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
D E CE M B E R 2 0 1 2 A Business Information Group Publication #40069240
Full Spectrum 2013 PRIMARY INSURANCE MARKET OUTLOOK
VIN as DNA BY VIC WIWCHAR
Quake Stakes BY DARIUSH MOTAZEDIAN & JAMES HUNTER
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VOL. 79, NO. 12, DECEMBER 2012 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP
www.canadianunderwriter.ca
COVER STORY
2013 Primary Insurance Market Outlook
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Insurers in Canada faced polar opposites in 2011 and 2012. What will 2013 hold? It looks like a full spectrum of issues, ranging from large loss events to tepid economic growth, earthquake risk, infrastructure renewal and technology will be on the minds of insurers right across the country.
FEATURES
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Vehicle Numbers
Car-Share Programs
Detailed vehicle information, available in VINs, offers the promise of accurate underwriting and damage assessment, as well as efficient collision repair.
Is auto insurance keeping pace with car-sharing services that are turning the traditional notion of “one driver-one vehicle” on its head?
BY VIC WIWCHAR
20
BY CRAIG HARRIS
50
16 Settlement Offers
42 Earthquake Mapping
What are the ethical considerations in a situation where a policyholder who has been involved in a serious car accident demonstrates he simply wants the settlement process to end, prompting an adjuster to make a low offer?
Seismic microzonation mapping of earthquake-prone zones can offer a basis for policy-making and building code requirements by enhancing the understanding of the potential for spatial distribution of hazards.
BY THE CIP SOCIETY
BY DARIUSH MOTAZEDIAN & JAMES HUNTER
24 Auto Fraud
55 Underground Infrastructure
The Ontario Auto Insurance Anti-Fraud Task Force released its final report in November. Key among the group’s recommendations are beefing up FSCO authority, and getting all stakeholders involved in combating fraud. BY ANGELA STELMAKOWICH
Environmental Liability
New legislation is expected to help advance efforts to stem damage to underground phone lines, Internet cables, water lines, natural gas lines and hydro lines by centralizing co-ordination efforts. BY JIM DOUGLAS & JOHN TROZZO
Weather Losses
It seems Ontario’s Ministry of the Environment is getting more aggressive about naming directors and officers who may be personally responsible for clean-up costs.
It looks like 2012 will mark the fourth consecutive year of billion-dollar losses for Canadian p&c insurers, and factors leading to expensive natural catastrophe years is unlikely to improve anytime soon.
BY GREG MECKBACH
BY GLENN MCGILLIVRAY
December 2012 Canadian Underwriter
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VOL. 79, NO. 12, DECEMBER 2012
PROFILE
Editor Angela Stelmakowich astelmakowich@canadianunderwriter.ca (416) 510-6793 Associate Editor Greg Meckbach gmeckbach@canadianunderwriter.ca (416) 510-6769
10 Risky Enterprise Michel Turcotte, recipient of the 2012 Donald M. Stuart Award, is in the transformation game: identifying risk and potential loss and turning that knowledge into organization-wide systems that combat loss. BY ANGELA STELMAKOWICH
SPECIAL FOCUS
6
Editorial
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Marketplace
58 Moves & Views 60 Gallery
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EDITORIAL
Reputation at Stake
Respondents reported time and productivity losses, serious reputational damage, loss of customer loyalty, legal costs and lawsuits, and regulatory fines. Angela Stelmakowich, Editor astelmakowich@ canadianunderwriter.ca
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Canadian Underwriter December 2012
A person has his or her word; a company has its reputation. And it is a reputation — that all-encompassing, all-purpose “it” defined as much by action as by belief — that can be shattered by anything and everything from calculated criminality to an honest mistake. Beyond actual cash out of hand, what might be the ultimate ramifications? Consider what comes after thousands upon thousands of gallons of oil spew into the Gulf of Mexico; a once-revered football program is catapulted into the annals of shame by direct harm and absent response; or a hacked insurer database potentially compromises the personally identifiable information of more than a million individuals. The first two situations (it is hoped) would be few and far between, but the third could become more commonplace as insurers, brokers and all manner of insurance stakeholders use “technology the good” to build great stores of information that become targets of abuse, misuse or a lack of care. “In a global economy, driven by electronic commerce, it is essential that all necessary steps are taken to ensure consumers are protected from an unintentional release or criminal theft of their personal data,” Dave Jones, California’s insurance commissioner, said following the hacking incident in the United States. The insurer responded by offering each compromised
customer a year of free credit monitoring and identity theft protection, which includes notification of any changes to credit information, as much as $1 million identity fraud expense coverage and access to their credit report. Awareness about how a data breach can affect business — from hard costs to the intangibles of a solid reputation — is on the rise, but still a divide exists between what should be and what is being done. “Although organizations have become more aware of potential threats, they do not seem to accurately perceive the repercussions associated with data breaches,” said Dmitry Shesterin, vice president of product management at Faronics, which sponsored a recent cyber security readiness survey involving 803 individuals south of the border. Of the 60% of businesses in the Faronics survey that had experienced a data breach within the last year, respondents reported time and productivity losses, serious reputational damage, loss of customer loyalty, legal costs and, to a lesser extent, lawsuits and regulatory fines. Despite the increased awareness, despite the potential hard costs, almost twothirds of public companies, 64%, do not buy cyber insurance, notes the Chubb 2012 Public Company Risk Survey. It is that disconnect between rising awareness and flagging response where reputational harm can emerge.
Insurance is critically important — not only to address what has happened, but as a reminder to review what could happen. Even with the best intentions and excellent processes in place, that “could” is always a possibility. Addressing that demands identifying risk and determining what is acceptable as an organization. But it also demands casting a critical eye on behaviour. It is essential to consider what, where and when something may happen, and have in place practices and processes throughout all segments of an organization. Culture must be carefully cultivated but, once instilled, can help guard against preventable loss and the potential for harm to reputation as a result of misdeeds, deliberate or otherwise. Expectations about what an organization views as acceptable must be clear — and consistent. It is also necessary that an organization carefully consider the views of other entities that it deals with. There is no guarantee these will be in step. That “something” that may lay waste to a reputation, even a good one built over time, is best avoided. If not, however, it needs to be managed and response needs to be swift. The school of hard knocks has plenty of lessons to teach. The hope is that careful review, assessment and preparation in advance will help to avoid the whole sorry mess in the first place.
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MARKETPLACE Sign up to receive Canadian Underwriter’s free Insurance Headline News Email Alert: http://bit.ly/cuenews
Regulation COURT UPHOLDS 60-DAY WAIT LIMIT FOR MEDIATION The Court of Appeal for Ontario has upheld a decision by a lower court to dismiss the appeals by insurers in a case involving wait time for mediation before the Financial Services Commission of Ontario (FSCO). Hurst v. Aviva Insurance Company details circumstances in which four individuals made separate, but similar, claims to their insurers under the Statutory Accident Benefits Schedule (SABS) after being in vehicle accidents. The claimants pursued litigation against their insurers, citing failed mediation through FSCO, since their claims were not mediated within 60 days — a limit set out in the commission’s Dispute Resolution Practice Code. FSCO had not provided reports to the claimants noting that mediation had failed, since it said the 60-day parameter only applied after the mediation application had been assessed by staff and found to be “complete.” The insurers then argued in court that mediation had not failed because the 60-day limitation did not apply. A lower court judge dismissed the motions by the insurers, who appealed to the Court of Appeal for Ontario. The appeal court upheld the earlier decision, which hinged on wording in sections of SABS. The appellant insurers had argued the
8 Canadian Underwriter December 2012
wording did not set out a 60day limitation on the mediation wait time. “The purpose of the legislation is to make mandatory a mediation process that is timely and effective,” the ruling notes.
PEI EYES PROHIBITION ON CREDIT SCORING Prince Edward Island has drafted regulations to ban insurance companies from using personal financial information after receiving complaints some individuals have been denied residential property or private passenger automobile insurance. The draft regulations were released after complaints the “practice has resulted in some individuals either not being offered insurance, or only being offered insurance at unaffordable rates,” notes a discussion paper on the issue. The type of information being used by some insurance companies include credit history, rating and score or credit-based insurance score; income level; net worth; indebtedness; credit card ownership; and whether or not a late payment has been made to an insurer, which did not result in cancellation. If use of personal financial information becomes widespread, “that, in turn, may lead to significant availability and affordability issues within the province, with respect to these insurance products,” the paper notes. The Canadian Council of Insurance Regulators’ Credit Scoring Working Group,
tasked with reviewing the use of credit scoring by insurers, was unable to develop recommendations on the matter. The group notes in its November 2012 report that it had a “preponderance of opinion, but a dearth of fact as to the actual and current, rather than potential, harms that may be accruing to consumers from the use of credit scores by insurers.” To make recommendations, market conduct reviews by various provincial regulators would be needed, it adds.
Claims SEVERE WEATHER TALLY TO TOP $1 BILLION IN 2012 The Insurance Bureau of Canada (IBC) reports that insured damage from severe weather across the country is less than last year, but is still expected to exceed $1 billion in 2012. Citing estimates from Property Claim Services Canada (PCS-Canada), IBC notes total insured damage for 2012 is approximately $1.19 billion, down from last year’s $1.7 billion. The data suggests thousands of claims have been filed for damage to homes, cars and businesses as a result of severe weather events this year. Ontario and Alberta were most hard hit. A weather system that tore through Ontario and Quebec in May brought with it high winds and flooding that resulted in $260 million in damages. But it was the
wind, flooding and hail storms that battered in and around Calgary in August that proved most expensive, with insured damages pegged at more than $500 million. Superstorm Sandy caused $100 million-plus in damages in Ontario and Quebec.
Canadian Market CBN ACQUIRES SOUTH WESTERN INSURANCE An agreement has been reached, although terms have not been disclosed, for Canadian Broker Network (CBN) to acquire Intact affiliate, South Western Insurance Group Ltd. The transaction involving the wholesale insurance intermediary is expected to close by the end of 2012. Upon closing, South Western will operate as an independent subsidiary of CBN with its own leadership team, name and brand. The deal marks CBN’s expansion into the wholesale insurance market and offers South Western the ability to expand its relationships with insurance companies, CBN reports. “With more than 50 years supporting brokers, South Western’s growth potential is significant thanks to its strong industry relationships, experienced professionals and unique underwriting expertise in niche and specialty insurance products,” says CBN chair Daryn McLean.
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MARKETPLACE
COMMERCIAL INSURANCE FOCUS OF NEW FORUM Brokers, MGAs and insurers involved in the commercial space in Canada will be the focus of a new conference next year launched by MSA Research Inc. The first Canadian Commercial Insurance Summit (CCIS), scheduled for next June, offers attendees expert speakers, breakout sessions and networking opportunities. The CCIS agenda and conference ground rules will be driven by an inaugural advisory committee, members of which include senior executives with some of the country’s largest insurance companies and organizations. “Support for this has been overwhelming as there is an obvious need for a national annual gathering for leaders in the Canadian commercial market,” Joel Baker, president and CEO of MSA Research, says of the conference.
investments from $3.25 billion annually to $5.75 billion, bringing spending (as a percentage of GDP) more in line with levels in the mid-1950s to the mid-1970s. This “allowed proper infrastructure
maintenance and growth.” Ottawa is working on an infrastructure funding plan to use when the current plan ends in 2014. “A long-term federal funding commitment that reflects the life-cycles of
the infrastructure it is meant to fix is needed to allow municipalities to invest wisely and strategically in priority areas over decades, not just years,” says FCM president Karen Leibovici.
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Risk Management MUNICIPALITIES CALL FOR BILLIONS MORE IN INFRASTRUCTURE DOLLARS The Federation of Canadian Municipalities (FCM) is calling on the federal government to create a 20-year plan and to beef up annual funding by $2.5 billion to address aging infrastructure. The FCM is proposing the federal government increase its municipal infrastructure
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December 2012 Canadian Underwriter
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PROFILE
Risky Enterprise Angela Stelmakowich Editor
Michel Turcotte, recipient of the 2012 Donald M. Stuart Award, has made his life’s work getting risk under control. You could say Michel Turcotte’s work life has been about good timing — a risk management job requiring knowledge of insurance opens up when he is an underwriter; a cable company needs to fill a position and he has worked as a computer programmer; and he is wellversed and well-positioned during the emergence of a new media entity, allowing him to help build an enterprise risk management (ERM) program almost from scratch. The recipient of the 2012 Donald M. Stuart Award, Canada’s highest honour in the risk management field, has constructed and implemented risk management programs for major corporations in Canada and around the world, RIMS and RIMS Canada Council noted in a release announcing the award.
NEW DIRECTION But Turcotte’s enviable resume had to start somewhere. Armed with a Bachelor of Commerce degree — and facing a dreary economic
10 Canadian Underwriter December 2012
state in about 1990 — Turcotte set out to find a job, any job. With his finance background, “it was either a bank or an insurance company,” says the current senior director of risk management and insurance at Invanhoe Cambridge Inc. in Montreal. “I ended up in an insurance company as a health benefits underwriter,” he says. He stayed at Manulife for a few years, completing his MBA part time, before setting out to find a new job. This time it was as a risk manager at Provigo, a grocery retailer based in Quebec. “I didn’t know anything about it, but they were looking for somebody who knew about insurance. That was me.” In his job interview, he was asked about his experience in property and liability insurance; Turcotte responded he had none, but knew about insurance. “Insurance is a concept. Once you know how it works, it is just a question of learning the specifics of each policy,” he says. The new position afforded the opportunity to take a wider view of things. Underwriting can be a solitary pursuit, Turcotte says, but risk management is involved in every aspect of a business. When Provigo was bought by Loblaw Companies Limited — and risk management functions relocated to Toronto — Turcotte was off to find a job yet again. He landed a risk management position at
Videotron, then independent but now a wholly owned subsidiary of Quebecor Media. When Turcotte arrived on the scene, Videotron was mostly a cable television company, with a bit of commercial telephone service thrown in. That was in about 1999, and the company’s risk management program, having got off the ground just a few years earlier, was not especially sophisticated. Still, Turcotte was in his element, addressing risk management issues in a tech/telecom environment, enabling him to employ the
Turcotte knew nothing about risk management. “They were looking for somebody who knew about insurance. That was me.” year of computer programmer experience he had gained before obtaining his degree. He spent a year at Videotron before the company was bought by Quebecor Media Inc., today one of Canada’s largest media companies. No longer was Turcotte dealing with risks primarily associated with cable television; now there was also newspapers, magazines, telephone service, an Internet portal and Internet devices. Everything was new at Quebecor Media. “We had to put
the insurance program in place, we had to almost start from scratch,” says Turcotte, who served as director of risk management. RIMS reports Turcotte’s work there “changed the risk culture of the organization from one of mere risk transfer to one of the most complex enterprise risk management programs in the country.” ERM demands taking a broader view of risk with the ultimate goal being to improve the overall cost of risk. It is not a static thing; it requires adjustment whenever a new risk emerges or the size of a risk changes. “You do two things at the same time: you work with senior management, getting them to be more involved in risk,” Turcotte says. In addition, “you work on the insurance program itself to make sure it evolves.” To be truly effective, ERM requires buy-in across the board, starting with senior management. “If you don’t get senior management to believe in risk management, you’re going to have an insurance program and that’s it. You’re going to transfer the risk all the time,” Turcotte says. There also needs to be staff buy-in. “You talk to employees on site on a regular basis about loss, about near-losses, about value that you need for your insurance,” he says. “Risk management is something that everybody in a company needs to be
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the job. “I don’t think this happens too often in a lifetime. I thought it must be a sign. I have to go.” And go he did, now dealing with all manner of propertyrelated risk for the property owner, manager, developer and real estate investor.
LIVE AND LEARN
concerned about. That’s when you can build a more adaptive and more costeffective program because everybody is on the same page about what you’re trying to achieve,” he says. “There needs to be some risk management, some risk controls, some re-evaluation of the risk appetite of the corporation.”
CULTURE SUPPORT For companies that view risk management positively, seeing its upside, there will likely be more related activ-
ity; a negative view likely will inspire the opposite response, Turcotte says. It is only when an organization’s culture embraces risk management “that you can talk about ERM.” Turcotte remained at Quebecor Media for 11 years, until 2010, before moving to his current role at Ivanhoe Cambridge. He was actually approached and following a 15-minute meeting over coffee, was told he was the company’s choice for
Over the years, RIMS notes in its statement, Turcotte has made significant contributions to the field of risk management education, both as an author and as a lecturer. He is responsible for pioneering French-language risk management education in Quebec, something that is near and dear to his heart. “I strongly believe that it is the responsibility of seasoned risk professionals to provide leadership, and mentor the next generation of risk managers,” Turcotte says in the RIMS statement. “I always loved to write and to teach,” he says, even doing course recaps to help with studying while at university. While at Provigo, a spot opened up to teach a risk management course at a university. He was quick to give it a try, teaching for three years. Turcotte also helped out when a distance-learning university came up with a new certificate program that included the three Canadian risk management (CRM) courses. Turcotte worked with the university for six years, translating part of a risk man-
agement book and incorporating some of the information that he had included during his lectures. “Now, the only way someone in Quebec can get their CRM in French” is through that distance-learning program, he says. “I guess that’s part of my legacy” in risk management. It may be that teaching and working on the French version of CRM finds its roots in his childhood. “My dad left and my mom was on welfare. We were living in like a ghetto,” Turcotte says. “For us, university was out of reach. There was no way any of us would go to university.” But school always came easy to Turcotte. After his father, who was working as a janitor at a hospital got him a part-time job there, he saved the money to be able to go to school. “I felt that I needed to give something back because of the chance that I got,” he says. Perhaps what Turcotte is most proud of, however, is the novel he wrote, Malediction. “Obviously the main character is a risk manager,” he says with a laugh. The book follows the protagonist in his quest to find the artifacts that contributed to the mysterious deaths of 15 of the 17 people who opened the tomb of Tutankhamun in the early 1920s. Being a part-time hobby, the book took four years to write. No matter. To a risk manager, effort over time can make for a very happy ending.
December 2012 Canadian Underwriter 11
Photo: Julian Haber
PROFILE
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Vic Wiwchar
Director, Business Development Audatex Canada
Accurate underwriting and damage assessment for vehicles relies on having detailed vehicle identification. Absent this, collision repair can become more inefficient and expensive, as well as frustrating for customers. Detailed vehicle identification is the foundation of accurate damage estimations and effective collision repairs. Without it, there can be incorrect parts ordering and poor workshop planning, leading to inefficiencies, unnecessary cost, delays and, often, frustrated customers. At its worst, an absence of detailed identification can result in poor and unsafe repairs. For the insurance company, there are implications with respect to risk assessment, pricing, claims assessment, indemnity and expense costs — all of which, clearly, are best avoided. If one were to “channel surf” the hundreds (or
12 Canadian Underwriter December 2012
thousands) of stations that are available today via local cable or satellite services, it is unlikely there would be any hour of any day of any week where there is not some program involving C.S.I.-type investigations or crime dramas from which to choose. Almost invariably, there is some minute clue or detail in these fictional scenarios that helps “solve the case.” And more often than not, DNA evidence is used to help the authorities secure a conviction. Although the insurance industry is usually not quite so dramatic, there is information available on almost every vehicle on the road that is very much like human DNA:VIN (vehicle identification number), which is continuously being used in more and better ways to create efficiencies.
UNRAVELLING THE POSSIBILITIES In the mid-2000s, a number of organizations in Europe began looking at the possibilities offered by using the VIN. When unravelled, this vehicle DNA could or should offer a complete picture of a vehicle as far back as the day that it
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rolled off the production line. In theory, a VIN allows for more or less instantaneously retrieval of a vehicle’s content, including model, interior, standard equipment, factory-fitted options, original trim and paint. While this may seem to be a simple concept, for organizations that provide this service, a lot of skilled data development and linking needs to be done. The quality of the result can certainly differ, depending on an organization’s knowledge and skill. To more accurately underwrite a vehicle or to assess damage from a claim perspective, the first step is to correctly identify the vehicle model, sub-model and options. As vehicles become increasingly sophisticated and the numbers of sub-models proliferate, this is not as simple as it sounds.Take as one example the VW Golf — across Europe, there are currently 67 sub-models on the road with different engines, safety features and options, often semi-customized at the factory in line with the demands of the owner. Optional equipment can have a major impact on a vehicle’s final value, so understanding it is important. Not only does this equipment help determine if the vehicle repair exceeds the threshold for total loss, it also helps establish correct repair cost, correct parts to order and how to plan the job effectively in the workshop. Consider that the basic version of a BMW 740i costs about $108,000, while a fully loaded version can run at, say, $121,000.This also holds true for more mainstream vehicles — an Audi A4 has a price tag of between $47,000 and $53,000, depending on the equipment and options chosen by the customer. So it is little wonder that tools are being developed to inject some “science” into the process to correctly identify vehicles. For example, search tools and software solutions that offer a cascading series of options may be presented to an estimator to identify the equipment and options on the vehicle. Helpful as that may be, it nevertheless
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relies on personal knowledge of the vehicle to select the correct options. Furthermore, the process is time-consuming, taking from 15 to 20 minutes on average to complete, and does not eliminate user error. Products and services are currently available that offer concrete business benefits for claims departments and body and paint repairers, including identification with negligible search errors, perhaps saving 15 to 20 minutes
Currently, insurers can lack accurate information for setting premiums. If an insurer gets the premium level wrong and over-insures, the offer may not be competitive and chances losing the customer. per estimate (assuming there are no vehicle modifications post-purchase); automated selection of correct equipment and repair options; accurate estimates, helping reduce the number of re-calculations and leading to quicker insurer approval; fewer errors in parts ordering and exchange of wrong parts; and enhanced customer satisfaction and retention because of correct repairs and improved cycle times.
TRANSPARENCY IMPORTANT There are also direct benefits for an insurer since additional transparency in the process helps reduce errors, re-work and re-approval, contributing to bringing down claim handling costs. Of course, not all VIN identifiers are created equal. Decoders, often available on the web for little or no money, tend to provide only basis data — vehicle, build year, standard equipment and a list of possible options — which replicates some of the disadvantages of search tools. Since these decoders are not integrated into the estimation system, it can result in time-consuming re-keying and possible input errors. More sophisticated versions do exist, providing the aforementioned data, the grade and individual vehicle content, and are directly integrated into the estimation system. The next stage in VIN evolution is likely to be its development as an insurance underwriting tool. Currently, insurers can lack accurate information for setting premiums. If an insurer gets the premium level wrong and over-insures, the offer may not be competitive and the insurer chances losing the customer — be it new business or the renewal of a long-standing client. If insurers under-insure, they are not covering their risk with adequate premium. This can often be the case when insuring a vehicle that is “second-hand” — even the new owner may not be aware of its features and options. The addition of vehicle and option prices to VIN will allow insurers to quickly understand the vehicles they are underwriting and establish correct premiums. The VIN will identify the retail price, the options and individual pricing — which is key to understanding different depreciation rates on, for example, high-end equipment such as navigation, audio and drive assist. The potential customer will also benefit from a quick and accurate quotation. There are now more than 25 major vehicle manufacturers in Europe that are linked to VIN identification systems,
including VW, BMW, Audi, Toyota, Peuincluding VW, BMW, Audi, Toyota, Peugeot, Renault and MAN (a heavy truck geot, Renault and MAN (a heavy truck manufacturer). It is estimated that more manufacturer). It is estimated that more than 35% of estimations make use of than 35% of estimations make use of VIN as part of the process. VIN as part of the process. There are also benefits from a fraud There are also benefits from a fraud perspective, although that would be via perspective, although that would be via either front-end underwriting or the either front-end underwriting or the claims investigative and evaluation claims investigative and evaluation processes. Ultimately, the insurance processes. Ultimately, the insurance company needs to know the following: company needs to know the following: • Is the vehicle we are about to insure • Is the vehicle we are about to insure being accurately depicted? being accurately depicted? • Is this a risk we are comfortable writing? • Is this a risk we are comfortable writing? • Are we getting the right rate for the risk? • Are we getting the right rate for the risk? Of course, other variables such as a Of course, other variables such as a vehicle’s history of drivers/users also vehicle’s history of drivers/users also play a major role in the underwriting play a major role in the underwriting process. Would it not be ideal if a deprocess. Would it not be ideal if a detailed and accurate representation of tailed and accurate representation of risk was available with almost every risk was available with almost every single new business application — or single new business application — or even a renewal — that is processed? even a renewal — that is processed? While a VIN may not address the issue While a VIN may not address the issue
of after-market installations or modifiof after-market installations or modifications, at the very least, it provides a cations, at the very least, it provides a strong foundation that is part of both strong foundation that is part of both the underwriting and claim practices the underwriting and claim practices of most insurance organizations. of most insurance organizations.
NEXT STOP: NORTH AMERICA NEXT STOP: NORTH AMERICA
In Canada and the United States, VIN In Canada and the United States, VIN is mostly limited to European manuis mostly limited to European manufacturers such as BMW, Mercedes, VW, facturers such as BMW, Mercedes, VW, Audi and Volvo — with the notable Audi and Volvo — with the notable exception of GM. The lower adoption exception of GM. The lower adoption rate is likely as a result of a “who jumps rate is likely as a result of a “who jumps first” attitude on the part of vehicle first” attitude on the part of vehicle manufacturers, who may have concerns manufacturers, who may have concerns about sharing data. about sharing data. At the same time, insurers are not At the same time, insurers are not pushing vehicle manufacturers, which pushing vehicle manufacturers, which possibly are not fully aware of the popossibly are not fully aware of the potential benefits that VIN can bring. tential benefits that VIN can bring. That VIN has developed more quickly That VIN has developed more quickly in Europe than in North America perin Europe than in North America perhaps as a result of four factors: haps as a result of four factors: • the European Union’s regulatory envi• the European Union’s regulatory envi-
ronment places an obligation on vehicle ronment places an obligation on vehicle manufacturers to make specific data, manufacturers to make specific data, such as VIN, available; such as VIN, available; • the repair market is under intense • the repair market is under intense pressure from insurers to improve effipressure from insurers to improve efficiencies and reduce costs (although ciencies and reduce costs (although this is not unique to Europe); this is not unique to Europe); • electronic repair systems, which can • electronic repair systems, which can fully leverage the benefits of VIN, are fully leverage the benefits of VIN, are highly penetrated in most European highly penetrated in most European markets; and markets; and • the initial vehicle makers to address • the initial vehicle makers to address VIN were the German brands, which VIN were the German brands, which have well-developed VIN data structures. have well-developed VIN data structures. It appears mostly a matter of time It appears mostly a matter of time before there is higher penetration in before there is higher penetration in North America. North America. The expanded use of the VIN may not The expanded use of the VIN may not be the “smoking gun” that solves the be the “smoking gun” that solves the case on television programs, but it is case on television programs, but it is certainly a tool that promises to assist certainly a tool that promises to assist the insurance industry as a whole today the insurance industry as a whole today and in the future as technology conand in the future as technology continues to evolve. tinues to evolve.
D ECE M B E R 2 N D, 3:52 P. M .
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The
The CIP Society Ethics Series
Reluctant Claimant
The CIP Society Insurance Institute of Canada
The CIP Society represents more than 16,000 graduates of the Insurance Institute of Canada’s Fellow Chartered Insurance Professional (FCIP) and Chartered Insurance Professional (CIP) Programs. The CIP Society, through articles such as this, is working to bring ethical issues to the forefront and provide learning opportunities that enhance the professional ethics of all insurance professionals.
What are the ethical considerations in a situation where a policyholder, having experienced a serious car accident, displays tell-tale signs that he just wants the claims process to be over and done. What if an adjuster responds to that vulnerability by making a settlement offer that is too low? Insurance professionals — particularly adjusters, both company and independent — deal with all kinds of people, at times when they are most vulnerable. It may be tempting to allow a claimant’s inexperience, lack of understanding or even demanding personality to influence
16 Canadian Underwriter December 2012
the claims process. But should it? Consider the following example: After experiencing a serious car accident, a policyholder was rattled and wanted to erase any memory of the upsetting event. Constant reminders, including an impending court date for careless driving, made the client simply wish the accident had never happened. Not being a strong negotiator at the best of times, at this stage, he was particularly vulnerable. Conversations between the client and an adjuster began soon after the accident occurred. It was quickly determined his car would be written off and a settlement offer would be prepared. Following several discussions between the adjuster and the nervous client, it became clear to the adjuster that the client was not going to reject any offer. Taking advantage of the situation (and the client), the adjuster provided an offer of settlement that was a fraction of what it should have been. Justifying her actions, the adjuster reasoned
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she was providing value to the company and its shareholders, and she felt it was the responsibility of the client to stand up for himself. In this scenario, the client’s frame of mind became a factor in the adjuster’s decision-making. Under what circumstances does the client’s manner, awareness or negotiating skills become factors in an adjuster’s decision-making process? Did the adjuster act unethically? Are there circumstances in which a company’s bonus structure, meant to help keep costs low, represents a conflict of interest for the adjuster’s support of the settlement? Are there circumstances under which a situation (or a client) might merit a lower settlement?
Gavin Mascarenhas, BA, CIP Assistant Vice President, Claims The Dominion The presentation of any claim should be viewed as “a time to shine” or the time to fulfill the promise made as an insurer. Protecting the interests of our policyholders and guiding them through the claims experience is the essence of our commitment to them. In this situation, the adjuster took advantage of the policyholder to reduce the amount paid. It is the obligation of an insurer to honour the contract completely — to fully indemnify — regardless of the level of knowledge of the insured person. The insurance contract is one of utmost good faith. Allowing a policyholder’s knowledge or congeniality to influence the claim settlement amount could be considered an act of “bad faith.” This would put the insurer at risk of punitive damages and certainly does very little for the reputation of the insurer and the industry as a whole. Insurers have a responsibility to effectively manage costs to protect the shareholder interests and the premium dollars paid by policyholders. In the context of loss costs, this means paying only what is owed — no more or no less. It would be very difficult to believe
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that any insurer would have or support any agenda that would result in paying less than what is owed to any policyholder in any situation. Any decision regarding the amount owed to a claimant should be guided solely by the obligations, terms and limitations of the contract. Assuming those have been met, the objective is to pay
Any decision regarding the amount owed to a claimant should be guided solely by the obligations, terms and limitations of the contract. The objective is that everything possible has been done to restore the insured to the financial position he or she was in prior to the loss. 100% of what is owed, as well as ensure that the claims experience is a positive one and that everything possible has been done to restore the insured to the financial position he or she was in prior to the loss. It is as simple as that.
Darrell Mack, BAC, FCIP Claims Manager SGI Canada In this scenario, the adjuster took advantage of the customer and this has compromised her integrity, values and trust. The adjuster has a duty to act in good faith and her actions prejudice the insured. The adjuster must inform and treat each customer with the same level of care, regardless of the customer’s status in life. The adjuster must provide the benefits to which the customer is entitled under the contract of insurance. Failure to do so is acting in bad faith. Offering a lower settlement to save her company money, or because she can get away with it, will only damage
the public confidence in insurance companies. There are no circumstances that warrant this action. The boss — when he or she becomes aware of the situation — should discipline, counsel and retrain the adjuster for breaching this trust and for placing the company’s reputation at risk, whether or not it is exposed. There is an old saying — if you lie for me, you will lie to me — and the same can be said about cheating or stealing. As a boss, how could I trust this employee to do the right thing next time? Does the bonus structure create a conflict of interest? Even if not directly, the insured could perceive it as such because the adjuster’s actions can result in a gain or advantage by virtue of her position. Imagine what would happen if the customer found out he was duped and decided to go to the media, or to bring a legal action for bad faith? Business ethics are for the benefit of the customer and the employee. Employees have a responsibility to treat people fairly and with respect. Employees are expected to exercise good judgment and common sense. Employees must fulfill their duties in the best interests of the insured and the company. This employee is a moral, legal and ethical risk to her company, and her behaviour should not be condoned by her manager or by the organization.
Miles Barber, B. Comm. (Hons.), FCIP, CRM Executive Adjuster Network Adjusters Ltd. The claim adjustment involves the negotiation and settlement of the value of the car that was damaged beyond economic repair; in effect providing indemnity to the policyholder for the value of his car. Ideally, the vehicle’s value would have been appraised and the settlement parameters would have been established through reporting by the adjuster to the insurer. An independent adjuster
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The company’s business objectives and bonus structure should not present a conflict of interest for the adjuster because the mandate to keep costs low spans across multiple business objectives.
receives instructions from the insurer related to the low/high ends of the settlement parameters and these should reflect the value of the vehicle given the usual considerations of mileage, age, mechanical and cosmetic condition, etc. Although, it would not have been unethical for the adjuster to commence negotiations at or near the lower value of the settlement parameter spectrum, deliberately undertaking discussions outside these parameters would contravene the insurer’s instructions and would be unethical in regards to the policyholder. In this scenario, the naïveté of the client became a factor in the adjuster’s decision-making, but delivering indemnity through the loss adjustment process should not be done in a manner that is “punitive” to the policyholder. The adjuster should respond by providing the client a detailed explanation of the adjustment process, as well as conduct an ethical negotiation of appropriate indemnity owed. The policyholder has paid a premium for the insurance product and is entitled to delivery of that insurance product. Claims vary file by file.They have their own attributes and nuances with respect to claim settlement value — indemnity. If there is a desire by an insurer to reduce operating costs, the most homogenous approach would be to control costs on the expense side of claim files. Reducing claim-handling expenses is where some form of consistent cost control, or even cost reduction, may be able to be achieved, as opposed to punitively reducing claim settlement indemnity to individual policyholders. Delivering the insurance product to the client should be at the forefront of consideration.
18 Canadian Underwriter December 2012
Tammie Norn, FCIP CEO Proformance Group Inc. It is the adjuster’s duty to act in utmost good faith at all times in her negotiations with the policyholder. It is unethical to take advantage of a person simply because he is unfamiliar with the system or has limited negotiation skills. The naïveté or, on the other end of the spectrum, pushiness of a client should neither increase nor decrease the value of the claim. At claim time, the car is worth the same regardless of who the owner is. If there are no policy exclusions or extenuating circumstances that would affect the value of settlement, then the offer should be made based on the fair market value or replacement cost of the vehicle, depending on the specific policy wording. If the adjuster’s boss adheres to the adjuster’s code of ethics and acts with utmost good faith at all times, the adjuster’s actions should never be justified and, in fact, should be reprimanded. In addition, the company’s business objectives and bonus structure should not present a conflict of interest for the adjuster because the mandate to keep costs low spans across multiple business objectives. The expense loss ratio is within the control of the company. For example, the adjuster can contribute to lower costs by working overtime only as needed and approved, saving on hotel costs and limiting the use of office resources, among other things. The loss ratio can also be controlled by ensuring prompt and fair claim handling: the adjuster should investigate, evaluate, negotiate and settle her claims in an expeditious and fair manner.
An unfair settlement can lead to litigation down the road, which is extremely costly and time-consuming, and may end up damaging the company’s reputation.This could result in bad publicity, non-renewals and decreased penetration in the marketplace.
LAST WORD By (incorrectly) assuming she was providing value to her company and that the company and shareholder needs somehow superseded those of the policyholder, the adjuster acted unethically. She violated two fundamental principles of insurance contracts: good faith and indemnity. By doing so, she not only put her own reputation at risk, she represented both her company and the insurance industry as a whole in a bad light. When in doubt, adjusters, like all insurance professionals, have a number of ethical guidelines at their disposal. The Insurance Institute of Canada’s Code of Ethics guides industry professionals in all roles, and is applicable to all elected FCIPs, CIPs and HCIPs. Independent adjusters should refer to the Canadian Independent Adjusters’ Association Code of Ethics, as well as to their respective provincial regulator’s guidelines governing licensure. In British Columbia, for example, the Insurance Council of B.C.’s Code of Conduct includes wording very specific to our scenario: “(All licencees) must not take advantage of inexperienced or unsophisticated insureds.” Living by example, acting in utmost good faith and practising professional ethics everyday, with everyone, will go a long way toward inspiring good faith and greater confidence from insurance consumers.
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Getting Personal Greg Meckbach Associate Editor
Some lawyers caution that Ontario’s Ministry of the Environment is getting more aggressive about naming directors and officers as being personally responsible for clean-up costs. It is also important to note commercial general liability insurance policies do not usually cover risks of historical contamination and third-party liability does not necessarily cover clean-up costs of one’s own property. Anyone considering serving as a director or officer of an organization that owns, occupies or manages property would be well-advised to do some research on the property itself and the potential liability for environmental contamination, some experts suggest.They further warn typical third-party or commercial general lia-
20 Canadian Underwriter December 2012
bility (CGL) insurance policies tend not to cover historical contamination on one’s own property. A director or officer could be liable both in cases where the contamination occurred before he or she assumed the role, or while holding the role, explains David Estrin, an environmental lawyer and partner at Gowlings’ Toronto office. “The recent decisions by the Ontario Environmental Review Tribunal (ERT) and by the courts are certainly tending to the direction that officers and directors should be very concerned about responsibility for historical contamination as well as for making sure that they are taking steps to prevent new contamination arising,” Estrin says. He has appeared before several tribunals in Ontario, including the ERT, a quasi-judicial body that hears applications and appeals under the Environmental Protection Act as well as several other provincial statutes. One case before the tribunal, in which Estrin was not involved, was Currie v. the Director, Ministry of the Environment (MOE). That case involved a former resin manufacturing facility in the community of Cayuga, approximately 40 kilometres south of Hamilton. After at least 21 years of issuing orders against St. Lawrence Resins and various numbered firms
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and individuals involved with the property, in 2010, MOE ordered the three former directors to undertake remediation work at the property. All three appealed to the tribunal, but lost their bid to have the orders overturned. Rosalind Cooper, a partner with Fasken Martineau in Toronto, represented one of the aforementioned directors, Donald Rickerd. The other two, represented by separate counsel, were John Currie and Robert Labatt. During the International Sites and Spills Expo, held November 7 to 8 in Mississauga, Ontario, Cooper told attendees Rickerd had “extremely limited contact with the company,” only visited the site once, was not involved in environmental matters, and did not know how the business operated. ERT records indicate that Rickerd was chairman of St. Lawrence Resins in 1995 and that MOE officials had visited the site as early as 1989, noting that liquids were leaking from barrels stacked outside. Rickerd testified a different firm occupied the property after 1998, but in 2008, he was nonetheless subject to an MOE order. “It was essentially an investment that he had been persuaded to make by some friends who said, ‘Let’s go in together and fund this company and hope it will be profitable,’” Cooper related at Sites and Spills. The venture never was, she said, adding that Rickerd lost a great deal of money. When he finally walked away from the business and the company sold the property, “they thought they’d never have to deal with this site again. Lo and behold, a number of years later, here’s an order saying, ‘You three have to clean it up at whatever cost.’” Cooper reported she has received many calls from people who were thinking of or had assumed a directorship or a position as an officer of a company. “There are some serious concerns about the fact that they could be held personally liable or responsible for cleaning up a property,” she said. Cooper noted there is no maximum limit on costs for a corporation, or for a director or officer, who has been issued
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a clean-up order from MOE. Provincial charges may result in fines, for which there are maximums. In the case of a clean-up order, however, the person or organization that has been subject to the order is responsible for the entire cost, she explained.
“If there is going to be insurance coverage for this kind of thing, it has to be specifically coverage that’s clearly set out in the directors’ and officers’ policies or some other policy that the owners of that property or the managers of that property have obtained. General liability and third-party liability won’t do it.” Many parties who have been hit with clean-up orders appeal to the ERT, arguing that the contamination was not their fault.
CHANGE OF DIRECTION In the past, Cooper told expo attendees, her opinion was that the tribunal seemed more interested in hearing arguments that someone served with an order should not have liability imposed
on them, but this changed in 2009 when MOE ordered the City of Kawartha Lakes to remediate the discharge of furnace oil, originating from a private home. Initially, it was the owner who was served with an order. But since the clean-up cost exceeded the limit on his insurance, MOE then issued an order to the municipality, which the city appealed and lost. In essence, the city argued it was not at fault because the oil came from a private residence. Cooper reported the tribunal ruled that questions of whether one party is more at fault than another “are suited to another forum,” such as a civil court. The court’s direction “overturned all the advice” Copper said she had been giving clients, which was that they could argue fairness before the ERT. “This is particularly frightening for companies who had either occupied or had charge, management or control of properties in the past and then sold those properties or no longer lease them,” she suggested during her presentation. Although not commenting specifically on the cases cited by Cooper, Estrin says MOE usually issues orders against corporations before naming directors or officers. However, there are two situations where directors and officers could be named: the first is where ministry officials believe the corporation is “essentially a shell and does not have assets,” and the second is where MOE officials are concerned “the company is going to be very difficult about the situation” and the MOE wants to get “more appropriate attention” to the order from a director or officer, he adds. “Oftentimes, individual officers and directors may choose to concede that something ought to be done and offer to have action taken, which could be quite expensive. Of course, if the ultimate financial burden is overwhelming on the individuals, they will fight it,” or file an insurance claim, Estrin says. Noting that he is unfamiliar with the specific clauses in D&O insurance policies that would apply to environmental clean-up orders of an organization’s
own property, “normally, third-party liability coverage is not going to be available when the contamination is on the insured’s own property and the issue is cleaning up the insured’s property, where the order is normally issued,� Estrin explains. “If there is going to be insurance coverage for this kind of thing, it has to be specifically coverage that’s clearly set out in the directors’ and officers’ policies or some other policy that the owners of that property or the managers of that property have obtained. General liability and thirdparty liability won’t do it,� he cautions.
“The standards in Ontario have been becoming more stringent over the last few years, so an investigation and report done five years ago or even three years ago, which says the site met standards then, may not be reflective of today’s standards,� Estrin explains. That being the case, the best advice “would be to make sure that such a study done by such a qualified person is a very recent one,� he adds.
“Aside from insurance — to the extent that you can get insurance for historical contamination liability — the best approach is to not become an officer or director unless [you are] satisfied that appropriate due diligence investigations have been carried out on the property to identify pre-existing liabilities and the company had adequate resources in place to deal with those.�
GET PREPARED Most CGL policies cover some form of pollution, says Gary Hirst, national director of brokerage firm Burns & Wilcox Canada. That said, CGL usually covers “sudden and unforeseen� pollution rather than pollution caused by contamination over time, Hirst adds. Consider as just one example a restaurant owner who hires a contractor to collect fat and grease for reprocessing. In this scenario, company directors should ensure the contractor carries appropriate insurance since, without that, the business could be responsible for any related clean-up costs. “If the corporation doesn’t carry the right sort of liability coverage, then, of course, the directors do then have an exposure, because they’re the ones that actually bought the insurance policy in the first place,� Hirst points out. “We have quite a few directors and officers approaching us wanting to really understand what their exposures are as a director,� Hirst adds. To reach that understanding, Hirst says that a director needs to have knowledge of law, insurance and the company’s operations. A prospective director should also ask to see the Phase 2 environmental site investigation report, Estrin says. Under Ontario law, this assessment is intended, among other things, to determine the location and concentration of contaminants and to obtain information about environmental conditions.
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talkin g SFRAUD
It may not have been the 11th hour, but it was close. The Ontario Automobile Insurance Anti-Fraud Task Force released its report — promised for the fall of 2012, following a sneak peak this summer — on November 22. Angela Stelmakowich Editor
The release of the report — the culmination of about 16 months of work to address issues that were years in the making — is likely to kick start many things: hard work, countless meetings and plenty of different perspectives. When the task force’s steering committee sought input on proposals last summer, it could not affix a precise number to what auto fraud was costing the system and its players. Citing a KPMG study, the range was about $769 million to $1.6 billion. Ernst & Young indicated the figure may have been underestimated “because it does not specifically address premeditated fraud, which could range between $130 million to $260 million per year.” Despite failing to nail down a specific number, it was agreed the problem was big and in need of remedy. “Auto insurance fraud is a significant problem in Ontario,” Dwight Duncan, Ontario’s finance minister, said after the release of the task force’s final report. Fraud, abuse and waste in Ontario auto “contributes to increased claims costs and leads to consumers paying higher premiums. A vital part of combating auto insurance fraud in Ontario is informing and engaging drivers so they can detect fraud and avoid becoming victims,” Duncan said.
24 Canadian Underwriter December 2012
Some proposals noted by the steering committee last July — regulation of health clinics and the towing industry; tightened controls on the delivery of auto accident benefits; and enhanced authority of the Financial Services Commission of Ontario (FSCO) — have made the cut.The 38 recommendations in the latest report are wideranging, covering the broad areas of prevention, detection, investigation and enforcement, and regulatory roles and responsibilities. A number of recommendations to government have already elicited tough talk and hard stances. • require insurers to disclose publicly how they choose and assess the performance of businesses and professionals they recommend to consumers or refer them to see, such as independent medical examiners; • implement a province-wide licensing scheme for the towing industry; • reduce uncertainty and delay for those who have legitimate auto insurance claims by moving aggressively to address the current backlog of mediation cases before FSCO; and • adopt a $500 fee for missed medical exams. With regard to the last recommendation, it appears the intent is to dissuade fraudsters who would expect that false claims would be caught
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in a defence examination, Andrew Murray, a civil litigation lawyer and current president of the Ontario Trial Lawyers Association (OTLA), said in an interview with Canadian Underwriter after the report’s release. Murray noted, though, that measures already exist to penalize uncooperative claimants. “We say that the penalties are already adequate and that this would be an unnecessary punitive measure,” he added. The Fair Association of Victims for Accident Insurance Reform would surely agree. The $500 cancellation penalty is not fair and should not be considered an effective tool against fraud, FAIR stated in its response to the final report.
BEEFING UP FSCO Perhaps the biggest move flowing from the comprehensive review, however, is found in the recommendations to substantially expand FSCO’s authority. Either as a result of legislative change (through amendments to Ontario’s Insurance Act) or government direction, this proposed power hike seeks to equip FSCO with the tools to support and promote reduction of fraud. Consider these recommendations to government: • enhance FSCO’s powers to investigate and sanction unfair or deceptive acts or practices; • give FSCO the authority to oversee and audit the business and billing practices of health clinics and individual practitioners who invoice auto insurers; • provide a range of sanctions for FSCO to apply where clinics are not following FSCO’s business-practice standards, including the ability to limit or curtail a regulated facility’s access to the Health Claims for Auto Insurance system; • have auto insurance fraud investigators working in the private sector provide information to FSCO where it would be relevant to detecting, investigating and enforcing sanctions against those engaged in organized or premeditated fraud; and • endorse and require the development of protocols for active information sharing about suspicious cases among the investigative divisions of FSCO, the Workplace Safety and Insurance Board
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and the Ontario Health Insurance Plan. In keeping with the new responsibilities, the provincial government should consider revamping FSCO’s mandate. An independent review, within three years of the mandate being finalized, should also be carried out. “FSCO will have to recognize that it will no longer be ‘business as usual,’” notes the report.
ONE AND ALL Another recommendation that could have legs is the call for insurers to move aggressively to establish an organization that would pool and analyze claims data to identify potential cases of organized or premeditated fraud. That would demand Ottawa move to secure passage of amendments to the Personal Information Protection and Electronic Documents Act, the goal of which is to remove any undue limitations on the abil-
IBC is optimistic that the numerous recommendations within the task force’s anti-fraud report will be implemented in the coming weeks and months. ity of insurers to pool claims information to combat fraud, the report notes. The task force also recommends that government consider amending Ontario’s Statutory Accident Benefits Schedule to allow insurers to suspend income replacement benefits when there is compelling evidence that a claimant has submitted a fraudulent claim for medical or rehabilitation accident benefits. Further, government is being urged to amend the rules so claimants play a more active role in helping detect and prevent fraud.They should be required to confirm attendance at treatment facilities and receipt of goods and services billed to insurers, as well as require insurers to itemize the list of invoices they have received when they provide a benefit statement to a claimant every two months. Reporting, essential to fighting fraud, would be fostered by the recommendation for government to introduce
legislative protection prohibiting reprisal or retribution against individuals who, in good faith, provide information about suspected fraud.
MOVE FORWARD The Insurance Brokers Association of Ontario (IBAO) has urged the provincial government to accept and implement the report recommendations. “If implemented, it will represent a giant step forward to combat fraud and abuse that will ultimately lead to lower premiums for Ontario drivers,” argues Randy Carroll, CEO of IBAO. Ralph Palumbo, vice president, Ontario for the Insurance Bureau of Canada (IBC), echoed the call to move forward. “This marks a significant step in the fight against fraud, raising awareness and sharing best practices for fraud prevention,” Palumbo said at the time. IBC is optimistic the recommendations will be implemented in the coming weeks and months, notes a statement from the bureau. “We will continue to be vigilant on the fraud file and work with law enforcement, insurance companies, government and the public to investigate fraudulent activity, and to continually raise awareness of a problem that affects everyone,” Palumbo notes. The cost of auto fraud in the Greater Toronto Area is as much as $540 per insured vehicle, IBAO points out. “We need to do what we can as soon as we can to remove that cost,” Carroll adds. IBAO contends that everyone — from government to consumers, insurance companies, lawyers, health care practitioners and collision repair facilities, among others — has a role to play in combating fraud so that auto insurance remains both affordable and available. What is critical to OTLA is that legitimate claimants are not negatively affected by efforts to target fraud. “I think generally we all want fraud to be eliminated from the system,” Murray said. “What we certainly don’t want the public to take away as a message is that the whole system is filled with fraud and every claim needs to be eviscerated or scrutinized because that’s really, really doing a disservice,” he noted.
Full Spectrum It’s a safe bet that Canada’s property and casualty insurers are in for big changes. How dramatic those changes will be, what form they will take and when they will ultimately unfold are expected to fall on many points along the spectrum. Building on hard data and emerging trends, insurance companies are blending old with new as they prepare for all shades of risk.
28 Canadian Underwriter December 2012
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fter the polar opposites of the last two years — from the red-hot losses of 2011’s catastrophic events to the relative greenlight calm of 2012, albeit one punctured by a superstorm and a barely felt, but wholly unnerving, earthquake — 2013 looks poised to offer p&c companies in Canada its own mix of defining colours and shades of grey. The push to become better prepared for what lies ahead may help smooth the transition and avoid yet more extremes. The coming year looks to be an opportune time to rethink risks once in the background, but now coming to the fore, and integrate a new view of necessary responses to meet ever-changing customer demands and expectations. Insurers have plenty of issues to consider: the divide between the economic cost of catastrophic losses and levels of insured risk from increasingly severe large loss events; earthquake risk, costs, capacity and cover; catastrophe modelling requirements; tepid economic growth; the looming fiscal cliff; the importance of strong underwriting; merger and acquisition activity; infrastructure renewal; the need to tailor claims solutions by location, customer and activity; and, of course, technology… technology… technology. Canadian Underwriter asked senior executives for Canada’s primary insurance companies this question: What do you regard as the key existing and emerging p&c trends and how will your company respond to meet these issues in 2013? Again, responses ran the length of the spectrum. Here is what the executives had to say, presented in alphabetical order by last name.
December 2012 Canadian Underwriter 29
COVER STORY
Full Spectrum
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Barbara Bellissimo
Senior Vice President & Chief Agent State Farm Canada
Record low interest rates mean insurers must concentrate on the fundamental components of underwriting results — rate adequacy, risk selection and efficiency — to achieve a satisfactory return on capital. Increased regulatory and capital requirements continue to burden the industry. We support government efforts to meet the needs of Canadian consumers. For example, Canada’s anti-spam legislation (CASL) intends to promote electronic commerce, yet some key provisions will be detrimental, restricting the industry’s ability to communicate with customers and adding significant compliance costs. Consumers have clearly voted for the convenience and security of e-commerce. We hope the final CASL regulations will strike the appropriate balance. New technology allows insurers to capture information on driving behaviour to better match price to risk. We will work with provincial regulators to find ways to leverage this new technology to achieve the real benefits available for consumers that result from the enhanced correlation between driving behaviour and the price of auto insurance. Ontario auto insurance reform is moving in a positive direction. Nevertheless, more work is required. The Ontario government must move to implement key recommendations of the Ontario Auto Insurance Anti-Fraud Task Force. The accident benefits schedule introduced in September 2010 continues to provide Ontario consumers with some of the most generous benefits available in North America. To be affordable, stable and sustainable, the Minor Injury Guideline must be reinforced and work around the catastrophic impairment definition must be completed. The mechanism for dispute resolution as it exists today is not working. Initiatives have been implemented to address the serious backlog, but do not address the systemic issues in the 30 Canadian Underwriter December 2012
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dispute resolution process. The government must proceed with urgency to address these key areas of Ontario’s auto reform. Increasingly severe weather events continue to put pressure on aging infrastructure. We support loss prevention solutions and champion the cause of infrastructure renewal. In many communities, infrastructure systems have reached their life expectancy, posing real risks to families and communities. In 2013 and beyond, we will continue to work with all stakeholders to implement positive and sustainable changes that will allow us to provide customers with accessible, responsive and affordable insurance products.
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Charles Brindamour CEO Intact Financial Corporation
As we approach the New Year, we are gaining a better understanding and greater clarity of the developments that will shape the performance of our industry.
The Euro zone’s unresolved debt crisis and the United States’ looming fiscal cliff means that our industry will continue to operate in an economy characterized by tepid and modest growth, low interest rates and volatile financial markets. While such an environment is conducive to greater discipline in our core insurance activities, the industry will still have to contend with numerous challenges such as inadequate pricing conditions in commercial insurance, uncertainties over the outcome of the auto insurance reforms in Ontario, a home insurance product that was not designed and priced for climate change and, finally, our ability as a nation to deal with the aftermath of a major earthquake. However, the most significant trend of 2013 and beyond will remain the ever-evolving needs, demands and preferences of our customers as they embrace new technologies. The transformational impact of this change cannot be understated as new, nontraditional competitors may emerge and current players are adapting or evolving their business models. This is the reason why at Intact, we intend to continue to put the customer at the centre of all our processes and ensure we provide them with an outstanding experience. This evolution in consumer wants and needs is also the reason why we will continue to provide brokers with a broad product suite, high-quality service and the tools, financial solutions and technology that will allow them to offer the best customer experience. This has been our strategy for years with the launch of our web offerings for brokers, increased brand and marketing efforts to drive traffic within brokerages, and the adoption of technology that allows brokers to be more efficient and focus more of their time and efforts on their customers. While challenges may be disrupting, they are a source of incredible opportunities for all of us and, at Intact, we believe we are well-positioned to pursue our organic growth.
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©2012 Swiss Re
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COVER STORY
Full Spectrum
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Alister Campbell CEO
The Guarantee Company of North America
Having recently moved from a large global financial institution to a smaller, Canadian-owned insurer, I was curious if the most significant trends affecting the p&c industry were any different from my new vantage point. Declining investment yields, uncertain economic prospects, rapidly shifting dynamics in the primary distribution channel, the threat of new entrants, consolidation… turns out the list is the same no matter where you work in our industry. There are some key trends beyond our narrowly defined industry that will clearly continue to have impact on all of us in 2013. So much is changing around us that sometimes it is hard to keep up with it all — as consumers much less as corporate leaders. The speed of things is accelerating, which includes customer expectations. The 7/24 world is now across multiple platforms — bricks and mortar, phone, “smartphone,” tablet and social networks. Are we ready to serve customers across them all? Increased customer sophistication, coupled with demands for transparency, will require more clarity from us about coverage, pricing and compensation. Web technology has a propensity to enable dis-intermediation. Are we ready to respond? Shifting wealth patterns in the Canadian demographic are changing how we think about customer segmentation. Are we ready for the public policy questions that will come from that? Globalization is affecting our customers in commercial lines and the exposures they incur are shifting just as fast. Do we have that covered? Given all that is changing, it is interesting how much remains the same. The willingness to pay for value, the power of relationships, the need for human intervention in a claim, the influence of brand, the desire for a trusted advisor. 32 Canadian Underwriter December 2012
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These elements will all evolve in the face of so much change. And that change will force all of us to evolve (perhaps faster than we would like). The winners will understand and respond to what is changing… but remember those elements of the customer that are truly immutable. Doing so will make it a lot easier to handle the vagaries and trends in our specific industry and enable the winners to prosper in 2013 and beyond.
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Andrew Hollenberg President ACE Canada
Much like social media before it, cloud computing is gaining ever-widening acceptance in Canada. While Canadian organizations are adopting at a much slower rate than other G7 nations, Canadian companies have not ignored the considerable business benefits of its use. Some are exclusively utilizing its hardware capabilities as a way to store data; others have embraced its software capabilities for such things as email,
human resources tools, customer relationship management and day-to-day business applications, including word processing and spreadsheet programs. Cloud providers often do as good a job or better than most organizations in providing data security, simply because of the amount of resources these providers can deploy to the security function. However, they are often seen as a target by industrious hackers. While cloud computing offers many strategic benefits, it has been criticized by privacy advocates, particularly when data is stored offshore. To illustrate this, data stored in the U.S. is subject to search under the Patriot Act. Given the cloud’s ability to provide the computing power enjoyed by the world’s largest organizations, small to medium companies can often gain entrance at a fraction of the cost. As a result, these companies may adopt cloud computing at a higher rate and may be susceptible to the same types of security breaches. Like social media, cloud computing is gaining a strong foothold across Canada. While the business risks of social media are often reputational in nature, cloud computing presents the same types of challenges, often with the added dimension of business interruption and all the implications of a privacy breach. Many technology watchers have classified cloud computing as a “megatrend” and have viewed it as past the tipping point. As adoption grows, Canadian companies remain responsible for the safekeeping of their data. For these companies, it is critical to have in place specialized insurance coverage. ACE offers a fully scalable product for Canadian companies of all sizes that focuses on privacy liability arising out of lost computer equipment, network security breaches and human errors. It also covers companies from errors made by third-party service providers. As more companies adopt cloud computing, the potential exposure for data breaches and the need for data security will continue to be of concern to Canadian companies.
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COVER STORY
Full Spectrum
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Patrick Lundy CEO, President & Chief Agent Zurich Canada
The global economy has remained flat over the last few years, many countries are going into near default and, in addition, a “superstorm” just hit the most populated city on the continent. In contrast, Canada seems to be faring slightly better and has not slipped into a serious recession. In fact, the country is poised for a continued stable outlook, growing gross domestic product (GDP) at a projected annual rate of 2% to 3% in the next three years. This is the complicated business environment in which we now live and we may be viewing the new normal for several years to come. To survive, carriers need to find out how to turn this environment to their advantage. If they do not adapt to change, their future may mirror the crawling economy. Looking at the old world in a new way and helping customers do the same is not an easy task, but as insurers, it is our job to identify the risks of the future and help our customers understand and prepare for them. We need strong balance sheets to pay claims and we need to tailor solutions by location, customer and activity. New catastrophe modelling requirements that will be implemented in 2014 are expected to increase capital obligations, putting pressure on the market as a whole. Regulations like these and the low interest rate environment mean being disciplined and focused in underwriting is imperative. Not only does it provide a return to shareholders that we are not getting from investment yield, it will position carriers for a harder market. At Zurich, we endeavour to look at problems in new ways to ensure that we understand the industries we serve and can anticipate the issues they are facing. By consistently evolving our strategy and also listening to our brokers, we will adapt, adjust and become even better in the changing environment we face. 34 Canadian Underwriter December 2012
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Ken McCrea President & CEO Wawanesa Mutual Insurance Company
There are a number of industry trends or issues that warrant attention, a number of which are of greatest concern and will be a focus for Wawanesa. First is the continued severe weather in Western Canada, mainly Alberta. This is of particular importance to Wawanesa because of our strong presence in the region. It is well-known that severe weather has resulted in significantly elevated wind, hail and water claims in the last three to four years. This can no longer be viewed as an experience fluctuation, but rather a “new normal,” which Wawanesa is addressing through changes to product design and rates. That said, it is challenging to take the necessary actions in a manner that does not disrupt business or result in consumer dissatisfaction with the industry.
Second is the risk of a major earthquake in British Columbia. While there is similar risk in Ontario and Quebec, B.C. is our main focus due to our significant business volume in the province. A number of developments have highlighted the risk and costs of a major quake, including increased insured property values, increased loss estimates from updated earthquake models, increased reinsurance costs because of recent global earthquakes, and anticipated increased reinsurance requirements as a result of the Office of the Superintendent of Financial Institution’s new guideline. These developments all lead to a need for significant increases in customer earthquake premiums. The company is offering product options in an effort to keep coverage affordable. Like many companies, Wawanesa continues to engage in replacement of our core insurance legacy systems. New technology will provide the means to assist our brokers and employees in providing improved service and a better overall experience for customers. We have made great progress in recent years and in 2013, will embark on a multi-year project to replace its policy administration system, the final stage of our enterprise system replacement strategy. Other trends include the increasing adoption of sophisticated pricing approaches and continuing to adapt to a low interest rate environment.
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Kevin McNeil President & CEO Gore Mutual Insurance Company
We believe 2013 will see insurer and broker expenditures in technology accelerate to achieve improvements in customer service and operating efficiency. Outdated, inflexible legacy systems must be replaced with modern clientcentric and adaptable core systems. Innovative technologies — that are rapidly increasing customer expectations and reducing costs in other industries — need to be adopted.
All software providers are not created equal. The pressures of the P&C insurance industry can often result in quick, short-term solutions to needs as and when they arise: solutions which may fix an immediate problem, but which all too often – and all too soon – crack under the strain of the exponential rate of change. Such an approach is tactical in nature, providing short term relief but, frequently, long term pain. Carriers who have a longer term vision – who want the job done right – take a more strategic approach. Which is why so many have turned to iter8, observing its track record of success in streamlining insurance processes and saving companies’ money. We design, build and implement progressive solutions which are both scalable and flexible, enabling future growth and handling future change; solutions which are broader in scope and deeper in functionality, and which can integrate quickly, easily and completely with existing architecture. iter8 increases profitability through innovation and proven expertise in both the insurance business and in technology. It’s what carriers have come to expect from Canada’s leading insurance technology provider. Because when it’s worth doing, it’s worth doing right.
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COVER STORY
Full Spectrum Our industry is far behind and the catch-up will be costly and high risk. Many realize there is no choice but to bite the bullet and get on with it. If we continue to linger in the past, insurers and brokers alike will face increasing criticism for being antiquated and out of touch. We will also see new entrants using technology to capture significant market share from traditional players. Clients are becoming conditioned to receiving instant solutions, often through online tools. Recognizing that customers behave differently, brokers and insurers need business models that allow them to customize their services. Products and services must be delivered in seconds, maybe minutes, but definitely not hours. Insurers will need to leverage technology to find new ways of doing business. Several are examining how big-data search engines and predictive analytics can provide more underwriting insight; some are moving to paperless electronic workflows; most are starting to replace their legacy systems with state-of-the-art technology that provides the foundation from which companies are then able to innovate. Better, more innovative solutions become possible when working with modern open core systems. All participants in our industry need to embrace new technology to drive down the cost of doing business and create exceptional customer experiences. During 2013, Gore Mutual will continue its legacy system transformation; now well under way. The company will also introduce innovative technologies in all of our operations, beginning with the launch of a new system early in the New Year.
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Ellen Moore Chair, President & CEO Chubb Insurance Company of Canada
During 2012, the industry continued to see a very competitive landscape as excess capital helped sustain eight years of a soft market. This remains counter-intuitive as underlying trends on loss de36 Canadian Underwriter December 2012
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velopment, increased and severe climatic activity and limited investment return on the industry portfolio are just three reasons for a long overdue market turn. There has been some movement on the commercial rate front and with the major events of 2012, we should anticipate greater momentum during 2013.
in Canada. There are several significant changes for 2013 that will add cost to our business and impose potential added capital requirements. Global catastrophic loss events have made consumers even more aware of the important role insurers play in rebuilding businesses and households. Chubb takes that responsibility very seriously and our strategy to deliver on that promise remains unchanged: stay focused on underwriting discipline; price to exposure; be innovative in the clients segments in which we excel; and provide outstanding service to our brokers and customers. We look forward to a successful 2013.
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Sean Murphy President Lloyd’s Canada Inc.
With limited investment opportunity and significant insuring events playing out in the market, Chubb believes focus is needed on making an underwriting profit within the industry. This is the only way to provide for consistency for the long term in pricing, product availability and ultimate consumer protection and market confidence. The fundamentals of our business will be critical as the upcoming year will present even greater challenges. While Canada remains a relatively stable economy, the influences around the world challenge our industry’s ability to grow and stay financially strong. The volatility of global financial markets continue to influence regulators and this is evident in many new or revised regulatory requirements being imposed
An emerging trend in the global insurance market is the increasing severity of major disaster events. Last year was the second costliest year overall for the insurance industry and the costliest for natural catastrophe claims on record. In the aftermath of these large loss events, what sadly becomes apparent is the disturbing difference between the economic cost of catastrophic losses and the levels of insured risk. In Canada, the most widely recognized, but highly difficult risk to quantify, is earthquake. There has been much talk in our industry about the risk of earthquakes and an effort to reduce its related solvency risk, the latter by increasing capitalization levels for insurers who write business in earthquake-prone areas. The accepted broader economic shock of such risks emphasizes the need for a comprehensive approach that avoids action taken in isolation which could have unintended consequences, including higher prices or reduced capacity on an already low penetration level of earthquake cover. A recent Lloyd’s-commissioned independent study by the Centre for Economic & Business Research highlights the cost of underinsurance to the
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COVER STORY
Full Spectrum state. The study showcases that the state bears an excessive portion of the cost for natural catastrophes in countries with a low level of insurance. Those costs can be reduced with a small increase in market penetration — a 1% increase in a country’s insurance penetration can reduce state liability by as much as 22%. In a difficult economic climate, these levels of financial exposure have a clear impact on economic recovery. Lloyd’s will continue to manage catastrophe risks, encouraging the need for a comprehensive approach to identify and address risks associated with earthquakes.
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Lynn Oldfield President & CEO
AIG Insurance Company of Canada
Some of the key existing trends in our business have been with us for a number of years and the expectation is that many will continue through 2013. The global financial and economic climate remains uncertain. At the time of writing, the business pages are filled with musings on the U.S. fiscal cliff, the possibility of a recurring and sustained recession and the continued uncertainty of many European countries’ balance sheets and their ability to service their growing debt loads. The global financial impact on our p&c industry in Canada is most evident in equity volatility, the sustained low interest rate environment and limited growth prospects for some Canadian corporate and commercial sectors. All of that coupled with a competitive marketplace with plentiful supply of capacity requires a return to the basic fundamentals of our business. Sustainability requires superior operating performance and a focus on continuous improvement. At AIG, we have increased the tools available to our underwriters and claims professionals. Risk assessment tools, dedicated risk training modules, fraud detection 38 Canadian Underwriter December 2012
systems and improved analytics all add value for our client and broker partners by sharpening our competitive offering. Science then requires the art of experience, brought together by years of underwriting, engineering and claims experience. Whether you deem the trend in global weather and catastrophic events to be due to global warming or climate change, there is no doubt of increased frequency and severity of operational risk on a global basis. Industry eyes have been opened by supply chain risk management volatility and swings in contingent business interruption valuations as the global nature of risk is impacted by events around the world. AIG will continue to provide thought leadership, education, training and tools to assist our client and broker partners in preparing their businesses to survive and thrive when faced with adversity. The unexpected has become the expected. Finally, the pace of change and technological advancements require new skill sets from our team members. AIG continues its core focus on mentoring. Employee engagement fosters a “can do” culture and that benefits our broker and client partners.
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improvement in the U.S. economy. Increased business investing and consumer spending along with gradual recovery in housing will benefit the Canadian business environment. As this unfolds, strengthened international solvency regulation is under development on a number of parallel
Gary Owcar
Chief Agent, President & Chief Operating Officer
CNA Canada
As of late November, the insurance industry is facing some big unknowns. What will superstorm Sandy cost the industry? How will newly elected leaders in the U.S. address the financial cliff? What further deterioration may occur in the Euro zone? Will the Middle East conflict escalate? Any or all of these events would alter the economic landscape and the insurance industry’s 2013 outlook. Turning to more predictable factors, economic growth is likely to remain tepid. Yields on investments will track with weak GDP growth. On a positive note, however, we should see some
tracks in various countries. Higher capital requirements are coming, and more sophisticated risk modelling capabilities will be table stakes. These trends will drive mergers and acquisition activity on the carrier side as well as change many aspects of their operations. Against this backdrop, carriers will be more challenged than ever to achieve their goals. With interest rates at historic lows, a 95% combined ratio is the new 100%. Strengthening pricing is the only way for the insurance industry to deliver a respectable return on equity to shareholders. The need for rate does not mean the market will harden across the board: globally speaking, there is still too much capital for a traditional hard
lenge is to meet the demands of the younger, tech-savvy generation of insurance buyers along with those who prefer our more traditional channels. This diversity of customer expectations requires that insurers stop looking 12 13 at distribution from our vantage point, and instead look at it from our customers’ perspectives. This means providing customers with choice, convenience and flexibility, as well as allowing them to use a variety of seamless channels 14 to communicate with their insurance providers or representatives, when and market. Instead, we expect to see mar- how they choose. ket adjustments by geography and lines At DGIG, we are transitioning our of business. distribution channels by strengthenEach company will have its own set ing our online and mobile capabilities, of challenges based on mix of busi- while also introducing networks of ness, underwriting appetite, balance exclusive agents and integrating it all sheet strength and capitalization. with our customer care centres. Overall, we continue to see this as a Another related trend is the focus on time of opportunity for CNA compa- enhancing the customer experience. nies with financial strength, deep in- While there has been a lot of talk in sights in preferred customer segments, the industry, there are no clear leaders. and underwriting and claims expertise This is a void DGIG plans to fill, as we in specialized lines. are implementing an intensive, multipronged program to improve the entire customer experience — from Sylvie Paquette the initial quote and sale through the President & Chief claims experience. Operating Officer Last but not least, we expect indus Desjardins General try consolidation to continue to gain Insurance Company momentum, as it becomes even more There are so many trends impacting apparent that size and scale really do Canada’s p&c insurance industry, that count. As was the case last year, DGIG it is difficult to narrow it down to the intends to be a participant, not a most important. wallflower. The prospect of record low interest rates continuing for at least the next George Petropoulos few years is certainly a big concern, President & CEO and will put pressure on rates and prof Travelers Canada itability. With 20 straight years generating an underwriting profit, Desjardins Travelers Canada is committed to proGeneral Insurance Group (DGIG) is viding the best possible products and well-positioned to maintain growth services to our customers and broand profitability through this increas- kers. As we think about key considerations for next year, we are focused on ingly challenging period. Technology is also impacting the indus- a number of initiatives, two of which try in a variety of important ways, and will are cyber risk and catastrophic events. We are helping our customers and become even more critical going forward. Insurance distribution channels are brokers manage these risks through an a key area already seeing significant evolving suite of products and services changes from technology. The chal- and through education.
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With rapidly advancing technology, there is a growing need for businesses to protect themselves against the potential financial losses associated with cyber crime. The threat is real and no business is exempt — regardless of size. Current data suggests that small businesses are the target of 40% of cyber attacks. At Travelers, we feel an obligation to help our customers and brokers understand cyber and other insurable risks as well as to develop solutions to manage those risks. In this digital era, cyber attacks and the ensuing media coverage are on the rise and are likely to continue. Catastrophic events, such as superstorms or the earthquakes that have rattled parts of Canada in recent months (fortunately with few aftereffects), reinforce the importance of monitoring, assessing and responding to the risks and potential exposures posed by our ever-evolving planet. We, of course, need to be there to fulfill our commitments after the event, but we also need to provide education and advice to our customers before they face a crisis. The value of sound underwriting, combined with risk management, claims excellence and the ability to leverage powerful analytics, allows Travelers Canada to meet the needs of our customer and brokers while delivering adequate returns to our business. With a team of dedicated service professionals, our commitment to be there when it matters most, remains our focus in 2013.
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Rowan Saunders President & CEO RSA Canada
Ontario auto remains a key agenda item for p&c insurers given its size and historical underperformance. While reforms appear to be working, the longterm sustainability of these may be jeopardized given the number of unresolved issues and the emerging downward rate pressure. December 2012 Canadian Underwriter 39
COVER STORY
Full Spectrum This will make it increasingly difficult to grow profitably in Ontario, which for RSA, means diversifying our geographic footprint. Case in point: our 2012 acquisition of Quebec-based L’Union Canadienne expanded our presence in one of Canada’s most attractive markets, and rounded out our end-to-end, coast-tocoast customer proposition. RSA will continue to seek out acquisition opportunities that align with our strategy, focusing on geographic diversification and specialty offerings, given that further market consolidation will likely be driven by strong players seeking growth in an economy that offers few organic opportunities. Indeed, this low inflation, low investment yield environment will require outstanding portfolio, cycle and financial management for the industry to deliver a reasonable return on equity. RSA will continue to turn up the underwriting dial in 2013, focusing on selective growth, while maintaining leading positions in our chosen markets.
With respect to weather, despite a benign H1, severe activity in Q3 will again drive above-average Cat losses for the industry. This, in addition to a number of near-misses, draws attention to the ongoing issues of inadequate catastrophe funding, tightening capacity in earthquake and wind-exposed zones, and increasing regulatory capi40 Canadian Underwriter December 2012
tal requirements. Prudent reinsurance, exposure management and predictive modelling will be key to mitigating this increasing global trend. The pillars of RSA’s success — Customer, People and Outperformance — will remain top of mind as we look confidently ahead to 2013. Fostering deep relationships with our broker partners, offering attractive, targeted customer propositions and investing in the technical expertise of our people, will culminate in another excellent performance for RSA.
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John Taylor President & CEO
Ontario Mutual Insurance Association
The Ontario Mutual Insurance Association (OMIA) represents 44 mutual p&c insurers incorporated in Ontario and has associate members from across the country. Member companies are all more than 100 years old and have deep roots in Ontario’s farm community. Over time, mutuals have grown and adapted to the emerging trends. While largely ruralbased, mutuals now provide a full line of agricultural, residential, commercial and automobile insurance. Like all insurers, OMIA has witnessed the explosion of technology and changing consumer perceptions of insurance as a product and its distribution. Up until the last few years, most technology discussions involved bridging a technology gap between distributors, such as brokers and agents, and the underwriter. Today’s technology discussion is broader in context and covers both basic communication with policyholders and electronic commerce with policyholders. The evolution of “personal” technology has changed the retail marketplace for typical consumer products considerably. That change is now also coming to the forefront in p&c insurance. We see the primary issue as ensuring the use of technology in researching and buying insurance adequately
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matches the importance that insurance plays in protecting Canadians and management of both personal and business risk. Many consumers see insurance, particularly personal insurance, as a commodity. In fact, the choices consumers make related to the selection of automobile, home and business insurance represent the most significant risk management they will undertake to protect them against a potential large liability, automobile and their largest personal asset (home or business). Ontario’s mutuals are continuing to focus on policyholder needs and providing personal service and advice to protect their policyholders. At the same time, we need to make investments and adapt to being able to reach policyholders through new technology, including social media.
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Bob Tisdale President & Chief
Operating Officer Pembridge Insurance Company
More than ever, the insurance industry must consider how to address the challenges our brokers and their customers face when trying to integrate the convenience offered by emerging technologies with our relationship-focused business model. Technology is one of our biggest challenges, but it is also one of our greatest opportunities to improve customer experience. How do we reconcile technology’s quick convenience with the time needed to provide trustworthy advice and counsel to clients? Today, research technology is allowing consumers to access ever-increasing amounts of information, regardless of the issue. Got a health problem? Google it and you will immediately get an answer.
Like self-diagnosis by Internet, though, there is a risk the answers given are not necessarily the right ones for the individual or for complex situations. The same is true for insurance. So how do we address this challenge? While technology certainly does create awareness and offers access to information, it does not replace the ability of a trained professional to diagnose the problem and prescribe the right treatment. Ours is a complex product that requires specialized expertise. The professionalism created through extensive training and education is being undermined by an “it’s simple and easy” approach to our products. This commoditization can erode our business fundamentals if we do not stay ahead of the curve in ways that are meaningful and add value for our clients. When it comes to insurance needs, one size does not fit all. Each of us has unique risk tolerances and risk profiles. Only professional investigation and advice can determine how to design a product the meets unique needs. Pembridge will support our broker partners in efforts to bring together technical solutions that offer convenience, but not at the expense of sound advice. Many industry surveys show that consumers demand and appreciate the specialized expertise that we offer as an industry. Fortunately, consumers continue to demonstrate they value that expertise by contacting insurance professionals before purchasing products. We, in turn, need to listen to customers, continuing to provide professional advice and not abdicating this responsibility to online search engines.
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Maurice Tulloch President & CEO Aviva Canada Inc.
Superstorm Sandy certainly made people pay attention to what environmentalists have been talking about for years. And our industry has been seeing the effects first hand for quite some time — though with some reservations.
There is now no denying the existence of climate change and the affect it will have on our society for the foreseeable future. So, what are we going to do about it? Rate is not the long-term solution to the problem, particularly in select regions, as it will not allow us to keep up with the loss trends and will, ultimately, lead to availability and/or affordability issues. Product reform and limiting perils are also not the right answers. Insurers, brokers and all levels of government must start working more closely together on mitigation and education around new climatic patterns and their potential impact. Consumers need to understand the importance of risk mitigation such as sump pumps, back-up valves and hail-resistant materials, as well as the proper maintenance of areas around foundations, eaves troughs, roofs, etc. We need to reward customers for taking the appropriate steps to protect themselves. Education efforts need to be clear, ongoing and come from all parties, including insurers, brokers and government. Combined with financial incentives, only then might we see a shift in behaviour. While we increase our own educational efforts and product research, we are also deepening our support for industry efforts. The Institute for Catastrophic Loss Reduction and tools such as the Municipal Risk Assessment Tool have the potential to level-set risk and educate consumers and business owners by providing more accuracy in identifying higher risk areas and mitigation methods.
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Silvy Wright President & CEO Northbridge Financial Corporation
Some of the key trends for 2013 are really continuations from this year — the ongoing challenge of the commercial lines rate environment and the rapid evolution of the distribution landscape. We have responded to these trends/ challenges by doing something that I
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believe is unprecedented in our industry — we brought together all four of the companies that made up Fairfax’s insurance operations in Canada under the management of Northbridge Financial Corporation. While we are expecting the commercial lines rate environment to return to more profitable levels, there is no doubt this will continue to be an issue for the industry in 2013. Our new scale allows us to leverage efficiencies and data in ways that were never before possible when we were operating as four separate companies. It also allows us to make significant investments in technology to help us gain deeper insights from a data mining and customer intelligence perspective. Keeping up with the changes in the distribution landscape has meant aligning ourselves with key broker partners and ensuring everything we do is focused on delivering value for our customers. For us, delivering customer value means leveraging dynamic distribution platforms that not only provide customers with a choice on how they interact with us, but also make it easier for customers and brokers to do business with us. Providing value also means not taking a broad-brush approach to delivering on products and services, but taking the time to really understand brokers’ and customers’ needs and delivering tailored solutions that better support their success. 2013 will continue to bring changes on many fronts, but bringing our companies together has given us a launch pad for the future. January 2013 will mark the one-year anniversary of the integration. While Northbridge has made great progress over the past year, it is just getting started. December 2012 Canadian Underwriter 41
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Map Quest
Seismic microzonation mapping of earthquake-prone zones will help provide enhanced understanding of the potential for spatial distribution of hazards, thereby offering a basis for policy-making and building code requirements.
Dariush Motazedian
Associate Professor Department of Earth Sciences Carleton University
James Hunter Emeritus Scientist Geological Survey of Canada Adjunct Professor Department of Earth Sciences Carleton University
Classification of the seismic characteristics of soils has become an important issue for major Canadian cities, including Ottawa and Gatineau in the National Capital Region (NCR), following the publication of the 2005 National Building Code of Canada (2005 NBCC). As in other areas of eastern Canada, earthquakes do occur in the Ottawa-Gatineau area. Large events are infrequent, although should they happen, their potential impact may be significant. Earthquake motion varies greatly across the region, depending on underlying geology and soil thickness, and the level of ground motions is amplified by soil overlaying bedrock. Reflecting that subsurface conditions play a major role in the damage potential of incoming earthquakes, amplification measurement methodologies have become an important part of the latest Canadian building code, 2010 NBCC. To provide a valuable tool to the engineering community for mapping seismic soil classes, a Working Group on Seismic Hazard Microzonation in the Ottawa Region was established in 2005. Based on collaboration between Carleton University and the Geological Survey of Canada (GSC), the program seeks to address problems directly related to seismic microzonation for earthquake hazard mitigation and the research is providing microzonation tools for the development of earthquake hazard maps in eastern Canada.
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IN THE ZONE Available online for both Ottawa and Gatineau, the maps represent the fruition of recent joint research by Carleton University and the GSC funded by the “Assessing Earthquake Geohazards” Project of Natural Resources Canada and the Canadian Seismic Research Network (CSRN). The work was led jointly by Carleton’s Dr. Dariush Motazedian and GSC’s Dr. Jim Hunter. The primary map of the Ottawa-Gatineau area displays the locations of interpreted NEHRP — National Earthquake Hazard Reduction Program — zones required for estimating earthquake motions at building sites, as defined by the 2010 NBCC. With approximately 800 sites in the two cities occupied by geophysical crews consisting of both Carleton University students and GSC staff, shear wave velocities of the materials were measured from the ground surface down through the soils to the bedrock. Velocity correlations were made with various unconsolidated soil units and with bedrock. These correlations were then applied to adjacent borehole information (~21,000 water wells and geotechnical borings) previously compiled by the GSC for the NCR. NEHRP zones, as described in the 2010 NBCC, can be derived from measurements of the average shear wave velocities from the ground surface to a depth of 30 metres (defined as Vs30). As shown, the Vs30 map demonstrates the pres-
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ence of five of the six NEHRP zones, ranging from Zone A (hard rock) to Zone E (very soft soil).The sixth zone, Zone F, describing special geotechnical properties of soils (sensitive clay, thick organic layers and artificial fill) cannot be distinguished by geophysical techniques alone and may exist within the mapped soil zones: Zone A (hard rock); Zone B (rock); Zone C (soft rock or firm soil); Zone D (soft soil); and Zone E (very soft soil). Throughout the survey area, GSC and Carleton University site investigations probed much deeper than 30 metres. In most cases, they probed to the top of firm bedrock to estimate the resonance effects that occur for sites where soft soils overlie firm bedrock and to provide regional geophysics data, which may be of use in future earthquake research. In the NCR, and throughout much of the Ottawa and St. Lawrence valleys, large shear wave velocity contrasts between soils and bedrock have been measured. These contrasts may lead to large ground resonance amplifications during earthquake shaking at specific
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frequencies (0.5 to 10 Hertz, Hz) or over long periods (0.1 to 2 seconds), which may vary in line with the thickness of the soft soil. This information is of interest for the construction of tall structures, where resonant periods may be similar to ground resonance. The fundamental site periods map, available both on the GSC and the Carleton University websites, provides the variation of ground resonance within
the Ottawa-Gatineau region based on the recommended “single overburden soil layer” analysis procedure, as given in the current NBCC. The Ottawa-Gatineau maps are offered as a regional guide to soil-rock geotechnical conditions; they are not meant to be utilized in lieu of direct on-site geotechnical measurements for NEHRP zone determination, as may be required for things such as building permits.
Interactive Vs30 Google Map for the City of Ottawa Overlays: Click to toggle layers: BH Geophys (18 Sites) HVSR (238 Sites) Boreholes (20716 Sites) Seismic Sites (1226 Sites) Vs30Class Class A Class B Class C Class D Class E Disclaimer The authors do not warrant or guarantee the accuracy or completeness of the data and information (“Data”) contained on this map and do not assume any responsibility or liability with respect to any damage or loss arising from the use or interpretation of Data. The Data on this map is intended to convey regional trends and should be used as a guide only. The Data should not be used for design or construction at any specific location, nor is the data to be used as a replacement for the types of site-specific geotechnical investigations recommended by the 2005 National Building Code of Canada and the 2006 Building Code of Onatrio.
A large loss
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Recent research suggests the resonance periods may alter from those provided on the region map during significant strong motion earthquake events. Other earthquake hazard mapping is under way as part of CSRN’s five-year, eightuniversity research project and includes Vancouver and Montreal. The GSC is also developing maps for North Vancouver and the Quebec City area. Final products could be available in the next year or so.
MICROZONATION MAPPING These continuing government-university research programs have a direct impact on the mitigation of earthquake hazards and, as such, the quality of life of Canadian citizens. The general benefits of seismic microzonation include a better understanding of the potential for and spatial distribution of seismic hazards, providing a rational basis for planning and policy-making regarding the mitigation of these effects. The microzonation maps generated over the course of the Ottawa-Gatineau research program are an essential tool
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for making earthquake emergency plans and for urban planning.They give authorities relevant and concrete information for focusing mitigation efforts, such as on schools and critical infrastructure, as well as on lifelines. They provide the framework to facilitate ranking of priority areas or structures by seismic vulnerability, thereby offering a reasonable basis for distribution of funds for upgrading, retrofitting and other remediation efforts. Organizations that benefit from having access to microzonation information include private industry, financial and insurance agencies and emergency services, as well as community and regional planners who address utilities designs, transportation networks, highoccupancy structures and hazardous goods transportation and storage (for example, toxic waste repositories and nuclear power stations). In eastern Canada, where there is a propensity for the occurrence of soft soils (the so-called Leda Clay), microzonation mapping has triggered joint government-
university research on additional 3D amplification of earthquake shaking in soft-soil basins within urban areas. In the long term, the seismic microzonation of earthquake-prone areas throughout Canada is expected to provide a better overall understanding of the potential for and spatial distribution of seismic hazards and will contribute substantially to the health and safety of Canadians. Notes and References: This article makes reference to information included in Earthquake Hazard Maps of the City of Ottawa, Ontario, Canada using Near-Surface Geophysical and Geological Methods (Hunter et. Al, 2010), and Development of a Vs30(NEHRP) Map for the City of Ottawa, Ontario, Canada (Motazedian et al., 2011); maps providing information for 25,000 data points are accessible at http://http-server.carleton.ca/~dariush/Microzonation/main .html; and free downloads of GSC Open Files 6191, 6273, 7067 and 7078 are available online at http://geoscan.ess.nrcan.gc.ca/starweb/geoscan/servlet.starweb?path=geoscan/geoscan_e.web.
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Craig Harris Freelance Writer
Car-sharing services, along with other developments such as peer-to-peer car renting, are turning the traditional notion of “one driver-one vehicle” on its head. Is auto insurance keeping pace? Wilson Wood recalls that when car-sharing services started popping up in the late 1990s, insurance companies had no idea what to make of them. “They were initially quite skeptical about this new service,” says Wood, who is chair of Car Sharing Canada and founder of Vrtucar, a transportation network that serves 1,800 members with more than 100 cars in Ottawa and Kingston in Ontario, and Gatineau in Quebec. “Some of these concerns still exist today,” he adds. Car sharing is a membership-based service available to all qualified drivers who are 21 years of age and older and have a G-class licence. No separate written agreement or contract is required each time a member uses or reserves one of a fleet of vehicles, which are located at
46 Canadian Underwriter December 2012
self-serve locations in a community. Members get access to a vehicle 24/7, while paying an hourly fee that includes gas and insurance. Currently, more than 40,000 members use car-sharing services in Ontario in cities such as Hamilton, Kingston, Kitchener-Waterloo, Ottawa and Toronto. Major cities in most provinces (including Halifax, Montreal, Winnipeg, Regina, Calgary and Vancouver) also offer similar programs. As of January 1, 2012 — based on data provided by Susan Shaheen at the University of California, Berkeley — 92,118 members shared 2,526 vehicles among 19 car-sharing organizations in Canada. Some familiar names include AutoShare, Communauto, car2go, Modo and Zipcar. Zipcar alone operates a fleet of 10,000plus vehicles in 20 major metropolitan areas with more than 760,000 members in the United States, Canada, the United Kingdom, Spain and Austria. Analysts expect the number of people using these services to double in the next five years. Research firm Frost & Sullivan estimates that approximately 980 car-sharing programs exist globally. By 2016, Europe and North America
Illustration by Remy Simard/www.i2iart.com
Driving Change
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combined should account for more than 9 million members sharing 150,000 vehicles through more than 450 programs. In some cases, large auto makers have become involved in car sharing, either as experimental start-ups (Daimler and car2go) or as add-ons to existing services (GM’s OnStar and Relay Rides). “This shows that our relationship with the automobile is changing,” notes Kevin McLaughlin, president of Toronto’s AutoShare, which has more than 12,000 people sharing 300 vehicles. “The old idea that there is one driver for every vehicle will not be the case in the future,” McLaughlin contends.
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that our monthly premiums are about $18,000,” Wood notes. Still, insurance rates for car sharing are double or triple what an individual car owner would pay for a similar policy.
COVERAGE QUESTIONS Another important issue is liability and accident benefits under current legislation, particularly in Ontario. As car sharing is seen neither as a “car rental” service nor a form of personal ownership, there are grey areas in how mem-
POTENTIAL STALL Many in the car-sharing sector point out, however, that auto insurance can act as an obstacle to expansion of the service, which is touted as an environmentally friendly and cost-effective option to individual vehicle ownership. One of the first questions is exactly how insurance should be structured for multiple drivers sharing one vehicle. Wood notes that Vrtucar is “grandfathered” under an older auto insurance policy from The Co-operators, in which vehicles are covered under personal lines with listed drivers. McLaughlin’s service, on the other hand, has a commercial auto insurance policy on its fleet of cars, also from The Co-operators. “Insurance is a huge barrier to car sharing,” says Wood, while acknowledging that he has been grateful for his individual partnership with The Cooperators. “With no clear direction from the Financial Services Commission of Ontario (FSCO), the application of auto insurance to car-sharing organizations is neither consistent, nor something that the consumer can look to with some sort of guarantee,” he adds. Both Wood and McLaughlin say that rates for their auto insurance have stabilized recently, down from much higher levels five years ago. And they are also seeing more competition and interest from brokers, “especially considering
With the renting of private vehicles for a profit-based service, there have been questions about auto insurance policies and regulations. In most cases, basic personal auto insurance policies do not cover the commercial use of a vehicle. bers of the service are covered under the auto insurance policy. “Current legislation is essentially based on the 1950s and 1960s model of car ownership,” says Wood, where drivers are either car owners or family members of car owners. “This lack of direction or clarity in the regulations puts our insurance providers and the car-sharing organizations liable when a car-sharing member is walking, riding
a bicycle or using public transit and involved in an auto collision,” he contends. In fact, Wood says two of his service’s largest insurance claims relate to members injured in situations that did not involve the use of a car-shared vehicle. In one case, a member of his service was injured in a fall while exiting a public bus. Given that car-sharing networks have thousands of members walking, biking and taking public transit, this is a difficult exposure to measure and contain, he says. “It is hard to understand how the legislation relates an accident benefits claim back to any tenuous connection to an auto insurance policy,”Wood observes. McLaughlin reports his insurance company has informed him that it would challenge any liability for accident benefits related to members who are not operating a car-sharing vehicle at the time of an incident. But lingering questions remain, especially if a case goes to court. Car-sharing services are pushing for “a fair and suitable playing field” with regard to insurance regulations that “provide the necessary protection for our members and our day-to-day operations,” Wood reports. “However, FSCO and the Insurance Bureau of Canada (IBC) are silent about car sharing,”Wood says. “We don’t exist. Car sharing through an organization or supplier is not addressed in auto insurance regulations or legislation.” FSCO notes in a statement, “As a riskbased regulator, (we) actively monitor the auto insurance marketplace for any emerging issues or gaps in consumer protection. Currently, we have identified no significant consumer protection issues around insurance coverage for car sharing or peer-to-peer car-sharing services.” IBC does not have an official “position” on car sharing, notes Pete Karageorgos, the bureau’s manager of consumer and industry relations. However, Karageorgos says that insurance companies may be cautious about a commercial auto policy in which not much is known about the individual driver records or loss experience.
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“I think one of the key challenges is that car sharing is not as strict as a traditional fleet policy, in terms of driver abstracts, experience, training or loss control,” Karageorgos says. “You may not know who exactly is the insured.”
SHARE AND SHARE ALIKE Car sharing is just one example of different mobility options in today’s vehicle marketplace. Peer-to-peer car sharing, also known as p2p, is growing significantly in the U.S., especially in key cities such as San Francisco and Boston. Companies like Relay Rides, Getaround, JustShareIt and Wheelz allow car owners to rent out their private vehicles through a member-based service. Relay Rides, which has raised more than $13 million from investors like Google and GM Ventures, also has an agreement with GM for subscribers to its OnStar communication assistance program. Peer-to-peer service providers handle reservations and payments — as well as insurance. With the renting of private vehicles for a profit-based service, there have been questions about auto insurance policies and regulations. In most cases, basic personal auto insurance
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policies do not cover the commercial use of a vehicle, and insurers may cancel or non-renew coverage if a personal vehicle is rented for a fee. Media reports indicate that at least one insurer in the U.S. — Geico — has amended its policy to explicitly read that car sharing is not covered. Three states in the U.S. — California, Oregon and Washington — have passed new legislation to deal with p2p car sharing. California’s Bill AB 1871, introduced in January 2011, establishes that personal car sharing is not defined as commercial usage of a car and prohibits insurance companies from cancelling insurance. Similar legislation became effective in Oregon in June 2011 and Washington State in April 2012.
RENTAL DIS-AGREEMENT In provinces such as Ontario, McLaughlin says that regulations do not permit renting out of a privately owned vehicle. Owners may have the option of registering through a car-sharing service such as AutoShare, thereby qualifying for insurance. “As it stands now, however, there would have to be changes in insurance
regulations to reflect this p2p option,” McLaughlin suggests. He points out “things could get a lot weirder” in mobility and insurance now that Google’s self-driving cars have been declared legal for testing in Nevada and California. Wood reports that, even today, programs like ride sharing, private shuttle service and van pools are all becoming much more mainstream in the world of private transportation. “I think the stereotype of one family, two kids and two cars in the driveway is outdated and reflects the institutional bias of car companies,”Wood comments. “I would like to see FSCO and others take more of a leadership role in this area,” he adds. The chair of Canada’s car-sharing association, though, notes there has not been much progress on the regulatory front. “We have been trying to get our foot in the door at FSCO, but we don’t necessarily have the lobbyists or time to get our points across,” Wood says. “We are seen as heretics by the automobile industry and, perhaps by extension, some auto insurers. But sooner or later, they are going to have to deal with these new mobility options.”
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ep
Glenn McGillivray
Managing Director Institute for Catastrophic Loss Reduction
The numbers don’t lie — 2012 looks like it will be the fourth consecutive year of billion-dollar losses for Canadian property and casualty insurers. And with factors leading to increasingly more expensive natural catastrophe years unlikely to improve anytime soon, large losses are now the “new normal.” Over the last few years, Canadian property and casualty insurers have experienced unprecedented claims costs resulting from natural catastrophes. The Institute for Catastrophic Loss Reduction (ICLR) now considers large loss catastrophe years to be the new normal for Canadian p&c insurers. Canadian carriers paid out $1 billion for each of the last four years and, in the case of 2011,
50 Canadian Underwriter December 2012
significantly more than that. Even with the wildfire in Slave Lake, Alberta removed, insurers paid out $4 billion in natural catastrophe claims since 2009; with Slave Lake, the total is closer to $5 billion. This is just the sum of those events that meet or exceed Property Claim Services (PCS) Canada’s $25-million claims threshold. Not included in the tally are many smaller events that fall under this minimum as well as those everyday, runof-the-mill weather-related losses, which, at present, no single system captures. ICLR estimates that severe weather costs for Canadian insurers now exceed $2 billion annually when losses from extreme events and smaller loss events are combined.
MAKINGS OF A TREND When Canadian insurers experienced back-toback, billion-dollar catastrophe loss years in 2009 and 2010 — the first time ever for consecutive billion-dollar losses in this country — many carriers began to ask, at least internally, whether this was the start of a trend or just a short-lived anomaly.
Illustration by Remy Simard/www.i2iart.com
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When considerably more than $1 billion was paid out in 2011 due to extreme weather and wildfires — another first for Canadian insurers, with three consecutive billion-dollar loss years — carriers began to reach outside their companies to ask if a new order was, indeed, taking shape. With 2012 being the fourth consecutive year for billion-dollar, weather-related losses in Canada, ICLR has gone on record as saying that large losses are, indeed, the way it is going to be for the Canadian insurance industry going forward. The Institute does caution, however, that while it considers the trend toward larger weather-related losses to be the “new status quo,” this does not mean Canadian insurers will experience billion-dollar losses every year. Rather, there will continue to be good years and bad years for such losses, with large-loss years no longer being the rarities they were just a few years ago. Only twice prior to 2009 did Canadian insurers pay out $1 billion or more in severe weather claims in a single year. The first was 1998 — the year of the Ontario/Quebec ice storm.The roughly $2 billion in claims tallied from that event make it the costliest insured natural catastrophe in the country’s history. The second was 2005, when $1 billion in claims were recorded, largely as a result of the August 19 rainfall event in the Greater Toronto Area.
TO WHAT DO WE OWE THIS DISPLEASURE? So why billion-dollar losses, and why now? On the surface, it may appear as though the trend toward more expensive catastrophe years for Canadian insurers “just happened.” However, analysis of available data shows that insured losses from severe weather have been moving in a steady upward direction for more than four decades and have been on course to exceed the “magic number” of $1 billion for some time. ICLR is of the view that this drive to $1 billion can largely be attributed to “creep” in three key areas: growth in concentration of values, particularly in
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Canada’s largest cities; degradation of the country’s infrastructure; and more large storms. While none of these areas are a direct cause of natural catastrophes, all three work in one way or another — and often in tandem — to worsen the impact of such events when they do happen. None of the changes in these three factors happened overnight; they changed over time and in increments (or crept) in
such a way that when comingled with extreme weather and wildfire, ensure that large losses are now the norm. Additional exacerbating factors that are making extreme weather events more expensive in Canada include the following: • the rising cost of basement flooding as homeowners finish lower levels of houses more lavishly (with laminate or hardwood floors, drywalled walls and ceilings, pot lights, expensive furniture
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and electronics, and high-efficiency furnaces, to name just a few examples); • building in dangerous places such as on coastlines and in the Wildland Urban Interface (WUI); and • weak public policy measures for building codes, land-use planning and municipal bylaws. None of the aforementioned — values, infrastructure, climate or the array of exacerbating factors — are likely to change for the better in any meaningful way anytime soon. As such, the drive to larger and larger loss years for Canadian insurers is expected to continue.
WHAT CAN INSURERS DO? The mistake would be to view natural disasters as inevitable, wringing our collective hands as an industry, and do nothing more than pull out the corporate chequebooks a little more often. However, as ICLR strongly maintains, “natural hazards needn’t be disasters.” For more than 15 years, the Institute has been working on behalf of Canada’s p&c industry to identify actions that could lessen the adverse impact of natural hazards on life and property. Established by Canada’s insurers at Western University, ICLR provides a forum for leaders in the disaster safety research community to work directly with insurance leaders to better understand the factors contributing to the alarming trend of increasing damage
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due to natural hazards, and to advance actions to build resilience to disasters. The Institute has been working on four main peril areas — wind, water, wildfire and earthquake — using four main yardsticks to measure success: quality research; effective partnerships; industry education; and consumer awareness.
Data shows that insured losses from severe weather have been moving in a steady upward direction for more than four decades and have been on course to exceed the “magic number” of $1 billion for some time. In early 2012, ICLR’s Board of Directors requested an action plan to guide the research and outreach efforts for the next three to five years. Written by ICLR’s Insurance Advisory Committee, the plan outlines specific actions for reducing the risk of loss from the four main peril areas. The plan for each of the four hazards
includes a comprehensive review of potential actions, including the importance of increased investment in public infrastructure; working with municipal officials to change local bylaws and planning; influencing new home design and construction; and building public awareness of actions to reduce the risk of loss. In line with that review, three critical elements of the new research to action plan are as follows: • partner with municipalities to advance homeowner basement flood risk reduction efforts; • promote best practices to enhance the resilience of existing homes to damage from water, wind, earthquake and wildfire; and • work with builders to champion resilient design and construction of new homes. Beyond continued support of ICLR’s loss reduction research program, Canada’s p&c insurers can leverage available resources and tools, including ICLR’s new basement flood mitigation website at www.basementfloodreduction.com; the Institute’s “how to” and information videos on its YouTube channel; and its “Protect Yourself” series of booklets. ICLR’s way forward is ambitious, but critical to confront the “new normal” of large losses taking hold in Canada, through research to identify best practices for loss reduction. Most loss and damage is preventable if emerging findings are applied.
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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
Granite Claims Solutions Global Adjusters and Marine Surveyors www.graniteclaims.com
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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
Canadian Underwriter December 2012
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
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One Call to A tion The Ontario Regional Common Ground Alliance (ORCGA) works to prevent damage to underground infrastructure, including “lifelines” such as phone lines, Internet cables, water lines, natural gas lines and hydro lines. The insurance industry is seen as a strategic partner that can further advance preventive efforts.
Jim Douglas President Ontario Regional Common Ground Alliance
John Trozzo
Insurance and Risk Management Professional
Bill 8, the Ontario Underground Infrastructure Notification System Act, 2012, has been a long time coming. Championed by the ORCGA, Progressive Conservative MPP Bob Bailey and New Democrat MPP Paul Miller, the bill received Royal Assent on June 19, 2012, coming into force the same day. The insurance industry is among the many stakeholders that can benefit from its passage. The ORCGA serves as a means to unite all stakeholders in the utilities industry through forming a common alliance to promote efficient and effective damage prevention for Ontario’s vital underground infrastructure. The not-forprofit organization was recognized in 2003 to advance adoption of the best practices of the Common Ground Alliance — born of the amalgamation of Ontario One Call and its members’ Damage Prevention Committee, comprised of utility owners and locate organizations, and the Technical Standards & Safety Authority’s (TSSA) Third Party Damage Prevention Task Force, made up of Enbridge, Union Gas, the Council of Ontario Construction Associations, Landscape Ontario, the Construction Safety Association of
Ontario, the Ontario Sewer and Watermain Construction Association and the TSSA. Ontario One Call has been instrumental in bringing together large organizations such as the Ministry of Labour, the TSSA, the Electrical Safety Authority and the Infrastructure Health and Safety Association with the utility companies. The next phase is to engage the insurance industry, which will, ultimately, prove both a large and a strategic stakeholder in the fight to mitigate damage to underground facilities. The industry can affect change through policy wordings, rewarding good clients and encouraging non-compliant clients to modify their behaviours.
PASSAGE INTO LAW The passage of Bill 8 establishes Ontario One Call Ltd. as the single point of contact for all underground utility location services in the province. This centralization will benefit stakeholders involved in the protection of underground infrastructure and further benefit those involved in the insurance industry. The bill notes that Ontario One Call, the corporation, has several responsibilities: operate a
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CU Seminar ad December 2012_Layout 1 12-11-09 11:41 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 Events: Toronto – Annual Industry Trends Breakfast with Phil Cook . . . . January 17 St. John’s – CIP Society Bowling Event . . . . . . . . . . . . . . . . . . . . . . January 18 Toronto – Annual Fellows’ Reception . . . . . . . . . . . . . . . . . . . . . . . February 7 CIP Society PROedge Seminars: Toronto – Cyber Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 16 Vancouver – Wine 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 24 Ottawa – Speakers Luncheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 31 Hamilton – Slips, Trips and Falls . . . . . . . . . . . . . . . . . . . . . . . . . . . February 5 Ottawa – Leading Insurance Cases of 2011-2012 . . . . . . . . . . . . February 28
Convocations: CIP Society members are encouraged to welcome our new grads to the Society at convocations and awards functions across the country: IADQ – Québec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 5 IIO – GTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 24 IIO – Kawartha/Durham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 1 IIO – Hamilton/Niagara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 21 IIO – Conestoga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 28 IADQ – Montréal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 13
Keeping you at the forefront of the P&C industry. The CIP Society. MEMBERS BENEFIT. www.insuranceinstitute.ca/cipsociety
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call system to receive excavator requests for the location of underground infrastructure within Ontario; identify for excavators whether underground infrastructure is located in the vicinity of a proposed excavation or dig site; notify a member of the corporation of proposed excavations or digs that may affect the underground infrastructure of the member; and raise public awareness of the corporation and the need for safe digging practices. With the passage of Bill 8, it becomes the shared responsibility of the gas, electric, telecommunication and construction industries to promote safe digging around critical infrastructure that includes phone lines, Internet cables, water lines, natural gas lines and hydro lines. The industry-led One Call system ensures that homeowners, surveyors and contractors are aware of all underground utilities, which must be marked, at a dig’s location.The new system eliminates the need for the many time-consuming calls that now must be made to utility owners and operators. Furthermore, the new requirements will help reduce the number of illegal excavations, incidents caused by damage to underground utilities, interruption of services to the consumer, and claims and dollars spent cleaning up the mess. “This new law isn’t just about streamlining a confusing system to make it easier to dig in your backyard; it’s about preventing accidents and saving lives. But also, this law will cut red tape, allow shovels to get into the ground quicker and put job-creating plans into action faster,” says Bailey. Adds Miller, “To have been one of the MPPs who brought greater worker and community safety to all parts of Ontario, fulfills one of my goals in being elected to provincial Parliament.”
PARTNERING WITH INSURANCE Millions of dollars are spent each year to handle claims and losses that are a direct result of the construction industry excavating without first locating underground infrastructure. The ORCGA has united industry stake-
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holders through a 430-member network working toward a common goal of safe digging practices and shared responsibility. The organization has created best practices (introduced in 2004 and now regarded as the accepted benchmark for stakeholders); a training program (Dig Safe Program, introduced in 2009); and a unified approach to effective damage prevention, all working in concert to meet twin goals of enhancing public safety and the reliability of the underground infrastructure. It becomes imperative the ORCGA and the insurance industry work together to help encourage policyholders to adopt the best practices and train employees. Alliance officials are confident the collaborative effort will bring about
The new requirements will help to reduce illegal excavations, incidents caused by damage to underground utilities, interruption of services to the consumer, and claims and dollars spent cleaning up the mess. an immediate reduction in the number of accidents and claims and, in turn, a cost savings to the insurance industry as a whole. The ORCGA points to the insurance industry’s efforts around the Wood Energy Technology Transfer (WETT) program and wood heat. As many who underwrite personal lines are aware, there has been an evolution, almost a revolution, in the use of wood heat in Canada. This was a major cause of losses to the insurance industry until about the mid-1980s, spurring the formation of the WETT program. Stakeholders in both the wood heat industry and the insurance industry worked together to create an environment where proper use of wood heat was rewarded and improper use was no longer considered acceptable. The result was a reduction in the number
of claims, lost lives and total losses. With the implementation of WETT education and best practices programs, today, about 20 years later, WETT and the insurance industry have changed the face of wood heat. This partnership ensures that the use of wood heat is and will continue to be a safe and reliable source of heating. This is a good news story, one that resonates well with consumers. In fact, the wording in many insurance policies now insists on certified appliances and the use of WETT-certified individuals to perform installation, repairs, maintenance and inspections on wood heat appliances. The ORCGA’s mandate is similar to that of WETT — educate its members, create and instigate best practices and work with the insurance industry to help put in place programs to reward properly trained companies and individuals. The insurance industry can be a strong advocate for safe digging and, like the WETT program, can assist the alliance in becoming a vital component in issuing policies for companies involved in excavating. This past April, the ORCGA held its first Insurance Awareness seminar. It was attended by participants from all facets of the insurance industry, including companies such as Intact Insurance, Economical Insurance, Frank Cowan Company Limited, Masters Insurance brokers, ClaimsPro, Allstate, RSA, Northbridge Insurance, Unifund Assurance Company, CAA and BFL Canada Risk and Insurance Services Inc. Insurance partners will have another opportunity to further become engaged in the effort as part of an upcoming Property Casualty and Underwriters Club (PCUC) luncheon this January, where the ORCGA has been invited to continue discussions with the insurance industry. The thought is that the ORCGA working along with the insurance industry can make change happen, reducing the chances of excavation work putting at risk vital underground infrastructure in Ontario.
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MOVES & VIEWS UPCOMING EVENTS: FOR A COMPLETE LIST VISIT
www.canadianunderwriter.ca
AND CLICK ‘MY EVENTS CALENDAR” ON THE HOME PAGE
1
Mark Wilson [1], a CEO of AIA Group Ltd. until 2010, will assume the helm as CEO of London-based Aviva PLC on January 1, 2013. Wilson, a former CEO of AXA Asia Pacific Holdings Ltd. and former CEO of AXA China Region Ltd., joined Aviva's Board of Directors on December 1. When Wilson begins his new role in January, John McFarlane — who has been acting in an executive capacity since CEO Andrew Moss left earlier this year — will become non-executive chairman, Aviva notes in a statement. The company operates in 21 countries, with Canada being its second-largest general insurance market.
2
Kanetix Ltd., an insurance quote comparison company, has acquired Insurance Hotline, which includes ComparaSave.com, for an undisclosed amount from subsidiaries of Torstar Corp. The Kanetix.ca and InsuranceHotline.com websites will be “marketing strategies,” but will continue to run as separate brands managed by Kanetix Ltd. The idea going forward is to increase overall traffic to both sites, which will help grow broker and insurance partners’ businesses, reports Janine White, vice president of marketplace for Kanetix. Noting that Insurance Hotline has a larger number of broker relationships than Kanetix, White says, “I think we are
58 Canadian Underwriter December 2012
1 going to be stronger together to help grow the channel.” Torstar will hold a minority stake in the new entity.
3
Bruce Martin [3] has joined Granite Claims Solutions as vice president of strategic solutions. Martin brings more than two decades of experience in the insurance industry to the new post, having held senior claims, sales and leadership roles at both insurers and independent adjusting firms, Granite Claims Solutions notes. Based in Toronto, his new responsibilities will include acting as a liaison between the company’s adjusters and insurers across the country to identify new services and improve efficiencies. “Bruce’s broad experience and in-depth knowledge of the claims industry will allow him to take a very technical approach to working with our clients,” says Michael Holden, the company’s president and CEO.
4
Assured Automotive of Toronto has announced it has formed a new company operating five auto
3 collision repair centres in the Ottawa area. Having acquired Frank & Guy Auto Body Ltd. on October 1, which was owned by Guy Cousineau [4a], Assured Ontario East is now comprised of the three Frank & Guy locations and two Concordia Collision Centres garages, bringing Ontario locations to 43. “We feel that the insurance companies will have some benefit to dealing with a multiple-store operator, a corporately owned entity, as opposed to the traditional methods of customer care,” says president and CEO Tony Canadé. Walter Grego will be Assured Ontario East’s president; Cousineau will be vice president of operations, technical; and Don Strong [4b] will be vice president of operations, administration.
5
The YMCA of Greater Toronto’s risk intelligence program has been recognized with RIMS’s 2012 Enterprise Risk Management Award of Distinction. “Our YMCA risk strategy has evolved through integrative thinking that is generating new perspectives and tools, enabling us to respond successfully to the changing
4a needs of communities we serve,” says Monica Merrifield, vice president of risk intelligence for YMCA of Greater Toronto. “Enterprise risk management has become an increasingly important organizational competency that not only protects organizations from detrimental risks, but has proven to help identify positive risks that can lead to profitable opportunities,” says Carol Fox, director of strategic and enterprise risk practice for RIMS. Judging criteria for the award includes the scope of the ERM program and how it engages different levels throughout the organization; the program’s link or connection to overall mission; and its ability to create additional value.
6
Vancouver-based On Side Restoration Services Ltd. has acquired Higgins ProTeam Restorations Inc., a restoration contractor in Ontario. “Our mission is to be and be seen as the leading restoration contractor in Canada and there is no doubt that you have to have a solid foothold in the Ontario market to think about making that a reality,” says Craig Hogarth,
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MOVES & VIEWS
tomers and insurance policy information. MobileProducer, which does not work with other BMSs or with other vendors’ systems, is currently available for download both from Apple iTunes and Google Play.
4b
8a
8b
company founder and owner. Each of Higgins ProTeam’s four offices offered restoration-emergency services, contents and re-construction to select insurance companies, insurance brokers and property managers. Jay Kielt will oversee London/ Woodstock, Bill O’Callaghan will oversee Burlington and a new manager will be hired for Kitchener, with all locations operating under the On Side Restoration name as soon as is practicable. The company has branches in British Columbia, Alberta, Atlantic Canada and Ontario.
lana, CSN’s chief operating officer. “Consumers will also be happy with the fact that all businesses making up the new network are collision repair facilities selected for their high levels of performance and their standards of excellence,” adds Michel Charbonneau, CEO of Carrossier ProColor in Quebec.
customer service as he helps build the company’s eastern presence. Féron and Buch will report to ClaimsPro president Bob Fitzgerald.
7
CSN Collision & Glass will partner with Quebec-based Carrossier ProColor to create Canada’s largest national collision network, with 265 locations. Carrossier ProColor will now represent the interests of CSN in Quebec. “The cultures and synergies of our two networks are an excellent match, and this alliance will not only help to strengthen and grow both CSN and Carrossier ProColor, but will also allow us to provide a complete national solution to our national insurance partners,” says Flavio Batti-
8
ClaimsPro has welcomed two new vice presidents. In line with the creation of distinct business units in Ontario, Paul Féron [8a] and Dan Buch [8b] will serve as vice president for Western Ontario and vice president of Eastern Ontario, respectively. A 14-year veteran of ClaimsPro and in the insurance industry for more than 30 years, Féron has been a key player on the company’s management team, building a strong professional network of branches in southwest Ontario. He will be based in London. Ottawa-based Buch, who has worked at Cunningham Lindsey and State Farm, will focus on providing clients quality work and excellent
9
10
Applied Systems Inc. has announced the general release of version 12 of The Agency Manager (TAM), a single-entry system. “For Canadian customers, it includes all-new capabilities for writing commercial lines policies,” Applied Systems notes of the software for insurance brokers and agents. It includes enhanced integration with Compu-Quote Inc., acquired by Applied Systems in June and whose software includes applications that compare underwriting and rates for auto and property insurance, adds a company statement. As for other new offerings, MobileProducer works over both WiFi networks and cellular networks using the third-generation and Long Term Evolution standards, and extracts data from the broker management system (BMS). Among other things, users will be able to access client accounts, activities, contacts, prospective cus-
Keal Technology now offers realtime, round-trip, policy change transaction to its broker community. This is possible through keal connect, the company’s single entry multiple company interface solution. Brokers can process a fully underwritten and brokerapproved endorsement transaction in the insurer’s policy administration system, without leaving sigXP, Keal’s BMS, and without insurer involvement. “Our studies indicate that on average, 30% of all broker-related transactions are pure policy changes,” says Keal president Pat Durepos, but policy change transactions account on average for less than 1% of brokers’ revenue. The product can help improve workflow, Durepos suggests. Keal has also partnered with Intrinsync, whose real-time technology will allow brokers to offer policyholders online service and purchase options 24/7. “This will be achievable by the end of next year,” says Colin Simpson, president and CEO of Intrinsync.
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December 2012 Canadian Underwriter 59
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
WICC Ontario Chapter held its annual Breakfast for Cancer on November 7 at the Fairmont Royal York in Toronto. More than 500 insurance industry supporters attended the sold-out event. Dr. Eileen Rakovitch of Sunnybrook “Odette Cancer Centre” shared fascinating insights into the latest cancer treatments and research. WICC Ontario’s 2012 year-to-date funds donated to the Canadian Cancer Society are over $900,000.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
Registered Insurance Brokers of Ontario (RIBO) held its annual general meeting on November 8, 2012 at the Arcadian Loft in Toronto. Attendees who gathered for refreshments and lunch also heard from outgoing president Jim Hawryluk, who spoke about the importance of keeping pace with the needs and demands of clients.
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The 57th Annual Black Tie Dinner of the Toronto Insurance Conference (TIC) was held at the new Four Seasons Hotel in Toronto on November 8. Humanitarian, social activist and bestselling author Craig Kielburger was the keynote speaker. Kielburger cofounded Free The Children in 1995 at the age of 12. He also co-founded Me to We, a social enterprise that encourages daily choices that change the world.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
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GALLERY 57th Annual TIC Black Tie Dinner continued from Page 63
ADVERTISERS’ INDEX ACE INA Insurance
7
Aviva Canada Inc.
68 (OBC)
Burns & Wilcox
33
Cira Medical Services
60
CNA Canada
15
Crawford & Company (Canada) Inc.
19
Cunningham Lindsey Canada FirstOnSite Restoration The Guarantee Company of North America Insurance Institute of Canada
9 44, 45 43 5, 56
Insurance Internet Directory
54
The Insurance Marketer
23
Impact Auto Auctions
13
iter8
35
OIAA 2013 Conference
49
Ontario Insurance Directory
52
RIMS 2013 Conference
37
RSA – Royal & Sun Alliance Insurance Company of Canada The Sovereign General Insurance Company TIWA Wine & Cheese
2 (IFC) 67 (IBC) 51
Travelers
25
Swiss Reinsurance Company Canada
31
WINMAR
27
XL Group
21
64 Canadian Underwriter December 2012
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Impact Auto Auctions has opened a new location in Oshawa, Ontario, increasing the company’s Greater Toronto Area storage capacity and overall presence. The new Impact Toronto location has 37 acres of vehicle storage and a 12,000 square foot office, auction and inspection building. The addition increases the auto salvage management company’s GTA storage capacity by 60% to 5,500 vehicles. The new site also features office and training space for insurance appraisers, along with an early tow and appraisal area.
66 Canadian Underwriter December 2012
Impact uses web-based technology, LiveBlock Hybrid Auction, to bring together worldwide online bidders with live ones. Along with its existing online services for insurance, fleet and rental customers, Impact has a new service called Document Express, which it says allows for simplified tracking of branding forms, titles and other sale documents for selling customers. Impact, a wholly-owned subsidiary of KAR Auction Services Inc., now has 14 locations in British Columbia, Alberta, Ontario, Quebec and Atlantic Canada.
Thank you
for your support “ On behalf of over 3,500 Aviva Canada employees, I’d like to thank our valued broker partners for making 2012 such a successful year. Together, we’re meeting the changing needs of today’s customers and doing what it takes to respond with flexibility and innovation. As our industry evolves, it’s more important than ever to work together with partners you can trust. At Aviva, we’re continually listening to broker feedback, understanding your needs and coming up with easier ways to do business. Once again, our positive broker satisfaction survey results speak to our strong partnership, and we continue to work alongside you as we reinforce our commitment to the broker channel. Thank you for your support, and best wishes for the coming year from everyone at Aviva.”
Maurice Tulloch President and CEO, Aviva Canada
AvivaPartner.ca Home | Auto | Leisure & Lifestyle | Business | Group | Surety Aviva and the Aviva logo are trademarks of Aviva plc and used under license by Aviva Canada Inc. and its subsidiary companies.
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