

1

2

i-hire.ca

canadianunderwriter.ca

Your job posting on i-hire.ca will reach thousands of qualified candidates actively seeking jobs in the Insurance Industry. i-hire.ca is the key destination for Canada’s insurance professionals.

Your job posting on i-hire.ca will automatically appear on the official website of Canadian Underwriter magazine, canadianunderwriter.ca, where you will reach tens of thousands of unique visitors per month.

3 canadianunderwriter.ca Email Newsletter In addition, your job posting will be emailed to over 25,000 insurance professionals who subscribe to Canadian Underwriter’s Daily Headline News Insurance E-Alert.

FREE job postings, 3 times the exposure www.i-hire.ca

FREE! • FREE! • FREE! • FREE! • FREE! • FREE!


Online Brokerage (Aug12)_DG_AS.qxp

8/15/12

of the vehicle in question, and any additional information required to get an accurate premium price. Once the insurer’s rates come up (White’s brokerage works with five major carriers), the consumer will be asked to select a premium payment option (monthly, full pay, etc.). At any point during the online transaction process, the consumer can go to the physical brokerage for help, call a toll-free telephone number or open an online chat dialogue box with a licensed broker who will be able to answer any questions in real time. Depending on the insurance carrier, there may be a three-day, five-day or seven-day period for the brokerage to review and verify the information the consumer submitted online. This is to avoid fraud. “So, for example, you couldn’t have an accident now, come online and then buy the product to make sure you have insurance,” White says. “Checks and balances are in place.” Once the online application is submitted for binding, staff at the brokerage will pull up the applicant’s abstract, driving history, claims history, etc. to verify the information submitted online. If the information is accurate, the policy will be issued. In the instance of a discrepancy, the brokerage will contact the applicant, make him or her aware of the discrepancy, and offer the amended premium price. At that point, it will be up to the consumer to choose whether or not he or she will proceed. The website contains a number of disclaimers, making information clear to consumers about coverages, and privacy binding privileges and authority. J. Gerard Fortin et Associés Inc. in Montreal has been offering similar online insurance services for the past two years. Its president, Bruno Fortin, is careful about using the term “online binding” since this may be misinterpreted to mean a purely automated process, when, in fact, it is not. He notes that at some point during the online transaction process, one of his brokerage staff members will review and bind the web-based submissions.

60 Canadian Underwriter August 2012

10:39 AM

Page 30

HOW TO START AN ONLINE BROKERAGE At White’s brokerage, a staff member in each of the brokerage’s 18 offices across New Brunswick is licensed for business specifically associated with gotoinsure.ca. Each of these brokers is trained to handle questions about all five of the brokerage’s insurers, even though some of the offices do not offer all five of the brokerage’s markets in their specific locations. “We have customer service reps in all of our offices that are licensed for gotoinsure.ca, so there aren’t any issues with regard to licensing and being onside with the regulators,” White says. “As well, they have the training for the insurers that are on the online site if a client does call. Not all of our offices deal with the same companies, but the online site has five companies, so all of our staff members are trained for those

Once the online application is submitted for binding, staff at the brokerage will pull up the applicant’s abstract, driving history, claims history, etc. to verify the information submitted online. If the information is accurate, the policy will be issued. five companies. We have staff in those brokerages that are designated to be gotoinsure.ca CSRs, in case someone wants to call or come in.” Fortin says the operations at his brokerage did not change much when the online service was first offered. But a few months ago, the brokerage hired someone to work only on the website. “You have to have someone who is very involved on a day-to-day basis doing it,” he says. Thus far, Fortin’s brokerage has just one broker licensed to do the online service. The Quebec insurance regulator has performed an audit and given the online brokerage its blessing. Building and maintaining an online brokerage may not be for small or

thrifty brokerages. Fortin estimates that development costs for his online brokerage to be more than $100,000. “The broker [developing an online brokerage] must have a lot of money, because the development of the website is the tip of the iceberg,” he says. “There is also all of the publicity, time and resources you have to use to get this thing going.” Publicizing the online brokerage is crucial: It isn’t always the case, as in the movie Field of Dreams, where “if you build it, he will come.” “The biggest thing, I think, is the advertising part of it,” says White says. “The costs when you get into the advertising [include] the Google ad words, the analytics and the search engine optimization. This is far advanced of what we ever did in-house.” White’s brokerage hired a marketing firm in the Maritimes “to help us with our graphics, our whole tagline, our pitch, our storyboard. And that cost of some money going forward.” And so how does a broker rustle up this kind of money? For his part, Fortin is looking for investing partners — which might include other brokers, insurance companies or IT organizations with a stake in the development of a unique online service. White says it has been somewhat easier to publicize in New Brunswick, because the total market of about 800,000 people in the province is smaller than in Toronto, Ontario, for example. But the brokerage does have expansion plans in the works, and as it acquires more offices, it will need to think about the costs associated with bringing on new gotoinsure.ca online agents. Ultimately, both brokers say, consumers will benefit from offering online brokerages to the consumer. “We realize there’s a certain demographic out there that want to do stuff themselves — they want to do self-serve,” White says. “And we determined it would be really cool if we could come up with online, virtual brokerage, but still give consumer a choice to deal face to face. That’s how we came up with this concept.”



pg62 Internet

8/7/12

12:10 PM

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

62

Canadian Underwriter August 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


CSIO (Aug12)_DG_AS.qxp

8/15/12

11:46 AM

Page 28

CSIO’s

New Strategic Plan CSIO says it is planning a proactive service delivery, including enhanced communications with its members and a move beyond maintenance of standards. Catherine Smola President, Centre for Study of Insurance Operations (CSIO)

We live in a world in which technology changes rapidly and it’s essential to keep up. Thus, in an effort to stay current and deliver results to members and consumers, the Centre for Study of Insurance Operations (CSIO) revealed a new strategic plan at its annual general meeting on May 29 in Toronto. The plan will establish the course for the organization during 2012-14, announced Steve Whitelaw, senior vice president of business solutions for The Dominion and chairman of the CSIO Board of Directors. “The new strategic plan means a firm commitment from CSIO to enhancing the value it provides to its members,” said Whitelaw. “The plan

places a greater emphasis on delivering improved services, solutions and collaborative opportunities that will help members leverage CSIO standards to improve not only their own competitive position, but the competitiveness of the entire broker channel.” The new strategic plan is intended to allow CSIO to deliver leading-edge standards, provide exceptional membership support and enable CSIO to innovate and create solutions. As part of this new plan, CSIO has reshaped its mission statement, vision and values to better reflect its commitment to members to be a proactive and responsive organization. Currently, CSIO provides an open forum in which members can work together to develop and enhance existing standards, in addition to seeking ways to improve the competitiveness of the P&C insurance industry. Membership benefits include access to exclusive online CSIO standards and forms; maintenance of CSIOnet, a secure network allowing EDI communications between insurance companies and brokers; access to a comprehensive set of tools, training and expertise designed to help members with standards implementation; participation in the

August 2012 Canadian Underwriter 63


CU Seminar ad August 2012_Layout 1 12-07-19 11:30 AM 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 PROedge Seminars: London – Goderich a Year Later: Triumphs, Challenges, Lessons Learned . . . . . . . . . September 20 Toronto – Defamation Law Primer . . . . . . . . . . . . . . . . . . . . . . September 20 Edmonton – Equipment Breakdown Insurance . . . . . . . . . . . . . . . . October 3 Nanaimo – Equipment Breakdown Insurance . . . . . . . . . . . . . . . . . October 5 Edmonton – Advanced Business Interruption . . . . . . . . . . . . . . . . October 17 Ottawa – Equipment Breakdown Insurance . . . . . . . . . . . . . . . . . October 25 London – Equipment Breakdown Insurance . . . . . . . . . . . . . . . . . October 25

CIP Society Events: Hamilton – Annual Beach Volleyball Tournament . . . . . . . . . . . . . August 29 Regina – Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . . . September 5 Kawartha/Durham – Beach Volleyball Tournament . . . . . . . . . September 5 Ottawa – Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . . . September 7 Corner Brook – Annual Golf Tournament . . . . . . . . . . . . . . . . . . September 7 Charlottetown – Annual Golf Tournament . . . . . . . . . . . . . . . . September 13 London – Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . . September 21 Kelowna – Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . September 21

Keeping you at the forefront of the P&C industry. The CIP Society. MEMBERS BENEFIT. www.insuranceinstitute.ca/cipsociety


CSIO (Aug12)_DG_AS.qxp

8/15/12

11:46 AM

Page 30

CSIO will be introducing a number of new measures that move beyond maintenance of standards and forms. Members can expect more communication; increased support with standards implementation and training; more collaboration to determine best practices; and new technology initiatives.

standards development process; and networking opportunities with professionals who are experienced using the latest technological tools. The new strategic plan was developed following a highly participatory planning process that featured input from numerous stakeholders through focus groups, surveys and industry meetings. The process included a comprehensive assessment of CSIO’s organizational strengths and weaknesses, including where the organization needs to be in the future and how it intends to get there. Building on discussions with key stakeholders, CSIO’s new plan incorporates the following four strategic pillars:

Strategic Pillar 1: Improve the efficiencies of the broker channel: Over the next few months, CSIO will survey its members to determine the Top 10 operational efficiency metrics for the delivery of products and services. CSIO plans to align its initiatives around these efficiency metrics, which will help determine which initiatives will make a significant impact on improving the competitiveness of the broker distribution channel. Strategic Pillar 2: Deliver leading-edge technology standards and solutions: CSIO was originally created to develop and maintain standard forms for the broker channel. But as the industry evolves, CSIO must look beyond standards to delivering leading-edge technology solutions that will push the industry forward.This is especially true in light of emerging trends such as the use of mobile applications and social networking tools.

Strategic Pillar 3: Advance a culture of high performance delivery: CSIO is committed to re-engineering the standards development and change process; in doing so, it will significantly increase the frequency of release dates for its standard updates.This will benefit CSIO members because the need to build workarounds will be reduced and more efficient solutions can be developed directly. This, in turn, will lead to increased productivity for its members. Strategic Pillar 4: Strengthen the organizational framework: As an organization focused on finding efficiencies, CSIO understands the importance of reviewing and streamlining its own internal processes in order to bring its standards to the industry effectively. Recently CSIO welcomed a new manager of standards and business process improvements, who will be responsible for analyzing the organization's processes and workflows and recommend operational improvements so that CSIO can better serve its members. In addition, CSIO will increase the frequency of communication with its members. New standard releases will encourage members to support the updates and to implement them within their own organizations.

KEY VALUES Underlying the four strategic goals listed above are key values that motivate everything CSIO does. These values include being collaborative, proactive, responsive and disciplined. With the introduction of this new strategic plan and our key values, CSIO can help focus

the actions of the organization as it delivers on its business objectives. CSIO’s new mission statement is as follows: “We serve brokers and insurers. We deliver leading-edge technology standards and solutions in order to improve the competitiveness of the broker channel for the benefit of all CSIO members.” CSIO’s new vision statement is as follows: “CSIO is a highly respected organization that delivers leading-edge technology standards and solutions enabling excellent customer experience through the broker channel.” In the upcoming months, CSIO will be introducing a number of new measures that move beyond the maintenance of standards and forms. CSIO will proactively recognize industry challenges and trends. Members can expect more communication by way of surveys and focus groups; increased support with standards implementation and training; more collaboration to determine best practices; and new initiatives that deliver innovative technologies. The new strategic plan will roll out over a two-year period. It will take time for the strategic goals to come to life, but CSIO has taken the first step to ensure that the industry is headed in the right direction. As a member-driven organization, CSIO takes its commitment to developing and improving the services it provides to its members very seriously. By investing in this strategic process, CSIO is building a strong, responsive and collaborative organization committed to improving the competitiveness of the broker distribution channel for the benefit of all CSIO members.

August 2012 Canadian Underwriter 65


M&V (Aug12)_DG_AS v2.qxp

8/15/12

11:56 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

Marsh has appointed Bertil Olsson [1] as its North American energy practice leader, bringing the Canadian energy hub under his leadership to meet the demands of oil and gas companies for more seamless risk expertise and solutions. Having led the U.S. energy mining and power practice from Houston since 2008, Olsson now also has responsibility and oversight for Marsh’s growing and expanding Canadian energy operations. U.S. and Canadian energy companies face similar risk profiles, he says. “With closer coordination between our Canadian and U.S. energy hubs, Marsh will be in a better position to stay abreast of the ever-changing energy landscape and offer more seamless, world-class risk solutions to our North American clients, many of which have cross-border operations.” Olsson “will be bringing greater connectivity across North America and enable clients in Canada and the U.S. to benefit from this closer coordination,” says Andrew George, Marsh’s global energy practice leader.

2

Paul Taylor [2] is the new chair of the board of directors for the Insurance Corporation of British Columbia (ICBC), a position that has been vacant since Nancy McKinstry resigned in January. The appointment for Taylor, president of TransAlta

66 Canadian Underwriter August 2012

USA, will be 12 to 18 months. His public sector career includes serving as: chief of staff to British Columbia’s premier; B.C.'s deputy minister of finance; secretary of B.C.’s Treasury Board; and president and CEO of the ICBC. He has also served on boards, including NaiKun Wind Energy Group, B.C. Automobile Dealers Association, TransAlta Power Ltd., the Conference Board of Canada and the World Wildlife Fund - Canada.

3

John Belyea is the new CEO of Moore-McLean Insurance Group Ltd., an independent insurance broker in Ontario. Belyea joins the company’s executive team and will be responsible for leading the personal and commercial service teams, and the finance and administration departments. Over his 23-year career, Belyea has held numerous leadership positions in the insurance brokerage industry, including as founding partner of Easyway Insurance Brokers and senior partner at Creighton & Company Insurance Brokers. Upon the company’s sale in 2007, he formed Belyea Consulting Group Ltd. Between 2007 and his appointment at Moore-McLean, Belyea worked with dozens of organizations across Canada on projects such as mergers and acquisitions, strategic planning and process improvement initiatives.

1

2

6

7

4

Glenn Gibson [4] will be the CEO of a consulting practice that Crawford & Company is building in Canada. Most recently executive vice president for global strategy, projects and development, Gibson’s new role will include further developing Crawford’s Canadian consulting practice in the areas of technical loss adjusting, arbitrations, strategic planning and enterprise risk management. “Glenn has a unique skill set that combines technical knowledge with skills in strategic planning and enterprise risk management,” Jeffrey Bowman, president and CEO of Crawford, says in a statement. Gibson began his four decades in insurance at Fireman’s Fund Insurance Company, helped build Adjusters Canada and held a

number of executive positions at Crawford, including CEO of Crawford Canada and CEO of the Americas. Last year, the Chartered Insurance Professionals’ (CIP) Society in Canada recognized him with the 2011 Established Leadership Award. Also at Crawford, Barbara White has been promoted to branch manager of Crawford & Company (Canada) Inc.’s Thunder Bay, Ontario office. White joined Crawford in 1997 and has held numerous supervisory positions in its growing accident benefits product line.

5

Gaetano Geretto [5] began his new duties July 2 as senior director of insurance risk management and strategy in the regulation sector of the Office of the


M&V (Aug12)_DG_AS v2.qxp

8/15/12

11:56 AM

Page 61

MOVES & VIEWS

7 4

8 Superintendent of Financial Institutions Canada (OSFI). Before joining OSFI in 2008, Geretto was the founder and president of Pelecanus Strategic Advisory Services, a consulting firm providing strategy development and stakeholder and risk management services to senior leadership teams in the life insurance/reinsurance sectors in Canada, the United States and the European Union. Before 2008, he had amassed considerable experience in numerous senior leadership roles. These included president and CEO of the North American operations of Revios Reinsurance, a similar position in the life reinsurance operations of the Gerling Global Re group, and executive and senior management positions with Sun life of Canada, Transamerica and Prudential

5

9 (U.K.), as well as pension consulting experience with Towers Perrin.

6

Michel Caron [6] has been named the new vice president of sales for Canada at Audatex Canada. Caron will have direct responsibility for business development across the country, helping to advance the company’s reach and better penetrate both the insurance and collision repair sales markets. Caron has been with Audatex Canada for eight years, the last five of which he has led sales in the company’s collision repair services (CRS) division “with significant growth year-over-year,” notes Anthony Giagnacovo, managing director for Audatex Canada.

Pranab Pandey [7] has been appointed as the Centre for Study of Insurance Operations (CSIO)’s new manager of standards and business process improvements. Pandey will work closely with CSIO members to deliver leading-edge standards and solutions that will improve the competitiveness of the broker channel. Pandey has more than five years of specialized experience in service-oriented architectures, electronic data interchange and real-time data integration. Most recently he served at TATA Consultancy Services. He holds a MBA from Queen’s University, a Bachelor degree in engineering from the G.B. Pant University of Agriculture and Technology in India, and certifications in project management and customer relations management.

8

Caroline Schweppe [8] has joined ClearRisk Inc.’s leadership team as vice president of business development in Ontario. Schweppe has 20 years of experience as a marketing and business development executive, with more than 10 years working with IT start-ups within the Canadian and U.S. financial services industry. Her former industry positions include president of Carosch Inc., a sole proprietorship started in 2003; a director with CGI; assistant vice president of marketing and business development for IAO Automated Information Ser-

vices; and account executive with Marsh McLennan Insurance Brokers. “Caroline brings with her an impressive track record of success in the insurance and financial services industry that will help ClearRisk grow significantly,” Craig Rowe, CEO of the company, says in a statement. ClearRisk is a provider of web-based software solutions to the North American insurance industry.

9

Waclaw Kuza [9] has joined Cunningham Lindsey as a marine surveyor and adjuster. As a master mariner, Kuza brings to his new role more than 20 years of domestic and international experience with various types and sizes of ships and cargo. That experience includes seven years on an ocean-going vessel, two years as a staff adjuster and two years as director of compliance and operations. “Both Kuza and the other Canadian team members offer both marine surveying and marine adjusting services, and are part of a global marine specialty group that assist customers here at home and abroad,” says Joel McQuilkin, director of specialty services, transportation fleet services for Cunningham Lindsey. Kuza will work from the Canadian head office in Mississauga, Ontario. Follow @CdnUnderwriter on

http://twitter.com/CdnUnderwriter

August 2012 Canadian Underwriter

67


GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Women in Insurance Cancer Crusade’s B.C. Chapter (WICC BC) hosted its spring event, “The Black & White Masquerade” on Apr. 3. Birks Jewellers generously donated use of their flagship location downtown. The setting could not have been better for a night of fun, fancy and generosity. Costumed stilt walkers provided a charming welcome at the doors. Inside, guests were greeted with a flute of champagne and their very own feather boa. Special

guest emcee Lynn Colliar of Global TV kicked off the night, encouraging all to explore the photo booth, palm readers, caricaturist and silent auction. Mingling among dazzling displays of jewellery, 150 guests were treated to delicious hors d’oeuvres and a selection of drinks. Thanks to the generous support of sponsors and guests that evening, WICC B.C. raised a total of more than $22,000 for the B.C. Cancer Foundation.

Birds on a Wire Property & Casualty Insurance Newswire 68 Canadian Underwriter August 2012


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 65

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Career Connections and the Insurance Institute of Ontario hosted a special cocktail reception in Toronto on June 20 to “Toast the Success” of the Career Connections program. The program aims to encourage young adults and career seekers to pursue skilled professions available in the insurance industry. Margaret Parent, director of the Career Connections Program, thanked the program’s ambassadors and stakeholders for their participation and discussed plans for 2012-13.

Lana Wood Executive Vice President Northbridge Insurance® Western Canada Fabian Richenberger, President of Northbridge Insurance, is pleased to announce the appointment of Lana Wood to the position of Executive Vice President, Western Canada. Lana joins Northbridge Insurance with over 20 years of experience in the Canadian insurance industry. After successful careers with RSA and Marsh, she most recently served as President and CEO of Western Financial Group. In her new role Lana will lead the Western Canada team in achieving our vision of making our customers and brokers more successful. She will also play an integral role in building our brand presence and growing our business in the Western marketplace.

August 2012 Canadian Underwriter 69


GALLERY

Chubb Insurance Company of Canada hosted its 13th Annual Chubb Charity Challenge Golf Tournament in Toronto, Montreal and Whistler (hosted jointly by Vancouver and Calgary). Thirteen years ago, Chubb wanted to expand its traditional charity golf tournament into a

North American event that would benefit the producers, Chubb and the community. Each region hosts a local qualifying event annually. The winning foursome is invited to attend the North American Championship in the United States. This year, the championship will be held in mid-October at The Ritz-Carlton, Reynolds Plantation

WE RESTORE CONFIDENCE

with

[ WATER ] [ FIRE ] [ WEATHER ]

24/7/365 EMERGENCY RESPONSE NATIONAL COVERAGE PROFESSIONAL PROJECT MANAGEMENT QUALITY ASSURANCE - COMMITTED TO EXCEEDING SERVICE LEVEL AGREEMENT REQUIREMENTS POLICYHOLDER SATISFACTION FOCUSED

When things go wrong, we have the right approach to restoration. It begins with a companywide commitment to customer service to our broker, adjuster and policyholder clients. With the expertise, experience and equipment to handle losses of any size – with national coverage. Our emergency response, 24/7/365 days a year, has us always available. Our detailed reporting and single source of contact model provides for an efficient and smooth process. Committed to exceeding service level expectations and policyholder satisfaction. Contact Paul Davis Systems today, we’re ready to make things right for you.

1 800-661-5975

EMERGENCY

RESPONSE 24/7/365

www.pds.ca

70 Canadian Underwriter August 2012

PDS_WithoutPrejudice_GEN_REVISED.indd 1

12-07-27 1:40 PM

in Greensboro, Georgia. Each brokerage contributes $2,500 to charity to participate in the local qualifier. Between 2000 and 2011, more than 4,800 teams from the United States and Canada have raised a total of more than $9.6 million for various charities. Canada’s four offices have surpassed $950,000. Jones Brown Inc., a Canadian team from Calgary, won last year’s North American tournament. As a result, a $50,000 donation was made to the team’s local charity, Hospital for Sick Children. The goal in 2012 is to raise more than $11 million. After all the scores had been tabulated, The CG&B Group Inc. emerged as the winner in Toronto, Aon Risk Solutions was the winner in Montreal and Lloyd Sadd Insurance Brokers Ltd.’s Calgary branch represented the West. Each of the Canadian teams attending the final in Georgia will receive a minimum of $5,500 for their local charity.


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 67

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

The League of Ordinary Gentlemen held a fundraising event, “Music Heals,” on June 20 at the Hard Rock Café in downtown Toronto to benefit The Biggar Endowment for Muscular Dystrophy at the Holland Bloorview Kids Rehab Hospital. More than 400 insurance industry-related patrons attended the live

music performance, which collectively raised more than $25,000 for the cause through ticket sales, a silent auction and raffles. Including its previous fundraising efforts, The League has raised more than $100,000 in support of Street Kids International, as well as WICC (the Women in Insurance Cancer Crusade) and The Daily Bread Food Bank.

Sandy MacSpadyen, President of Direct IME Corp is pleased to announce the following executive appointment

Announcement Gina Greco

Vice President, Business Development In her new role,Gina will lead the development of our Property & Casualty,Life & Health and Medical-legal business that supports insurers, lawyers, and employers across Canada, the U.S. and the UK. Gina will be responsible for the overall expansion and implementation of Direct IME’s key sales and marketing initiatives and overall growth strategy across Canada. Gina has over 20 years of experience in the insurance industry. She brings a wealth of knowledge in all aspects of the IME business,gained throughout her tenure in various sales, marketing and management roles with several large assessment and disability management firms. Gina is known for her commitment to service excellence, innovation and building strong relationships with colleagues and clients. Customer Focus is the guiding principle of Direct IME’s success,demonstrated through professional, fast and efficient service. This approach has earned Direct IME the trust and respect of its clients. We are confident in Gina’s abilities to continue to fulfill the evolving needs of our insurance, corporate and legal customers and to provide them with the Concierge Service that they have come to expect from the Direct IME team. Direct IME is a leading provider of evidence-based independent medical examinations (IMEs), peer reviews, bill reviews and related services for the insurance and legal industries across Canada,the United States and the United Kingdom,and is supported by an industry leading technology platform. 216-3447 Kennedy Rd. Toronto, ON M1V 3S1 Office: 416.609.3211 Toll-free: 1.888.253.4470 Fax: 416.609.9021 www.directime.ca


Gallery (Aug12)_DG_AS.qxp

8/15/12

GALLERY

The 2012 version of the Canadian Cancer Society's Relay for Life featured the largest-ever number of insurance industry participants. The Relay is a tribute to the lives of loved ones who have been touched by cancer. Teams of 10 people took part in the 12-hour, overnight, non-competitive relay, taking turns walking, running or strolling around a track. In Ontario, more than 1,000 friends and members of the insurance industry formed teams under the Team WICC banner in 13 different locations. Sixty-five teams raised more than $303,000 in pledges; sponsorships raised the total to $394,391. Relay For Life is now WICC Ontario’s largest fundraising activity.

72 Canadian Underwriter August 2012

12:41 PM

Page 68


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 69

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

August 2012 Canadian Underwriter

73


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 70

GALLERY WICC at the CCS Relay for Life continued from page 73

ADVERTISERS’ INDEX ACE INA Insurance

9

The ARC Group Canada Inc.

7

AXIS Reinsurance Company (Canadian Branch) Aviva Canada Inc.

17 83 (IBC)

Burns & Wilcox Canada

23

Canadian Litigation Counsel

45

canadianunderwriter.ca

55

Chartis Insurance

29

CNA Canada

27

Crawford & Company (Canada) Inc.

21

Cunningham Lindsey Canada

11

Direct IME

71

Elliot Special Risks

39

FM Global FirstOnSite Restoration Great American Insurance Group

2, 3 24, 25 41

The Guarantee Company of North America

19

IBAO Conference

57

i-hire.ca Insurance Institute of Canada

59 51, 64

Insurance Internet Directory

62

inswire.ca

68

Liberty International Underwriters

43

McGannon Foundation

53

Northbridge Insurance

69

Paul Davis Systems

70

QBE Canada

15

Quelmec Loss Adjusters RSA – Royal & Sun Alliance Insurance Company of Canada ServiceMaster of Canada Limited

80 84 (OBC) 49

Starlight ‘Wish Upon a Star’ Golf Tournament

61

Travelers

37

WINMAR

31, 81

XL Insurance Zurich Canada

74 Canadian Underwriter August 2012

5 35


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 71

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

August 2012 Canadian Underwriter 75


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 72

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

SCM Insurance Services recently held parties in Mississauga and Richmond Hill, Ontario to celebrate the launch of Cira Medical Services Inc. Riverfront Medical Services and Medisys IMA, previously acquired by SCM, were re-branded on June 4 as a single entity, Cira Medical Services Inc. The Richmond Hill gathering was held on June 28 at Marlowe Restaurant. Dozens of Cira and SCM staff attended to thank, celebrate and interact with stakeholders within both the insurance and medical industries.

76 Canadian Underwriter August 2012


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 73

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Giffin Koerth held its first annual golf tournament, the “Giffin Koerth BIG DIVOT Forensics Invitational,” on July 20 at Wooden Sticks Golf Course in Uxbridge, Ontario. Fifty-four guests played Wooden Sticks’ storied greens — an 18-hole championship layout featuring holes inspired by courses such as Augusta, Royal Troon, Oakmont, TPC Sawgrass and St. Andrew’s.

August 2012 Canadian Underwriter 77


Gallery (Aug12)_DG_AS.qxp

8/15/12

GALLERY

More than 260 golfers attended the 13th Annual WICC Ontario Golf Tournament on July 9 at Angus Glen Golf Club in Markham, Ontario. Attendees enjoyed a barbeque lunch, silent auction, raffle and dinner. A WICC cheque for $125,000 was presented to the Canadian Cancer Society.

78 Canadian Underwriter August 2012

12:41 PM

Page 74


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 75

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

August 2012 Canadian Underwriter 79


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:41 PM

Page 76

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Aviva Canada’s National Special Risk Casualty division held a 2012 London Olympic Opening Ceremony Party on July 27 at the

Against the Grain Urban Tavern at Corus Quay in Toronto. Broker guests enjoyed food and refreshments while the ceremony was broadcast on the big screens.

Identifying Investigating Resolving ... for over two decades

LOSS ADJUSTERS

Ottawa Canada 1-888-872-6226 Professional Liability General Liability Commercial Property Personal Property Auto Construction Marine Transportation Environmental

Claims, Risk Management & TPA Services 80 Canadian Underwriter August 2012


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:42 PM

Page 77

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Totten Insurance Group held its annual Dog Guides Charity Invitational Golf Tournament in support of the Lions

Foundation of Canada Dog Guides on July 12 at the Ingersoll Golf & Country Club in Ingersoll, Ontario. Derek Spafford of Munich Re shot a hole-in-one on the 15th

hole and won a $10,000 prize. Since 1983, more than 1,700 Canadians between 4 and 90 years of age have successfully graduated with a dog guide from Lions Founda-

tion of Canada Dog Guides. The impact these dog guides have had on their handlers’ lives ranges from simplifying everyday tasks, such as picking up a dropped

item, to getting help when it is needed most. Dog guide skills include canine vision; hearing ear; special skills; seizure response; and autism assistance to name a few.


Gallery (Aug12)_DG_AS.qxp

8/15/12

12:42 PM

Page 78

GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery

Software provider Brovada has laid claim to being first in North America to introduce a realtime policy change XML upload without the need for a broker to interact with a company portal. Brovada gave a live demonstration of its new technology in Toronto on June 21. “This is a big announcement for Brovada,” Brovada CEO Karl Greenlaw said at the demonstration. “As far as we are aware, this is

82 Canadian Underwriter August 2012

the first policy change upload using web services in North America.” Nine years in the making, the new, out-of-the box technology allows a broker to initiate an electronic policy change upload to the carrier without having to re-key the information into a company portal. The solution is capable of accepting a broker policy change submission, validating the data and overriding company policy data without requiring any intervention by the company, said Michael Wright, senior vice president of operations at Brovada. Thus far, SGI and Grenville Mutual Insurance Company have signed on to use the technology.


Where others see a policy...

“What a Compu difference! - Quote ’s PreFil solution l is lots of t saving us im e o n auto quotes. Av of this g iva’s suppor t clearly s reat ser vice h ow commit s they’re brokers ted to like us.”

...we see people

Amy Mills, President Christie Mills Insurance Brokers Ltd. Toronto, ON

Aviva believes brokers can see further – beyond policies and transactions to the people seeking insurance expertise and advice. That’s why we’re always looking for ways to make it easier for you to do business, like offering Compu-Quote’s new PreFill solution absolutely free until September 30*. Try it today and complete more quotes in less time, so you can get back to doing what you do best: putting your customers first. Experience how we put people before policies. Contact us today.

AvivaPartner.ca Home | Auto | Leisure & Lifestyle | Business | Group | Surety *Certain terms and conditions apply. Aviva and the Aviva logo are trademarks of Aviva plc and used under license by Aviva Canada Inc. and its subsidiary companies.

M-1136 Aug CU-June12.indd 1

6/28/12 2:42 PM


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 businesses to multi-national organizations through a network of independent brokers. If you’re big on managing risk, partner with RSA.

large commercial & speciality insurance

| rsabroker.ca

©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.


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.