Canadian Underwriter February 2012 by Annex Business Media

C A N A D Aâ&#x20AC;&#x2122; 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

F E B R U ARY 2 0 1 2 A Business Information Group Publication #40069240

Driving on Display BY CRAIG HARRIS

Collaborating on Technology BY RICK ORR

Data Exchange BY DAVID GAMBRILL

Education is the key to your success!

Insurance Institute National Education Week 2012 February 27 to March 2 Unlock your career potential and enhance your professional development by taking advantage of the special seminars and events on offer during National Education Week!

In the increasingly complex world of insurance, continuous learning isn’t an option—it’s essential. With events held throughout Canada on a variety of relevant and topical industry issues, National Education Week offers rewarding opportunities to help you set yourself apart from others in the industry. To find out what’s on in your local area, visit the website or contact your local Institute or Chapter.

www.insuranceinstitute.ca/NationalEducationWeek

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VOL. 79, NO. 2, FEBRUARY 2012 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP

www.canadianunderwriter.ca

COVER STORY

Driving on Display

32 FEATURE

Consumer Interface

Social Circles

Brokers and carriers must collaborate to build workflows and communication systems that better serve consumers.

Companies are exploring the possibility of allowing consumers to use their friends and social circle to help reduce premiums.

BY RICK ORR

BY ALEXEY SALTYKOV

16 Flexible Connections A once-linear connection between consumers, brokers and insurers, mediated through paper-based processes, has shifted because of the unbounded flexibility of the Internet. BY BRENDA ROSE

24 Commercial App A new app allows commercial insurance brokers to gather complete information from a client at the client’s place of business and send it to an underwriter by means of a tablet — with minimal keyed entry. BY KEVIN CAMPBELL

Kusnierz Overturned

Data Delivery

The Ontario Court of Appeal has ruled in Kusnierz that psychological impairments can be combined with physical impairments for the purpose of determining a catastrophic injury.

IBAC’s Data Exchange Project is one step closer to a roundtrip data exchange between a broker management system (BMS) and an insurer’s policy administration system.

BY NEIL P. WHEELER

BY DAVID GAMBRILL

Usage-based insurance (UBI) is moving steadily into the mainstream in many large insurance markets, particularly in the United States. Insurers in Canada have shown interest in UBI, but few comparable programs are in place. Will telematics ever catch on in Canada? BY CRAIG HARRIS

vehicle technology on insurers, collision repairers and original equipment manufacturers (OEMs). BY DAVID GAMBRILL

44 Once and Done In achieving broker-carrier workplace efficiencies, companies can interpret and adapt a ‘once-and-done’ approach to suit their specific business and technical goals. BY KARL GREENLAW

52 Stress Relief P&C companies need to help their executives and top performers manage their stress levels.

28 More With Less

BY CAREY-ANN OESTREICHER

Brokers can learn from their direct writer competitors, which have automated their processes to do more for less.

54 Acquisition Retrospective

BY RENEE DUREPOS

42 CCIF Coverage CCIF’s annual meeting in Toronto discussed the impact of advanced

RSA presents key reflections on its merger with GCAN Insurance Company after the one-year anniversary of the deal. BY SUSAN MURPHY

February 2012 Canadian Underwriter

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VOL. 79, NO. 2, FEBRUARY 2012

PROFILE

Editor David Gambrill david@canadianunderwriter.ca (416) 510-6796 Associate Editor Vanessa Mariga vanessa@canadianunderwriter.ca (416) 510-6793

10 Building Consensus CSIO president Catherine Smola aims to build a consensus between brokers, insurers, vendors and other stakeholders working towards “once-and-done” technology solutions. BY VANESSA MARIGA

SPECIAL FOCUS

Editorial

Marketplace

Senior Publisher Steve Wilson steve@canadianunderwriter.ca (416) 510-6800 Associate Publisher Paul Aquino paul@canadianunderwriter.ca (416) 510-6788 Account Manager Michael Wells michael@canadianunderwriter.ca (416) 510-5122 Account Manager Christine Giovis christine@canadianunderwriter.ca (416) 510-5114

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Connect with Canadian Underwriter

62 Moves & Views

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64 Gallery

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Canadian Underwriter February 2012

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EDITORIAL

Disharmony

Perhaps the best hope for resolving the credit scoring issue is to see the emergence of a better, less contentious rating factor. David Gambrill, Editor david@canadianunderwriter.ca

Canadian Underwriter February 2012

One frustrating aspect of doing P&C insurance business in Canada is the lack of harmonized regulations across the country. This manifests itself in a variety of ways, the most recent example being the use of credit scoring in insurance underwriting. A significant number of brokers — not all — dislike credit scoring for a variety of reasons. Some note it is difficult to explain to clients the conceptual relationship between credit use and their insurance premiums. Others are concerned about procedural fairness, because the process of rating credit is not transparent and not immune to error. For insurance companies, on the other hand, the statistical correlation is clear: consumers with good credit scores make fewer claims, and therefore they deserve lower premiums. Companies argue that credit scoring is only one rating factor among many that allows them to gain a better understanding of the risks their policyholders present. An unknown, prospective policyholder could cost a company nothing over 10 years, or more than $10 million in 10 minutes. A company needs predictive information to help determine the risk. Thus far, everyone has simply agreed to disagree. Some provincial regulators have legislated in this area, while others have not. In all of this flurry of (in)activity,

the Canadian Council of Insurance Regulators (CCIR) undertook a review of the issue. And although the CCIR’s recommendations are never binding on its provincial members, some hope existed the association might take a longer view of the issue and advocate for a more coordinated regulatory response. It is important to take a consistent approach to the issue across the country. It does not make sense for credit scoring to be allowed in one part of the country, or in some insurance lines, but not allowed in others. If credit scoring is good or bad, then it is good or bad wherever you are in the country. Certainly, the reasons for liking or loathing it are consistent across the country. But after examining the issue for almost a year, the CCIR has yet to pronounce on the issue, and the president of the association has recently given a speech that said, in effect, lower your expectations. “Frankly, there will be no harmonized policy on use of credit information in underwriting,” CCIR chairwoman Danielle Boulet said in a Dec. 13 speech at a Canadian Association of Financial Institutions in Insurance (CAFII) board of directors meeting. "Some jurisdictions feel it is a valid tool to underwrite and price insurance, but other jurisdictions have banned its use already and still others are moving to do so.

“Ultimately, this is a government decision dependent upon a combination of political and socio-economic conditions within a jurisdiction, and a jurisdiction’s level of tolerance in relation to any potential risk identified.” Although this analysis is sound, it is neverthless disappointing to those of us who would prefer to see a consistent approach to credit scoring upheld across the country. For critics, it will always be frustrating to see credit scoring allowed in one province when it is not allowed in another. For proponents, it is frustrating to be able to offer credit scoring in some jurisdictions, but not others. And for consumers, it doesn’t make sense that credit scoring would be allowed or not allowed simply on the basis of where one lives, and not on any kind of common principle. Expecting politicians to act in a coordinated fashion on this issue, without bickering, when there are so many other issues that deserve their attention, seems like folly. Perhaps the best hope for resolving this is to see the emergence of a better, less contentious rating factor. This isn’t entirely out of the question, given the rapidly emerging sophistication of analytics. But until that happens, it appears the industry is stuck with yet another inconsistent legislative response to an issue in need of a national standard.

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MARKETPLACE

Claims MANITOBA FLOOD DAMAGE PROJECTED TO COST GOVERNMENT $815 MILLION The projected costs of widespread flooding in Manitoba this past spring will be $815 million, according to the government of Manitoba's quarterly financial report. By the end of the second quarter, $437 million had been spent on the spring flood. The forecast of unbudgeted expenditures for the 2011 spring flood includes funding for the Building and Recovery Action Plan and other financial assistance of $483 million to support homeowners, businesses, First Nation communities and municipalities, as well as $332 million to support livestock and crop producers for AgriRecovery and excess moisture programs. Infrastructure expenditures are projected to require an additional $159 million. These expenditures include the restoration of bridges, roads and dikes and the construction of the outlet channel to alleviate the pressure on Lake Manitoba and Lake St. Martin.

FSCO SEEKS HELP FROM PRIVATE DISPUTE RESOLUTION COMPANIES TO HELP CLEAR UP BACKLOG The Financial Services Commission of Ontario (FSCO) is seeking help from up to four private dispute resolution companies to help eliminate a backlog of files, estimated

8 Canadian Underwriter February 2012

to be more than nine months as of May 2011. FSCO posted a Request for Proposals (RFP) on MERX, Ontario's electronic tendering system, on Jan. 16, 2012. The service providers would handle the backlog of files, while FSCO's existing dispute resolution staff would receive files as usual. FSCO added that as mediation files move through the system, it anticipates an increased demand will develop in arbitration. “As a result, in addition to mediation services, the RFP is seeking service providers to provide arbitration services in order to respond to the expected increase in demand,” FSCO said. “These companies will be used to supplement FSCO's existing resources and address the files in the backlog. “FSCO expects to have contracts in place with qualified service providers by May 2012.”

Regulation HARMONIZED APPROACH TO CREDIT SCORING IN CANADA WILL NOT HAPPEN: CCIR The Canadian Council of Insurance Regulators (CCIR) is currently reviewing the results of a consultation it conducted last year on credit scoring, but it doesn't appear likely that a harmonized approach to credit scoring will be the outcome. “Frankly, there will be no harmonized policy on use of credit information in under-

writing,” CCIR chairwoman Danielle Boulet said in a Dec. 13 speech at a Canadian Association of Financial Institutions in Insurance (CAFII) board of directors meeting. “Some jurisdictions feel it is a valid tool to underwrite and price insurance, but other jurisdictions have banned its use already and still others are moving to do so. “Ultimately, this is a government decision dependent upon a combination of political and socio-economic conditions within a jurisdiction, and a jurisdiction's level of tolerance in relation to any potential risk identified.”

in Canada may have ended in 2011, but that doesn't necessarily mean that a hard market will follow directly on its heels in 2012. “We tend to graph [market cycles] as ‘Vs,’” Cook said. “That is, we reach the bottom and it goes up again.... “But I'm going to suggest to you that for the insurance industry, the graph is going to look like the bottom of a bucket. It's going to come down, it's going to be flat, and then it's going to go up again. And that flatness, I think, is going to hold for at least the next two to three years [2012-14].”

Canadian Market

CANADIAN COMMERCIAL RATES IN 2012 EXPECTED TO BE “STABLE”: MARSH

HARD MARKET IN CANADA UNLIKELY IN 2012 A hard market cycle will not likely happen in Canada's property and casualty insurance industry in 2012, according to Philip Cook, president and CEO of Omega Insurance Holdings. Cook talked about market cycles, escalating catastrophe losses and a number of other hot topics in the insurance industry at the 2012 CIP Society Industry Trends Breakfast. “The $64,000 question is: Have we reached the turning point and will we see the hard market starting in 2012?” Cook asked. “I stick out my neck and say, ‘Absolutely not.’” Cook said the soft market

Canadian commercial insurance rates are expected to remain stable across most lines of business in 2012, continuing a trend that began in the second half of 2011, according to a report by Marsh. In its report, Navigating the Risk and Insurance Landscape: Canada Insurance Market Report 2012, Marsh noted that substantial catastrophe losses and reduced investment returns prompted many insurers to seek rate increases in 2011. Property insurance rate reductions will likely cease in 2012, especially for Canadian insureds with significant loss histories or U.S. catastrophe exposures. Companies with U.S. catastrophe exposure will likely see rate in-

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MARKETPLACE

creases of up to 15%. Rates for financial and professional lines, including for directors and officers liability, are expected to remain stable in 2012, although some rate decreases are still achievable. “Entering 2012, the Canadian insurance market remains in a state of transition,” said Marsh Canada Limited president and CEO Alan Garner. “Insurers are expected to be extremely disciplined in their underwriting and seek rate increases where they can. “Insureds that are able to provide insurers with complete, accurate and quality data will be best positioned to secure more competitive rates at renewal.”

pact on the possibility of this occurring. But he noted that since insurance services are already in the virtual space, social networks could use their net-

works to extend their reach by offering insurance services to different generations of users. Most likely this could be done through some kind of ‘white label' arrangement,

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SOCIAL NETWORKS COULD BECOME INSURANCE DISTRIBUTION CHANNELS BY 2014: GARTNER What if social networks such as Facebook, Myspace or Google+ became insurance channels unto themselves in the next two years? Juergen Weiss, a research director at Gartner, a technology research firm, said this kind of development could be a very real possibility — perhaps as early as by the end of 2014. Weiss hosted the Gartner Webinar, 2012 Industry Predicts: Disruptive Technologies for Insurers, on Jan. 11. Weiss did not name any specific social network providers prepared to offer insurance services. He also noted that regulators would have an im-

in which the insurance product is sold under the brand of one company (a distributor) while a separate company (an insurer) actually provides the product.

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PROFILE

Building Consensus Vanessa Mariga Associate Editor

CSIO president Catherine Smola is helping brokers, insurers, vendors and other industry stakeholders to create “once-anddone” technology solutions. Sometimes building a consensus is harder to achieve than building the most complex piece of infrastructure. Catherine Smola, the new president of the Centre for Studies of Insurance Operations (CSIO), has spent a great deal of her career in the insurance industry bridging the gaps between stakeholders’ disparate points of view. Smola was first exposed to the insurance industry when she spent her summers in university working as a ‘Girl Friday’ in a brokerage. She liked the brokers’ attention to detail and focus on customer service. “The personalized service, the personalized advice, the fact that the brokers took the time to really understand each and every clients’ situations and insurance needs, that impressed me,” she says. Once she finished university, she pondered what to do next. CIGNA Corporation (now ACE) was advertising a management

10 Canadian Underwriter February 2012

trainee program for recent university graduates. Her summers working in the brokerage had sparked an interest in joining the industry, so she applied and was accepted. “The program was fantastic,” she says. “I worked through various departments and my permanent placement landed me in the commercial lines area. I loved it. The complexity of the risks really drew me to the commercial files. No two risks were the same. I had the opportunity to go out with the engineers from the loss control department and visit the factories and facilities that we were insuring. It was an outstanding learning experience.” After two years with CIGNA, Smola moved on to manage the property facultative department of Swiss Re. From there, she moved to ING, where she worked primarily in the insurer’s corporate office. Her various roles and responsibilities at ING included research and development, writing the commercial lines fleet underwriting manual, to developing a whole new suite of commercial lines products. In 2005, she was appointed vice president of Trafalgar Insurance Company, and the next year ING (now Intact) purchased Grey Power and appointed her president of the brokerage operation. “So, that’s my path to date,” she says. “I began as a broker, went to a big American company, moved to a European

reinsurer and ended back up at a Dutch-Canadian company.” Smola officially joined the CSIO as its president in January 2012.

ACHIEVING CONSENSUS CSIO’s central mandate is to seek ways to provide a competitive advantage for the independent broker distribution channel in Canada by working with its membership base of 2,100 brokerages, 21 insurers, 43 mutual insurers, and 25 vendors. “The key to CSIO’s mandate is the leadership role it plays, by providing a dynamic and open forum in which all industry stakeholders work together to develop and enhance existing standards and to seek ways to improve both the efficiencies and competitiveness of the industry as it continues to evolve,” she says. Of course, given the multitude of stakeholders representing different corners of the industry, achieving this mandate sounds easier said than done. Smola observes her professional background has prepared her well to take the reins of CSIO. Both Swiss Re and ING/Intact helped her to hone her collaboration skills. “As a reinsurer, you need to go out and market your organization’s ability to reinsure accounts,” she says. “You have to work with carriers to build the confidence that we’re the right reinsurer to partner with. “And certainly in my role at

ING/Intact, being in the corporate office, I was responsible for working with the three regions — western Canada, central Canada and Quebec to develop national strategic initiatives such as the implementation of a commercial lines rating tool. I brought the regions together, with their respective vested interests, and we built the tool. If we had a disconnect, if one region wanted something and another opposed it, then we had to work together and find consensus.”

I think driving the consensus is not necessarily going to be the biggest challenge moving forward. I think it’s going to be the speed at which we can get the standards implemented. CSIO is essentially doing the same thing, but on a much larger scale, she says. “I didn’t have the authority [at Swiss Re or at ING] to say: ‘I know you disagree, but this is what we’re going to do,’ just as I don’t have that authority at CSIO,” she says. “But I have developed skills throughout my career — project management, leading strategic initiatives, bringing various stakeholders to the table —

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PROFILE

that are essential in building a consensus.” And while CSIO has been around for 30 years now, finding that consensus is more critical now than ever before. “In the last 10 years, the independent broker channel has lost approximately 10% market share of personal auto and 13% personal property to the direct writers,” she says. “There are a number of reasons to believe this trend will continue.” Direct writers enjoy an “efficiency advantage,” she notes. They sell one set of products which allows them to have standardized workflows with more efficient processes. Direct writers are also leveraging Internet technology to attract customers who prefer to do their insurance purchasing online. Brokers, on the other hand, work on different company systems, each with their own specific workflow and processes. “I think driving the consensus is not necessarily going to be the biggest challenge moving forward,” she says. “It’s going to be the speed at which we can get the standards implemented. CSIO’s mandate is to build those standards, but then we can’t just leave it at that. We need to get our members to understand just how important it is to move towards using the standards. We’ll develop the

TIME FOR OPTIMISM

standards, but then the vendors need to program them into their systems and the carriers’ systems need accept them as well.” The Insurance Brokers Association of Canada (IBAC) has developed guiding principles necessary to deliver a technology solution designed to improve the competitive position of the independent broker channel. In a nutshell, IBAC identified a number of key principles: • data transactions that start in the BMS must end

in the BMS; • data flows between systems electronically and transparently, without user intervention; • all data transmissions must strictly adhere to CSIO standards; • XML data that flows to a company’s system is processed and returned in real time; • workflows must avoid connection to and a broker’s use of an insurer’s web portal; and • translations are to be addressed on the insurer’s side of the transaction, not on the broker’s side.

In all of CSIO’s 30 years of existence, Smola believes there has never been a time like the present when brokers, insurers and vendors are so committed to seeing the CSIO’s mandate through. Why is this particular moment so promising? Smola says that despite the continuing momentum of the direct writers, as well as the fact that company portals have been out for a while now, the workflow savings and efficiencies that portals initially promised just haven’t materialized. “Portals had a place at one point, but they are not going to stop the erosion of market share towards the direct writers,” she says. “In fact, many brokers believe the use of company portals today is actually a contributing cause of their slower market share growth because of the inefficiencies that go along with using them. These portals do not facilitate the brokers’ workflow to allow them to spend their time and energy doing what they do best — assessing each customers’ insurance needs and providing them the best coverage advice. “The vision and guiding principles outlined by IBAC need to be respected as we work together to develop technology solutions designed to improve the competitive position of the independent broker channel in Canada. Certainly we at CSIO are committed to working with the industry stakeholders as we develop and implement industry standards that will advance the once-and-done, real-time vision.”

February 2012 Canadian Underwriter

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Plugging into the Needs of Consumers

Rick Orr

President, Insurance Brokers Association of Ontario (IBAO)

Imagine brokers walking away from $150 million each year. That’s a lot of money, no matter how big you are. I’ll explain the context for this figure later, but for now I will just say it illustrates the importance of emerging technology to brokers in the future. The Insurance Brokers Association of Ontario (IBAO)’s message this year is one of collaboration. We need to work together with industry stakeholders to stop the incremental loss of market share. Brokers and insurers need to work together to build better communication systems and workflows. Insurers need better integration with brokers to improve their workflows and efficiencies, which in turn will reduce insurers’ expense ratios. Brokers need improved integrations with companies to streamline brokers’ workflows, reduce inefficiencies and allow brokers more time to interact with clients and sell insurance. Brokers also need to improve the way they interact with their clients to ensure that they are communicating with clients using the client’s preferred method of communication. This will

12 Canadian Underwriter February 2012

help brokers deliver on the values and needs clients are looking to have satisfied. Those are a lot of words to say insurers and brokers need to work together to build better systems that benefit all of us.You will hear a number of times this year that it isn’t about one broker insurer beating another broker insurer. Our mindset needs to shift to become, what’s best for the channel? How will the initiative we’re working on eventually benefit all three parties in the transaction — the consumer, the broker and the insurer? For some, it will take a fundamental shift of mindset to think of other parties when looking at workflows and system development. Others already understand we need to work together more than we ever have in the past. To reinforce my point that we can begin to collaborate as a channel, I thought I’d review a few of the current initiatives in our industry that are significant for all of us. Let’s start with back-end system initiatives, the broker-insurer initiatives, before we consider the consumer-broker initiatives.

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Brokers need to collaborate with industry stakeholders to build better workflows and communication systems.

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BROKER-INSURER INITIATIVES First, there is E-Doc, or electronic document download. E-doc is a workflow designed to seamlessly send a PDF file of the policy directly from the insurer to the broker management system using the CSIO download, and then attach the policy PDF directly to the client screen within the BMS. This little workflow change could save the industry millions of dollars through increased efficiency. Without E-Doc, the insurer would print the broker copy and courier it to the broker. The broker would then process the paper to be filed, store it and then go to retrieve the paper copy if required — all while meeting the workflow requirements of both insurers and brokers, as well as satisfying the legal requirements of the regulator here in Ontario. Several major insurers have committed publicly to building the E-Doc solution, including The Dominion, Intact and Aviva Canada. Other insurers have developed a better understanding of the initiative and are continuing to investigate. The project built significant momentum after the IBAO’s Ontario convention in October 2011. The Centre for the Study of Insurance Operations (CSIO) is now reviewing the standard around which the industry will build the solution. The IBAO is working closely with CSIO, which recognizes the importance of this project and is working to quickly finalize its portion. Second, we have Transport Layer Security (TLS), a lesser-known initiative recently announced by CSIO.TLS provides encrypted email transmissions between brokers and insurers. Each party needs to enable a security certificate on their email server; this automatically creates a secure email transaction. TLS will allow brokers to stay within their own BMS and workflows when sending attachments and documents to insurers in a secure manner. This is a significant development. It means brokers no longer have to log into company-specific portals to attach signed endorsements or send sensitive claims information. This is just one more step towards staying within our own BMS and will lead to future advancements.

14 Canadian Underwriter February 2012

Let’s move on to a few consumer-broker industry initiatives.

CONSUMER-BROKER INDUSTRY INITIATIVES IBAO studies show consumers want to make a personal connection when purchasing insurance, use a brand they recognize and complete a simple transaction. To this end, IBAO has been encouraging insurers to continue to brand themselves online. However, they need to drive traffic to a common point, where a consumer can then choose a

Brokers need to develop better technology that drives efficiencies into the system. This will reduce insurers’ expense ratios, thereby allowing them to deliver more competitive rating. broker they recognize, perhaps through the broker’s involvement with his or her local community.This would marry the brand of the broker the consumer trusts with the brand of the insurer he or she recognizes. This method allows brokers to deliver on the broker value proposition of providing choice and advice. Third, mobile applications are a consumer-facing initiative at the forefront of many discussions. Mobile apps will deliver value to a consumer. However, brokers believe the value should be derived from brokers’ — as opposed to the insurers’ — mobile apps. If each and every carrier develops its own mobile app and pushes it out to

policyholders, then insurers miss the point, which is that they should be supporting the broker channel. The connection should be between brokers and consumers, not between insurers and consumers. Insurer-specific mobile apps weaken the consumer-broker connection, remove the broker from the equation and confuse the consumer if the carrier is changed at renewal. We would be much better off with one broker mobile app that served all customers of all carriers. Imagine if brokers had the opportunity 10 years ago to deliver one broker portal rather than a portal for each and every carrier with which they work.We didn’t have the solution 10 years ago, but we do today. Let’s not let this opportunity slip by. IBAO, through its wholly owned subsidiary Independent Broker Resources Inc. (IBRI), will be releasing a broker mobile app sometime in the first quarter of this year. Now let’s think about the future. If we can accomplish the delivery of an electronic copy of the policy to the broker from the insurer, then what practical and legal hurdles do we need to address to deliver the same PDF to clients (should they prefer to receive it that way)? The next logical question is how to deliver an electronic liability slip for a consumer to carry in his or her smart phone? The IBAO has begun to do some preliminary research on these questions and will continue to work towards providing brokers with solutions. So what does the $150-million figure I mentioned earlier have to do with this article? No, it is not the cost to build any of these initiatives. It’s the cost if we don’t. In Ontario, for each and every 1% of lost market share, brokers lose $150 million dollars of revenue. Brokers need to develop better technology that drives efficiencies into the system. This will reduce insurers’ expense ratios, thereby allowing them to deliver more competitive rating. Brokers also need to do a better job of interacting with consumers, finding out when how they want to do business. Thankfully, there is a glimmer of hope at the end of the tunnel. Some stakeholders are starting to see the light.

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A ersonal P Connection A once-linear connection between consumers, brokers and insurers, mediated through paper-based processes has shifted because of the unbounded flexibility of the Internet. Brenda Rose

Vice President, Firstbrook Cassie & Anderson

It’s always been about connecting with customers. Picture a broker, and one imagines handshakes across kitchen tables, neighbourly shoulders sharing times of loss, and even the warm shelter of encircling magenta blankets. All are visualizations of the fundamental assurance consumers derive from knowing the individuals charged with their protection. Savvy insurers, too, have traditionally relied upon that connection. They trust the brokers’ first-hand client knowledge, which helps them to fine-tune underwriting and cement client loyalty. Of course, the idea of ‘connecting’ suggests other imagery as well — including the use of wires and switches to link random, distant points invisibly and instantly. Today customers often wish to “connect” instantly and effortlessly, without the need for physical presence or even a spoken exchange. Consumers still want to engage with their professional advisors. But looking forward, some of the expectations for that interaction may be completed transformed.

16 Canadian Underwriter February 2012

SHIFT IN BUSINESS PRACTICE For brokers, connecting electronically with customers does require a shift away from traditional business practice. Historically, though, so did the introductions of the telephone and the fax machine.The simple fact of change does not automatically spell disaster for businesses that have previously communicated using traditional means. Far from it, the Internet and the online world have actually created opportunities for brokers to reinforce the levels of service and customer connection that other competitors cannot match. Realizing that full potential, however, will demand far more than a superficial tweaking of well-worn approaches. The Internet challenges all of our assumptions about how insurance business should occur. Since it is simply another medium through which people can interact, online communication is not tied to any particular distribution mode. It offers almost unbounded flexibility. Virtual delivery is not confined to the digital perpetuation of current processes, nor are brokers limited merely to mimicking direct writers’ commodity offerings. With sufficient investment, ‘online’ can mean ‘full-serve’ instead of ‘self-serve,’ with knowledge, options and advice delivered in new ways. Similarly, electronic communication has evolved far beyond generic auto-messaging. It is now individualized and interactive. The success of

social networks, characterized by equalopportunity self-expression, means that customers expect active participation. Furthermore, the online customer experience is now largely introspective: websites consistently elicit information from their visitors, and ultimately leverage viewers’ own preferences for the purpose of advertising. Information flows and overflows. Paired with contextaware capabilities, viewers’ personal data and accrued preferences are more powerful than ever as the means to filter content and tailor site presentations. Within the insurance universe, this concept of a multiplicity of options filtered through the prism of a client’s own needs is in fact most closely analogous to the full range of coverage and carrier options, as filtered through the suggestions and advice that brokers offer to their clients. Traditional insurance interactions are mostly linear. They are rooted in information gathering and the subsequent transference of paper from one stage to the next. Are these tired, old processes mandatory or comprehensive? Virtual environments are not so narrowly defined. Their architecture creates and mirrors the random patterns of viewers’ navigation in, out and around sites or apps. Consumers’ interests drive their web activity. Brokers and partners wanting to leverage online opportunities should therefore concentrate on the interests that command their consumers’ attention. They must pinpoint what customers desire when they connect with their advisor online. And by employing continuously evolving technological capabilities, they must transform their interactions to accommodate their clients’ desires.

cludes offering features online such as advice on coverage, valuations and risk management, relative merits of policies or insurers and/or explanations regarding rates or conditions. Customers will expect interaction specific to themselves. They may wish to ask a question and chat with a representative. They might want to access their own account and policy information, request a change of coverage or make a

CONSUMER EXPECTATIONS The consumers’ potential wish list is limitless. Certainly the web can be used for housekeeping tasks such as making payments. And quoting, although it is not always comparative, is now commonplace. But to provide the full range of broker value, brokers must deliver more substantial and meaningful information in interactive forums. This in-

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For a broker to reach customers online successfully (independently of any particular insurer), he or she must weigh business exigencies against practical realities. Some of these fantastic deliverables are costly. They require expensive and sophisticated analytics, research, IT and staffing resources. Personal customization often requires an even greater investment. For many individual brokers, the price is out of reach. However, cooperative efforts, alongside staged development, may bring solutions. Reconciling customer desires for clarity and simplicity with the intricacy of the subject matter is another important issue. Insurance is fundamentally complex, and even somewhat commoditized products can puzzle civilians. Over-simplification is harmful and can result from a lack of available options, explanations and understanding online. By choosing to interact electronically, consumers have not relinquished their rights to choice, or to access advice and advocacy. In addition, the desire for simplicity cannot be allowed to compromise any professional diligence or the legal safeguards concerning information collection. It is critical to maintain the same principles and guidelines that have oriented the business in the past and have protected the consumer online as elsewhere. The move to a more informal mode of communication does not dilute any of the responsibility embedded within the client connection. The onus is on brokers to find creative, clear ways to deliver on their full, unique value within the new environment. Technical requirements must also be considered, apart from the costs involved. Customers must be able to view accessible and accurate information. Some broker management system (BMS) vendors in Canada are developing pre-packaged modules for their software — such as TBW’s I-client or TAM’s CSR-24 — so that brokers will be able to provide integration between the Internet and their systems. Others, including Keal, Power Broker and CIMData, stand ready and anxious to offer custom development. Some insurer rat-

18 Canadian Underwriter February 2012

ing engines today can be exposed and made available to clients through BMS links. Similarly, other insurer-hosted data can be exported to broker sites or systems. Wherever the information resides, it must be consistently reliable to be useful. Also, it must be exposed to the customer in comprehensible forms. Brokers and insurers, together with CSIO, still have work to do to in order to improve the richness and quality of the information they share. Brokers need to roll up their collective sleeves and initiate a necessary dialogue with both vendors and insurers to

Insurers that recognize opportunities and are committed to broker distribution would be wise to invest with brokers in cooperative online efforts. Pooled ideas and resources will best serve the customer. determine shared objectives, priorities and development needs. As online activity continues to expand, all competitors, eternally watchful of market share, are alert to new ways to reach new audiences. Without broker participation, insurers will surely grow impatient and consider acting unilaterally. In doing so, they might disregard the inherent limitations of single-insurer presentations, which are unable to offer choice or advocacy.

CONNECTING THROUGH THE BROKER CHANNEL Insurers that recognize opportunities and are committed to broker distribution would be wise to invest with brokers in cooperative online efforts. Pooled ideas and resources will best serve the consumer. Working together, industry stakeholders can work towards online offerings that are relevant to consumers’ lifestyles. A few basic guiding principles will reinforce brokers’ primary objective of safeguarding consumers’ interests. One of these principles is that the broker’s relationship

with the client is key to the client’s obtaining full choice and advice. Insurers committed to broker distribution would ensure that their public communications, electronic or otherwise, consistently include broker presence. For existing customers, this would include branding specific to the broker the client has chosen. Public-facing websites or other electronic applications or tools would constantly and prominently display options such as ‘Speak to a Broker’ or ‘Your Broker Is …’ as ready links to broker sites where clients might seek out broader options and advice. Similarly, insurer cooperation with brokers online could reinforce their commitments on privacy, integrity of the broker relationship and respect for consumer rights. Working together demonstrates that all acknowledge the customer’s information is personal and will not be used for any other purposes. Furthermore, the customer is the customer of the broker, and therefore the file information belongs to the broker as the customer’s representative. Brokers cannot waver in their responsibility to the consumer by accepting compromise on electronic offerings that do not live up to the same standard of service that would be provided in person. Educating the public about finances is becoming a larger part of brokers’ professional duties; therefore, the online delivery of that information is increasingly important. Uniquely positioned between the public and insurers, brokers enjoy all of the possibilities suggested by abundant multi-directional communication.With an entirely new means of interaction literally at our fingertips, the challenge is to apprehend and apply all its potential. As brokers serve consumers, they cannot be content merely to replicate past activities. It is a question of discovering what the new media make possible, and collaborating with partners to realize this potential. Brokers’ connection with consumers will flourish as it amplifies, becomes multi-dimensional and multi-faceted. It is limited only by our own imaginings.

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Clarifying

Catastrophe

Neil P. Wheeler Partner, Lerners LLP

In Kusnierz v. Economical Mutual Insurance Company, the Ontario Court of Appeal confirmed on Dec. 23, 2011 that psychological impairments should be combined with physical impairments to determine whether a person injured in a car accident has sustained a “catastrophic impairment.” The Ontario Court of Appeal’s decision in Kusnierz has a number of implications for automobile insurers and persons injured in car accidents in Ontario. Among other things, the appeal decision confirms that physical and psychological impairments should be combined under the 55% definition of catastrophic impairment in the Statutory Accident Benefits Schedule (SABS), and that psychological impairments should not be considered exclusively under the mental/behavioural definition. The appeal decision therefore ends the uncertainty created by the Kusnierz trial decision regarding combination of physical and psychological impairments under the 55% definition, and it restores the consistency in the case law that had existed following Desbiens v. Mordini.

20 Canadian Underwriter February 2012

The Court of Appeal’s decision in Kusnierz will also likely be relevant to its upcoming determination of the appeal in Pastore v. Aviva Canada Inc. (argument was scheduled for January 2012). The Pastore appeal involves competing interpretations of the mental/behavioural definition of catastrophic impairment.When it rules on Pastore, the Appeal Court may well reference Ontario Court of Appeal Justice James C. MacPherson’s findings in Kusnierz regarding the purpose and proper interpretation of the applicable legislation. Finally, the Court of Appeal’s decision in Kusnierz will likely be relevant to any future amendments the Ontario government might contemplate making to the definition of catastrophic impairment.The Financial Services Commission of Ontario (FSCO), the province’s insurance regulator, created an expert panel to review the definitions of catastrophic impairment in December 2010. The panel issued its report in April 2011. The panel’s report recommended that physical and psychological impairments not be com-

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The Ontario Court of Appeal has ruled in Kusnierz that psychological impairments can be combined with physical impairments for the purpose of determining a catastrophic injury.

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bined under the 55% definition, and that further investigation of this issue was needed. A number of stakeholders in Ontario’s auto insurance system criticized this recommendation. It will be interesting to see what impact the Kusnierz appeal decision has on the Ontario government’s consideration of this recommendation.

COMPETING INTERPRETATIONS Facts in Kusnierz Robert Kusnierz suffered serious physical injuries in a 2001 car accident, including a below-knee amputation. He also developed psychological impairments. He sued The Economical Mutual Insurance Company, which was responsible for providing him with accident benefits. Kusnierz and Economical agreed the only potentially applicable definition of catastrophic impairment in this matter was the 55% whole person definition. They disagreed about whether Kusnierz’s psychological impairments should be assigned percentage ratings and combined with percentage ratings for his physical impairments to determine whether he satisfied the 55% definition. Trial decision Ontario Superior Court Justice Peter Lauwers released reasons in October 2010 following Kusnierz’s trial. He concluded that psychological impairments could not be combined with physical impairments under the 55% definition. He also found that Kusnierz could not meet the 55% definition on the basis of his physical injuries alone. He therefore determined Kusnierz was not catastrophically impaired. Prior case law Lauwers’ decision in Kusnierz was inconsistent with Ontario Superior Court Justice Harvey Spiegel’s 2004 decision in Desbiens v. Mordini, the leading trial decision regarding catastrophic impairment. Philippe Desbiens, for whom the writer acted, was a paraplegic prior to a car accident in which he suffered further significant injuries. Spiegel’s decision 22 Canadian Underwriter February 2012

found, among other things, that Desbiens met the 55% whole person definition by assigning a percentage to his psychological impairments and combining them with the percentage for his physical impairments. Desbiens confirmed catastrophic impairment status could be attained by a broader group of injured persons than many insurers had maintained. The insurers’ position was that only physical impairments should be considered under the 55% definition. Prior to Lauwers’ decision, the court had followed Desbiens in Arts (Litigation Guardian of) v. State Farm Insurance Co. in

2008. In addition, the Financial Services Commission of Ontario, the administrative body that regulates accident benefits, followed Desbiens in several arbitration decisions.

Appeal decision In allowing Kusnierz’s appeal, MacPherson’s written decision for the Ontario Court of Appeal preferred the reasons of Spiegel in Desbiens and Ontario Superior Court Justice Robert MacKinnon in Arts to those of Lauwers. MacPherson discussed five principal reasons in support of his conclusion. First, he found a proper interpretation of the 55% definition was consistent with Kusnierz’s interpretation. He expressly adopted Spiegel’s analysis in Desbiens on this point. That analysis included findings that: • the drafters of the legislation intended the definition of catastrophic impairment to be inclusive rather than restrictive; • the definition of “impairment” was extremely broad; and • the 55% definition ensured that persons who did not suffer the specific in-

juries or conditions described in the other definitions, but who nonetheless had a severe impairment or combination of impairments, were able to recover needed health care expenses. Second, MacPherson noted the purpose of the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, used to define impairments under SABS, supported combination. He found Lauwers had erred in concluding that combining physical and psychological impairments would contradict the Guides’ express purpose of providing an objective and standardized system for evaluating impairment. He noted the Guides’ parallel aim of assessing the total effect of a person’s impairment. He stated that to disregard the mental and behavioural consequences of a person’s injuries because they are too hard to measure would defeat the purposes of the Guides. Third, MacPherson noted the Guides described at least five situations in which an assessment of a person’s physical impairment should take mental and behavioural impairments into account. Unlike Lauwers, he found these situations were illustrative rather than exhaustive. Fourth, MacPherson felt that combining physical and psychological impairments produced results consistent with the purpose of the accident benefits legislation. He stated that interpreting the 55% definition to allow assessment of physical impairments in combination with psychological impairments was not inconsistent with the intention that catastrophic impairment determinations should remain rare. Finally, MacPherson found that combining physical and psychological impairments promoted fairness and the objectives of the statutory scheme. He stated it seemed unfair to deny a person with combined physical and psychiatric impairments the enhanced benefits that were available to persons with similarly extensive impairments that fell entirely into the physical category or psychiatric category. He disagreed with Lauwers’ conclusion that the legislator chose to forbid the combination of physical and psychological impairments.

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Commercial Lines? There’s an App for That

Kevin Campbell President, Policy Works

A new app allows commercial insurance brokers to gather complete information from a client at the client’s place of business and send it to an underwriter by means of a tablet — with minimal keyed entry. Thousands of apps for smart phones and iPads give tech-savvy customers a wide range of functions, from booking a flight to making a dinner reservation and conducting bank transactions. Does this mobile access have a future in commercial lines insurance? We’ve answered this question by creating the Policy Works Producer app. Policy Works has bundled many of its best ideas in an iPad application that we think could change the way commercial insurance is sold. Producers and prospects will be able to meet and share information like never before. The discussion around risk, coverage and pricing will be

24 Canadian Underwriter February 2012

more detailed, engaging and professional. Once the information is reviewed with the prospect, the producer will be able to submit the risk to markets right from the prospect’s office. No more bundling up documents and spreadsheets to cart back to the brokerage. As insurance companies continue to evolve their broker connectivity solutions to produce real-time rates, the Producer app will show policy premiums to the prospect in real time as they come in. The promise of speed, transparency and accessible information has never been closer for commercial producers and their increasingly sophisticated, demanding clients. Field-testing with select brokers will begin in March.

THE PRODUCER APP The Producer app is intended to augment one of the primary roles of the commercial insurance broker — that of the front-line underwriter. “As brokers, we are the front-line underwriters,” says Paula Dorsey, president of The Dorsey Group. “We need to embrace anything that can help us in that role and make us more efficient.We need to be able to gather the right kind of information and ensure it gets to the underwriter in a

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complete and accurate submission.” Professional brokers like Paula are committed to gathering complete, thorough information about a prospect. A great deal of that information is now available through online sources. Our Producer app gives producers a tool to help collect that information up front, verify it with prospective customers and package it into a professional submission for insurers. When it comes to meeting client expectations, quick adopters of technology can be powerful drivers of change. Consider, for example, two brokers meeting with a prospective client. One comes armed with information about the prospect’s business from online sources and demonstrates a solid understanding of the client’s business through a fun and engaging conversation around an iPad. The other broker arrives with the proverbial cocktail napkin on which to jot down some notes. To whom will the modern client gravitate, even if the premium is a little higher? Building a great mobile app for commercial lines is challenging and requires a new way of thinking. Although tablets are fantastic for gathering, organizing and sharing information, they are not very good for detailed data entry. So how do you build a tool producers can use effectively in the field? We have been working on this problem for over two years now and have designed a really simple interface that is actually fun to use. No, really! We call it SASI, which stands for Simplified Application for Specific Industries. We studied the commercial lines information our brokers are exchanging electronically with nine insurers today and identified a common set of data.We then created a user interface based on this data set. We made it look a lot like the paper forms our producers use today because we felt familiarity would ensure ease of use and hence adoption in the field. Finally, we turned the problem of data entry on its head: we incorporated third-party data and coverage templates to transform the task of data entry into one of data validation. So instead of keying in a bunch of data, a

26 Canadian Underwriter February 2012

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broker can simply confirm or reject each piece of information with their prospect and key in only what needs to be corrected. The diversity of commercial risks adds another dimension to the challenge of building a mobile app. “When you look at opportunities for brokers, I think there will be a divide between the transaction-based small business clients and the larger, higher-end clients,” notes Jim McGregor, president of The Precept Group. “The sweet spot will likely be in the middle.There are opportunities with mid-market clients to use technology to make things more efficient and combine that with the professionalism of the broker’s advice.”

Once the information is reviewed with the prospect, the producer will be able to submit the risk to markets right from the prospect’s office. No more bundling up documents and spreadsheets to take back to the office. Our mobile app is designed to handle a wide spectrum of risks. We made it easy to handle simple package-policy risks without compromising the flexibility required to handle the multiple locations and complex coverages typical of larger risks.

TECHNOLOGY AND TRUST Technology aside, mid-market risks present a whole other set of challenges to brokers. Here the value of the broker’s human connection and trust are paramount, both with underwriters and clients. Brokers working in this domain are hesitant to use the automated rating workflows of portals because they can often get a better quote from underwriters who trust the broker’s “gut” feeling about a risk. Commercial clients, too, demand a higher level of service and face-to-face contact with brokers than personal lines customers.

This human connection can be enhanced by sharing information that goes beyond what today’s commercial portals can do. Things like broker notes, photographs, satellite views, and loss and inspection reports demonstrate to the underwriter and the client that brokers have done their homework; they go a long ways towards establishing the trust required for these risks. So how do we collect and exchange information that goes beyond CSIO standards while still realizing the efficiencies the standards bring? On the broker side, our SASI interface is built right into the Producer app.That makes it easier to capture standard CSIO information for simple, one-location risks as well as larger, multi-location risks. The Producer app also makes it easy to include information that goes beyond the scope of CSIO standards. Producers can gather information like loss and inspection reports, front-facing photos and top-down property shots from online sources prior to visiting a prospect. Once onsite, they can add notes to capture their “gut feel” about a risk. They can take photographs with the iPad itself to give underwriters a good sense of the risk. Producers can even incorporate additional information provided by the client, such as equipment schedules, with just the touch of a finger. On the insurer side, we’ve been working with carriers to lay the groundwork for building systems that will maximize the amount of time underwriters spend working with their brokers on midmarket and larger risks. These systems will perform “electronic triage” to map, score and route incoming submissions either to an automated rating system for transaction-based small business risks that qualify, or to an underwriter when human judgment is required. Underwriters will see all of the rich information collected in the field by the producer using the Producer app and will be spared from the tedium of rekeying CSIO standard data — and associated re-work due to errors — into their underwriting toolset. Ultimately this will enable them to spend more time working with their brokers doing what they do best: underwriting.

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More With Less

Opinion/Analysis

Brokers competing with direct writers can learn from some of the technologies and techniques direct writers have employed: automating processes so that the employees can accomplish more in a shorter space of time. “What has worked in the last 100 years selling insurance will not work in the next 10.” — Kimberly Harris Ferrante, Gartner

Renee Durepos Vice President, Client Services, Keal Technology

Based on constant change affecting the landscape of the independent broker distribution channel, it is a reality that if brokers allow themselves to remain stagnant, they will fall behind. Competition and technology are on the long list of external factors contributing to this fastpaced environment. In a recent Keal broker survey, 100% of all brokers surveyed acknowledged the threat of the incursion of direct writers and banks into the property and casualty insurance marketplace is the biggest challenge they face today. After more than 20 years of this intrusion, this should hardly count as ‘news.’ Ignorance is no longer bliss, but awareness and action are two different beasts. It is one thing to see new competitors enter your business; it is quite another to research alternative ways of doing business, search for new tools and develop a strategic plan. In light of this, brokers should be asking themselves: ‘What will my brokerage look like in

28 Canadian Underwriter February 2012

two, five or even 10 years? Who will my clients be, and will I meet their expectations? What do I need to do today to maintain and increase market share?’ Keal recently had an opportunity to get a bird’s eye view of the internal operations of a direct writer. In a nutshell, micro-management is the name of the game: everything is measured through the use of business tools and technology solutions that allow them to compete leaner and meaner. Call recording systems allow them to book premiums faster by way of audio signatures. Call scripting is not only a portion of their quality assurance program, but it plays an important part in the employee’s performance evaluation. Employees work on a “points reward system.” If an employee gets a sale by following a script, they get merit points. If they don’t get the sale but followed the script, they still get rewarded. But when they get a sale without following a

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script, they get rewarded but less than if they had followed the script. They use “needs-based” questions with clients and follow rigid time goals. For example, they have 10-12 minutes for a new auto insurance policy, and 15-20 minutes for a new home insurance policy. For direct writers, the process is as important as the result. When asked why they won business from brokers, they said consumers have difficulty reaching their broker. And once they did reach their broker, the broker’s response time for information, quotes, etc was slow. When direct writers were asked why they lost business to brokers, the main reason was that consumers wanted to talk to a local broker. As a Broker Management System (BMS) provider, Keal strongly believes in the ability of the independent broker distribution channel to increase its market share. Technology plays a critical part in making this happen. The good news is, some brokers are organically increasing their volume, and at a quicker rate than their direct writer competitors. These brokerages have a few things in common: they are paperless, they use call recording, they have embraced best practices and they are committed to more rigid processes and measurements. In short, what gets measured gets done.

NATIONAL SURVEY RESULTS To support this knowledge, Keal commissioned a national survey of more than 25 Keal brokers to gauge their use of BMS technology.We asked about their current challenges, and whether or not they were paperless and using integrated call recording technology. We also asked for their thoughts about electronic document downloads and SEMCI. The high-level results of the survey are included below:

Paperless • 79% of brokers surveyed are paperless. • 17% expect to become paperless sometime over the next two years. Brokers referenced the following measurable efficiencies of going paperless: 30 Canadian Underwriter February 2012

• Refined workflows: increase productivity and flexibility. • Time and cost savings: no paper, less storage. • Faster client response time. • Greater organization: access to all for all. • Increased E&O protection. The adoption rate of paperless workflows in the broker distribution channel is good news when you consider the cost of paper heavy workflows. For example, 7.5% of all documents (i.e. policy-related documents) get lost, and the cost to recreate a lost document is $220. It is easy to realize the hidden costs — not to mention the increased liability exposure — of a paper-rich brokerage. Less paper is definitely more.

Call Recording • Only 25% of brokers surveyed are enjoying the benefits of call recording. • Good news: 58% of brokers show an interest in investing in this technology within the next 2 years. Brokers listed the following benefits they have gained from call recording: • Quality assurance and training. • Increased E&O protection and reduced E&O costs. • Booking premium faster with audio signatures. • Call scripting for audio signatures and telemarketing. • Performance and result metrics. Call recording in the broker distribution channel is indeed an untapped opportunity. Direct writers have been using this technology for more than 10 years, representing a significant explanation for their increase in market share. Brokers using this technology are competing on a level technology playing field with their competitors. Single Entry Multiple Company Interface (SEMCI) Keal’s survey makes it clear brokers know they need direct connectivity technology to compete.To help illustrate the urgency of this technology, Keal selected eight brokers, representing $290 million of personal lines premium volume, and analyzed their policy change transactions.The survey found pure pol-

icy changes accounted for 23% of all transactions. Of these transactions, revenue accounted for less than 1% of the total commission revenue, or $3.68 per transaction. Policy change transaction is the most time-consuming transaction.When brokers apply the cost of the policy change transaction, the margins are very slim, if not negative. This begs the $1-million question:What solution will allow brokers to minimize the time needed to complete transactions that bring the least revenue to the bottom line? The answer is simple: automate them through SEMCI solutions. Keal’s position on SEMCI is clear: it is available today. It is the responsibility of every BMS provider to develop functionalities for brokers to make true SEMCI a reality. To this end, Keal applauds and supports the IBAC (Insurance Brokers Association of Canada) Data Exchange Project initiative. (For more information about the project, please see the article on Page 58.):

MORE FOR LESS The objective of SEMCI is do more with less — fewer user clicks, fewer navigation screens and fewer data fields that have to be re-entered. In a nutshell, doing more in less time. Technology will continue to change the way you do business with your clients and carriers. It will contribute directly to your brokerage’s future success and your profitability margins. Opportunities exist for brokers to re-invent themselves using technology that is currently available and affordable. A broker’s biggest fear should not be banks or direct writers, but their own apprehension towards adopting the right technology tools to grow their business. The old attitudes of “if it ain’t broke, don’t fix it” and “we’ve always done it this way” may be comforting theories, but they certainly don’t represent a strategic plan to increase market share. Instead, brokers should take a second look at their workflow procedures and actively research existing technology tools and platforms that will allow them to do more with less.

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Driving on Display Usage-based insurance (UBI) is moving steadily into the mainstream in many large insurance markets, particularly the United States. Insurers in Canada have shown interest in UBI, but there are few comparable programs in place. Depending on the perspective, the telematics experience here in Canada points to either a vacuum or an opportunity BY CRAIG HARRIS

32 Canadian Underwriter February 2012

5 4 3

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ecent reports from industry observers suggest usage-based insurance (UBI) is gaining a strategic foothold in many global insurance markets. UBI programs typically feature a telematics device that can be plugged into a vehicleâ&#x20AC;&#x2122;s diagnostic on-board computer to track mileage and driving habits. The actual telematics device is a small gadget about the size of a thin mobile phone that plugs into the vehicle onboard computer through the diagnostic port, usually under the dashboard. It measures how often, how and when the vehicle is driven, and stores information about acceleration and braking. It does not record where the vehicle is driven, although some UBI programs also include a GPS tracking device. Data is captured and sent back to the insurer for analysis, with safety ratings and performance usually shared with customers via secure web portals.

February 2012 Canadian Underwriter 33

COVER STORY

Driving on Display UBI programs are proliferating in many countries after years of trial and error. “There are weekly announcements of new telematics-based offerings,” says Catherine Stagg-Macey, senior vice president with Celent and author of the January 2011 report Telematics-Based Insurance: Has Its Time Finally Arrived? “Some big names are placing their reputations on the line. In our view, the barriers are no longer around the technology but rather the customer’s appetite. The question remains: can insurers make this an interesting proposition for the customer?” In a credit outlook report published in December 2011, Moody’s Investor Services noted that “adopting UBI sooner rather than later will not only attract better drivers willing to participate, but will also allow carriers to build and maintain a database on numerous variables that influence loss costs.” Towers Watson, which closely tracks the UBI market, says insurers representing 60% of the U.S. personal auto insurance market have implemented a version of a UBI program in at least one state. That translates into about 55% of the top 20 American private passenger vehicle insurers offering some kind of telematics service. “While UBI is active in many parts of the world, I think North America is the hub of activity,” says Robin Harbage, director of global marketing of UBI for Towers Watson. “I would be very surprised if we don’t see ubiquitous UBI programs in the U.S. within two years.” Several brand name insurers in the United States have rushed to embrace telematics following the lead of UBI pioneer Progressive Insurance Company. Progressive’s Snapshot program is now available in 39 states. The Hartford Financial Services Group is the latest insurer to launch a telematics program called TrueLane, which will be rolled out this year. Other UBI offerings include Allstate’s Drive Wise, Liberty Mutual’s Rewind, State Farm’s Drive Safe & Save and Travelers’ IntelliDrive. 34 Canadian Underwriter February 2012

THE CANADIAN EXPERIENCE Yet in Canada, the pursuit of telematics solutions does not match the enthusiasm or activity south of the border. The first insurance company to offer a pilot on UBI, Aviva Canada, quietly disbanded its Autograph program in August 2011 after five years in operation. “We certainly learned a lot about what a telematics solution could look like in this market,” says Aviva Canada spokes-

We believe telematics does have a future role, but the main issue is cost. Unless the cost equation shifts significantly, we think there will be limited take-up in Canada. person Glenn Cooper. “We believe telematics does have a future role, but the main issue is cost. Unless the cost equation shifts significantly, we think there will be limited take-up in Canada.” Harbage says Towers Watson offers specialized consulting services to help insurance companies find cost-effective UBI solutions. It is working with nine of the top 25 U.S. private-passenger auto insurers and two of the top five Canadian insurers on UBI. Harbage notes that another Canadian insurer has requested a proposal on developing a UBI program.

Towers Watson also offers a program called DriveAbility, which provides analytical support for insurers with UBI programs and an individual score for each vehicle for policy rating purposes. Currently, 18 North American insurers are getting advice from Towers Watson on their UBI programs, including one Canadian company that signed on in January. “I think you could expect to see at least three or four Canadian UBI programs in the next two years,” says Harbage, who did not disclose the names of the Canadian insurance companies. “Getting into the market can be a bit daunting, though. More clients are coming to us for help.” Several of the Top 10 insurers in Canada, as measured by direct premium written, declined to comment for this article, including The Co-operators, Economical Insurance Group, Intact Canada, RSA Canada and State Farm. Allstate Canada chief risk officer Ryan Michel, whose parent company launched its Drive Wise UBI program in the state of Illinois in December 2010, says “we are looking at a telematics program in Canada, but there is no definitive plan to offer it in the near future. Generally, I think it is inevitable that telematics will emerge here. The costs and logistics issues will be addressed and consumers will, in fact, start to demand it.” At least one Canadian-based insurer is rolling out a version of a telematics program for commercial auto fleets. Zurich Fleet Intelligence is a global fleet management program that uses vehicle telematics to monitor, understand and manage driver behavior, according to Leszek Bialy, vice president and head of customer and distribution management for Zurich Canada. “Zurich Canada is working to integrate the use of telematics as part of its commercial fleet management solution,” Bialy notes. “Currently, (we are) in discussions with a variety of telematics vendors to bring a complete solution to commercial fleets. This is an ongoing process.”

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Driving on Display Commercial fleets may be an easier entry point for telematics in the insurance market, according to Zurich Canada’s national director of transportation for commercial markets Angelique Magi. “Unlike perhaps with the personal lines market, we have the benefit of the insureds coming to us,” Magi says. “They want us to help them understand the data, give them risk insights, help them manage their fleets. There is so much data in the onboard vehicle systems, but the question is how it is utilized so that fleet operators can get a handle on what it means.” Harbage concurs that there are a host of perks for telematics on the commercial auto front. “When you peel back the information and look at it, there are all kinds of benefits,” he says. “If you have safer fleets, it obviously means fewer losses and lower insurance costs, but it also tends to result in lower fuel costs. Where we have seen safer fleets, there has also been a 10% reduction in fuel consumption — that is a huge cost factor.” However, the personal lines market represents the largest piece of the auto insurance pie for mainstream insurance carriers. And here the activity in the United States has yielded refinements and results — and perhaps potential lessons for Canadian insurers keen to try the telematics market.

OBSTACLES AND INCENTIVES A common obstacle with any UBI program is customer participation — gaining a critical mass of clients for economies of scale. Insurance companies are reluctant to disclose how many drivers are in their telematics programs, but research firm Frost & Sullivan estimates the U.S. market could have 1.1 million UBI activations by 2017. Harbage notes the typical proportion of drivers in an insurer’s book of business who opt for UBI is roughly 40%. “Insurers have tried a number of methods to encourage customer buy-in,” he says. “One of the key things about UBI is self-selection. It is voluntary and you 36 Canadian Underwriter February 2012

tend to get better, safer drivers willing to participate in the program.” The most prevalent lure is discounted rates, with the promise that premiums will only go down, not up. Progressive Insurance, which first started to experiment with UBI in 1996, has refined its Snapshot program to offer quick savings and simplicity to the customer, according to Richard Hutchison, general manager of UBI for the Ohio-based insurer.

I think you could expect to see at least three or four Canadian UBI programs in the next two years. Getting into the market can be a bit daunting, though. More clients are coming to us for consulting help. “Snapshot is easier to understand and more attractive to drivers,” Hutchison says. “We know from our research that this version will be more appealing because drivers can save money after just 30 days instead of six months.” With the Progressive UBI program, drivers who sign up only need to share six months of driving data before they return the telematics device to the insurer. People who drive less,

in safer ways and during safer times of the day are more likely to get a discount. Progressive may require periodic check-ins with customers for an updated picture of driving habits, Hutchison notes. Progressive is emphasizing savings up to 30% for drivers who voluntarily sign up for Snapshot. With mass media advertising through its spokesperson “Flo,” the company has the widest geographical presence and has attracted roughly 250,000 drivers to its UBI program. The company also released a survey in December 2011 that estimated more than 39% of drivers in the United States, or 70 million people, could save with UBI programs like Snapshot. Allstate gives drivers an immediate 10% discount off their car insurance if they join the Drive Wise UBI program, which is offered in Illinois, Arizona and Ohio. The program tracks factors used to calculate a driver score, including mileage, hard or extreme braking and maximum speed. Driver behaviour and total mileage determine the amount of further discounts (up to 30%) for those participating in Drive Wise. “The Drive Wise program has had a tremendous reception, more than we anticipated,” says Michel, who did not disclose actual participation numbers. ‘’Part of that is that we educated our agencies and pursued targeted customers who were likely to enroll in the program.” Other insurers have tried different angles to help draw customers into their UBI services. Liberty Mutual subsidiary Safeco Insurance’s Rewind program turns the incentive from the front-end discount to the back-end claim, providing instant forgiveness for an at-fault accident, ticket or minor violation for the first policy term. In return, customers plug in a telematics device that monitors driving habits for an “evaluation period,” according to Safeco. Drivers who qualify can get their accident or ticket permanently waived from their insurance record.

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Driving on Display Safeco also offers a Teen Safe Driver Discount of up to 15% if a telematics device is installed in the vehicle a teenager drives on a regular basis. State Farm Insurance, the largest writer of personal passenger auto insurance in the United States, is using telematics as part of a broader safety, emergency and roadside assistance program called Drive Safe & Save. State Farm offers several devices, including In-Drive Communicator and In-Drive Connect that collect data on driver behaviour and analyze driving statistics. The company advertises that low mileage and safe drivers can get discounts of up to 50%. Other devices, such as In-Drive Visor Clip, give drivers access to emergency and roadside assistance with the touch of a button. The program is available to drivers in California, Illinois, Ohio and Texas. In addition to concerns about volume, another hurdle facing telematics offerings has to do with privacy: people are nervous about the use of data, fearing that some kind of Orwellian ‘Big Brother’ might be monitoring their driving behaviour. Privacy groups and some lawyers in the United States have raised questions about how data could potentially be used in certain scenarios, such as accident claims investigations. Harbage acknowledges there is ongoing sensitivity about data, but the voluntary nature of the UBI programs, coupled with full disclosure from the insurer, usually blunts the concerns. “Insurers have been very careful with this and we have always recommended complete transparency,” Harbage notes. “They have to spell out specifically what the data will be used for and what it won’t be used for. For example, many insurers state upfront that the data will not be used for claims investigation, unless the client specifically requests this.” Michel, who was involved in the launch of the Drive Wise program, says Allstate has been extremely transparent about the information it tracks and how it is used. “We do not include a GPS so we don’t monitor where 38 Canadian Underwriter February 2012

vehicles are driven,” he says. “We only look at distance and other factors that are directly measurable from the car’s own technology. Customers themselves can also see the results. We don’t want any surprises in terms of privacy, data or discounts. Everything is transparent.”

In the past we have relied on customers talking to agents and saying, ‘Here is how frequently I drive, here is where I live, here is my safety record,’ and we gave them a rate. With telematics, we get a much more detailed view of the data. We get a much more individualized risk profile. COSTS Arguably, the biggest obstacle facing insurers in the area of telematics is cost. The expense of setting up a UBI program involves more than just the actual price tag of the devices. It also includes the cost of capturing, storing and analyzing the data. Even here, however, insurers have benefited from

advances in technology. In most cases, companies do not charge customers for the cost of the device or participation in the UBI program. “The costs have come down,” notes Harbage. “That is true not just for the cost of the devices but also for the data storage, speed of data transfer and analytics. For example, two years ago, the telematics device cost $200. Now, it is half of that. The data storage and maintenance costs have also gone down. Cost is still an issue, of course, but not as much as it was in the past.” Part of the cost issue has to do with logistics, notes Michel. “An insurance company has to invest in a device that can be installed easily in the customer’s vehicle, can capture data and send it seamlessly back to the insurance company,” he says. “The technology is there and the costs are coming down. But UBI is also about volume. You have to get the numbers and that can take some time.” For proponents of UBI programs, the benefits of telematics in underwriting and rating far outweigh the costs associated with offering the service to drivers. “In the past we have relied on customers talking to agents and saying, ‘Here is how frequently I drive, here is where I live, here is my safety record,’ and we gave them a rate,” says Michel. “These models only partly reflect the individual risk. With telematics, we get a much more detailed view of the data. We get a much more individualized risk profile.” If verified mileage is not already in use as a rating factor, usage-based rating offers an immediate upgrade in price accuracy, adds Harbage. “There are also major advances in risk segmentation from using more detailed vehicle data. An excellent example of this is traffic density and road type based on when and where the vehicle is actually driven.” Harbage says the micro-data of UBI programs go well beyond the “traditional insurance pricing algorithms” of insurance underwriting, which often include more indirect risk factors such as credit scoring and territory rating.

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Driving on Display

One hurdle facing telematics offerings has to do with privacy. People are nervous about the use of data, fearing that some kind of Orwellian ‘Big Brother’ might be monitoring their driving behaviour. “UBI uses actual vehicle operation data to measure risk exposure, achieved in near real time,” he says. In the commercial auto market, Zurich Canada’s Magi says the initial application of telematics is focused on fleet safety and driving behaviour. However, the data could play a role in underwriting and rating in the future. “Telematics provides the best ‘overthe-road’ information about fleets; not just how many kilometers they drive, but where they drive, what time of the day and so on,” says Magi. “Right now, our fleet intelligence solution is customer-focused in giving our clients greater insights into risk management. But this information and data can eventually be used for underwriting purposes to offer more accurate pricing acuity on fleet experience.” Underwriting knowledge and rate accuracy are clear goals for insurers, but telematics also offers a public good, Harbage says. “It is really exciting how UBI can encourage safer driving,” he notes. “There is the ability to give 40 Canadian Underwriter February 2012

consumers information on key measurements such as speed and braking. We can say, ‘Here is how you drive now, here is how you can improve and here is where your insurance can be lower.’ I think that is a message this industry would embrace.” Harbage lists other potential societal and public policy benefits of UBI programs, including changes in driving habits/frequency, lower car emissions, fewer road casualties, improved emergency response times to accidents and even reduced insurance fraud. In a fraud case, for example, insurers could use telematics to demonstrate that alleged injury claims incurred at extremely slow speeds. With the pace of UBI programs steadily gaining ground in the United States, the next year or two may prove to be an interesting period as Canadian insurers test out the market for telematics. “I think UBI would make sense especially in the Ontario auto insurance market,” Michel says. “The premiums here are quite high. If drivers could see that certain factors

and behaviours will reduce their rates, I think they would be quite interested.” Harbage observes a tendency for market leaders to force the issue, pushing other large brand names into UBI. “And then you have the smaller to medium sized companies finding their own way into the programs,” he says. That seems to be happening in the U.S. market, as insurers search to put their particular spin on UBI. One potential dilemma for insurers that have no plans to offer UBI in the future may be whether they will face adverse selection. In both their reports, Celent and Moody’s suggest late adopters will likely have to deal with the threat of more highrisk drivers as safer drivers gravitate to the discounts of UBI programs. “Adverse selection should be a concern for insurers,” argues Harbage. “If there are enough big names attracting a significant amount of customers to these UBI programs, what risks are the other insurers left with? The key question for those insurers with no UBI program is: how long can they go without doing this?”

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Putting

p u H m ty Back Together

2012 Canadian Collision Industry Forum (CCIF) meeting in Toronto

David Gambrill Editor

The rapidly emerging use of advanced vehicle technology (AVT) is causing insurers to look down the road and ask about rates, write-offs and repairs. Prompted by government regulations mandating safety and environmental sustainability, advanced vehicle technology (AVT) may soon reach a point when human drivers find themselves passengers in their own fully automated vehicles. And while that might be a pleasant thought for people who don’t like to drive, the increased integration of AVT into vehicle design means insurers will have difficult decisions to make in the future. AVT is expensive to repair, escalating the severity of insurers’ claims costs even if claims frequency decreases. The costs associated with

42 Canadian Underwriter February 2012

fixing the increasingly ubiquitous AVT may soon cause insurers to debate: 1) rate adjustments, 2) when to write off damaged vehicles and 3) the difference between underwriting “cosmetic” and “functional” repairs.

IMPACT OF AVT Representatives of insurance companies, collision repair centres and Original Equipment Manufacturers (OEM) all met to discuss the implications of AVT at the Canadian Collision Industry Forum (CCIF) meeting in Toronto on Jan. 28. Examples of AVT include the use of highstrength steels, aluminum, carbon fibre, welding and bonding techniques, electronic vehicles/hybrids, on-board diagnostics and electronic safety features, among other things. Speakers at the conference noted discussions about AVT used to be relevant only to high-end luxury vehicles. But now AVT is filtering down into the more mainstream design of standard and economy vehicles. “Four, five or six years ago, our friends at BMW were willing to share where they were going with technology with members [of CCIF] sitting here,” said panel moderator Larry Jeffries, a former chairman of the CCIF. “At the time, you could say respectfully: ‘BMW is still

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Some of these new technologies have very little history, not only of safety and protection in some ratings scenarios, but also from a manageability of repair standpoint. Without that history, it is difficult to set rate. growing, but it’s still somewhat of a niche player. The price point of the vehicle is a little higher.’ But in 2012, we’re talking about [AVT technology] in the Ford Focus and the Chevy Cruze. The technology is not simple. There is advanced technology in those cars at price points that are [affordable for consumers].”

Adjusting rates Even so, AVT isn’t so widely available that economies of scale make them less costly to repair. Jeffries cited U.S. collision repair statistics suggesting that claims frequency is actually declining, although the number of total losses is on the rise.This suggests the severity of claims is increasing. Insurers bankrolling the repair of vehicles fitted with AVT technology may soon have a choice to make about incorporating the increased repair costs into the driver’s premium. “Loss costs are obviously important to insurers,” said panelist Rich Zamperin of Allstate Insurance Company of Canada. “Advances in technology drive costs. We’re talking about the increasing complexity, the equipment required to make the repair and the training that’s necessary to make the repair successfully and correctly.” The accelerated emergence of AVT has thrown a new wrinkle into rating and pricing the auto insurance product.Typically, rating is based on analyzing historical data. But with AVT, “we’re trying to assess the unknown,” Zamperin said. “Some of these new technologies have very little history, not only of [safety] and protection in some ratings scenarios, but also from a manageability [of repair] standpoint.Without that history, it is difficult to set rate.”

In answer to a question from the audience, Zamperin said Canada’s ‘takeall-comer’ legislation means insurers cannot refuse to insure vehicles equipped with AVT. He repeated the oftused expression that insurers can insure a house that is burning down for the right price, as long as the rate is appropriate for the risk. But as loss costs escalate, so, too, do premiums. Another issue is how to set rates when AVT is not yet a standard feature of all new vehicles. “Technology continues to accelerate and it is increasingly difficult to figure out the proper rate across the board for all [vehicles] when only a handful may causing this [loss trend],” Zamperin said. “And as things move forward, it becomes not just a handful, but your whole fleet.”

Increased write-offs When cars with expensive technology are no longer a niche market, the issue of write-offs looms large. “If we’re talking about a Ford Fista that’s sold in the European market and has technology for opening your door — that’s an entry-level vehicle,” said Zamperin. “It’s probably going to cost you $1,500 to $1,600 to repair a car that has thousands [of kilometers] on it and maybe worth only $5,000 at the end of the day.” Ken Boulton, who was not speaking in his role as the manager of vendor programs at The Dominion, made a similar point when the discussion was opened up to the audience: “The request for a new mirror on a 1974 Cordoba with 450,000 miles on it makes the point that by replacing the mirror, you are only making the rest of the car look bad.” And so will insurers write off more damaged cars, knowing the cost of

restoring the vehicles back to pre-accident condition are not worth the effort? “Nobody likes total losses.” Zamperin said in response to the question. “I certainly don’t, and the customers won’t stand for that. That’s not the way we want things to go in this industry.”

Functional v. cosmetic repairs In fact, the insurance industry may soon be engaged in a much more nuanced debate about repairing vehicles with AVT. Insurers know customers have an expectation that damaged vehicles will be restored to pre-accident condition following a claim. But as AVT technology becomes more integrated into the overall vehicle design, a question arises as to what kind of repairs might be considered “good enough.” Jeffries and others in the industry observe that as AVT becomes more integrated into the car's design, questions may likely arise as to whether or not repairs are “functional” (necessary) or “cosmetic.” Boulton suggested consumers might develop elevated expectations of repairs as AVT becomes standard in most vehicles (i.e. as the pre-accident condition includes more bells and whistles). This could lead to a discussion in the future about what types of repairs insurers can be expected to underwrite. “This kind of thing is going to get worse, because most AVT are integrated with the bumpers and grills and all of this kind of stuff,” said panelist Michel Matte of BMW Group Canada. “And if by chance you happen to be cosmetically repairing other parts of the car just to get to that [central damaged part], is that a byproduct of the repair that's required or is it something that is really required?”

February 2012 Canadian Underwriter

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An ideal state of

Transactional Efficiency

Karl Greenlaw

CEO, Brovada Technologies Inc.

When it comes to achieving broker-carrier workplace efficiencies, companies can interpret and adapt a ‘onceand-done’ approach to suit their specific business and technical goals. ‘Once-and-done’ is a catchphrase commonly used and frequently misunderstood. It suggests an ideal state of transactional efficiency between brokers and carriers, yet it provides little indication about how to achieve it. Although there are some slight nuances to its accepted definition, the concept advocates the ability for a broker to work almost exclusively within his or her respective broker management system (BMS) when transacting business with one of his or her markets. This may sound simple and straightforward, but the industry’s slow adoption of solutions resembling once-and-done has frustrated brokers and led to a general skepticism regarding the ability for carriers and brokers to interact in a truly ‘single-entry’ medium. The true impact, however, is being felt on the premium side. As broker-based companies continue to lose market share, direct writers are growing their

44 Canadian Underwriter February 2012

books and servicing a significant portion of the market with considerably fewer staff members compared to the broker channel. This is a direct challenge to the broker community (pun intended) and is a true measure of broker-carrier efficiency. In an attempt to mitigate the losses, the industry over the past two years has focused more substantially on improving broker efficiencies within the industry. Associations such as the Organization of Real Time Brokers Implementing Technology (ORBiT) and the Insurance Brokers Association of Canada (IBAC) have raised the awareness of the need for more once-and-done solutions. These groups and others like them (realtime.org) lobby insurers and vendors to support the once-and-done mentality when developing systems responsible for broker-carrier communication. Their voice is clear: traditional web portals, which are cumbersome and timeconsuming, will not provide the transactional efficiency required to remain competitive. In many instances, traditional portals require partial or complete re-keying of policy information.That’s 100% inefficient. Carriers are realizing, some faster than others, that one key differentiator used to compete for broker business is the ‘ease of doing business.’ Or, to put it another way, a key selling point in-

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cludes the processes and technologies a carrier offers to streamline a broker’s workflow and, ultimately, the brokercarrier communication. Solutions increasing efficiency are no longer ‘nice to have.’ They are now ‘need to have.’ This is where once-and-done comes into play. Think of once-and-done as a combination of a golfer’s equipment, skill-level and knowledge of the game. The more refined each of these areas is, the higher degree of efficiency golfers will demonstrate when trying to get their ball to the pin. Likewise, if you focus on once-and-done-based systems and processes, brokers and carriers will begin to see the efficiencies and the resultant increase in premium volume over time.

ONCE-AND-DONE SOLUTIONS At Brovada, we have partnered with some of the largest (and smallest) companies to bring once-and-done solutions to market. We’ve learned that once-and-done is not a single defined workflow to which every company must adhere. Rather, it is an approach companies can interpret and adapt to their specific business and technical goals. So what constitutes a good once-anddone approach?

A good approach A good once-and-done model should provide the following elements in order to be most effective for brokers/carriers striving for efficiency. • Little to no re-keying of information when submitting a quote, new business or policy change transaction to the insurer. Traditional portals that have upload functionality from a BMS frequently do not accept all of the available data, forcing the broker to re-key it unnecessarily. A lot of the incomplete upload problems are introduced by vendor systems, which repurpose their old, less complete EDI interfaces, or by insurers that build their input with a quoting solution provider. The threshold of data required to perform a quote is significantly less than the data housed in the 46 Canadian Underwriter February 2012

BMS. Beyond having a few companyspecific questions, brokers should not have to re-key information found within their BMS. • Very few input screens. Traditional portals mimic the screens of the BMS. Because of that approach, they are not very efficient at presenting information in comparison to the streamlined screens available using web development techniques. As a guideline, the ideal number of enterable screens required to maximize efficiency and usage of a company upload solution should be between one and three.

A good once-and-done model should have little to no re-keying of information when submitting a quote, new business or policy change transaction. • Minimal navigation to complete the upload of a record. Extensive navigation is one of the biggest problems of traditional portals. More screens to navigate almost always results in more screens into which data must be entered. Also, screen navigation adds substantial confusion and effort, specifically for newer brokers. • Summarized errors and underwriting rules. As with data entry, brokers should not have to ‘search’ for errors or omissions. Missing and/or error data should be presented in an easy and simple manner so that the broker can quickly correct or complete the entry. • Abstraction of the policy administration system. Brokers should not have to concern themselves with the specifics of the policy admin system (other than meeting the data completeness requirements of the company).This is also an advantage to the company, since it allows for minimal broker disruption when changing or replacing policy admin systems.

A poor approach So what constitutes a poor once-anddone approach? Obviously any solution that doesn’t take into account the above concepts

will not produce the efficiencies for which companies are looking when they approve the IT spend to implement a broker-connectivity solution. In addition, here are some key points to be considered: • Poor response time. Whether it’s the ability to generate a timely (and accurate) quote, or to add or change a current policy efficiently, policyholders are expecting real-time responses and will struggle with brokers who cannot provide them with the appropriate turnaround. • Too many systems. Brokers have systems, carriers have systems and numerous vendors provide interfacing and peripheral systems. If a broker has to think about which system he or she will use next, the efficiency is gone.

COMPETITION So why can’t the industry come together and build a single solution based on these concepts and attain complete adoption? Because insurers compete; and this is a good thing. Competition amongst insurers will drive better solutions and ultimately better adoption than a single solution. Insurers invest in their solutions and infrastructure to obtain a competitive advantage. As long as their shareholders are looking for increased return on investment, the shared system approach, while appealing in theory, will not receive the support or adoption required to succeed. Only by measuring a solution compared to its competition, based on the concepts outlined above, and sharing that information with the industry at large can we accurately assess the efficiency of the system and ensure the maximum adoption of once-and-done. We are all driving towards the same goal to minimize data re-entry. Like golfers, who start the day with different equipment, skill-levels and knowledge, we will all finish the round. It just depends on the number of strokes it took to get there. Eventually, by focusing on the right concepts, we will hit the proverbial ‘hole in one’ and achieve the true once-and-done model.

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Among other technology innovations, companies are exploring the possibility of allowing consumers to use their friends and social circle to help reduce premiums. Alexey Saltykov Co-founder, CEO InsurEye Inc.

Insurance is not considered to be an extremely innovative or exciting industry, and with reason. No one wants to be confronted with unexpected surprises when it comes to our protection. Being conservative in the insurance world is not bad, because less risk is a good thing. Nevertheless, the world is not standing still. Some interesting technologies are finding their way into the insurance industry. Here’s an expert, up-close look at the Top 3.

Innovation #1: MOBILE DEVICES IN INSURANCE When we think about insurance, it’s all about our protection. Wouldn’t it be logical to carry this protection with us always, even on everyday items such as keys, a wallet and a cell phone? Some companies have recognized this need and have 48 Canadian Underwriter February 2012

started offering mobile insurance applications. The general idea is not very complicated. All of your insurance data are accessible through the mobile application, and thus you have a full set of information with you. Sometimes this is convenient — for instance, if you need to know your current life insurance coverage and conditions offered by your employer when making a decision about buying additional life protection. But sometimes it is crucial, as in the example of a motor vehicle accident. When used for accidents, mobile services should help consumers find advice during this difficult time. They can arrange help from police, medical services and towing. They can also be used to locate and contact the nearest vehicle repair facility. Some insurers already provide these kinds of mobile services (Nationwide, State Farm, and USAA, for example). Using their apps, you can check your own data, take a photo of an accident scene, call towing services, initiate claim processing, etc.

Outlook Mobile services are expected to develop even further, move towards seamlessness and cover other types of insurance. In travel insurance, for

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Tapping Into Social Circles

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example, they might determine a person’s location, notify them about any gaps in their travel protection and provide suggestions to buy insurance through the mobile device. While in a hospital abroad, your policy can be automatically translated into the native language so that you can be shown to the local doctor.The technology already exists, but is it not being sufficiently leveraged. The next stage of development would be to use video streaming to support customers after an accident. Using a video recorder, a customer can show the service center specialist the accident, documenting it at the same time. How many of us would refuse having a live advisor in a moment of need?

Innovation #2: TAPPING INTO SOCIAL CIRCLES Different companies are already exploring the possibility of consumers using their friends and social circle to reduce insurance payments. The technology to do this already exists; now it’s about defining a viable business model. How does it work? The idea is very simple. Once a registered user, consumers can build groups consisting of the people they trust: friends, family

Different companies are already exploring the possibility of consumers using their friends and social circle to reduce insurance payments. members, colleagues, etc.When a group member needs to be reimbursed for a small claim, members of the group cover the associated costs together — typically under $50 per person — instead of submitting to the insurer. This solves several issues for insurance companies: • Insurers are able to provide group members with better insurance deals, since the claims history of the people in the group remains clean (group members pay for the small claims themselves, distributing the risk — i.e. micro-insurance).

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• Insurers increase their cross-sell, since group members are trying to increase the size of the group by recruiting other members.Those who recruit new members get acquisition commission from insurers. • Claims fraud rate goes down because people are much less likely to try to cheat on friends than on the insurance company. A German company, friendsurance.de, has been using this model. It claims insurers participating in this program could save up to 15% in operational costs because they don’t have to process insurance small claims.

not a product that you would prefer to buy from a Facebook contact claiming to be an insurance broker or from a company you saw on LinkedIn. Many of us make the buying decision based on the experiences of people we trust and respect — often our family, friends or people we know.

Outlook A key development would be a more intelligent use of data and insights by insurance companies in order to create better, consumer-focused products and improved service.The focus should shift

The focus should shift from attempting to contact consumers over social media to listening to what consumers are saying.

Outlook A similar lending concept has already demonstrated the power of the social circle for finance management services. The communitylend.com platform, also available in Canada, has already enabled peer-to-peer lending and enjoys solid growth. Will a similar approach work for insurance? The key will be readiness of insurers to participate in such a service. In order for the model to work, insurers must be prepared to offer lower rates to the members of social groups. Otherwise, consumers won’t see a tangible benefit to joining a social circle insurance community. Innovation #3: LEVERAGING WEBSITES AND SOCIAL MEDIA Social media have changed many things in our life. But how exactly can they influence insurance? Insurance is probably

from attempting to contact consumers over social media to listening to what consumers are saying. Some companies are trying to do this through a social media presence. For example, State Farm and TD are using social media to ask for consumers’ opinions. Ideally insurers will listen to consumers whenever and wherever consumers are ready to share their experiences, by means of article comments, blogs, review sites and even advice exchanges with friends. The technology is already there. Some companies, such as Research Now, offer solutions to track a particular brand’s feedback and opinions through all social media and websites, extracting meaningful insights. Intelligent algorithms, data mining algorithms and meaningful data visualization can fully transform the face of modern marketing for insurance companies. Take, for example, a recent article about a retired B.C. couple on a fixed income. The couple reportedly received a $50,000 bill for a U.S. hospital stay despite the fact that they had purchased a travel insurance policy. This resulted in over 1,000 comments from readers. Just imagine this untapped goldmine of direct consumer insights for travel insurance providers.

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Cracking Under Pressure? Companies need to help management executives and top performers manage their stress levels to avoid burnouts that can negatively affect the bottom line. Carey-Ann Oestreicher

Chief Engagement Officer, Potential Unlimited

Are you stressed? Have you ever thought about quitting your job and packing it all in because you feel burned out as a result of the fast pace you’re keeping? Has stress negatively affected your health? Have you had problems sleeping because your mind will not shut off, or you are worried about an upcoming meeting? Well, if you have ever felt stressed on the job enough to consider leaving the organization, you are not alone.

STRESS: THE BUSINESS COSTS A recent study by consulting firm Towers Watson suggests employers appear to be making false assumptions about what drives valued talent to seek opportunities elsewhere. In the study, for example, human resources professionals reported the Number 1 reason for employees to leave their organizations was due to lack of ca-

52 Canadian Underwriter February 2012

reer opportunities. But employees themselves said their Number 1 reason for exiting was most often due to stress. In the work I do within the industry in the areas of leadership development and corporate wellness, I see stress is one of the greatest factors affecting job satisfaction.This new study released from Towers Watson confirms what most of us already know: we are stressed — big time! Reducing stress at the workplace isn’t just a ‘nice to do.’ It’s a ‘need to do.’The effects of stress on your people are likely already trickling down to your bottom line. According to Health Canada, stress on the job and work-life conflict are costing Canadian businesses between $4.5 billion and $10 billion each year. I conducted my own research on stress, examining mostly professionals in management and top leadership positions within the insurance industry. The results echoed what the Towers Watson study found. In my own study, close to 70% of the 700 people I surveyed reported feeling so stressed in their jobs that they either have left their positions within the past year or are currently considering leaving their roles. It is important that the industry’s leaders take note of the impact of stress on their employees — especially since the battle for top talent will

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be even more competitive over the next few years, given that so many individuals in the insurance industry workforce are retiring.There will be fewer individuals upon which to draw to fill those key roles in your company. So you want to keep your talent happy, as well as create or maintain your reputation as a top employer attracting new talent. Now of course a certain amount of stress can actually improve performance. But I’m not talking about that here. The kind of stress to which I am referring is the type that hampers creativity, plays havoc with people’s moods and can tear teams apart.

learn tools they can put into practice every day to help prevent burnout before it begins to take control of their careers.Your bottom line can suffer when these individuals burnout, go on stress leave or leave your organization to go somewhere else in hopes it will be a change of pace for them.

Tips for organizations Here are some tips to help organizations manage their employees’ stress levels. • Identify your top talent and ensure you are nurturing them to go the distance in their careers. • Create an organizational culture based on performance and not on “face-time.”

MANAGING STRESS In my line of work, I see quite a few ‘stressed-under-the-radar’ top performers. These people are your true leaders and show great potential. They are producing great results, they are well-connected and working as hard as they can. These individuals are on your executive management team; if they are not, they soon will be. On the outside, they look like they have it all together. But because these people are so driven, (which they probably are in all areas of their lives), they are stressed and overextended. They are in great danger of facing burnout at some point. These leaders and rising stars need to be nurtured throughout their careers if you want them to go the distance at your company. Often as individuals are promoted, they are sent on management training courses to prepare them for their new roles. Management programs can be great, but they may not include any content preparing managers and leaders to face the accelerated levels of stress that will be part of their everyday lives. If these managers and leaders are better able to manage their stress, they will be more relaxed and positive around their staff, which will positively impact your overall culture. In addition, they will be more clearminded and focussed, making them more effective decisionmakers. Leaders are under a lot of pressure. They really need more than the occassional vacation to unwind.They need to

Human resource professionals reported the Number 1 reason for employees to leave their organizations was a lack of career opportunities. But employees themselves said the Number 1 reason was stress. Excessively managing your employees’ physical whereabouts is an additional stress on you as a leader, too. • Ensure you have an appropriate corporate wellness plan in place, and re-evaluate it every five years. Remember that what might have worked in the past may not be meeting employees’ needs now and could be a waste of your company’s money. • Hire executive coaches to work with your senior management team and those employees exhibiting great po-

tential. This will help retain them and support their development. • Consider offering a health credit that would cover items such as gym memberships. Exercise has been shown in numerous studies to reduce stress. • Think outside the box. I have seen an increase in the number of corporate clients using meditation offerings to help reduce stress and enhance creativity.

Tips for individuals Here are some tips to help individuals reduce their own stress levels. • Learn to unplug. Do not sleep in the same room as your mobile device. Have a place to put your phone before bedtime and don’t look at it again until morning. • Remember it’s okay to take risks and make mistakes. Don’t sweat the small stuff. • Get in shape to go the distance. Exercise is a great way to manage stress levels. • Work with a coach and mentor to offer you the support you need. • Reduce multi-tasking. Once seen as an admirable characteristic for a leader to possess, multi-tasking is now starting to be seen as a habit that creates stress for individuals who are doing too much at once. It is better to place more focus on fewer tasks at a time to achieve greater success. • Don’t try to be all things to all people. We know this doesn’t work in business, so why do we try to do this in our own lives? The reality is, work-life balance is about determining our true priorities and delegating or outsourcing the rest.

Clarification Canadian Underwriter profiled the OIAA’s current first vice president, Steve DelGreco, as the incoming president in its January 2012 edition, a departure from its tradition of profiling current OIAA presidents. This departure from tradition was the result of an editorial error and was not intended to create confusion about the status of the current OIAA president, Brett Colville. Colville’s current, one-year term as president ends in July 2012, at which time DelGreco is scheduled to succeed Colville. Canadian Underwriter sincerely apologizes for any confusion or inconvenience this may have caused.

February 2012 Canadian Underwriter

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Sum of the Parts Susan Murphy

Vice President, Sales and Distribution, RSA Canada

One year later, RSA presents some key reflections on its merger with GCAN Insurance Company. The world of mergers and acquisitions is typically fraught with complexities. Even when a new entity strives to retain the best facets of two organizations, history shows a number of deals do not survive the first five years. When RSA acquired GCAN Insurance Company — a Canadian mid-market, large risks and specialty commercial insurer — in January of 2011, we were conscious of the complexities involved in taking two very different insurance players in size and scope and bringing them together to become Canada’s third-largest general insurer and most specialized provider on a global scale.

54 Canadian Underwriter February 2012

Although GCAN presented a major opportunity for RSA, it wasn’t without risk. Both were property and casualty insurers, but other similarities were few and far between. The employee models, broker distribution models and product offerings were all quite different. Understandably, the acquisition was met with some skepticism in the property and casualty marketplace: how can different cultures with disparate propositions come together without diluting the value of both? With a year’s experience now behind us, we can say that one of the biggest P&C purchases in the Canadian insurance industry — at the time, the transaction was the single-largest acquisition in over a decade — has succeeded in providing the best of the best for our clients, brokers and employees in regard to appetite, scope and scale. This is not to suggest that that there have not been challenges along the way. The following is a glimpse into how RSA has shaped the environment for our internal and external stakeholders over the past year, setting us on a path toward success and growth for 2012 and beyond.

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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 CRU Adjusters Calm in the face of a storm. www.cruadjusters.com Cunningham Lindsey International independent claims services. www.cunninghamlindsey.com Kernaghan Adjusters Doing What Is Right®. www.kernaghan.com McLarens Canada International Loss Adjusters and Surveyors. www.mclarens.ca

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PCA Adjusters Limited Adjusting to Meet your needs™ www.pca-adj.com Quelmec Loss Adjusters Identifying, Investigating, Resolving...for over a quarter century! www.quelmec.ca

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CONSTRUCTION CONSULTANTS MKA Canada, Inc. Providing creative solutions to the Construction, Legal and Insurance Industries. www.mkainc.ca

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The ARC Group Canada Inc. Your Partner in Insurance Law & Risk Management. www.thearcgroup.ca

GRAPHIC COMMUNICATIONS Informco Inc. Integrated Graphic Communications Specialists. www.informco.com

INSURANCE COMPANIES 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

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SPECIALTY INSURANCE Wawanesa Insurance Earning your trust since 1896. www.wawanesa.com

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MAKING EMPLOYEE NEEDS A PRIORITY Experts on post-merger management say successful M&A integrations are most often rooted in similar corporate cultures. From the outset, RSA was acutely aware of the different cultures to be integrated following this transaction. Each company’s prior experiences varied markedly. On the one hand, RSA is a large global public company; on the other, GCAN is a small, specialized risk firm. RSA invested a lot of time and effort in preparing how to address the needs of its new GCAN employees, while at the same time remaining focused on RSA employees also affected by this change.

Experts on post-merger management say successful M&A integrations are most often rooted in similar corporate cultures. From the outset, RSA was acutely aware of the different cultures to be integrated following the GCAN transaction. Having dedicated a lot of thought to post-acquisition human resources management, including consideration of benefits, compensation, systems and its broker distribution platform, RSA felt confident it could successfully meet the expectations of GCAN employees and concurrently deal with any RSA employee concerns. RSA’s international network allows GCAN employees new opportunities on a global scale to which they would not previously have had access. It was therefore disappointed when some people chose to leave the organization in spite of this enhanced employee offering. A key lesson learned from this experience is that even if an organization directs a lot of energy and attention towards the smooth transition of employees, when employees come from different cultures, a few may still decide it is not the right fit for them.

As it turned out, several of the departed employees returned to RSA within a few months. Now they are some of the proudest ambassadors of the newly formed proposition.

act as advisors, participate in product launches tailored to their clients and receive customized training programs and HR support.

PLAYING ON A GLOBAL SCALE CULTIVATING THE BROKER RELATIONSHIP As previously noted, the broker community approached the acquisition with some skepticism and even apprehension. In our discussions with brokers, some expressed concern that RSA, given its size and scope, could take a conservative approach to underwriting writing and thus detract from the very essence of GCAN — that is, the quick delivery of high-quality, highly specialized solutions for complex risk. Consequently, we worked very hard at moving the dial from skepticism to openness with our broker partners, who are now starting to see tangible gains as a result of our post-acquisition strategy. With the addition of GCAN’s risk expertise, RSA can now offer its broker partners a broader range of options for clients under one roof. Brokers now understand that RSA’s capacity has strengthened in the last year. Key international clients in a variety of sectors — construction, renewable energy or manufacturing and distribution, to name a few — can now receive a complete product offering with access to a global network through a single source. RSA will expand on these results in 2012. With GCAN now integrated, RSA will continue to have local authority and expertise and write for challenging risks. In addition, its appetite, ability and global reach continue to grow. RSA has also launched Electus, a new recognition program for brokers. Electus (Latin for chosen) is a program RSA created post-acquisition to recognize its top-performing brokers across Canada. Electus is unique in the Canadian marketplace: it combines the strongest aspects of RSA and GCAN’s original recognition programs. Electus brokers receive distinctive services and benefits. They

RSA has a global reach, with a presence in 140 countries. This global capacity is of high value to our broker partners and clients, but is equally important for our underwriting team.The specialized risk market can now be served globally. One year into the acquisition, this advantage is showing real results. RSA’s newly joined underwriters from GCAN now have access to global training and resources. They are frequently shuttling off to courses in the United Kingdom or elsewhere. They lead on accounts they could not have accessed previously and write bigger volumes of business because of RSA’s reach. They are now able to apply their expertise in markets outside of Canada. A year into the acquisition, RSA is already seeing a measurable difference. It has a competitive advantage in that it is

RSA’s newly joined underwriters from GCAN can now lead on accounts they could not have accessed previously and write bigger volumes of business because of RSA’s global reach. one of the few Canadian providers of solutions in global risk. With a mature marketplace here in Canada, global risk presents a huge opportunity and one in which RSA is determined to play a leadership role. As with every merger and acquisition, there is still more learning to do, but as an organization we believe we have found a strategic fit with GCAN. For RSA, a key lesson is that with proper planning and attentiveness to stakeholders, even very different parts can come together to make a greater whole.

February 2012 Canadian Underwriter

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Simplifying Data Delivery David Gambrill Editor

IBAC’s Data Exchange Project is now in its third phase, one step closer to a coveted round-trip data exchange between a broker management system and an insurer’s policy administration system.

The most recent effort, dubbed the Insurance Brokers Association of Canada (IBAC) Data Exchange Project, is a pilot project now entering its third and final phase. And although this will be the toughest phase of the pilot — completing a round-trip data exchange between broker and carrier systems — the progress thus far has generated some reason for optimism and enthusiasm.

ROUND-TRIP DATA EXCHANGE What does it take for a broker to send a policy change request from a consumer to an insurance company electronically, and then have the insurer transmit the changed policy back into the broker’s data management system? Thus far, it has taken an insurance industry investment of several millions of dollars, two abandoned high-profile, industry-wide tech initiatives (SYNCRON and the CSIO Portal), and now a new, cautious re-commitment among brokers, insurers and technology vendors to take a phased, flexible approach to broker-carrier data exchange.

58 Canadian Underwriter February 2012

IBAC’s Data Exchange Project is targeting a specific, common transaction between a broker and an insurer — a policy change request. The policy change request could be changing the vehicle, changing the driver or modifying the limits or deductibles of the policy. Pat Durepos, president and CEO of Keal Technology, one of several technology vendors working on the IBAC project, says his figures show policy changes account for between 28% and 35% of a broker’s transactions with an insurer. For a broker, policy changes represent “a substantial proportion of the work that needs to be

Illustration by Greg Hargreaves/www.threeinabox.com

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accomplished each day,” says Brenda Rose, an IBAC technology champion. “It is also not at all automated right now. It’s extremely labour-intensive. It’s extremely expensive for the work to be done, for both insurers and brokers. It’s expensive because there’s no premium generated. When you do policy changes, there are credits or there are charges, so it nets out.There’s all of this activity — people hours, paper, all kinds of turbulence — it’s costing all of this money, and there’s no payoff for it. And we’re doing it right now in the most expensive way we possibly could.” That is, through re-keying of information. Why does this happen? “A broker has his or her broker management system (BMS) with a representation of the policy in it,” notes Doug Johnston, vice president of partner relations and product innovation at Applied Systems, a software vendor working on the IBAC project. “However, the actual policy for the term…is at the insurance company.” Fulfilling a policy change request requires the two systems to communicate with one another. “How are you going to do that?” Johnston asks. “Are you [as a broker] going to throw it on a piece of paper and mail it to the carrier, where someone there re-keys it and changes the policy? Or are you going to log into the carrier’s [electronic] portal, and therefore know how to use each one of your five or six carriers’ portals? All of that takes time. And in the meantime, you have a customer on the phone saying ‘How much is this going to cost me?’” Time, as they say, is money. Keal Technology, another vendor involved in the project, recently held discussions with brokers that fixed a dollar amount to the lost productivity. “We talked to a group of eight brokers for [our] last presentation, representing $290 million of client volume, and we showed them that on every transaction, they were losing $5.04 every time they did a policy change,” Durepos said. “That goes across the country.” And while brokers

lose money making policy change transactions, they are not talking to new customers about revenue-generating activities — like bringing in new policies to the brokerage. And with the loss of organic growth comes the loss of broker market share.

IBAC DATA EXCHANGE PROJECT What, then, is the broker’s endgame? When a customer calls to make a policy change, the broker wants to send an XML data record of that change to the

When brokers and insurers do policy changes, it’s costing all of this money and there’s no payoff for it. And we’re doing it right now in the most expensive way we possibly could. carrier in real time through their BMS. The carrier would then take that record of the change, pull it into their backend policy administration system, process the policy change and then send the new policy back to the broker — including the new billing amounts — within seconds. The IBAC Data Exchange Project has established a framework of principles guiding the development of such transactions. These principles are: • data transactions should start and end in the BMS; • data should flow between systems

electronically and transparently, without user intervention or data entry on insurer portals, systems or pop-up screens; • transmission formats and content should strictly follow Centre for the Study of Insurance Operations (CSIO) standards; • insurer systems should immediately respond to requests from broker systems through means such as a simple acknowledgement, error message or, ideally, a complete return transaction; and • any translation or manipulation of data to accommodate an insurer's system should occur on the insurer's side of the transaction (not within the broker system). Any tech solution will do, as long as it conforms to the above principles. Thus far, IBAC’s project has followed an incremental, phased approach. Phase I involved verifying the vendors' ability to generate one standard, specific, CSIO-compliant XML policy change transaction from within their respective broker systems and electronically transmit it to a specific location, kind of like an empty mailbox. In Phase II, now completed, CSIO reviewed and approved electronic messages submitted by two insurers, Aviva Canada and Intact Insurance, as sample automated responses to policy change requests from broker management systems (BMS). Phase III of the project, now underway, aims to link the data transactions between the broker BMS and the insurer’s policy administration systems. Vendors — including Keal, Custom Software Solutions, Power Broker, PolicyWorks, CIM-Data and Applied Systems — have been working with several participating insurers to pilot a virtual round-trip transaction from broker to insurer system and back again.

KEY CHALLENGES This may sound easy in principle, but it is a major challenge. “One of the biggest issues is that policy change is the most complex of all transactions in

February 2012 Canadian Underwriter

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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.

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Toronto – Severe Weather . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 21

Vancouver – 3rd Annual Battle of the Insurance Bands Charity Event . . . . . February 23

Ottawa – Leading Insurance Coverage & Liability Cases . . . . . . . . . . . . . . . . February 28

St. John’s – CIP Society Annual Curling Bonspiel . . . . . . . . . . . . . . . . . . . . . . February 29

London – Leading Insurance Coverage & Liability Cases . . . . . . . . . . . . . . . . February 29

Toronto – CIP Society Annual Curling Bonspiel . . . . . . . . . . . . . . . . . . . . . . . . February 29

Vancouver – Cyber Liability Breakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 1

Ottawa – CIP Society Gourmet Grads Cooking Class . . . . . . . . . . . . . . . . . . . . . . . March 1

Vancouver – Environmental Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 21

Toronto – CIP Society Symposium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 26

Ottawa – “How Can I Get Through to You”– Glenn Foster . . . . . . . . . . . . . . . . . . . May1

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

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If you put a group of smart insurance company people in the room, then a group of smart CSIO people and other brokers, you could probably figure this data exchange issue out. But it’s a very complex problem. insurance,” says Johnston. “It gets down to the complexities of how insurance companies are required to manage the data that represent their policies. There are regulatory and accounting issues that make the representation of a policy very complex within an insurance company. I think if most people could actually get a visual image of what the data records looked like within an insurance company to manage a policy, they’d be flabbergasted.” The complexity is partly a consequence of an insurer’s obligation to report a policy change to a regulator. When a policy change is requested 95 days into a policy, for example, the original 365-day policy doesn’t exist anymore. So an insurer must then report to the regulator a transaction that essentially lops off the back 270 days of the full-year policy, showing the policy as it existed for the first 95 days, and then what the replacement policy looks like for the remaining 270 days of the 12month policy cycle. Things get even more complicated when you further slice and dice the policy. What happens, for example, if you issue a policy on Dec. 1, make a change on Jan. 20, and then the client calls back and says they forgot to report a change that occurred on Jan. 5? In this scenario, an insurer essentially has to report the original state of the 365-day policy issued on Dec. 1. Then it has to reflect the Jan. 20 change (by reporting the policy in force for the 51 days leading up to the change, and then for the remaining 314 days of the 12-month policy cycle). But once the Jan. 5 change is called in, the insurer then has to revert back to the original Dec. 1 policy for the first 36 days, apply the Jan. 5 change for the next 15 days, and then re-apply the

Jan. 20 change to get back to what the policy really should look like for the remaining 314 days of the 12-month policy cycle. Further complicating matters, insurers have their own back-end policy administration systems for implementing these changes. Each system handles these changes in its own unique way, and each process has its own timeframe. It is therefore challenging to link all of these various systems and methods of policy administration into a broker BMS. Which is not to mention that each broker BMS is different as well. Scott Andrew, president and CEO of Custom

Software Solutions, says even a simple request to change a deductible requires broker systems to contain information about multiple carriers’ underwriting rules. “If you do a deductible change — let’s say you want to go from a $500 deductible to a $1,000 deductible on a coverage item — you as a broker need to know the options [i.e. the deductible amounts an insurer offers],” says Andrew. “A $1,000 deductible might not be an option. It might be $500, $700

and $1,500 with that [insurance] company. You need that information in your program management system somewhere. You need access to that information, so you either need to request those parameters from the company system or you need to have a BMS sophisticated enough to know what those underwriting options and rules are.”

CAUTIOUS OPTIMISM For these and other reasons, IBAC’s data exchange project, which is currently in a proof-of-concept stage only, does have its work cut out for it. All vendors note Phase III will be the most challenging of all of the project’s phases, for a variety of different reasons. Applied says the forthcoming introduction of its EPIC broker management system, anticipated in early 2013, will facilitate the kinds of transactions envisioned by IBAC’s project. Andrew says CSS pioneered this round-trip transaction 10 years ago, before an XML standard existed to support the transaction. “It’s just a matter of doing this within the selected (CSIO) standard now,” Andrew says. Durepos says brokers must now take up the banner and advocate for insurers to be aware of and become involved in the project. Whatever the future challenges may be, participating technology vendors are striking an optimistic, if cautious chord. “If you put a group of smart insurance company people in the room, then a group of smart CSIO people and other brokers, you could probably figure this out,” says Johnston. “But it’s a very complex problem.We have talked to insurance companies that say, ‘We support our brokers, we support IBAC and we want to be supportive of this process. But technically this is really, really hard.’”

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UPCOMING EVENTS: FOR A COMPLETE LIST VISIT

www.canadianunderwriter.ca

AND CLICK ‘MY EVENTS CALENDAR” ON THE HOME PAGE

ClearRisk has announced two appointments within its sales and marketing department. Ray Dillon [1a] joins the St. John’s-based company as chief sales and marketing officer. Chris Gardner [1b] has been promoted to vice president of sales and marketing. “Ray led the sales team that grew Cable Atlantic to be one of the biggest acquisitions ever in this region, and went on to lead Rogers’ Atlantic Canadian sales team,” said ClearRisk CEO Craig Rowe. “We are confident he will lead us to similar growth.” He went on to say that Gardner has been with ClearRisk for nearly four years and has made a valuable contribution to the company’s success to date.

ACE Canada, the Canadian-based operating division of the ACE Group, has appointed Steven Lucas as vice president of national accounts. Lucas will be responsible for leading the business development strategy and will act as the principal contact for ACE Canada's national account segment. He will report to David Brosnan, country president of ACE Canada. Lucas has approximately 10 years of insurance experience. Previously he served as assistant vice president for ACE Canada's management liability division. He started his career with

ACE Canada in 2005 as a senior underwriter specializing in directors’ and officers’ insurance.

RSA has unveiled a ‘stem-to-stern' proposition, including a suite of offerings in commercial, personal and large commercial and specialty lines. RSA has developed a new definition for its commercial lines business, which is segmented by premium size into two categories: Commercial and Large Commercial & Specialty. The Commercial division (formerly known as Small to Medium Enterprise or SME) is set up to efficiently handle customers with commercial premiums of less than $25,000, mainly Canadian operations with lower hazard exposures. Since acquiring GCAN Insurance in January 2011, RSA has combined the strength of both organizations to build out its Large Commercial & Specialty platform, which includes tailored solutions for large, complex, national and multinational P&C risks. In personal insurance, RSA is shifting its focus from a generalist-only insurer to writing specialists’ insurance as well. RSA will continue to write traditional home and auto insurance, but will now cover specialized products, thus combining the flexibility and service of a niche insurer with the scale and capacity of a generalist insurer. Special-

Canadian Underwriter February 2012

ized personal lines offerings include private client insurance for high net worth clients and RSA Travel.

SCM Risk Management Services (RMS) has launched iClarify Commercial, a desktop commercial insurance tool. The tool allows insurance professionals to access an “unprecedented” amount of real-time, insurance-relevant data on commercial properties across Canada, a SCM release says. “At the click of a button, insurance professionals will be able to access claims reporting, photos, occupational information, Fire Underwriters Survey information and nearly a century worth of environmental site maps” for roughly 750,000 commercial properties across Canada, said RMS president Greg McCutcheon. According to feedback from brokers, iClarify Commercial will provide increased data accuracy, increased confidence in submissions and the heightened ability to impress current and prospective clients with comprehensive,

4 reliable information, the release continues. Underwriters will also benefit from increased data accuracy and increased confidence, eliminating processing inefficiencies and accelerating the process from submission to bind, it adds.

The Insurance Brokers Association of Ontario (IBAO) has launched a new website tool, MyInsuraceShopper Know Your Stuff—Home Inventory, a free online home inventory software for consumers. The new tool allows consumers to list home contents, including a brief description or photograph, and estimate the replacement value of each item. Users can also make a video of rooms, cupboards and

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6c shelves and store it off-site. The tool includes free, secure online storage so consumers will have access to their inventory anywhere, any time. Visit http://knowyourstuff.org/ for more information.

Crawford & Company (Canada) Inc. has announced three new appointments in its operations. Randy LaBrash [6a] is now the director of GTS in western Canada. He will focus primarily on commercial large loss files handling within the region; in addition, he will assume responsibility for growing the GTS product line in western Canada. Shelley Upton-Landry [6b] has joined the company as director of operations for the Atlantic region. She is a bilingual

6b claims insurance professional who has worked as a telephone and road adjuster and held various roles such as team lead and director of claims. Jules Giasson [6c] is now the branch manager for the Winnipeg, Brandon, Regina and Saskatoon offices.

The H.W. Kaufman Financial Group, parent company of wholesale broker and underwriting manager Burns & Wilcox, has acquired Chesterfield Canada Inc. The deal was part of a broader transaction in which Kaufman purchased Chesterfield Group Ltd., a London-based insurance broker and underwriting organization with companies in the United Kingdom, United States and Canada. The acquisition expands Kaufman Financial Group's international presence in the specialty insurance marketplace. Chesterfield Canada Inc. is a wholesale broker of specialty commercial business placed with domestic Canadian insurers and Lloyd's of London. Chesterfield's of-

fices are located in Toronto and Ottawa and will operate as Burns & Wilcox Canada. Gary Hirst, executive director of Chesterfield Canada Inc., said: “Combining the shared values and entrepreneurial qualities of the two organizations enables us to offer a greater depth and breadth of products to our clients and producing brokers across Canada.” All of Chesterfield Canada's employees, including senior management, will become part of the Burns & Wilcox Canada team.

Aviva Canada Inc. has announced the 12 winners of its third Aviva Community Fund. This year, the fund awarded a total of $1 million to communitybased initiatives across the country. The projects receiving funding are: • Kitchen Equipment to Help Feed Bodies and Soul (Kamloops, B.C.). • Northern Lights Wildlife Society, Bear Rescue Facility (Smithers, B.C.). • Holyrood School Courtyard Classroom (Edmonton, Alberta). • G.S. Lakie Convertible Theatre/Summer Arts Institute (Lethbridge, Alberta). • Yorkton Skateboard, Bike and Walking Park (Yorkton, Saskatchewan). • Kate's Kause Accessible and Inclusive Playground (Elmira, Ontario). • St. John School's Field

of Dreams (Guelph, Ontario). • St. Joseph's Villa/S.I.M Gym— Seniors in Motion (Dundas, Ontario). • Cameron Street Public School's Yard Revitalization (Collingwood, Ontario). • Give our Lions a Place to Roar—Lincoln Centennial Public School (St. Catharines, Ontario). • The Cascades Club (Chelsea, Quebec). • All Natural Play Area—Centre de plein air Domaine-NotreDame (Sainte-Catherine-dela-Jacques-Cartier, Quebec). A full list and complete description of these projects can be found at: http://www.avivacommunityfund.org/search/grid

XL Group plc, with the help of Accenture, has launched a new multichannel customer portal that provides customers with access to claims information via XL’s website and through mobile devices. The XL GlobalClaim Customer Portal offers real-time access to claims-related information such as the contact details and locations of participating XL claims handlers, date of loss, policy number and claims status. The claims data, available online and currently through an iPhone application, are generated by XL GlobalClaim. Accenture helped XL design and develop the portal and mobile services capabilities.

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APPOINTMENT

GALLERY

John Nolan Executive Vice President & Chief Underwriting Officer

Mr. Michael S. McLachlan, President and Chief Operating Officer of Berkley Canada is pleased to announce the appointment of Mr. John Nolan as Executive Vice President & Chief Underwriting Officer. Mr. Nolan will be involved in overall corporate strategy, and all important initiatives. He will be responsible for establishing and maintaining a consistent underwriting approach throughout the company. John will help establish our overall risk appetite by segment and the introduction of additional technology to support our underwriting efforts. In addition to his Underwriting responsibilities, John will lead Berkley Canadaâ&#x20AC;&#x2122;s Product Development and Segmentation Strategies. Mr. Nolan brings with him over 30 years of underwriting experience in Commercial Lines and Specialty Lines from across the country. He also brings many years of experience in Business Development and Strategic Planning. John is a graduate of Memorial University of Newfoundland and holds a FCIP designation. Berkley Canada Inc. underwrites on behalf of the Canadian branch of the Berkley Insurance Company, a 100% owned subsidiary of W.R. Berkley Corporation. The W.R. Berkley Corporation, founded in 1967, is one of North Americaâ&#x20AC;&#x2122;s premier commercial lines property casualty insurance providers. As a member company of W.R. Berkley Corporation, Berkley Canada provides customers access to the financial resources and stability of a global corporation with the flexibility and understanding of a local company. John Nolan 416-594-4804 jnolan@berkleycanada.com

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Canadian Underwriter February 2012

The Ontario Pond of the Honourable Order of the Blue Goose hosted its annual Galabration at the University Club of Toronto on Dec 8, 2011. More than 100 ganders and guests attended an elegant evening of fellowship and dining in the true spirit of the Christmas season.

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Adrian Hall RSA is pleased to announce the appointment of Adrian Hall as Vice President of its travel business. RSA has been a top travel insurer in Canada for many years but the acquisition of the business assets and expertise of travel distributor etfs in July, solidifies its overall position as a leading travel insurer in Canada. As part of his VP role, Adrian will also take on the position of Managing Director of RSAâ&#x20AC;&#x2122;s legal entity RSA Travel Insurance Inc./Assurance Voyager RSA inc. (RSA Travel), which includes the etfs brand. Adrian has significant insurance experience and has been with RSA for more than 17 years. Most recently he was the Director of Personal Specialty Insurance (PSI). Previous positions within RSA Canada include, Director Corporate Marketing & Communications; Director Broker Management; Regional Vice President, Toronto; Commercial Insurance Director, Ontario; and Corporate Business Director. Prior to this, Adrian held numerous international positions in marketing, communications, customer management and sales across the UK, Europe, Latin America and the Middle East. Adrian will lead RSA in its ambitions to become the leading travel insurer in Canada and across the RSA group globally.

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QRIMA, RIMS Québec Chapter, held its annual Holiday Luncheon on Dec 15, 2011 at the Ristorante BICE in Montréal. More than 125 risk managers and industry partners attended the sold-out event. Scott Clark, President of RIMS, was among the honored guests when Daniel Desjardins, senior director, Global Risk Management and Insurance at Bombardier, was presented the QRIMA 2011 Excellentia Prize. The Excellentia Prize is given out bi-annually to worthy Québec Risk Managers for their significant involvement at the chapter level, including their outstanding contribution to the field of risk management.

Canadian Underwriter February 2012

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

The Ontario Insurance Adjuster Association (OIAA) held their 2011 Christmas Party at The Fairmont Royal York Hotel in Toronto on Dec. 14, 2011. Hundreds of partygoers gathered for this annual seasonal celebration from which the OIAA donated some proceeds from every ticket sold towards its charity of choice, Big Brothers and Big Sisters.

Steven Lucas ACE Canada, the Canadian-based operating division of the ACE Group has announced the appointment of Steven Lucas as Vice President, National Accounts. Mr. Lucas will be responsible for leading the business development strategy and will act as the principal contact for ACE Canada’s national account segment. Mr. Lucas will report to David Brosnan, Chief Executive Officer, ACE Canada. With approximately 10 years of insurance experience, Mr. Lucas previously served as Assistant Vice President for ACE Canada’s Management Liability division. Mr. Lucas commenced his career with ACE Canada in 2005 as a senior underwriter specializing in directors and officers insurance. Prior to joining ACE, Mr. Lucas spent three years with a global carrier based in Canada, in an underwriting capacity within its executive liability group. Mr. Lucas received an Honours Bachelor of Arts degree in Mathematics from Wilfred Laurier University and has completed the Canadian Securities Course. ACE Canada® refers to ACE INA Insurance and ACE INA Life Insurance, subsidiaries of the ACE Group, and is rated AA- (Very Strong) by Standard & Poor’s and A+ (Stable) by A.M. Best Company. ACE Canada, through its underwriting companies, provides insurance products and services throughout Canada. Additional information on ACE Canada and its products and services can be found at www.ace-ina-canada.com. The ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the S&P 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acegroup.com.

February 2012 Canadian Underwriter

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

gather evidence to the FPA each year are caused termine if a criminal investiat the according Festive Vancouver internationally gation is the next Thestep.â&#x20AC;? Honourable Order of Golf accepted Club. The stanevent by lightning strikes; the other dards for wildfire The investigation into Goose the BC Pond the Blue resultedinvestigain more than half arise from human actions tions, the release says. gifts being such as unattended campcause of the Slave wild- Christmas heldLake its Annual 100 childrenâ&#x20AC;&#x2122;s to the to release, fire took five months to comLuncheon on Dec. 7,Accordingdonated the Salvationfires, debris burning and about half Army of thefor 1,600 wildindustrial activity like gas plete and involved extensive 2011. Forty-two memtheir Christmas fires that typically ignite in flaring or slash burning. onsite and offsite work to bers and guests attended gift drive.

February 2012 Canadian Underwriter

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APPOINTMENT

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

On Dec 14, 2011 the Portuguese Insurance Professionals Association (PIPA) hosted its annual Christmas Luncheon in Toronto, where PIPA members brought guests to sample some Portuguese wine and food. Attendees included brokers, adjusters, underwriters and supporters. PIPA is a non-profit organization dedicated to promoting the insurance industry, foster professionalism and encourage academic excellence by providing scholarship funds at the grade 12 or post-secondary education level. For more information about PIPA, please visit www.pipaontario.com

Rick DeBruyn Gary Owcar, President and COO of CNA Canada, is pleased to announce the recent appointment of Rick DeBruyn as Assistant Vice President, Branch Manager, Winnipeg, effective February 1. Rick joined CNA Canada in 2006 as a Senior Underwriter. Rick joined CNA from ING, Winnipeg, where he has served as Senior Commercial Lines Underwriter since 1995. He holds a BA in political science from the University of Winnipeg. Rick is a Chartered Insurance Professional and has 16 years of experience in the industry. “Over the past six years at CNA, Rick has developed an excellent reputation with regional brokers and has been a positive contributor to the success and growth of the Winnipeg Branch,” said Gary Owcar. “I am confident he will succeed in his new role and will continue to support the Manitoba marketplace with local representation, developing strong broker relationships, and focusing on business and territory development.” Serving businesses and professionals since 1897, CNA is one of the largest North American commercial property and casualty insurance companies and has strong financial ratings from A.M. Best, Moody’s and Standard & Poor’s with stable rating outlooks. CNA’s insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA’s services include underwriting, risk control and claims administration.CNA is a registered trademark of CNA Financial Corporation. For more information, please visit www.cnacanada.ca

February 2012 Canadian Underwriter

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The Ontario Chapter of the Risk & Insurance Management Society (ORIMS) held its Christmas Luncheon on Dec. 15, 2011, at the Westin Harbour Castle in Toronto. More than 700 attended. In keeping with the spirit of giving, the ORIMS executive chose to raise funds for The Daily Bread Food Bank. More than $8,000 and hundreds of pounds of food were raised to help the food bank in its fight to eliminate hunger in and around Toronto.

ADVERTISERS’ INDEX ACE INA Insurance

7, 67

Arch Insurance Company (Canada Branch)

Aviva Canada Inc.

Berkley Canada

Brovada Technologies Incorporated CARSTAR Automotive Canada

39 75 (IBC)

ClearRisk

CNA Canada

Compu-Quote, Inc.

Crawford & Company (Canada) Inc.

Cunningham Lindsey Canada Custom Software Solutions, Inc.

9 19

The Guarantee Company of North America

GroupOne Underwriters

IMCA

instouch.com Insurance Institute of Canada

47 2, 27, 45, 60

Insurance Internet Directory

iter8

Keal Technology OIBA

5 68

Pencross Financial Corporation

PolicyWorks

RIMS

Risk Management Services – An SCM Company RSA – Royal & Sun Alliance Insurance Company of Canada

37 25, 65

WICC

Unica Insurance Inc.

Canadian Underwriter February 2012

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On January 18, the partners and staff of McCague Borlack LLP hosted their 18th annual ‘Christmas in January’ party. McCague Borlack LLP is the Ontario affiliate of the Canadian Litigation Counsel and the Harmonie Group. Members from both groups were in attendance to enjoy cocktails, hors d’oeuvres and networking.

Canadian Underwriter February 2012

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APPOINTMENT

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

The Northern Alberta Insurance & Risk Management Chapter (NARIMS) and the Insurance Institute of Northern Alberta (IINA) held a joint Christmas party on Dec 8, 2011. A total of $1,500 was donated to Edmonton’s Christmas Bureau from this event. This was a great opportunity to chat with new and old friends!

Gale Lockbaum GALE LOCKBAUM JOINS ARCH INSURANCE COMPANY (CANADA) AS CHIEF FINANCIAL OFFICER Gale Lockbaum joined Arch Insurance Company (Canada Branch) on November 28th as a Senior Vice President and Chief Financial Officer. In this role, Gale will be responsible for managing all aspects of the finance function for Arch Canada and will report directly to Gordon Kerr, CEO and Chief Agent. “Gale’s addition to the Arch Canada management team is a real win for the organization. Her broad financial and industry experience significantly strengthens our overall capabilities,” said Gord. Gale has more than 15 years of insurance finance experience and joins us from CNA Canada in Toronto where she served as Senior Vice President and Chief Financial Officer. Prior to her role at CNA Canada, Gale held progressive finance positions at three Canadian property and casualty companies covering commercial, personal and title insurance. In addition to her industry experience, Gale’s public accounting experience includes KPMG and Ernst & Young. Gale received her Honours Bachelor of Commerce degree from Queen’s University and is a Chartered Accountant with the Canadian Institute of Chartered Accountants.

www.archinsurance.com

February 2012 Canadian Underwriter

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More than 400 stakeholders representing the insurance claims and collision repair industries attended the Canadian Collision Industry Forum (CCIF) meeting on January 28, in Toronto. Speakers included Tom Bissonnette, Parr Autobody, Saskatoon and CCIF chairman; Mike Bryan, CCIF administrator, Richard Flint, of Richard Flint International, Andrew Shepherd, of I-CAR Canada, Leanne Blackborow, of CCIF Skills Program, Roger Schroder, of Car-Part.com, Steve Fletcher, of ARC, and a panel of speakers on the topic of Advanced Vehicle Technology, moderated by Larry Jefferies, of CARSTAR Automotive Canada. Speakers on the panel included: Don Strong, Concordia CARSTAR Collision, Ottawa; Rich Zamperin, of Allstate Insurance Canada; Michel Matte of BMW Canada, in addition to other panelists. The CCIFâ&#x20AC;&#x2122;s mission is to provide a forum for the collision repair industry to share information, best practices and a means to develop solutions to common national issues and challenges. CCIF takes place three times a year in different cities across Canada.

Canadian Underwriter February 2012

You might say “seamless integration.” We just call it a good fit. You might say “seamless integration.” We just call it a good fit. At CARSTAR we are dedicated to making the transition from claim to repair as seamless and simple as possible for you and your clients. We are working with many insurance companies to significantly reduce their claim-processing times and find solutions to their common challenges. We have also implemented various programs through our CARSTAR Care Centre to facilitate the claims process such as our cross-province and cross-border claim support. With 150 locations in 10 provinces — Just think of us as your Vehicle Repair Management Company.

We’re big on global reach

The North West Company Inc., a leading Canadian based retailer of food and general merchandise has foreign operations operating under its Cost-U-Less and Alaska Commercial Company banners in such places as Fiji, Guam, St. Maarten, Netherlands Antilles, Cayman Islands and the USA. Through our Global Network, RSA provides seamless cross-border insurance coverage to meet our client’s needs worldwide. RSA has one of the largest international networks in the insurance industry, extending to more than 140 countries. It is through the strength of this Global Network that we can provide tailored insurance solutions for large complex, national and multinational P&C risks requiring local expertise, seamless delivery and brilliant service. With over 300 years of experience, RSA is an established ‘A’ rated insurer offering a complete suite of insurance solutions for small business to multi-nationals through a network of independent brokers.

If you’re big on global reach, partner with RSA INSURANCE.

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