C A N A D A’ S I N S U R A N C E A N D R I S K M A G A Z I N E . C A N A D I A N U N D E R W R I T E R . C A
F E B R UARY 2 0 1 0 A Business Information Group Publication #40069240
Mind the Gap BY CRAIG HARRIS
Data Exchange 2.0 BY JOHN EASTLY
Risk-Based Underwriting BY DAVID GAMBRILL
An insurance policy is like a good goalie: it’s the last line of defense in business protection. A Great American insurance policy can be a game-changer, making you a winner with your clients. With Great American on your team, you’ll have the power play advantage from start to finish. Scotia Plaza, Suite 2100 I 40 King Street West I Toronto, Canada M5H 3C2
Property & Inland Marine Division Executive Liability Division www.GreatAmericanInsurance.com
VOL. 77, NO.2, FEBRUARY 2010 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP
www.canadianunderwriter.ca
COVER STORY
Minding the Gap
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Significant gaps in data related to homeowners’ insurance have accumulated over the past several years, leading to what is now known as the “insurance-to-value” (ITV) crisis. Recently, vendors have set their sights on giving insurance companies and brokers the data they need to determine the accurate value of a client’s home. BY CRAIG HARRIS
FEATURES
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Data Exchange 2.0
Underwriting, Refined
Newer forms of technology are emphasizing more personal and flexible forms of insurer-broker communication, independent of the type of workflow.
Insurers are increasingly segmenting their homeowners’ risks according to peril, using a new methodology dubbed as “risk-based underwriting.”
BY JOHN EASTLY
BY DAVID GAMBRILL
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12 iClarify
42 What You Don’t Know
Working with brokers and insurers across the country, RMS has made significant strides in developing a new technology addressing the industry’s insurance-to-value (ITV) issue.
Brokers often say they need improved technology to compete with direct writers, without realizing that some of the new technologies they seek are already available in the marketplace. BY PAT DUREPOS
BY GREG McCUTCHEON
46 Paperless Phase 20 Part XIII Undertaking Federal and provincial insurance regulators are still working on harmonizing their reporting requirements in light of Part XIII amendments, their most recent effort being a voluntary undertaking circulated in December 2009. BY ROBERT McDOWELL AND MARVIN MIKHAIL
In an effort to go paperless, Gore Mutual took a phased approach to delivering a new document generation project. BY TOM CLAYTON
54 Executive Shuffle Maurice Tulloch has a full plate of issues in front of him as he settles into his new role as CEO of Aviva Canada. BY DAVID GAMBRILL
Front Seat Driver
Flying High
28 Reviewing Risk
56 Non-Compete
How a simple, green-yellow-red LED light display can help train drivers out of unsafe driving behaviours.
A new technology is available that will allow brokers to offer travel insurance without assuming any additional E&O liability.
BY DAN STEERE
BY GAIL ROBERTSON
Risk managers are checking insurance quotations using a new software that converts Excel spreadsheets into Webbased, real-time applications.
The best way for a brokerage to retain an ex-employee’s clients is to focus on customers rather than on non-compete and non-solicitation agreements.
BY UGUR KADAKAL
BY RICHARD YASNY
February 2010 Canadian Underwriter
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VOL. 77, NO.2, FEBRUARY 2010
PROFILE
10 Future Investment Insurance organizations wishing to hire the best and the brightest need to set a good example by making valuable investments in their workforce today.
Editor David Gambrill david@canadianunderwriter.ca (416) 510-6796
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BY VANESSA MARIGA
SPECIAL FOCUS
6
Editorial
8
Marketplace
58 Moves & Views 60 Gallery
Advertising Sales Christine Giovis christine@canadianunderwriter.ca (416) 510-5114
President Bruce Creighton Vice President Alex Papanou
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Canadian Underwriter February 2010
EDITORIAL
Cat Calculator
The insurance industry sorely needs a new, basic technology that will better quantify the industry’s overall value to consumers. David Gambrill, Editor david@canadianunderwriter.ca
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Canadian Underwriter February 2010
Quite often when the industry talks about tech issues, it discusses the need to explore technologies that will bring together various segments of the insurance community to provide better, more streamlined service to consumers. But one thing the insurance industry sorely needs is a new, basic technology that will better quantify the industry’s overall value to consumers. We need a ‘cat calculator.’ As envisioned, a cat calculator would provide real-time statistics from insurers across the industry, showing how many claims have been opened as a result of either a man-made catastrophe or a natural catastrophe event such as a fire, flood or earthquake. It would give the public an immediate, real-time, aggregate total of how much these claims are worth. As far as we know, this kind of technology has not been invented yet. If it existed, it would aid the industry immensely in putting a credible, tangible dollar figure to the kind of contribution insurers make to society during times of great stress and hardship. Frankly, as it stands now, no one has any idea about the scope of the work insurers do until well after people have forgotten that a catastrophe has occurred. Without any kind of quantifiable figures early in the process, when the disaster is top of mind for the public, it is quite clearly impossible for the industry to demonstrate its true value to the community in a clear and tangible way. The proposed ‘cat calculator’ would be a means to this end. A demonstration of how such a
calculator might work can be found on Health Canada’s Web site. Early during the days of the spread of the H1N1 influenza, the public had immediate and online access to current H1N1 flu statistics compiled and disclosed online by Health Canada. Take, for example, the chart that can be found at: http://www.phac-aspc.gc. ca/alertalerte/h1n1/surveillance-eng.php. The Health Canada stats in this chart are not complicated at all. The chart simply lists the provinces and territories, gives a territorial breakdown of the number of deaths related to H1N1 during the most current week and displays the cumulative death totals for each province since the beginning of the outbreak. The beauty of the table is that basic information about H1N1 was available to the public early. It was easily accessible on the Web site, and it provided the public an instant snapshot of the scope of the deaths related to H1N1. In short, it provided context. Presumably, the table was updated and kept current through consultation with the various hospitals in each of the regions. No doubt the numbers weren’t perfect. (How, for example, do you keep track of non-hospitalized patients who succumbed to the disease? How do you determine whether the death was a result of H1N1 when other symptoms may have been present?) The point here is this: any methodological concerns about how the data was collected quite rightly did not deter Health Canada from reporting what in-
formation it had in a timely and simple manner. Now, transfer this idea over to the insurance industry’s reporting of damage claims during catastrophic events. Imagine insurers from across the country submitting basic, aggregate, electronic, peril-driven claims information to a central database. The data would not have to be elaborate. Figures might be based on the number of Notice of Losses received by insurers and a dollar amount for the claims. (Insurers can debate all they want how the data is to be defined, so long as it’s simple for the public to understand.) The proposed cat calculator would compile and collate the claims totals from insurers and spit out aggregate data in a format quickly and easily digested by the public (the Insurance Bureau of Canada’s Web site would seem the logical spot for this information to reside). Et voila, within a day of the major rainstorm, hailstorm, propane explosion, burning of the creamery factory, etc., the public can see insurance companies generally have opened ‘x’ number of claims worth ‘y’ millions of dollars. With these real-time cat calculations, the public — and their political representatives — will know clearly and immediately how much these major claims cost the industry as a whole. Most importantly, these numbers would provide a very tangible way for the public to see for themselves how the insurance industry contributes a great deal to the public’s recovery efforts in the event of a catastrophic disaster.
PROGRESS COMES FROM
STRENGTH As one of the world’s largest insurers, the ACE Group has the capacity, know-how, people and balance sheet strength to meet your needs today — and to be there for you in the future. Our commercial lines span property, primary and excess casualty, risk management and engineering, professional risk, and many specialty classes — all with substantial capacity. We also provide our clients with life, accident and health products specifically designed for the employer, credit and affinity markets. With offices in more than 50 countries and doing business with companies and individuals in more than 140 countries, ACE is ready to serve you today.
© 2009
For information on ACE Canada, visit us at www.ace-ina-canada.com
INSURING PROGRESS®
PROPERTY & CASUALTY
ACCIDENT & HEALTH
LIFE
MARKETPLACE
Canadian Market THREE SEPARATE WEATHER EVENTS CAUSE A TOTAL OF $637 MILLION IN INSURED DAMAGES: IBC Three separate severe weather events occurring in Alberta and Ontario in 2009 caused insured damages totalling $637 million, according to figures released by the Insurance Bureau of Canada (IBC) In Alberta, deadly windstorms tore through the province between Aug. 1 and Aug. 3, resulting in insurance payouts to claimants totalling Cdn$365-million. Torrential rains in the Ottawa and Hamilton regions between July 24 and July 26 resulted in Cdn$196 million in insurance payouts. And in mid-August 2009, a series of more than 14 tornadoes touched down in the Greater Toronto Area, causing insurance payouts in excess of Cdn$76 million.
NOVA SCOTIA MOVES AHEAD WITH INJURY CAP REVIEW Nova Scotia’s government is moving ahead with its promised review of the province’s $2,500 minor auto injury cap. The government has issued a nine-page discussion paper on the cap, entitled Concerning the Cap on Pain and Suffering Awards for Minor Injuries, and is calling for public input on the paper by
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Canadian Underwriter February 2010
Feb. 15, 2010. “The Office of the Superintendent of Insurance will conduct the review over the next few months with a target completion date of spring 2010,” the discussion paper says. The paper includes sections about the history of the cap, damage awards that are not subject to the cap and the minor injury definition. It also has a page outlining ‘Issues With the Cap,’ which acknowledges the following: “Since the introduction of the cap, there has been a measurable decrease in average premiums for private passenger vehicles. Premiums have also been relatively stable.” Even so, the discussion paper goes on to say, “the precise impact of the cap, if any, is difficult to determine.” The full paper is available at: www.gov.ns.ca/finance/en/ho me/insurance/
ONTARIO AUTO RATES INCREASE BY 2.49% IN 2009 Q4 Ontario’s insurance regulator has approved a 2009 Q4 auto insurance rate increase of 2.49%, based on the entire market. In the fourth quarter of 2009, for the 55.48% of the province’s auto insurance market that had rate changes approved, the average rate change was +4.49%, when weighted by market share, the Financial Services Commission of Ontario (FSCO) reported. Rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were
-10.60%, -2.43%, -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market.
Risk Management COMMERCIAL PREMIUMS DROP IN 2009 Q4: RIMS SURVEY Premiums continued to tumble for commercial insurance buyers in 2009 Q4, with few signs that the soft phase of the pricing cycle is nearing the end, according to the RIMS Benchmark Survey. The survey, administered by Advisen Ltd., tracks changes in insurance policy renewal prices as reported by North American corporate risk managers. Directors and officers’ liability and general liability posted decreases in average premiums, while property held steady again. General liability saw the largest decrease, with average declines in renewal premiums of 5%. Average D&O premium fell 2.8%. Property remained relatively unchanged, falling less than half a percentage point, according to the survey. “While market conditions are benefiting insurance buyers, they are contributing to growing financial stress on agents and brokers that derive much of their income from commissions on insurance premiums,” according to a release.
H1N1 IMPACT COMPARABLE TO ONTARIO’S 2003 POWER OUTAGE The impact of H1N1 and seasonal flu on hours lost at work was comparable to that of the Ontario-U.S. power outage in August 2003, Stats Can reported in a recent study. About 1.5 million employed people aged 15 to 69 reported they were absent from work in November 2009 as a result of the H1N1 or seasonal flu, representing 9% of workers in that age group. On average, workers absent as a result of H1N1 and seasonal flu lost 19.6 hours of work each, for a total of 29.5 million hours lost. Including overtime hours to make up for lost time, the net effect of the H1N1 and seasonal viruses in November 2009 was a loss of 20.9 million hours. In comparison, the 2003 power outage cost 2.4 million workers in Ontario and Quebec a total of 26.4 million hours of work time. Including 7.5 million overtime hours, the net effect was a loss of 18.9 million hours.
Reinsurance NEAR-TERM MODELS ARE OVERESTIMATING INSURED DAMAGES: KAREN CLARK Near-term models designed to project insured losses from Atlantic hurricanes in the United States have significantly overestimated losses
MARKETPLACE
for the cumulative 2006-09 seasons, a Karen Clark release says. Three major catastrophe modellers introduced nearterm models in 2006 following the destructive 2004 and 2005 hurricane seasons. Actual cumulative insured losses in 2006-09 totalled $13.3 billion. But assuming long-term average annual insured hurricane losses of $10 billion per year, estimates provided by AIR Worldwide (AIR), EQECAT and Risk Management Solutions (RMS), initially projected insured losses for 2006-09 at $48.8 billion (AIR), $54.5 billion (EQECAT) and $54.6 billion (RMS), respectively, Karen Clark & Company said in a press release.
ance Research Council of Canada (RRC) said in a consultation paper submitted to the government. “In the absence of a government backstop [which would limit the exposure of private insurance companies to damage arising from terror-
ist events], the proposed regulation would severely challenge insurer solvency at the very time when insurance resources are most needed by the community,” the IBC/RCC paper says. “In light of this, the proposed regulation ultimately
runs counter to the intention of the Insurance Act and presumably the passing of such a regulation in the first place, [which is] to provide certainty that Albertans will be compensated in the unfortunate event that a major terrorist attack occurs.”
Cunningham Lindsey offers expert claims handling for the most complex and specialized losses. To access our team of experts, write to us at corpservices@cl-na.com for a copy of our new Specialty Services Directory.
Regulation IBC DENOUNCES PROPOSED PROHIBITION ON EXCLUDING FIRE CLAIMS FOLLOWING TERRORIST ATTACKS, EARTHQUAKES: Canada’s property and casualty insurance industry is “strongly cautioning” the Alberta government to scrap a proposal that would prohibit insurers from excluding claims for fire damage following terrorist or earthquake events. Primary insurers would run a higher risk of insolvency if the government implements its recommended change to the province’s Insurance Act, the Insurance Bureau of Canada (IBC) and Reinsur-
www.cunninghamlindsey.com
February 2010 Canadian Underwriter
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PROFILE
Back to Basics Vanessa Mariga Associate Editor
Carla Blackmore, the recipient of several awards in honour of her distinguished 34-year career, says the insurance industry must increase its investment in the development of its workforce to attract the top young decision-makers into its ranks. Carla Blackmore dodged a bullet. As a recent university graduate, she decided to leave her home province of New Brunswick and move to Ontario to find a job. She dropped her résumé off throughout Toronto, applying for any and all entry-level positions. Her first job offer came from Zurich Canada, and she accepted. The very next day a job offer from a bank rolled in. “I could have as easily been in the banking business, but for one day,” she says. “But I don’t think I would have been as happy in the banking business … [Getting the job at Zurich] was just pure luck because I didn’t know anything
10 Canadian Underwriter February 2010
about the insurance industry at the time.” Blackmore counts herself lucky for having serendipitously launched her career in insurance, but perhaps the insurance industry has come out as the real winner. She spent the next 34 years at Zurich in a number of different roles. During those three decades, Blackmore made it a point to commit her time and energy not only to her professional career but also to helping others both in the industry and organizations supported by the industry. She announced her retirement from the role of Zurich’s director of commercial programs in April 2009. To name a few of her contributions throughout her career, she taught courses at the Insurance Institute; sat as chair of the CIP Society Ontario Council; served as director of the Women in Insurance Cancer Crusade (WICC) Ontario since 2001; and co-chaired the Starlight Insurance Gala since 2007. (She has been involved with the Starlight Foundation since 1995.) The CIP Society estimates that through her involvement with both WICC and the Starlight Foundation, Blackmore has actively contributed to raising more than $6.4 million. Based on Blackmore’s commitment of time, energy and resources, the CIP Society awarded her with its inaugural National Established Leader
Award and the GTA Fellow of Distinction Award. At a reception for the GTA Fellow of Distinction Award in Toronto on Jan. 14, 2010, Blackmore, surrounded by friends, family and colleagues, offered a few words on the value of sharing one’s time. “The average work week is 37.5 hours,” she said. “That’s 75 half-hours. When you think of it that way, it becomes very easy to take one of those 75
Employees are getting paid to make decisions, not to spend 80% of their time documenting decisions. half-hours and do something for a cause that you believe in.” Devoting a bit of time is not only good for one’s self, but it helps to create a larger culture shift within the industry at large, she said. It sets in motion a chain reaction that ultimately, when looking at the big picture, is a win-win-win for those who are contributing, those who rely on the organizations or services that are being aided, as well as for the insurance industry as a whole. In a later interview, Blackmore said the insurance industry has not always been a coveted career choice for many, but that’s gradually changing.
She credits advertising efforts by associations and programs such as the Insurance Institute’s Career Connections. Previously coveted positions at high-paying, fast-growing organizations have lost their lustre, she says. The next generation is increasingly placing more focus on stability, ethics and global compassion. “The insurance industry doesn’t appear as bad to young people as it did in the past,” she says. “Those younger people are starting to move away, with their hearts and with their feet, from the high-profile, high-paying, fast-growing companies. They are looking for companies that have more future potential.” But the industry must do more heavy lifting to continue to attract talent and achieve success in the marketplace. That means doing more investing in its current workforce. “Right at the moment there is an increased focus on managing by numbers,” Blackmore says. “I agree that improving company performance is key for the stabilization of results, and producing ROE [return on equity] for shareholders helps ensure the survival of our industry and the companies within it, but there hasn’t been enough focus on developing employees. Not for the present and certainly not for the future.” Blackmore points to the fact that the industry’s demographics are rapidly changing at the moment. Several experts have
PROFILE
warned that the potential for a critical talent shortage looms sometime over the next five to 10 years. The time to address these issues is now, says Blackmore, reiterating her desire to make the insurance industry an even more viable option for people considering it as a future career. In her acceptance speech at the CIP reception, Blackmore suggested that people choose their employers in the same manner that they would choose their friends. “Employ-
ers have core values and personalities,” she added in an interview after her speech. “They also need to be able to have people who are enthusiastic. Not everyone needs to be a cheerleader, but people have to have enough enthusiasm to want to do their job.” Employees need to be able to influence others, she says. “The ongoing professional and day-to-day development of employees isn’t just a management thing, it’s part of the company culture. Enthusiasm in the
workplace can become viral.” Motivation and enthusiasm will flow from current and future employees being able to develop knowledge, expertise and skills, she says. This will give them the confidence and ability to make well-informed and skilful decisions. But there are obstacles in the way of employees experiencing such confidence and motivation, Blackmore notes. For example, too many companies have outdated systems and processes that result in
inefficiencies, she says. “It’s resulted in an inability to analyze information at both the employee and management level, and it’s led to an increasing level of frustration and stress for the staff of those companies.” The insurance industry is paying people a fair amount of money to analyze information to make decisions for the future, she observes. “Then [the employees] spend a ton of time trying to document those decisions — for good reasons — but they’re getting paid to make decisions, not spend 80% of their time to document the decisions.” At the end of the day, it basically comes down to empowering employees, she said. This is a result of committing to professional education and development on a day-to-day basis. “If they don’t have the skills they need to make the right decisions, or if they don’t have the confidence that they have the skills, then that doesn’t empower them.” But “the sky isn’t falling,” Blackmore adds. “Everything that needs to be fixed is fixable. If we work on recruiting and developing new employees who want to add value — that goes back to fixing existing systems and processes, all of which are fixable — then we need to start now. Otherwise, five or 10 years down the road, it will be too late to fix it. Essentially, it all comes down to people.”
February 2010 Canadian Underwriter
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The Evolution of Cost Calculation
Greg McCutcheon President, Risk Management Services (RMS)
iClarify has emerged as part of the industry’s effort to bolster insurance-to-value data validation.
surrounding ITV. Most importantly, in December 2008,every member of the SCM executive team unanimously agreed the time to act on ITV was immediate. Our solution had to be ready for first quarter 2010.
“The two most important requirements for success are: first, being in the right place at the right time, and second, doing something about it.”
Our strategy centred on the notion that iClarify had to be a national solution. In order to make this happen, we would require support from broker associations, insurers and industry stakeholders from across Canada.To this end, we could not have been more confident in the future potential of our solution when we received funding, partnership and endorsement from the Insurance Brokers Association of Ontario (IBAO) in August, followed by The Economical Insurance Group in September 2009. Equally important is the resounding support RMS received from Insurance Brokers Association of B.C. (IBABC). RMS met with IBABC in September 2009. In a room filled with insurers, brokers, members of the Insurance Bureau of Canada (IBC) and the Insurance Brokers Association of Canada (IBAC), RMS presented a working prototype of the RMS ITV solution.We were nervous.We knew that previous meetings on the topic had not gone well with other suppliers.We also knew that if industry representatives from British Columbia were not onside with our vision, our dreams for a national approach would be dead.The meeting was a big success for our team. In reflection, it was a pivotal moment that helped us push forward to achieve support from other broker associations across Canada, including official endorsement from the Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) in December 2009.
The decision to develop the RMS iClarify application was triggered by a series of events culminated in the fall of 2008. The Canadian market was dissatisfied with the “status quo” approach to insuring to value. Property underwriting results were deteriorating. All inspection and valuation suppliers were under scrutiny with regard to the accuracy of the replacement costs that they were generating.The cost of the problem was determined to be $11 billion annually, and growing. SCM Insurance Services purchased RMS in a deal that closed in August 2008. The partners in the deal quickly realized a number of synergies for the RMS division within the SCM Services continuum. For example, there was a shared cultural belief in using technology to drive value and efficiencies, which in turn presented encouraging conceptual workflow enhancements to the ITV dilemma.We received early validation by many industry stakeholders that our organization held more aggregate insurance total loss claims and construction data in Canada than any other organization. When indexed, this information provides tremendous insight into the fluctuating cost of claims on a very refined (FSA or policy) level, exposing the glaring industry problems
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CREATING A NATIONAL APPROACH
iCLARIFY – AN INTEGRATED BUSINESS SOLUTION Our understanding of insurance workflow practices is a key competitive advantage in the creation of iClarify. A paramount objective of our team was to make sure our offering not only integrated with point-of-sale distribution tools, but also aligned with anticipated best practices of the Insurance Bureau of Canada’s ITV committee process and CSIO data standards. In addition, at the forefront of the development process, we needed to make sure our back office application and support teams could process large quantities of in-force policies, enabling us to provide batch ITV updates on an insurer’s existing book of business. The announcement of our strategic partnership with Compu-Quote in August 2009, providing brokers using the eZITV solution with data verification, street view and overhead satellite images, captured critical mass within the property quote distribution channel. A similar distribution agreement with Powersoft was announced in November 2009. This agreement further enhanced valuations generated from the EvalWorks engine and was intended to increase our distribution scale and support for brokers in Western Canada. These partnerships have allowed us to complement, streamline and enhance the new business process, while at the same time creating a much more accurate policy quoting process and overall customer experience.
IMAGERY AND INSIGHT The original vision of iClarify focused exclusively on data, but the desire to provide streetscape imagery as part of the point-of-sale data validation process quickly became a strategic goal for the project in early 2009.This particular aspect of the iClarify process is very complex and required a great deal of innovation. RMS signed an exclusive contract in August 2009 to distribute iLookabout streetscape imagery to the Canadian insurance marketplace.The company has already captured the majority of homes in Canada and is uniquely focused on
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cities and towns with populations of 4,000 and greater. Equally important for RMS, iLookabout’s business model assures that photos will be updated on a regular basis to guarantee long-term accuracy and consistency. One of the unique attributes of the service is that it is not easily duplicated. It has the ability to make sure the image of a home provided at point of sale is
One of the unique attributes of the service is that it is not easily duplicated. It has the ability to make sure the image of a home provided at point of sale is indeed the correct dwelling. indeed the correct dwelling. Currently other suppliers provide imagery on homes in major city centres, but often the address does not correspond to the actual geographic location of the property. This may cause users to find themselves across or down the street from the actual home being queried. In effect, as a critical component of iClarify, our partnership with iLookabout and the value proposition brought forth by this relationship are not easily replicated.
THE PATH AHEAD Using the Compu-Quote comparative quoting application, the iClarify data validation point-of-sale solution will begin pilot testing with a select group of IBAO brokers in February 2010. We are confident this testing will provide positive response and facilitate widespread release in Ontario in 2010 Q2. The development of the service with Powersoft is scheduled for 2010 Q1, with hope that a similar broker pilot test can begin shortly in Western Canada. Ideally, the project rollout for the validation service will be Ontario, Western Canada, Quebec and Atlantic Canada. Our goal is to have the service implemented in a majority of the country by the end of 2010. Insurers have been testing the data outputs of the iClarify In-Force Renewal
Tool with very encouraging results thus far. In fact, we are well within our targeted objective of being able to provide property valuation updates on in-force policies in comparison to total loss cost. RMS envisions several companies will begin using the application to help them quickly identify policies within their property portfolios that are dramatically underinsured, facilitating a refined strategy to dealing with this problem.We are hopeful that iClarify will provide ongoing support to underwriters across Canada to maintain proper ITV levels throughout the property renewal process for years to come. iClarify continues to evolve. Not only does it offer tools to help the industry solve the ITV problem, it also functions as a property information services portal. Insurers, brokers and agents will be able to log on to www.iclarify.ca and obtain instant access to property underwriting services. Inspections, property images, valuation information, claims histories and demographic information can be purchased as a complete underwriting report or on an à-la-carte” basis. Furthermore, we will be expanding the service for commercial lines underwriters in 2010. We are in discussions with industry participants to determine how iClarify may have a claims application, providing pre-loss information after the occurrence of a claim.
A PIVOTAL YEAR 2010 will be a pivotal year for iClarify and for the industry in general.The IBC is poised to launch a massive consumer education program educating Canadians on the critical importance of insuring to value. Property underwriting results are under a great deal of pressure and thus it is imperative for insurers to address ITV and shore up bottom line profitability. Our industry has an opportunity to solve a 30-year-old problem and to implement new best practices to ensure the ITV issue does not resurface once again in three, five or 10 years from now. The creation of iClarify is RMS’s next generation of enhanced information technology — an evolution of services.
Data Exchange 2.0
John Eastly Vice President, Policy Works Inc.
In recent months, brokers have not been shy about putting their tech cards on the table. Whether it is the Insurance Brokers Association of Canada (IBAC)’s ideal electronic workflow initiative, or the work done by Ontario Real Time Brokers in Transition (ORBiT), the message is clear: “All transactions must start and end in the broker’s systems.” We couldn’t agree more. However, the path ahead is not necessarily that simple or straightforward. Insurance companies have invested significantly in their Web portals and these will not go quietly into the night. And let’s face it: some commercial brokers receive benefits and workflow efficiencies through portals. For a small brokerage with a limited book of commercial business — a brokerage that simply cannot justify adopting a full-on commercial management system (CMS) like Policy Works or comXP — portals provide a cost-effective alternative. But for
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serious commercial-lines brokers who have invested in automation, portals complicate the workflow and introduce duplicate data entry.
THE END OF ‘BRIDGING’ SOLUTIONS So should the industry get rid of company portals? No.The trick is to ensure we don’t throw the baby out with the bathwater. Let’s make portals part of the solution, instead of the only solution. Today, data-exchange integrations between broker systems and company portals are bridging solutions.These integrations reduce the friction of dealing with those company portals by automatically filling them with data from the broker’s CMS. The broker merely needs to complete the missing fields and hit ‘submit.’These bridging solutions eliminate duplicate data entry, reduce the corresponding problem of re-keying errors and streamline account and password management. But bridging solutions are not ideal. First, although a bridge fills in as much data on the Web portal as possible, the user must still find and fill in any missing data fields. That entails hunting through the portal’s online application form, trying to pick out the missing information from the fields that are filled in. In addition, the variations between insurer portals, such as different sign-on procedures and unique workflow processes, in-
Illustration by Sandy Nichols/www.threeinabox.com
Next-generation versions of data exchange promise to support all forms of insurerbroker communication and workflows.
Introducing Contractor Connection in Canada SM
Contractor ConnectionSM is Crawford’s managed repair network, providing the industry with a quick, efficient and customizable performance-managed system. Premier customer service delivery is Contractor Connection’s top priority. We offer reliable and credentialed contractors operating on a five-point quality assurance program and an estimate review process which provides cost efficiencies and the best value to our clients. Contractor Connection will provide enhanced customer satisfaction, indemnity management and time-in-process, as all facets of the repair are tracked and managed in real-time in our state-of-the-art management system. Email us at ContractorConnection@crawco.ca for more information. www.contractorconnection.com
Contractor Connection is part of the Crawford System of Claims SolutionsSM
Crawford & Company (Canada) Inc. is an equal opportunity employer
crease complexity and require brokers to train staff on multiple systems. Further, some portals won’t accept all of a broker’s business, forcing users to choose different workflows depending on the business at hand. And Web portals will never fit the needs of users who prefer traditional workflows like email, faxing or call centres. All of these limitations add up to friction in the broker-company distribution channel. The important thing to recognize about these bridging solutions is that they represent the first generation of Web solutions. We like to refer to them as Data Exchange 1.0. Bridging solutions are far from perfect, but they are the foundation on which we can build an even better future.That future is something we’re calling Data Exchange 2.0. Data Exchange 2.0 is about improving the communication between people.The goal is to foster the relationship between the broker and the underwriter, using technology to assist them in their preferred workflows. Brokers can choose from multiple workflows — email, fax, call centre, Web portal, or straight through — depending on their needs and preferences. And technology will support them by providing information in the richest possible formats. It sounds like a much better platform, but what does it mean specifically?
RICH DATA Let’s start with how information gets represented. One goal of Data Exchange 2.0 is always to provide the richest data possible. For the computers that are involved in the workflow, CSIO XML is the common language. It enables one computer to understand what another computer sends. But when people need to get involved, XML is not a friendly format. So Data Exchange 2.0 provides human-friendly formats too. PDF documents are the obvious choice, because of their ubiquity. If an underwriter and a broker both have a copy of the same PDF submission, they can use it to improve their communication.The underwriter, for instance, can say to the broker, “what is the meaning of the note on page 3 of your submission?” and the
18 Canadian Underwriter February 2010
broker can see the same document. In cases like this, the PDF literally lets them be on the same page. But rich data is not just PDFs. It can be any supplementary information that will help brokers and underwriters communicate. So, if there is scheduled information in Excel spreadsheets, inspection reports or even photos, these will be shared. Through rich data formats, we will be able to send and share all the information that both people and computers need.
Another goal of Data Exchange 2.0 is supporting multiple, flexible workflows. Brokers choose different workflows depending on many conditions: the kind of business, the urgency of the task, their personal preferences, and more. Technology will support people as they go about their work, regardless of which workflow they choose. And in each case, Data Exchange 2.0 will provide the richest data possible. Let’s look at some of the possible workflows, starting with the richest, most flexible ones that Data Exchange 2.0 can enable. The ideal is no-touch, straight-through processing, in which a broker prepares a submission in a CMS like Policy Works and uploads it straight to an insurance company’s Web services. Note that the broker does not send it through a portal, but rather directly to the insurer’s back-end system. If the insurer’s system can rate the submission automatically, it sends back a quotation to the broker in real time. If the insurer’s system requires additional information, it can use AskBack technology to send questions back to the broker’s CMS, so the broker can answer these questions in their own system. Again, this communication exchange does not require the broker to go outside their CMS.
For business that cannot be rated automatically, a Data Exchange 2.0 system would have the flexibility to refer the submission to an underwriter. In this case, the submission has still gone straight thru, but it’s no longer real time. Here’s where the people get involved. The underwriter needs to review the submission before quoting. With rich data, the underwriter gets a PDF copy to review, and the insurer’s system gets XML so there’s no time wasted on data entry. If required, the underwriter talks to the broker and resolves any questions before completing the quotation. Then the broker downloads the rich-data quotation—PDF and XML—into their system. Other workflows will also benefit from incorporating rich data. For example, let’s say a broker prefers to email submissions to their underwriter. In this case, the PDF is the focus of the communication. But to avoid errors and reduce turnaround time, we want to eliminate duplicate data entry at the insurer’s end. So a rich-data submission incorporates XML into the email, so the insurer’s systems can populate it right into their underwriting tools. Again, when the quote is ready, the broker can download it directly into their system. What about traditional kinds of submissions, whether through fax, paper or call centres? Some brokers may want to use these methods for certain types of business. Again, Data Exchange 2.0 supports whatever workflow the broker chooses with the richest possible data. In these cases, the broker has not yet entered anything into their CMS, so there’s no data to exchange in the first place. Fine. Data entry will begin at the insurer’s end, as it does today for these workflows. But the broker can pull this information back into their own system—without having to enter or re-enter data.
DATA EXCHANGE 2.0 Much like the Web moved from version 1.0 to 2.0 in its evolution, data exchange in the insurance industry is poised for its own transformation. Data Exchange 1.0 was all about getting computers to communicate. Data Exchange 2.0 is all about helping humans to work better together.
TEIG® Connex Suite™ is a family of technology solutions that simplify your workflow so you can focus on what matters most: your customers and delivering excellent service. The powerful solutions currently include:
Enhancements to existing TEIG technology
Real time billing, policy and claims inquiries
Secure document submission solutions
The Economical Insurance Group® (TEIG) develops products for TEIG Connex Suite that are simple and intuitive. • Get information faster • Exchange information easier • Spend time in your Broker Management System
www.economicalinsurance.com
To learn more about the TEIG Connex Suite, contact your Broker Interface Coordinator.
The Undertaking: Streamlining Part XIII reporting Provincial regulators have issued an undertaking to harmonize their regulatory approaches with OSFI in relation to Part XIII amendments. Robert McDowell Financial Institutions and Services Group, Fasken Martineau DuMoulin LLP
Marvin Mikhail Fasken Martineau DuMoulin LLP
The Canadian Council of Insurance Regulators (CCIR) sent a Consent and Undertaking to all foreign insurers licensed under the Insurance Companies Act (Canada) (ICA) on Dec. 1, 2009. The stated purpose of the voluntary undertaking was to harmonize the reporting basis for provincial and federal insurance regulators and to avoid the need for the provinces to create their own vesting assets in trust regimes.While a revised version of the undertaking issued on Jan. 19, 2010 makes the language clearer, the general effect is significant and remains the same. Where a foreign insurer is engaging in insurance business in a province under provincial insurance legislation, that foreign insurer must also ensure that it is “insuring in Canada risks” under the advisory so that assets are required to be vested in trust in Canada under the ICA.
20 Canadian Underwriter February 2010
BACKGROUND Amendments to Part XIII and the related OSFI Advisory 2007-01R1—Insurance in Canada of Risks came into force on Jan. 1, 2010. Part XIII will now regulate foreign insurers on the basis of where they conduct insurance activities regardless of where the risk is located. Over the past year, foreign insurers have prepared for the coming into force of Part XIII by conducting due diligence on their current lines of business to identify which ones were “insured in Canada,” filing quarterly progress reports to OSFI on the status of their work and generally trying to grasp all of the implications that Part XIII will have on their businesses going forward. Since the issuance of the first draft of the advisory in 2007, a lingering question was how the provinces would deal with the changes to Part XIII, and whether they would align themselves to the changes. Simply stated, the issue is this: although there is only one solvency regime for federal insurers, including vesting of assets (which is administered by OSFI), each province has its own distinct tests under its provincial insurance legislation for what constitutes the carrying on of insurance business in the province.The provincial tests are different from one province to the other;
also, they are different than the test set out in the OSFI advisory. Consequently, a foreign insurer could be “out of Canada” for the purpose of the advisory but “in Canada” for the purpose of provincial legislation. One potential implication is that the insurer engaging in insurance business in a province might not be required to vest assets in Canada with respect to that business if the business is not “insurance in Canada of risks” in accordance with the advisory. Also, the reporting basis under federal and provincial laws could potentially be different depending on the test that is used. This could lead to administrative burdens for foreign insurers. In OSFI’s Qs & As on the implementation of Part XIII issued in December 2008 (and revised in December 2009), OSFI stated it “is working with the provinces and territories to exchange ideas on how to address potential implications of the amendments on the regulatory framework for insurance in Canada.” However, until the issuance of the undertaking, there was no clear understanding about what was being done specifically to address potential implications of Part XIII in relation to provincial regulation.
THE CONSENT AND UNDERTAKING Three documents were initially sent to foreign insurers on Dec. 1, 2009. These documents were also posted on the CCIR Web site: (i) a covering letter from the CCIR; (ii) a notice from provincial regulators; and (iii) the undertaking.
The covering letter The CCIR’s letter explained that the CCIR had agreed to coordinate the distribution and receipt of the enclosed undertaking. The letter also alerted foreign insurers that the involved Canadian provincial insurance regulators appreciated their swift compliance with the request. The notice from provincial regulators The notice was by the Superintendents of Insurance of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon Territory, the Northwest Territories and Territory of Nunavut. Absent from this list are the Superintendents of Insurance of British Columbia and Quebec. The notice stated the following: “In an effort to mitigate the confusion that might result from foreign insurers
dealing with each regulator separately, the provincial regulators listed above have drafted a common undertaking. A foreign insurer signing this undertaking will be agreeing to conduct its activities in accordance with the terms of the undertaking. […] The provincial regulators, through this letter, are asking all foreign insurers authorized to insure in Canada risks under Part XIII to sign and return the enclosed undertaking.The undertaking represents the agreement by the foreign insurer to be bound by its provisions, and in all jurisdictions, other than Ontario, consent to have them added as conditions on their licence. The notice also stated the purpose of the undertaking: “The conditions listed in the undertaking have the effect of harmonizing the reporting basis for the provincial and the federal insurance regulators. Putting these licensing conditions in place will avoid the need for a foreign insurer to make arrangements for prudential (solvency) regulation individually with each province that is a party to the undertaking. This will also reduce the additional regulatory costs that foreign insurers were facing from the coming into force of the revisions to Part XIII by removing
THE UNDERTAKING [Editor’s Note: The entire Section 1. A. below was removed from the undertaking as a result of revisions made on Jan. 19, 2010. These revisions were circulated on the Web site of the Canadian Council of Insurance Regulators in early February 2010.] 1. A. In respect of all insurance coverage resulting from any activity or activities that cause the insurer to either carry on business under any province’s insurance legislation or transact insurance in any province, the insurer shall maintain an office, or have a representative located, in Canada, from or through which, the insurer shall: (a) communicate to the policyholder, (i) the offer to provide the insurance coverage; or (ii) the acceptance of the request for the insurance coverage; and (b) receive payment from the policyholder for the insurance coverage; and, B. all risks insured by the insurer as a result of any activity or activities that cause the insurer to either carry on business under any province’s insurance legislation or transact insurance in any province, shall be insured by the insurer only in a manner that requires the insurer to vest assets in trust in respect of those risks, pursuant to the act. 2. The insurer agrees to the above being added as conditions on its insurance licence issued by each province, other than Ontario. 3. For the purposes of Ontario, the insurer hereby acknowledges and agrees that the above are undertakings within the meaning of paragraphs 447(2)(c) and 448(1)(b) of the Insurance Act (Ontario).
February 2010 Canadian Underwriter
21
the need for additional pages on the quarterly and annual financial statements (P&C2 and Life2), except in Quebec.” The notice confirmed that the undertaking was being requested on a voluntary basis and was not disciplinary in nature. Finally, the notice requested that the undertaking be completed and returned by Dec. 21, 2009 — a tight deadline given that foreign insurers received the undertaking in early December 2009.
The undertaking The foreign insurer was asked to undertake and agree to the provisions contained in the undertaking. (Please see sidebar on Page 21.)
THE IMPLICATIONS The intention behind the undertaking was to avoid the need for the provinces to create their own vesting assets in trust regimes. Since a foreign insurer could be engaging in insurance business in a province while not “insuring in Canada a risk” under the advisory, it could be that, based on the advisory only, assets would not be required to be vested in trust in Canada in respect of the insurance coverage/risks that result from the insurer’s business in a province. To protect policyholders in the province, the provincial regulators felt that they would have had to create their own vesting assets in trust regimes. A simpler alternative would be to require that insurers carry on their business in such a way that they are caught by the advisory and thus would have to vest assets under the ICA. The CCIR and various provinces — except for British Columbia and Quebec — chose the latter approach, which was to be reflected in the undertaking. Unfortunately, the wording in the undertaking was overly restrictive, given its purpose. It had certain unnecessary implications: notably, the undertaking required certain specific activities be conducted in Canada (i.e., the maintaining of an office in Canada, from which the foreign insurer communicates to the policyholder and receives premiums).
22 Canadian Underwriter February 2010
This was not necessary to achieve the stated objective of the undertaking. The CCIR circulated a revised version of the undertaking on Jan. 19, 2010. The revised version of the undertaking removes Section 1.A of the undertaking and leaves only Section 1.B. According to the CCIR, these changes were made to provide foreign insurers with greater flexibility in respect of their Canadian business models. While the changes to
The CCIR revised its voluntary undertaking in January 2009 to provide foreign insurers greater flexibility in respect of their Canadian business models. the undertaking have brought greater clarity and have removed unnecessary requirements (i.e. maintaining an office or representative in Canada, etc.), the general effect is still the same: where a foreign insurer is engaging in insurance business in a province under provincial insurance legislation, that foreign insurer must also ensure that it is “insuring in Canada risks” under the advisory so that assets are required to be vested in Canada under the ICA. This is very significant. Essentially, the undertaking requires a foreign insurer that is not caught by the advisory to carry on activities so that it is caught. In other words, not only must it vest assets in trust for the business in a given province or provinces, it must do so for all of its business in all provinces/Canada.
BRITISH COLUMBIA AND QUEBEC British Columbia has amended its legislation and the effect will be the same as the undertaking. But the B.C. legislation goes one step further, as described below.The Extraprovincial Insurance Corporation (Canada) Business Authorization Condition Regulation (British Columbia) was made effective Jan. 1, 2010. The B.C. regulation provides the following: “1. It is a condition of every business
authorization issued to an extraprovincial insurance corporation (a) whose primary jurisdiction is Canada; and (b) that is the subject of an order of the superintendent under section 574(1) of the Insurance Companies Act (Canada) approving the insuring in Canada of risks by the extraprovincial insurance corporation that the extraprovincial insurance corporation’s insurance business in British Columbia is carried on as insuring in Canada a risk within the meaning of and in accordance with Part XIII of the Insurance Companies Act (Canada).” Consequently, if a foreign insurer is carrying on insurance business in British Columbia, that foreign insurer needs to be “insuring in Canada risks” under Part XIII. In addition to the activities-based test that already exists under B.C. legislation to determine whether an insurer is engaging in insurance business in B.C., certain amendments to the B.C. insurance legislation have also come into force on Jan. 1, 2010. They provide that if the risk or peril is in B.C., then an activity referred to in paragraph (a) of the definition of “insurance business” in that legislation (namely, the undertaking or offering to undertake to indemnify against loss in respect of a risk or peril), whether or not the activity is in B.C., is deemed to be carrying on insurance business in B.C. As such, where the risk is located in B.C. and the foreign insurer is undertaking to indemnify against loss in respect of that risk, the foreign insurer would also be caught and have to be “insuring in Canada risks” under Part XIII. Proposed amendments to the Quebec Insurance Act provide that Quebec itself may require vested assets in trust for insurers carrying on the business of insurance in Quebec but incorporated outside Quebec. Currently, this regime only applies to Quebec-incorporated insurers and the intention would be to broaden it to extra-provincial insurers. As of press time, it would appear that guidelines will be issued in the near future related to this issue — including what kind of assets may be vested in trust.
How red-yellow-green LED technology is helping to change driving behaviours and develop safer drivers.
Dan Steere CEO, GreenRoad
Ofer Raz was nearly run off of the road by a careless driver in 2003. The frightening experience inspired Raz to think critically about driving and the risky maneuvers that lead to crashes. Could the other driver’s recklessness have been prevented? Could technology be used to help drivers identify and curb their risky behaviors behind the wheel? These and similar questions kept running through Raz’s mind in the days and weeks that followed. Further study revealed to him that, although billions of dollars were being invested in building safer roads and vehicles, virtually nothing was being done to address driving behavior or to model how specific maneuvers correlate to the risk of crashes. At the time, Raz was director of product development for a real-time data mining company. He partnered with Hod Fleishman, whom he knew from product design school.Together, along with the help of several researchers, the two men de-
24 Canadian Underwriter February 2010
veloped new technology intended to improve driving behavior. Raz and Fleishman had to rely on their instincts, since research on this type of technology did not yet exist.They decided to develop a nonintrusive, in-vehicle light system that would provide drivers with real-time feedback on their performance so that drivers could identify and improve their behaviors immediately.This immediate feedback would also allow drivers to make the crucial connection between their actions and the consequences of those actions. Raz and Fleishman believed lights, rather than audio cues, would provide a “soft” reminder to drivers that they were demonstrating risky behaviors. They reasoned that lights would be unobtrusive, and thus they would not be potentially alarming or distracting to drivers.
CHANGING BEHAVIOURS Raz and Fleishman knew from existing research into the best ways to manage behavioral change — any type of behaviours, not just those exhibited behind the wheel — that providing even minimal feedback immediately is far more effective at changing behavior than providing sophisticated feedback after a delay. Consequently, Raz
Illustration by Sandy Nichols/www.threeinabox.com
Illuminating Driver Safety
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and Fleishman decided against using invehicle cameras: these devices would not provide the real-time feedback they sought, and drivers would perceive them as too intrusive, they concluded. Also, they believed such cameras would be cost-prohibitive. Money would be required to pay for streaming video from the vehicle to a central location, and also to pay the personnel needed to review, score and otherwise quantify the footage. At the end of the day, Raz and Fleishman wanted the new technology to be simple, affordable and effective. They did not want drivers to view the technology as something monitoring or spying on them in their vehicles, something to be used solely for punitive measures. Rather, they wanted technology that drivers would view as a tool to help them improve their driving. They wanted to empower drivers to improve their driving behavior for increased safety and driving efficiency. “We wanted to provide feedback to the driver, not collect ‘incriminating evidence’ about the errors they made while driving,” Fleishman says. “We believe most drivers don’t intend to drive aggressively.They may be distracted or angry or in a rush, but often a simple reminder is all they need in order to begin driving safely again.” As a result of their research, Raz and Fleishman created a preventive, red-yellow-green light display used by more than 80 vehicle fleets worldwide. They also developed algorithms to associate risk with vehicle movement.These same algorithms can be used to model how specific maneuvers contribute to the risk of crashes. Combined with in-vehicle sensors that measure up to 120 different risky driving maneuvers, Raz and Fleishman found they could identify and analyze those maneuvers that most affect safe and fuel-efficient driving — and deliver driver-specific feedback accordingly. Raz and Fleishman named their new company and its flagship technology-based service DriveDiagnostics — a name that would later be changed to GreenRoad. Raz and Fleishman conducted extensive internal and third-party validation
26 Canadian Underwriter February 2010
testing for both commercial and consumer use between 2004 and 2006. By the end of this testing, the service had been used in more than 1 million driver trips. The multi-billion-dollar commercial fleet industry recognized its potential not only to cut crash numbers and costs, but also to lower fuel costs because safer driving equates to more efficient driving. Insurance trials began.
GREENROAD 360 In 2007, GreenRoad launched a service that would later become known as GreenRoad 360.The service is intended to help commercial fleets, insurers and consumers measure, improve and sustain safe and fuel-efficient driving behavior. Real-time in-vehicle feedback is delivered via a simple, non-distracting
GreenRoad’s service is able to capture complex maneuvers such as accelerating into a turn while crossing over a lane. red-yellow-green LED display that enables drivers to identify and self-correct risky and inefficient driving maneuvers in the moment. Fleet management and risk-and-safety professionals gain complete visibility into driving behavior; they now have easy-to-use tools to help drivers achieve specific safety and fuelefficiency goals. Designed to be easy to implement and use, GreenRoad’s service is nevertheless highly advanced. It is able, for example, to capture complex maneuvers such as accelerating into a turn while crossing over a lane. Other solutions only register one-dimensional violations such as crossing into another lane.That is a critical oversight, because risky maneuvers
are often the result of more than one behavior. GreenRoad’s service is the first in the industry to provide total visibility into driving behavior, combining realtime, automated driver coaching with a Web-based application that continuously analyzes and rates individual driver and fleet-wide driving behavior. GreenRoad enables fleet management, risk and safety professionals and drivers to measure what is happening every minute of every driving hour. It provides details of all of the risky events that happen during any given driving trip — not just those caught on camera or witnessed by a supervisor on a ride-along. More than 80 fleets are currently using GreenRoad’s service, representing industries ranging from trucking, public transit and telecommunications to service delivery and public safety. Customers include Ryder, which has deployed the service in more than 50 depots, and the United Kingdom’s ministry of defence, which will use the GreenRoad service in more than 4,500 vehicles for the next three years. In addition, FirstGroup, the world’s largest bus company, signed a five-year contract to deploy GreenRoad’s service across its fleet of 9,000 buses in the United Kingdom, with the launch of its DriveGreen program in August 2009. Fleets using GreenRoad’s service have reported reducing crashes by up to 50% and cutting fuel usage by up to 10%. Due to the service’s aid in helping to identify and manage risk, GreenRoad has formed several strategic alliances with some of the world’s insurance industry leaders in brokerage and underwriting. GreenRoad anticipates announcing insurance partnerships in Canada in the coming months. Raz and Fleishman remain actively involved in GreenRoad today. They still share a passion for helping drivers become safer and more efficient behind the wheel. Raz serves as the chief technology officer. Fleishman is the company’s chief of safety, and leads partnership development in addition to serving on the board of directors.Together, they have created a technology-based service that responds to the global challenge of unsafe and inefficient driving.
The insurance industry’s only fully integrated Management Solution.
Sue McKay, Programmed Insurance Brokers Inc. Elmira, ON
Jeff Hart, Can-Sure Underwriting Ltd. Vancouver, BC
“We have gained efficiencies in both our Commercial and Personal lines divisions by having the Underwriter’s Workstation and Intelliquote integrated with the Broker Management System. The capabilities of the system have allowed us to adopt a paperless work environment.”
“The Underwriter’s Workstation has allowed us to functionally shift our organization to focus on our clients. It has streamlined our administrative functions and processes and dramatically improved the efficiencies of our system.”
Providing IT Solutions for Brokers, MGAs and Insurance Companies.
cssionline.com 1-877-281-6944
Quoting on
Risk New technology that converts spreadsheets into Web-based, real-time applications can aid a risk manager in checking quotes for accuracy. Ugur Kadakal, CEO Pagos Inc.
Managing financial risk has always been important, but it’s taken on increased significance during the recent economic recession. One major challenge is to manage the insurance quoting process.This is of particular concern for intermediaries responsible for pricing, product development and overall profitability of creditor insurance and reinsurance lines of business. Ensuring the accuracy of insurance quotes is a challenge faced on a daily basis. To this end, a unique conversion of an innovative Excel spreadsheet into a Web-based application became a means for one intermediary to assess the accuracy of the large volume of quotes that reinsurance intermediaries process every day.
CASE STUDY: RMA Reinsurance Management Associates (RMA) is a Toronto-based reinsurance intermediary and third party administration (TPA) firm. It specializes in managing portfolios of creditor insurance policies for some of the largest insurers in Canada. RMA serves clients in underwriting and administering insurance, reinsurance and retrocession business for a broad spectrum of life, accident and health risks. For their creditor
28 Canadian Underwriter February 2010
clients, RMA manages the entire business, providing a complete outsource infrastructure for administrative processing. Many of RMA’s clients, like car dealers and mortgage brokers, use industry-specific software packages to help them run the business; many of these include a quote module. Others have developed their own software tools for quotes, loan origination and so on. In light of the proliferation of quote-generation tools used by its clients, RMA looked for some way to know whether or not its clients were using the most up-to-date rates and eligibility criteria. In the absence of such a tool, an RMA team verified all of the quotes themselves internally — a tedious and time consuming process.
SPREADSHEET APPROACH Ed Yeung is RMA’s director of creditor products. He first came up with the idea of using Excel spreadsheets to develop quoting tools that his team used for creditor insurance premium quotes and quote verification. He incorporated filters, calculations and algorithms to ensure quotes were always accurate, complete and calculated using the most current applicable rates.The team quickly came to rely heavily on the spreadsheet tools. Since the spreadsheet tool was developed by and for people who process volumes of client insurance premium quotes every day, the tool also addressed a variety of common issues specific to RMA’s client base. One mortgage broker client that didn’t have industry software asked if he could get a copy of the tool for his company’s
Insurance Institute Ontario - CIP Society is pleased to present
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SYMPOSIUM The New Normal: Understanding and Conquering an Uncertain Future The CIP Society of Ontario is proud to present the sixth annual insurance industry symposium. This year’s one-day forum, The New Normal: Understanding and Conquering an Uncertain Future, will feature dynamic keynote and seminar speakers. These industry leaders will provide invaluable insights and vision needed for those in the insurance industry to navigate the ever-changing metrics of today’s economy. Participants can design their own personalized program from a variety of interactive, cutting edge seminars from companies such as Aviva Canada, Felix Group, JD Powers and Associates, Omega Insurance Holdings Inc. and RBC Insurance.
SPEAKERS
Robert Fellows
Gerry Visca
Patricia Lovett-Reid
Senior Vice President, Zurich Canada
Creativity, Innovation & Branding Guru
Senior Vice President, TD Waterhouse
Prior to his appointment in 2009 as Senior Vice President of Distribution, Marketing and Communications for Zurich Canada, Mr. Fellows was President and Chief Agent for St. Paul Fire & Marine. He also held leadership positions within Royal & Sun Alliance, Allendale Insurance and Arkwright Insurance. His 30 years of experience in the Canadian insurance industry and strong relationships with the Canadian broker community make him a much sought after expert in the P & C Industry. Robert holds an MBA from the University of Toronto and an FCIP designation.
Gerry is known to many as 'Canada's Inspirational Coach'. He is an international personal and corporate branding expert and one of the most diversiďŹ ed Creative Directors. Uniquely educated in design and architecture, he applies his creative skills, inspiration and insights to help people and businesses ignite creativity and innovation. Gerry has directed thousands of branding campaigns and creatively inspired close to 100,000 people world wide. He is a passionate entrepreneur, inspirational speaker, author of 3 books and a co-host on an upcoming television series.
Patricia Lovett-Reid, CFP, Senior Vice President of TD Waterhouse Canada Inc., is one of Canada’s leading and respected authorities on personal ďŹ nance. She is a regular market commentator for Business News Network, Canada AM, CTV NEWSNET and CP24. Patricia is also the host of MoneyTalk, a national prime-time television program on personal ďŹ nance, on the Business News Network.
Breakfast Keynote Speaker
Luncheon Keynote Speaker
Reception Keynote Speaker
Patricia holds the designation of CertiďŹ ed Financial Planner and a Honourary Fellow of the Canadian Securities Institute.
Thursday, May 13, 2010 (Registration begins at 7:30 a.m.) Toronto Board of Trade, First Canadian Place, 4th Floor, Toronto ACCREDITATION: RIBO: Management & Technical hours will depend upon seminars chosen. REGISTRATION: Due to a limited seating capacity, we ask that you please register by our early bird deadline, March 31, 2010. 5P SFHJTUFS DPOUBDU 5SBDFZ )VHHJOT BU F HUBFWFOUT!JOTVSBODFJOTUJUVUF DB t G t X XXX JOTVSBODFJOTUJUVUF DB
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internal use.Yeung made a few modifications to transform the spreadsheet into a tool that could be used in the field, and then sent the broker the revised spreadsheets. Word of the quoting tool spread throughout RMA’s client base. Before long, many RMA clients had requested copies of the spreadsheets. RMA set up a facility that allowed clients to download the spreadsheets. Quite a few clients took advantage of the free download and were using the spreadsheets. At first, this was great for RMA because it standardized and improved the quality and accuracy of a significant percentage of the quotes coming in for processing. But it wasn’t long before the downside became apparent: every time RMA updated a spreadsheet, or whenever rates or eligibility criteria changed, RMA had to post the updated version online and notify all of the clients using the tool to download the new version. The responsibility to maintain and provide updated downloadable versions, as well as to notify clients, frequently put an added burden on the RMA team. More problematically, though, RMA didn’t have the ability to control outside use. They had no way to guarantee clients using the spreadsheets downloaded each new update, or that everyone was using the most current version. In fact, they found that people often weren’t downloading the changes in a timely manner — indeed, if at all. RMA’s data entry staff and customer service group now spent extra time following up in the field. They looked for the source of inaccuracies, fixed incorrect and outdated rates and sorted out problems caused by missing or incorrect eligibility filters and controls. Dealing with the situation was a growing nuisance. It was tedious, time-consuming and error prone. The team was back to the same problem it had been trying to solve in the first place.
into fully functional, professional looking, interactive Web-based applications that did not require any programming. After a 30-minute training walkthrough over the phone, the RMA team downloaded and started using the product, SpreadsheetWEB. Within a matter of hours, they had successfully converted several spreadsheets and posted them online as Web applications on their own, with no help from IT. Using this tool, RMA can now quickly and easily post as many spreadsheetbased applications online as they choose. RMA clients simply go online to use the Web applications that replicate all of the functionality of the Excel spreadsheet tools.
FROM SPREADSHEET TO WEB APPLICATION
FLEXIBILITY AND CONTROL
While visiting vendor booths at an actuarial conference, Yeung discovered a product that converts Excel spreadsheets
30 Canadian Underwriter February 2010
As a result of the new technology, RMA doesn’t have to notify clients every time it posts a spreadsheet online, and it doesn’t need to be concerned about clients using an obsolete version. Thus far, the spreadsheet tool has been able to handle all of RMA’s quote generation and verification requirements. It supports more than 330 of Excel’s built-in formulas, so the RMA team can integrate complex, compound calculations and business rules into their Web applications. SpreadsheetWEB also uses Excel’s data input validation function, so that valid data is entered into SpreadsheetWEBgenerated applications. The RMA team specifies in Excel whether a particular cell requires entry of whole numbers, decimals, dates, times, etc., and sets data acceptance criteria where appropriate (i.e. such as numerical ranges between a low and high value). These validations are automatically implemented in the online data entry function of the Web applications.
The new spreadsheet tool is designed with flexibility and control in mind. Now when RMA staff members create a new spreadsheet, make a change or
update a rate table, the new version is available to clients as soon as the application is posted on the Web — and this is the only version that users can access. As a result, RMA doesn’t have to notify clients, or have any concern that someone might be using an obsolete version. RMA can control who uses the Web applications, and which users can access which functions. Using the Web applications, RMA can manage user IDs and passwords to grant, change and revoke access privileges for individuals and groups of users as needed. For example, car dealers can access only tools designed for them. Bank A may use different tools than Bank B.An employee might be allowed to view and modify only those quotes that he originated, whereas a manager would be able to update any of her department’s entries. RMA can also set defaults so that, for example, someone based in Quebec may be able to see only those customers or addresses in Quebec. None of this was possible using the downloaded spreadsheets.
COST SAVINGS RMA makes its spreadsheet Web applications available to clients free of charge. Its basis for doing so is that, in a competitive market, offering such a service is a clear differentiator that helps attract and retain clients. But without the new solution in place, providing these valuable online applications would have been prohibitively expensive. Without this technology, RMA would have needed to hire programmers and Web experts to design, develop, maintain and update the applications. Now, however, the RMA team can focus on their core competencies – building spreadsheet functionality in Excel. The new spreadsheet solution also saves RMA money in day-to-day operations.The intermediary can now process higher volumes more quickly and efficiently. It no longer has to invest staff resources in tedious and time-consuming data checking, rate and eligibility validation to ensure the accuracy of quotes. Faster, more efficient and more accurate quote processing is helping RMA save money and manage risk.
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Mind the Gap Insurance to value (ITV) data problems are now widely known in the insurance industry, EXW QHZ WHFKQRORJ\ VHUYLFHV ZDQW WR ÀOO WKH void left by undervaluation. The goal of these “data validation” tools is to shrink the gap between valuations and premiums, by giving brokers easily accessible information at the point of sale and comparing building calculations to actual losses. Many brokers are on board, but the bigger question may be: are insurance companies interested? BY CRAIG HARRIS
32 Canadian Underwriter February 2010
$11
billion is a big number. That is the latest estimate of the amount Canadian homes and commercial properties are undervalued. It provides a tangible measure of just how far off much of the inforce property business currently sitting on insurance companies’ books truly is. SCM Risk Management Services suggests that 70% of existing policies are underinsured by 33%, resulting in the above-cited shortfall in a variety of potential total loss scenarios. These include a major earthquake, fire outbreak, severe windstorm or — perhaps most importantly, given recent industry claims experience — a water-damage event. Given that Guaranteed Replacement Cost (GRC) prevails in most property insurance policies in Canada, the insurance industry is on the hook for the aforementioned funding gap. Insurers and brokers agree the underinsurance problem can easily range from 30 to 40%, which is an equally big number when it comes to accuracy. (Imagine if your employer “underestimated” your salary by 30% or if you were selling your home and a realtor undervalued its list price by 40%). “We have a significant gap in ITV, no question,” says Catherine Coulson, vice president of personal insurance for The Economical Insurance Group. “I think industry-wide it is easily in the 30% range, and in specific regions, such as parts of Western Canada, it could be much higher.”
February 2010 Canadian Underwriter
33
COVER STORY
Mind the Gap An exact number is difficult to determine, since many different technology tools are spitting out various different numbers. “Right now you are getting brokers using one calculator, a company using another and an inspection firm using another,” notes Rick Orr, first vice president for the Insurance Brokers Association of Ontario (IBAO) and a principal with Orr Insurance Brokers in Stratford, Ontario. “Even though they are all gathering the same data sets, the results can be way off. And 30-40% is not acceptable.” The significant data gap raises two key questions. First, how did the ITV calculations become so skewed from actual reconstruction costs in the first place? And second, what can be done to shrink the percentage down to a much more accurate number? Many cite a range of 10% or under as a much more acceptable variation in ITV accuracy calculations. ITV Calculation ITV calculation problems are not a new issue for the industry. Broker associations, including the IBAO and Insurance Brokers Association of British Columbia (IBABC), have publicly questioned the validity and regional variance of some
ITV calculator programs, including the program offered by MSB, a major player in the field of building inspection. Other ITV vendors in Canada have either launched new versions (e2Value in fall 2009) or issued a short-form calculator (PowerSoft in October 2009) to streamline broker collection of accurate property valuation data. 34 Canadian Underwriter February 2010
However, even with these changes, many sources argue that the two most prominent issues in building calculation accuracy today are: poor data quality (or missing data) at the point of sale; and inability to compare in-force property ITV calculations to actual industry loss data. The first issue highlights the old saw in technology: garbage in, garbage out. “What contributes to the ITV discrep-
Insurers and brokers agree the underinsurance problem can easily range from 30% to 40%, which is a big number when it comes to accuracy. (Imagine if your employer “underestimated” your salary by 30% or if you were selling your home and a realtor undervalued its list price by 40%.)
ancy is often the inadequacy of data,” says Brenda Rose, a vice president with brokerage Firstbrook Cassie and Anderson. “Sometimes we have to use bits of information to calculate the estimated values. The numbers you plug into the calculator have to be right. When I have a question mark on an indicator, how do we know that any of this is credible or accurate?” The second factor points to the glaring absence of any official, industrywide loss data registry. “If insurers were willing to share loss data, which would obviously be anonymous, it would be a very useful exercise to everyone’s benefit,” notes Rose. “There are all kinds of
reasons why some companies have not shared data. The fact is we have not gotten there yet as an industry.” New ITV Technology Several new tools, notably SCM Risk Management Services’ iClarify and iv3 Solutions, have come forward to address at least some of these ITV shortcomings. However, the companies behind these services stress they are not competing with the three main existing ITV software vendors in the Canadian market. Instead, these tools are known as “data
validation” services designed to improve the quality of information at the front and back-end of the property insurance valuation process. “When people first heard about iClarify, many thought we were trying to launch another ITV software calculator,” says Greg McCutcheon, president of SCM Risk Management Services. “That is not the case at all. We have a data validation engine that can be used on the front end to help brokers get accurate information or on the back end for companies to verify existing ITV calculations based on real, aggregated industry data.” SCM Risk Management Services, part of the SCM Group of adjusting and loss inspection services, has access to 3-million home inspection files, as well as a database of 18,000 total loss files and 65,000 partial loss files. In addition, it offers street-level visual data (purchased from ILOOKABOUT), claims history (from CGI), neigbourhood profile data and overview satellite images to brokers to validate the data they collect from consumers. According to SCM, brokers will be assigned a “confidence value” on
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COVER STORY
Mind the Gap the replacement cost value indicated for a certain property based on how much information is available. SCM has worked with Compu-Quote’s rating engine to make this information available to brokers. “It really improves the workflow, as a broker can get that data right at the point of sale,” notes McCutcheon. “Our data validation tool will populate the data for a certain neighborhood based on the information we have on the characteristics of that region and will also show pictures of a house and the street.”
For insurance companies, SCM also provides an indexing tool through which an insurer can run its existing portfolio against a database to find discrepancies in ITV calculations. “We can take a look at an insurer’s book and pinpoint areas where they are drastically underinsured,” observes McCutcheon. “We have enough information that we can apply it to show which risks are way off in terms of values. This is a tool for precision.” If insurers take a “shotgun approach” and apply inflation-guard adjustments to ITV across the board, as many have done in the past, they penalize the good clients with correct values and they subsidize the poor clients with inaccurate values, according to McCutcheon. Also, this approach ignores variations in inflation across Canada and even across regions. Moreover, it prolongs the painful but necessary process of insurers having to update their current portfolio of property business. iv3 Solutions is another technology provider targeting accurate property valuations in the property and casualty 36 Canadian Underwriter February 2010
insurance industry. Its sister company, Solidifi, has specialized in providing property valuation and data analytic services to banks and mortgage lenders for several years. But iv3 thinks there is a big opportunity to share its “unique loss control solution” with property insurers. “We are not a cost calculator provider for ITV, as this industry already has three companies [i.e. MSB, e2Value and PowerSoft] doing that,” says David Newall,
We support anything that will create a more streamlined process for brokers to validate information on some key data points. If brokers can easily and quickly verify things like square footage, and also get street mapping and photos, that is a great development. executive vice president of iv3 Solutions. “We work with insurance companies to provide them with improved access to multiple data sources that were simply not available previously.” Specifically, it offers a service called PropertyIntel Report, which gathers data sets from real estate, municipal tax and mortgage appraisals, and provides this information to insurance companies. Through a partnership with Altus Group, which provides construction cost information, iv3 is able to provide “automated intelligence” about individual properties and their surrounding neighbourhoods. “This is a very cost-effective and efficient solution for insurance companies and their sales force,” says Kevin Walton, executive vice president of corporate development for iv3 Solutions, which also provides home inspection services. “We want to use or repurpose that infor-
mation for the benefit of the insurance industry. We know this is a different industry (from mortgages), but we believe there is a lot of relevant data insurers can access from our sources.” iv3 Solutions has marketed its services to insurers over the last nine months, charging a per-property fee for its PropertyIntel Report. Newall says insurance companies are “interested,” but he declined to list specific numbers of contracts. The company is looking at bringing out new services, such as tools for regularly updating valuations on insurers’ current books of business. SCM Risk Management Services has benefited in its start-up phase from a funding relationship with IBAO, The Economical and one other unnamed insurer. “This is an issue that brokers deal with everyday in their offices,” says Orr. “So as an association, IBAO decided to dive into this and look for a solution. The amount of data in SCM’s iClarify got us very interested as an association.” Orr notes that iClarify addresses several concerns of brokers and insurers because it: s allows brokers to access data easily and do front-line underwriting; s validates the data supplied to insurance companies; and s uses actual partial and total loss data for comparison.
The first point is especially important for brokers, according to Orr. “We have been meeting with a lot of markets, trying to get them to buy into this (iClarify),” he says. “Whatever the solution, we
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COVER STORY
Mind the Gap believe the broker should be doing the ITV calculation. We are the closest to the customer. Some companies have talked about hiring third parties to do inspections and ITV calculations, but the best solution is to use the brokers.” Coulson says The Economical participated in iClarify’s startup phase mainly because it addressed broker-company workflow ITV issues. “We are interested in technology that will address tricky problems, but also technology that will help ease of use for brokers,” she notes. “This tool has the potential to do that. It can be integrated into the front-end and make the broker’s work process more efficient.” As the only ITV vendor to sign a formal agreement with SCM’s iClarify tool, PowerSoft president Chris Lang says improving broker workflow has to be the central goal of any data validation effort. “We support anything that will create a more streamlined process for brokers to validate information on some key data points,” Lang elaborates. “If brokers can easily and quickly verify things like square footage and also get street mapping and photos, that is a great development.”
The IBABC has endorsed the collaboration between PowerSoft and SCM Risk Management Services’ iClarify tool. “(This) is the kind of solution our members have been asking for,” says Chuck Byrne, executive director and chief operating officer of IBABC. “Data verification will save time, and the ability to present defensible calculations based on actual inspections and loss experience will en38 Canadian Underwriter February 2010
hance credibility. Having this ability to verify data instantly, at point of sale and in a transparent manner, will resonate well with consumers.” Fees are always a big question for technology services, and McCutcheon says SCM thought long and hard about how it would charge for using its data validation tool on the front-end. “There are thousands of quotes per month, but some companies don’t get the business.
That is why the IBC is focusing on consumer education. When you ask clients about square footage, do they know the right number or is it just something they heard from a real estate agent 10 years ago? And if they don’t know square footage, they sure are not going to know about building structure, components and so on. We understand that companies in the industry don’t want to pay for something unless they get a direct benefit from it. We have developed it so that the company that actually binds the business pays for the data verification. This fee is less than 1% of the premium.” McCutcheon says for the back-end process of data validation for insurance companies, there is a “tiered-pricing model that takes into account the number of policies and volume. We have also asked for a serious commitment from funding-partner insurance companies; in return they would get guaranteed pricing for five years.” SCM’s iClarify tool is being rolled out in February with select IBAO brokers. Western Canadian brokers will follow,
and then brokers from Quebec and Eastern Canada. “We don’t have a 100% solution,” McCutcheon says. “Our loss data is comprehensive, but we are adding data sets to it all the time. What we have is a big help at the right time.” Bob Fitzgerald is chair of the Insurance Bureau of Canada (IBC) working group on ITV and an executive vice president with Aviva Canada. In his opinion, “anything that will help us get to the right ITV number for the consumer is a good thing. Personally, I think these technology developments are great news. There are some entrepreneurial approaches to help us deal with a very complex issue.”
He cautions, however, that there are no singular solutions to the ITV problem. Fitzgerald notes the working group, formed in February 2009, is “at the end of the beginning” phase in terms of sending material for approval to the IBC board of directors. It plans to mount a public ITV awareness campaign, publish best practices procedures for insurance companies and brokers and provide guidelines for what industry groups want to see from ITV calculator providers. “We are expecting to move ahead on this in the early second quarter of 2010,” he says. McCutcheon says he supports the IBC working group. “We think this work is very important and we want to dovetail with that process,” he says. “This has to be a collaborative solution.”
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COVER STORY
Mind the Gap Industry-wide Loss Data One issue conspicuous by its absence in the discussions of the IBC ITV working group is any specific plan to either build the aforementioned industry-wide loss database or conduct closed claims file studies to verify existing building calculation values according to actual reconstruction costs. Fitzgerald says there are currently no specific plans to conduct closed claims files studies or collect industry loss data, “but that doesn’t mean there won’t be in the future.” “We have never collected it as insurance companies,” says Coulson. “It is the vendors who have collected the data; some have data warehouses but the data is proprietary to them.” This lack of verifiable industry loss data has been a bone of contention for some industry groups. “We have seen national insurers, those that insure properties coast to coast, base their ITV estimates on a mere 100 total loss files,” Orr says. “That has been the justification for arguing that their valuations are way under. By contrast, if you can’t gather and validate credible data based on (SCM Risk Management Services’ loss database), then there is a problem. We are talking about the difference between 100 and tens of thousands.” There just does not seem to be an appetite for such a loss database, says Lang. “To us, it would be logical for IBC to do it. But, like anything, it takes time and money to collect, update and manage the data. We would like to have something more consistent to run through our evaluation tool.” The fact that private companies are now moving into the market may raise some concerns about “proprietary” access to data and fee arrangements. But, McCutcheon asks, what is the alternative? “We would support any industry type of initiative to collect and share data, but I don’t think that is going to happen anytime soon,” he says. “Many larger companies simply do not want to share this data for their own reasons, and I am not sure if IBC is positioned to do so.” 40 Canadian Underwriter February 2010
If insurers were willing to share loss data, which would obviously be anonymous, it would be a very useful exercise WR HYHU\RQH·V EHQHÀW There are all kinds of reasons why some companies have not shared data. The fact is we have not gotten there yet as an industry.
Some argue the issue of consumer education must be front-and-centre in any industry ITV project. “I think the most prominent variable in the data collection issue is pretty simple,” says Coulson. “Most homeowners don’t know all the details about their house we need to come up with an accurate ITV. There are some startling statistics [suggesting that] 50% don’t know the square footage of their house. We need to encourage more awareness amongst consumers about basic elements of data we need, regardless of the calculator.” By making sure the information coming from consumers is as accurate as possible, that eliminates one of the variables, adds Rose. “That is why one of the things the IBC is focusing on is consumer education,” she says. “When you ask clients about square footage, do they know the right number or is it just something they heard from a real estate agent 10 years ago? And if they don’t know square footage, they sure are not going to know about building structure, components and so on.” Others are less confident that this is the real solution to the industry’s ITV woes. “The IBC working group is going to consumers with an awareness campaign and that is all well and good,” says Orr. “But we recognize that consumers are not a terrific source of data. No matter how many millions you spend on a consumer education campaign, my Mom will still not know the square footage of her house.” In fact, Orr contends that brokers are looking for real solutions available in the marketplace today and may draw a line in the sand when it comes to getting ITV issues on the right track. “We looked at it [the IBC ITV working group] quite honestly as [having] too many stakeholders,” he says. “We didn’t think there would be enough cooperation to truly come up with an industry-wide solution. Right now, we are encouraging insurance companies to participate in the iClarify tool. At the end of the day, it might have to come to us forcing this solution on insurers. If all the brokers got together, it could happen.”
What You Don’t Know
Can Hurt You Business tools and technology solutions are available to help brokers in their battle with directs.
Pat Durepos President, Keal Technology
I recently attended a broker roundtable featuring some of the largest and most successful brokerages in Quebec. The messages heard around the table were likely familiar to many firms across the country — all representatives had lost a certain amount of business to direct competitors, many speculated there would be a bigger push in advertizing and spending by these competitors to gain more market share and most felt at a competitive disadvantage in terms of technology. After more than 20 years of direct intrusion into the broker-dominated property and casualty insurance marketplace, these messages were hardly news. What I found odd, however, was how few brokers had a tangible business plan to address this threat — and how little they understood of the current technology that is available to help them do so. My perceptions are based on research that Keal Technology commissioned the French Group to undertake last year. In an opinion survey conducted with brokers from across Canada, 74% said the industry is experiencing a fundamental
42 Canadian Underwriter February 2010
change in distribution; 69% predicted new players would continue to gain market share. Moreover, 67% of brokers reported that changes in distribution had affected their business results. When asked to specify how their businesses had been affected, brokers most often responded: “keeping up with technology.” So brokers are well aware of the shifting competitive landscape. And yet, when asked if brokers had enough tools and resources to compete effectively against new competitors, a whopping 74% said no. 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. A comprehensive response from brokers should in part entail investing in technology for productivity improvements. This could involve: • setting growth and productivity goals; • separating sales, service and administration; • training staff to become pro-active (annual reviews, cross-selling, referrals); • measuring results; and • developing in-house technology expertise. Ideally, that in-house expertise should be matched with industry standards such as the Insurance Brokers Association of Canada (IBAC)’s electronic workflow initiative.
A FRESH PERSPECTIVE The bulleted points above are all important aspects of a forward-looking business plan. But let me give you some specific examples of how brokers can reap rewards by approaching problems with a fresh perspective. Keal’s “best practices” consulting team recently visited a successful brokerage. We met with both management and a handful of client service representatives (CSRs), producers and team leaders. We quickly discovered a disconnect between the brokerage’s “vision” and operational reality. For example, there was no real evaluation of the cost and benefit of certain procedures. In fact, in some instances, the brokerage had developed time-consuming work processes to produce information that was already stored in the broker’s BMS. By evaluating just one workflow procedure, the brokerage was able to save $12,000 annually. Imagine the potential of unlocking more efficiency, and allocating freed-up resources to support profitable growth. In another example, our consulting team encountered a brokerage that took four days to reconcile insurance company statements and broker accounts. The solution was to start using the sigXP automated electronic tool that automates all reconciliations. The result: four days of work was reduced to four hours, translating into 90% costs savings for the brokerage in that area. In many instances, brokers simply do not know about the latest technology that is available and customizable to the size of their firm. Call recording integration, voIP (voice over Internet Protocol) telephony, premium financing management systems and integrated marketing to target opportunities and manage carrier relationships are just some of these tools. Guess what? Direct writers and banks have used many of these technologies to gain market share.The same opportunities exist for brokers on a scalable level. For example, Keal recently formed a partnership with blueC 802, a company that provides call recording software called blueButler. This application is integrated with Keal’s sigXP BMS and gives brokers a cost-effective solution to com-
44 Canadian Underwriter February 2010
pete with direct writers on their own technological turf. How many brokers out there today use call recording software? All of the banks and direct writers’ call centres have been using this technology for decades now. Regardless of whether or not they know about these specific tools, brokers should be asking themselves if their technology vendors are true partners in their business — or are these vendors just trying to flog the latest version of a product? Does your vendor understand your struggles, challenges and priorities? Ask about technology platforms such as SQL. How long has a BMS run on it? What is involved in a conversion process, in terms of cost and complexity? What
A broker’s biggest fear should not be banks or direct writers — it should be the broker’s own complacency. about protecting data integrity? Similarly, brokers should ask whether or not their vendors offer end-to-end integration suites for all of the brokers’ personal and commercial needs. Software development and integration done directly by the BMS vendor are becoming more important to an increasing number of brokers.
IDEAL ELECTRONIC WORKFLOW Another key question for brokers is this: does your vendor support industry projects like the IBAC ideal electronic workflow initiative? This project endorses basic workflow principles for transactions between brokers and insurers, namely: • transactions that start in a BMS must finish in the BMS; • data flows between systems should occur electronically and transparently, without user intervention; • all data transmissions must strictly adhere to CSIO standards; • XML data that flows to a company’s system should be processed and returned in real-time (or via CSIOnet using existing BMS download procedures);
• 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 transmission, not the broker’s side. IBAC’s initial assignment was for BMS vendors to generate one standard, specific, CSIO-compliant XML policy change transaction from within their respective broker systems and electronically transmit it to an assigned location. As of late last year, four vendors successfully produced the standard transaction. (One vendor is “pending completion” and another is classified “resources not yet allocated.”) The next step is for insurers to receive and incorporate the data into their own systems. The stated goal of the IBAC ideal electronic workflow initiative is to discover more efficient methods to exchange information between brokers and insurers, for the benefit of both partners. As an industry standard for workflow and electronic transactions, this project holds immense potential for brokers to become more efficient in their day-to-day business operations and to improve customer service. In the meantime, a broker’s biggest fear should not be banks or direct writers — it should be the broker’s own complacency. The old attitudes of “if it ain’t broke, don’t fix it” and “we’ve always done it this way” may be comforting bromides, but they certainly don’t represent a strategic plan to grow your business profitably. Instead, brokers should take a sober second look at their workflow procedures — or perhaps use a consultant — to ensure that management’s vision and goals are aligned with staff processes. In addition, they should be actively researching existing technology tools and platforms that will allow them to do more with less. Whoever said “ignorance is bliss” surely did not refer to the shifting tides of the property and casualty insurance industry. Nor did the author of the quote refer to beleaguered brokers facing increased threats from savvy competitors with deep pockets. But it turns out that what you don’t know really can hurt you.
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A Paperless Phase Tom Clayton Industry Leader, Financial Services and Insurance Division, HP Exstream
In an effort to go paperless, Gore Mutual took a phased approach to delivering a new document generation project. The current business climate places unprecedented pressure on insurers not only to control costs and increase efficiencies, but also to improve customer responsiveness. Today’s insurance customers are looking for a comprehensive customer experience that goes beyond traditional explanation of benefits and claims statements. They want insurers to use communication programs that provide personalized information tailored to meet their needs. And they want their insurers to deliver such information in a way that consumers wish to receive it, be it through email, text messages, mailers or any combination of these delivery methods. So how can an insurer provide personalization and efficiency, and still maintain consistency to meet compliance regulations?
CASE STUDY: GORE MUTUAL AND HP EXSTREAM Gore Mutual, Canada’s oldest property and casualty insurer, sought ways to make it easier for their broker partners to do business with them. It ultimately implemented HP Exstream, a document automation software, enabling the insurer to streamline many of its business processes, increase productivity, and significantly decrease document design, production and delivery costs. Like most insurance companies, the Ontariobased insurer generated large quantities of
46 Canadian Underwriter February 2010
customer documentation such as policy declarations, billing notices and claims correspondence. This created a number of challenges for its legacy documentation generation system, including: • documents stored in multiple systems and formats; • inflexible systems and documents; • inefficient process for producing and distributing documents; and • document design and content creation performed by IT.
FINDING A BETTER WAY Committed to efficient, paperless workflows, Gore Mutual launched a ‘Document Generation Project’ to find the right solution to replace its legacy document system.The criteria included a single, intelligent infrastructure for real-time document generation.The company selected HP Exstream, which has fully-integrated capabilities for variable design. For example, the software allows the company to do controlled interactive document editing, testing, real-time composition, advanced data and content integration and output to more than 20 print and electronic formats from a single design. Operating in this kind of paperless environment helps Gore Mutual to serve brokers quickly and accurately, so they in turn can get their clients the information they need. Gore Mutual took a phased approach to replacing its legacy system. The insurer organized key program deliverables into projects, each focused on delivering incremental value while working toward the overall goal of transforming existing business processes. Using a Web user interface and service-oriented workflow, the company in-
tegrated and automated manual steps in the document creation process. Lastly, it organized and aligned internal resources, developing a 12-month plan for migrating users to the new document production system. Using HP Exstream, Gore Mutual began converting the design and output of its billing documents.Within 10 months, the company had completed their conversion, including personal lines and commercial lines policy declarations. Reducing paper-based processes in favor of electronic workflows, HP Exstream interactive software allowed Gore Mutual to create an application that manages letter templates, selection of letter recipients, attach documents and dictates the form of delivery into customized print mail queues or electronic distribution.This project was completed in just one year; it has resulted in a dramatic reduction of paper consumption.
templates by more than 50%, allowing for greater consistency and accuracy.
Decreased risk; enhanced compliance User authentication based on individual roles in the organization, as well as approval workflows where needed, provides the control necessary to meet compliance regulations and reduces errors.
Increased productivity Time spent generating letters has been reduced by 85%. More than 80% of transactions go through automatically, without the need for staff to touch or manage paper. Reduced costs The company has reduced its postage, paper and assembly costs as well as development and processing costs.
SHARING THE BENEFITS Today, nearly 200 employees use Gore Mutual’s document production application daily. Gore Mutual has successfully decreased operation costs, enhancing productivity and customer service. More importantly, it has been able to share these benefits with its broker partners. Brokers benefit from the speed at which letters are now created. The company’s increase in efficiency allows brokers to serve their clients faster, thereby allowing time to reach and serve more clients. Brokers are also seeing efficiency in document recalls. Documents are stored so they can be easily recalled and emailed to the broker. Other key benefits from migrating to HP Exstream include:
Improved customer experience Now staff, including claims adjustors, can focus on broker and client needs instead of time-consuming paper processes. Significant reduction in document templates Most business units experienced a reduction of document templates. One department in particular reduced letter
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February 2010 Canadian Underwriter
47
Risk-Based Underwriting Editor
Insurance companies today are grappling with changing and emerging perils, and their underwriting approach in homeowners’ lines is changing accordingly. As water damage becomes the pre-eminent peril facing homeowners (replacing fire as the Number 1 source of insurers’ claims payouts in homeowners’ lines), brokers and consumers can expect to hear a lot more about a new underwriting approach dubbed ‘risk-based underwriting.’ Simply stated, risk-based underwriting is a more granular, specific way of assessing typical exposures covered by a comprehensive homeowners’ policy — water, fire and theft. “When we are talking of risk-based underwriting, the intent is to refine the segmentation in the pricing or underwriting rather than looking at [generic] profiles in which all kinds of risks are bundled together,” says Martin Beaulieu, senior vice president of personal lines for Intact Insurance. Using risk-based underwriting, for example, companies will re-examine their homeowners’ book of business to assess how specific perils might affect a consumer’s risk profile. “We can look at what the fire risk is, what the water risk and what the theft risk is, and that’s where I think it’s important to refine the segmentation,” said Beaulieu. “It could be that each of these perils is moving in a different direction. So a single [homeowners’ risk] profile could be mov-
48 Canadian Underwriter February 2010
ing in one direction for water, and in another direction for fire, but at the moment it’s all defined as a big package. I think if we’re looking at that as a big bundle, we’re not providing the insured information as to what is their biggest exposure and how they can mitigate that risk. We’re starting to do that. The way we’ve done it is that our pricing is segmented by peril, but in the end we’re coming back with one premium.”
DATA COLLECTORS One upshot of this segmented approach is that insurers are amassing as much detailed information as they can relating to their homeowners’ books of business. “We’ve looked at our data historically, which is typically what actuaries would like to do, to project the future,” said Bob Fitzgerald, executive vice president and chief marketing and underwriting officer at Aviva Canada. “But we’ve also pulled into play a number of other sources of information that can help disaggregate the pricing of a personal property exposure. If you break [an aggregate profile] down and then build it back up by taking the inputs from various sources, you can get, in our view, a much more granular, more accurate reflection of the exposure without having to group risks in the thousands.” These various data inputs can get quite specific. In the area of water losses, for example, insurers
Illustration by Sandy Nichols/www.threeinabox.com
David Gambrill
INSURANCE INTERNET DIRECTORY
ASSOCIATIONS
COLLISION SERVICES
GRAPHIC COMMUNICATIONS
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
CertifiedFirst Network Consider it done.™ www.certifiedfirst.com
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Cameron & Associates Insurance Consultants Ltd. Claims consultants to the insurance and reinsurance community. www.cameronassociates.com Keal Technologies Complete technology solutions for insurance brokers. www.keal.com
Aviva Canada Inc. Home Auto and Business Assurance. www.avivacanada.com/ Catlin Canada Underwriting Ambition. www.catlincanada.com Chartis Insurance Company of Canada Your world, insured www.chartisinsurance.com FM Global The leader in property loss prevention. www.fmglobal.com Grain Insurance and Guarantee Company Commercial Lines Underwriters www.graininsurance.com RSA Leading car, home and business insurer. www.rsagroup.ca Sovereign General Insurance Company of Canada Since 1953 www.sovereigngeneral.com The Guarantee Company of North America “Specialized insurance products...professional service” www.gcna.com Wawanesa Insurance Earning your trust since 1896. www.wawanesa.com
CONSTRUCTION CONSULTANTS MKA Canada, Inc. Providing creative solutions to the Construction, Legal and Insurance Industries. www.mkainc.ca
DAMAGE COST CONSULTANTS CLAIMS ADJUSTING FIRMS Crawford & Company (Canada) Inc. One Globe, One Company www.crawfordandcompany.com Cunningham Lindsey International independent claims services. www.cunninghamlindsey.com Kernaghan Adjusters The Preferred Adjusting Solution. www.kernaghan.com McLarens Canada International Loss Adjusters and Surveyors. www.mclarens.ca Quelmec Loss Adjusters Identifying, Investigating, Resolving...for over a quarter century! www.quelmec.ca SCM Adjusters Canada Ltd. Committed to providing leading-edge claims management services. www.scm.ca
50 Canadian Underwriter February 2010
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INSURANCE SOFTWARE APPLICATIONS Keal Technologies Complete technology solutions for insurance brokers. www.keal.com Tritech Financial Systems Inc. Provider of an enterprise solution to P&C insurance companies and their agents and brokers in Canada and USA www.trifin.com
REINSURANCE Guy Carpenter & Company The world’s leading reinsurance intermediary. www.guycarp.com Munich Reinsurance Company of Canada Complete reinsurance coverage from Canada’s largest reinsurer. www.mroc.com Swiss Reinsurance Company Canada The leading P&C reinsurer in Canada. www.swissre.com Transatlantic Reinsurance Company For all your reinsurance needs. www.transre.com
RESTORATION SERVICES Winmar Property Restoration Specialists Coming Through For You! www.winmar.on.ca
RISK MANAGEMENT The ARC Group Canada Inc. Your Partner in Insurance Law and Risk Management. www.thearcgroup.ca
SPECIALTY INSURANCE William J. Sutton & Co. Ltd. Insuring Special Risks since 1978 www.wjsutton.com
are collecting refined data related to sewer zones. They are collecting data from municipalities on the age and nature of their infrastructure, including sophisticated mapping of the size and age of piping in specific areas. Although the escalating number of water damage claims has prompted insurers to reconsider how they are underwriting risk in personal property lines, the risk-based approach relates as well to other specific perils such as fire and theft. For example, insurers are collecting data intended to answer questions such as: are theft patterns consistent across geographic areas? What triggers theft? Are theft patterns different depending on whether the stolen items are on or off premises? Is all theft equal? Collecting more — and increasingly specific — data is intended to provide insurers a much more nuanced perspective on the risks in their homeowners’ books of business. “It’s almost like DNA [analysis],” says Fitzgerald.“It’s like looking at de-coding the genome, looking at what’s really going on in property, and then finding creative ways to provide attractive solutions to customers and brokers.” The new underwriting trend might even lead the industry in the direction of creating new, more specific insurance products down the road. “To my mind, a peril-based approach is about offering coverage for fire, offering coverage for theft, offering coverage for water damage and being specific about that,” says Mike Wallace, vice president of risk underwriting and reinsurance at RSA. “It’s probably having different rates and different segmentation for each one of those… “There is no water product, per se, but I think we are going to have to work with all of the industry bodies to come up with some agreement as to how that would look. In the meantime, you can look at segmenting your own product a bit differently.”
THE PRICE IS RIGHT Obviously a much more nuanced underwriting approach could be expected to result in a much more nuanced approach to pricing as well. Assuming that insurers collect enough information to
give them a more accurate portrayal of the exposure at a granular level, one can assume the data would help them narrow down to the point when they can almost price for a specific location and/or peril. Still, it’s somewhat up in the air as to how a more nuanced underwriting approach would affect a policyholder’s bank balance. Some consumers might receive a break on their premiums, based on a more specific assessment of their
risks. Others might not be so lucky. “We want to provide value to customers, provide value to brokers,” said Fitzgerald. “That’s not necessarily saying we are going to have a great price for everybody, but having the right price.” Certainly brokers will want to know how that “right” price is derived. And this goes to the heart of what insurers might argue is a necessary level of opaqueness related to the molecular level of risk-based underwriting. Insurers competing with each other at the level of data segmentation are loath to tip off their competitors about how risk-based underwriting helps determine specific pricing. “It’s the secret sauce argument,” said Fitzgerald. “Does Coke tell Pepsi what they are doing? Absolutely not.” Still, Fitzgerald supports an ongoing dialogue within the industry about what level of transparency is required. “It’s important for companies to be able to articulate at a high level the kinds of things that are influencing the customer proposition that’s being put forward, without getting into the granular… without saying how Cadbury puts the filling in the Caramilk bar,” he said.
RISK MITIGATION While a segmented analysis of risks or perils might not necessarily or directly translate into lower premiums for consumers, it might indirectly achieve the same result, insurers note.That’s because the same data underlying the underwriting approach can also point towards improved loss control and mitigation techniques. For example, in keeping with the concept of risk-based underwriting, insurers can advise policyholders living in an area at a high risk for water damage on how they can be more aggressive in mitigating water damage to their homes. A number of new technologies — including backwater valves, water detection sensors and automatic water shut-off devices — can be installed to reduce water damage inside the home. “It’s prudent to look at all of the exposures and protections and all of the activity that companies and insureds take to try and mitigate loss, and then give them an appropriate credit on their policy,” says Paul Johnstone, vice president of personal insurance at Chubb Insurance Company of Canada. “We’ve taken a step further. It’s a relatively new initiative at Chubb. When we have certain types of water-related losses, we actually provide funds in the claims settlement process to pro-actively post-loss install water-detection devices so that we can prevent future losses.” There are other ways to modify the product to account for more specific data, says Wallace. For example, insurance companies can put limits on coverage for sewer back-up.They could introduce higher deductibles for water damage, or so-called “water deductibles.” And they could start legal action against some of the manufacturers of products responsible for water damage inside the home. “When we talk about inside water, one of the things we’ll be looking at more closely is subrogation against some of the manufacturers of these [products], washers and dryers, for example,” says Wallace. “We haven’t done that much in the past, where a dryer or washer may fail under a warranty period.You do have an opportunity to go back and subrogate against them.”
February 2010 Canadian Underwriter
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A new online quoting tool is designed to help brokers offer clients travel insurance without any additional cost or E&O exposure. Gail Robertson Writer
Selling travel insurance has never been so easy. Brokers can now offer their clients travel insurance without E&O exposure and at little to no cost depending on amount of customization and branding. Simply add the new TravelRater quoting tool onto a Web site and travel insurance is instantly available and trackable. “It’s a no-risk approach,” says David Rivelis, senior vice president of CanAm Insurance. “Brokers can now sell travel insurance with a simple interface for their Web site, then sit back and wait for their commission cheques to roll in. We assume the risk and the costs for this tool, other than a nominal fee to customize the tool for a particular brokerage.” TravelRater has been developed by CanAm Insurance and built by Compu-Quote. It has the full power of the quoting tool similar to ezLeads Plus
52 Canadian Underwriter February 2010
(now used by brokers for home, auto and motorcycle quotes), but with an added twist — clients can check out multiple insurance products and purchase online. “Varying medical questionnaires have often created confusion for property and casualty brokers when attempting to match their client’s needs to the most applicable product,” says Rivelis. “This online tool allows brokers to direct their clients to their own broker Web site for the client to access multiple product offerings. The brokers get their commission, they prevent their client from going elsewhere for this product and we have a top notch claims record ensuring customers will be well taken care of.” Navigating the intricacies of travel medical questionnaires is not part of a broker’s general focus, says Rivelis. By providing a tool that allows customers to navigate through this process themselves, the broker eliminates any miscommunication regarding existing medical conditions. “With TravelRater, the customer is responsible for answering questions and submitting information for coverage so the broker removes any E & O exposure,” says Rivelis.
Illustration by Sandy Nichols/www.threeinabox.com
Online Travel
CanAm Insurance has more than 15 years of experience and expertise in the travel health insurance industry. Headquartered in Windsor, Ontario, and with offices in Vancouver and Toronto, CanAm understands travellers need affordable access to travel protection and assistance. CanAm offers a multitude of travel insurance products, including single trips, annual plans, all-inclusive packages, as well as plans for visitors to Canada and international students. TravelRater is built so that brokers can easily integrate the quoting tool into their existing Web sites. Clients can now explore travel options from the comfort of their homes. “TravelRater is an exciting product for Compu-Quote because we can now assist brokers even more in the online world,” says Compu-Quote executive vice president Brian Schwab. “It secures the broker as the trusted advisor and CQ technology has been proven to increase business and add value to a broker’s Web site.”
Schwab says it’s a perfect way to increase traffic to brokers’ Web sites. This might in turn allow brokers to reduce overall staffing and overhead costs. “It’s in the industry’s best interest that brokers have more products to sell and prevent the competition from taking business away,” says Schwab. “If the broker’s customers go elsewhere to buy travel insurance, you know for sure that competition will be eyeing the home and auto business as well.” TravelRater is designed to take users through the insurance acquisition process quickly and easily, step-by-step, building policy details into booking flow. Users can create an account to save quotes for 30 days or purchase the same day. Each onscreen reply the user provides influences what the tool asks next. This way, each user receives a policy that’s specific to his or her needs. Because TravelRater issues policies in real time, paperwork and overhead costs are virtually eliminated. “CanAm offers a wide array of travel
product choices for all demographics — families, single travelers, seniors and even groups and associations,” Rivelis says. “Ten minutes on TravelRater could mean the difference between a $60 policy and a $60,000 hospital bill for consumers. Brokers have the chance to educate their clients and then provide them with travel insurance products without assuming any of the risk for selling such items.” “Our current brokers point to our claims expertise with ACM (Active Care Management) as being a key reason they use CanAm’s services,” says Alex Bittner, director of sales for Eastern Canada. “Come claim time, a broker doesn’t want to hear negative feedback about travel insurance. They tell us that we far exceed the competition in this area.” CanAm owns ACM, “which gives us a tremendous advantage,” says Bittner. “We are not at the mercy of a third party for emergency assistance, claims adjudication and payment. We control strict ‘backend’ quality and service standards.”
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For more information, please contact your local underwriter or visit www.cnacanada.ca.
www.cnacanada.ca CNA is a registered trademark of CNA Financial Corporation. Copyright © 2009 CNA. All rights reserved.
l u f Sh f e Executive
David Gambrill Editor
Maurice Tulloch has become Aviva Canada’s CEO, and his top priorities include brokers, Ontario auto reform, water damage and technology
After two and a half years with Robin Spencer at the helm, Aviva Canada has re-shuffled its executive deck, promoting Maurice Tulloch from within to become its new CEO. Tulloch, an 18-year-veteran at Aviva, succeeds Spencer, who departed for the United Kingdom at the end of 2009 to take up his new duties as chief risk officer for Aviva plc. In addition to being part of Aviva Canada’s executive committee, Tulloch was previously executive vice president of broker distribution (Ontario) and specialty distribution. He has held senior management positions at Aviva-owned Pilot Insurance Company, Aviva Traders, Aviva Elite and Aviva Scottish and York. Tulloch’s first order of business was to respond to the nearly 1,000 emails he received from bro-
54 Canadian Underwriter February 2010
kers across the country welcoming him to the new role. Over the Christmas break, he managed to respond personally to most of them. “Those who know me know that I am very relationship-focused,” he said in an interview with Canadian Underwriter, perhaps stating the obvious. Tulloch will put his relationship skills to the test in working with Canada’s broker community. Under Tulloch’s leadership,Aviva plans to continue moving forward with its promotion of the broker channel, which Spencer made public last year. “I am looking forward to ensuring that at Aviva we continue to build the broker franchise in Canada,” Tulloch said. “The strategy doesn’t automatically change when a new CEO comes in. Robin, myself and my other colleagues on the executive team have spent the last 18 months refining our strategy, and just because Robin’s moved on, that doesn’t mean the strategy has to change. Our strategy is also socialized with the regional office in Chicago and with the parent office in London [England].” Tulloch is taking over the CEO corner suite with a full plate. He sees Ontario auto reform, a marked increase in personal property water damage claims and the development of technology as three of the industry’s key priorities for 2010.
ONTARIO AUTO Tulloch was encouraged by the Ontario government’s commitment in November 2009 to reforming the province’s auto insurance product, noting that injury costs in the province of Ontario are now “out of control.” The province has made 41 proposals to reform the auto product, several of which are directly aimed at control insurer’s claims costs. The government said it plans to implement its reforms by the fall of 2010. “I’m very encouraged,” Tulloch said of the reforms. “I think it’s absolutely the right direction for them to be taking… I’m very eager to work with my industry colleagues to ensure that this gets through to regulation and we’re able to implement this on time and in a manner that’s going to benefit Ontarians.” He also sees the reforms, which seek to provide more choice to consumers in terms of picking and choosing coverage options, as an opportunity for the broker channel. “I think [Ontario auto] is a wonderful opportunity to do what a broker does best,” he says. “By encouraging our partners to focus on choice, advocacy and counselling, this will be a win for the broker channel.”
WATER DAMAGE A second challenge for Tulloch — and the industry — will be what to do about flash, “microburst” storms that are threatening the personal property bottom lines of virtually every insurer across the country. “For most people, these microbursts don’t even register, but they’re happening very frequently,” Tulloch said. “This is the third year in a row that we have seen increasing water claims costs. We had catastrophe costs last year of about $75 million. If I take a 15-year average [for Aviva Canada], it’s about $39 million.The last four years at Aviva, it’s been over $50 million.The biggest for us this year was the August 1-3, 2009 [wind and hailstorm] event in Alberta.That cost us approximately $15 million.” Although a garden-variety microburst rainstorm doesn’t seem like it might cause a lot of damage, its precipitation
levels can easily overwhelm a municipality’s aging infrastructure. “If we look generally at the infrastructures we have in municipalities in Canada, they are relatively new by global standards — they are 50 to 100 years old,” Tulloch observed. “Even that relatively new infrastructure can only handle 50-65 mm of rain per hour.These microbursts have the absolute ability to drop 120150, even 200, mm per hour in a single event.” Water damage from a storm is compounded by the urban phenomenon of finished basements. “Where historically it may have cost the industry $2,500 to $4,000 to clean up a basement, now it routinely runs $30,000 to $40,000 — and it’s not uncommon to get claims for around $100,000,” Tulloch said. “One shift with a finished basement is that we absolutely have a responsibility to the consumer not only to ensure that we fix it, but that we fix it right the first time. That means you need to bring in the proper equipment, you need to remove the drywall up to a certain height, and ensure that you are absolutely drying it so that you don’t have any problems that will come back in three or four years, such as mould. So you’ve driven up the average claims costs and that is a trend we are likely going to see continue.”
NEW TECHNOLOGIES Tulloch says he is committed to developing technologies that make life more efficient for the brokers and consumers. Brokers have been calling for many years for a single-entry, multiple-interface (SEMCI) platform that would allow them to gather quotes from multiple insurers quickly without leaving their broker management systems. To this end, they have noted that individual insurer’s Web portals haven’t really led to the desired end of an industry-wide integration. Tulloch hinted he doesn’t really hold out much hope for a full-blown SEMCI solution. “We all realized a number of years ago that to try to get a group of insurers to agree on a technology platform just wasn’t going to happen,” he said. Nevertheless, he is committed to
ensuring that channel operates as efficiently as possible. “If I can make our technologies more efficient, this factors into the cost of business, which ultimately factors into the pricing that we can put forward.”To supplement its existing portal, Aviva Canada introduced WARP and Nexis, “two technologies that effectively allow our partners to operate in their broker management system,”he said. Aviva also introduced new technology that effectively cut the company’s paper production by about 35% last year. Using a system called ‘STEP’ (Save Trees Eliminate Paper), brokers are now able to download information from the insurer’s site in the form of a PDF file and e-mail the document to their clients. Tulloch said if he had his way, he would be able to convince the government to issue auto insurance cards to consumers electronically. Finally,Tulloch is inheriting a positive example of corporate use of social networking Web sites. As insurers and brokers ponder how best to leverage the online social networking community, at least one such venture has positively gone viral, tapping into local communities across Canada through the all-encompassing reach of the Internet. As of press time, Aviva Canada had just announced the winners of its online Aviva Community Fund. Eight “ideas” from across Canada, submitted by Canadians who wanted to make positive change in their communities, were selected by online voting and an independent panel of judges. Back in October, the insurer put up $500,000 to help fund ideas that seek to lead, empower and support positive change in Canadian communities. After eight weeks, the insurer received more than 2,000 contest entries from all across Canada, significant support from its broker and vendor partners, and the competition received extensive media coverage across the country. “What I can tell you is that this is not going to be a one-time thing,” Tulloch said. “There will be another fund and at minimum, at least the same amount of money. Stay tuned.”
February 2010 Canadian Underwriter
55
es Ti
Cutting with the Ex
Opinion/Analysis
Richard Yasny Toronto Lawyer
When it comes to retaining clients after an ex-employee leaves, non-compete and non-solicitation legal agreements are poor substitutes for excellent customer service. Non-competition and non-solicitation agreements are designed to prevent ex-employees from stealing your customers. And from time to time, you’ve seen legal articles warning you against poorly worded ones. (See John Elwick’s article,‘Barring the Floodgates,’ in the April 2009 edition of Canadian Underwriter.) But is it good for your business to rely on these “restraint-of-trade” agreements? They cost you legal fees to draft, argue and enforce. They distract you from your business. And courts dislike them because they restrict customer choice. Instead, isn’t it better for your business to direct your efforts to the real decision-makers — your clients? When an employee leaves, here’s an illustration of a letter you might draft yourself. The guiding theme is to show your customers
56 Canadian Underwriter February 2010
that, at all times, you put their interests ahead of yours. “Recently, John Smith left our company. As we hope you know, our first concern, always, is our responsibility to you and to protecting your interests. If you decide that you wish to continue dealing with John, we shall do all we can to make the transition easy for you. But our team offers more than any one individual can. So we hope you will stay with us and continue to rely on all of us to help you reduce the costs and manage the risks that affect us all, whether through insurance or through the other risk management techniques that we can help you apply. “We will call you within the next several days as part of our regular practice of helping you monitor and manage the risks you face, and to make sure that you continue to feel comfortable calling us any time.” At first, this approach may seem naïve and weaker than a sophisticated legal agreement. But consider the impression it would leave on your client. Of course, some will say it’s good to have both the “restraint-of-trade” agreement and a letter and follow-up call with clients. But is it? Whatever lawyers may say about your rights, it’s your customers’s opinion about your service that
matters.Your business depends on your full attention and devotion to your customers. Why distract yourself with ex-employees? If ex-employees can serve your customers better than you can, then you want to improve your business practices, not waste resources restraining your competition.
EXCELLENT CUSTOMER SERVICE In its 2008 Canadian Home and Auto Insurance Customer Satisfaction Study, J.D. Power & Assoc.
specialists call customers to give them an overview of the claims process. Show your customers that there is more to preparing for an accident than sprinklers and safety belts. Show customers that your whole firm is their best risk reduction resource. Bind them by more threads than just one employee. Costly and hard to enforce (even when valid), a non-solicitation or non-compete contract with an ex-employee doesn’t bind a customer.
Even if clients leave, in time they might return. Thus, the way you approach a former employee’s client may determine whether or not that client stays your own. Spend more time pursuing existing clients, through whom most of your referrals come, rather than chasing former employees for clients you may have lost. A business’s profits are found not in the law or contract but in the satisfaction of the customers who pay its bills.
found that “among the 12 brands [of insurers] that rank below the average, eight have their policies distributed primarily through independent brokers.” Another surprising fact: 50% of customers who use brokers never had their policy reviewed after the initial purchase. J.D. Power also found that “customer service overshadows price/premium or policy offerings.” The conclusion? Price cuts don’t keep clients. Service does. In a recent survey, the Insurance Brokers Association of Ontario found that “broker customers like to be contacted at least twice a year, not including renewals or claims.” Yet, “37% [of respondents] said they were contacted less than they would have preferred.” The same survey “found that 17% of the market has switched from the broker channel to another provider over the past three years.” And “18% of respondents were ambivalent when asked if they would recommend a broker to their family or friends.” Conclusion: Do not worry about whether former employees contact your clients;worry about whether you do. Customers are not stolen.They leave. Isn’t it better to spend your money on your customers? Turn a lost employee into a new opportunity to call customers and confirm your commitment to their interests. Give them reasons to stay. Stress the skills of your whole team over any single member. In your contact call, be prepared to review the customer’s policy as knowledgeably as if you had been the broker or agent who represented the customer from the start. And why not do more to keep the customers you have? Regularly have staff with different skills reach out to your customers with premium-reducing risk management ideas. Or have your claims
February 2010 Canadian Underwriter
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Kenneth V. Lavigne [1] has been appointed senior vice president and manager of FM Global’s Canada division. Lavigne replaces Perry Brazeau, who retired at the end of 2009 after 33 years with the company. Lavigne joined FM Global in 1980 as a boiler and machinery loss prevention consultant. He has held a number of positions with the company, including assistant vice president, client service manager, underwriting technical specialist and senior underwriter. Most recently he served as vice president and operations manager for Pennsylvania-based Mutual Boiler Re, a member of the FM Global group. In Lavigne’s new role, he oversees all client relations, underwriting, engineering, processing and administration for the Canada division.
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The Ontario chapter of the Women in Insurance Cancer Crusade (WICC) has launched the 2010 edition of its WICC C4C [Change for Change] Ontario Insurance Industry Challenge. For 12 months, participants will be challenged to raise as much money as possible using the C4C donation boxes. All funds will go to the Canadian Cancer Society. The Top 3 companies with the most funds raised by the
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end of April, July and October in 2010, will have their logos featured in advertisements in Canadian Underwriter. The company raising the most funds by the end of December 2010 will receive the grand prize of a full one-page advertisement profiling the company in the January 2011 issue of Canadian Underwriter, as well as recognition at the WICC Ontario 2011 Gala Dinner. To register or for more information, contact: Adrian Hall (416-2769255) or Barb Reddick (416-816-3615); email: wicc-changeforchange@hotmail.com. Purchase your C4C collection box at http://www.wicc.ca/changeforchange.asp
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Janice M. Tomlinson has received the inaugural Women In Insurance Cancer Crusade (WICC) Lifetime Achievement Award. The former president of Chubb Insurance Company of Canada and co-chair of WICC was presented the award at a retirement event in her honour on Dec. 9, 2009, at the National Club. The award recognizes Tomlinson’s dedication, passion and support of WICC, as well as her efforts in redefining Chubb’s corporate culture to include charity work, according to a Chubb release. Tomlinson was chairman and
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president of Chubb Insurance Company of Canada from 1995 to 2003. She was executive vice president and international field operations manager of Chubb & Son Inc. until her retirement at the end of 2009.
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Dave Prociuk is the recipient of the Jack Byers Award. Prociuk, who is with Allied Claims Adjusters Ltd. in Regina, received the award at the Insurance Brokers Association of Saskatchewan (IBAS)’s October 2009 convention. The award is presented annually by the IBAS board of governors to an individual who has made a noteworthy contribution to the Saskatchewan insurance industry. Prociuk
has devoted more than 35 years to serving and enhancing the insurance industry as a claims adjuster.
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The Automotive Industries Associations (AIA) will officially assume responsibility for I-CAR training in Canada as of May 1, 2010. The InterIndustry Conference on Auto Collision Repair (I-CAR) is a non-profit organization that develops and delivers technical training programs to professionals in all areas of the collision industry. Under its current structure, I-CAR was slated to cease operations in Canada as of the end of 2009. But based on material progress that I-CAR and AIA were making in No-
MOVES & VIEWS
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10a vember 2009, I-CAR’s board reconsidered. AIA president Marc Brazeau said the AIA is now committed to a “seamless transition” in which it would take over I-CAR International’s Canadian training operations in May 2010.
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Her Majesty Queen Elizabeth II appointed HKMB Hub International chairman Gregory Belton as commander of the Royal Victorian Order (CVO). Established in 1896, the Royal Victorian Order is a dynastic order of knighthood and a house of chivalry that recognizes distinguished personal service to the Queen and members of her family. The appoint-
10b ment recognizes Belton’s many years of service with the Duke of Edinburgh’s Award. The Duke of Edinburgh’s Award is a self-directed development program for young Canadians between 14 and 25 years old. Belton became involved with the Award in the 1990s; he became president of the Ontario division in 1992 and national president in 1994. As national president, he launched the Charter for Business, which has generated corporate donations exceeding $12 million, allowing the Duke of Edinburgh’s Award program to work with communities of at-risk youth.
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Catlin Canada now underwrites D&O liability and has appointed Christopher Mutcheson as product manager for the line of business. Mutcheson was most recently employed as the assistant vice president of financial lines for Executive and Risk Services. He has prior underwriting experi-
ence with Chubb Insurance Company of Canada and AIG Canada. During his eight years in the insurance industry, Mutcheson has acquired underwriting experience in D&O liability, employment practices liability, crime, kidnap and ransom and independent review committee liability insurance.
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iv3 Solutions has teamed up with Altus Group (TSX: AIF.UN) to bring a residential replacement cost toolset to the Canadian marketplace in early 2010. iv3 Solutions has also launched residential inspection management services and loss control solutions to the North American property and casualty industry. The company’s platform offers workflow automation, centralized procurement and invoicing, along with three inspection services: PropertyIntel, Exterior and High Value. A PropertyIntel report combines real estate, municipal tax assessment and appraisal data with the joint Altus-iv3 replacement cost toolset to provide automated intelligence about individual properties and their surrounding neighbourhoods.
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The Co-operators, Intact Financial Corporation, AXA and Granite Global Solutions
have each made individual pledges and/or donations totalling up to $240,000 to the Canadian Red Cross in support of relief efforts in Haiti. The Co-operators has pledged to match donations made by The Co-Operators staff and representatives, up to $150,000. Intact Financial Corporation has donated an initial $50,000. AXA has donated $20,000 to support the various measures being implemented to help the victims. Granite Global Solutions donated $20,000, and its partner companies — McLarens Canada, Sibley & Associates, Rochon Engineering, King-Reed Investigation Services and Henderson Structured Settlements — also all contributed to the cause.
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The Automotive Refinish division of PPG Canada has announced two appointments within its marketing division. Jennifer RosiakWong [a] is now marketing manager of value added programs for PPG Canada. In this new role, she is responsible for marketing and communications initiatives for the Refinish division of PPG Canada. Lianne Perissinotti [b] has joined PPG Canada as program manager of value added programs, including CertifiedFirst, MVP and Platinum Distribution.
February 2010 Canadian Underwriter
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Ted Bellinger, vice president of business development at ENCON Group Inc., is cycling from Vancouver to Halifax to raise funds for the Sears National Kids Cancer Ride.
Bellinger’s personal goal is to raise a minimum of $25,000 for the charity by Sept. 9, 2010, when the ride begins.“At any given time, cancer holds 10,000 Canadian children in its grip,” Bellinger said. “It robs them and their
families of the laughter and joy that should be part of every childhood. Riding in the Sears National Kids Cancer Ride will channel my physical, mental and emotional energy into something much greater — helping
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Canadian Underwriter February 2010
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brave children return to life as regular kids again.” Pledges in support of Bellinger can be made at www.snkcr.com/tedbellinger. Also, his supporters can follow Bellinger on his personal blog: www.tedbellinger.snkcr.com
APPOINTMENT
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The Lew Dunn Memorial Foundation raised a record $310,000 for colorectal cancer at its tenth annual Charity Golf Classic fundraiser held at The Club at Bond Head, Ontario, on Aug.17, 2009. Over the course of its 10-year existence, the Lew Dunn Charity Golf Classic has helped raise a total of more than $2 million to aid in the fight against colon cancer. The Lew Dunn Memorial Foundation and Aviva Canada host the annual charity event in honour of the late Lew Dunn, former president and CEO of CGU and Aviva Canada, who passed away from colorectal cancer in 1999. The Foundation raises funds for surgical scholarships specializing in colon cancer. The scholarship enables the University Health Network, together with the University of Toronto to train future professionals dedicated to working in this area of medicine.
Maurice Tulloch Igal Mayer, Chief Executive Officer of Aviva North America is pleased to announce the appointment of Maurice Tulloch to President and Chief Executive Officer of Aviva Canada Inc. Mr. Tulloch previously held the role of Executive Vice President and COO, Aviva Ontario and Specialty Distribution. In that role, he had overall accountability for developing and executing Aviva’s commercial lines and retail personal lines strategies in Ontario. Since joining Aviva in 1992, Mr. Tulloch has held several increasingly senior management positions, including an international role as Business Manager to the CEO of Aviva plc in London, UK. Upon returning to Canada, Mr. Tulloch built Aviva Traders’ growth strategy, assumed responsibility for Aviva’s national lifestyle and leisure insurance business (Aviva Elite) as well as the national affinity/ group business (Aviva Traders). He was also instrumental in developing and leading Aviva Canada’s claims customer care strategy. Aviva Canada Inc. is one of the leading Property and Casualty insurance groups in Canada, providing home, automobile and business insurance to more than three million customers. Our group of companies has more than 3,300 employees, 40 locations and more than 3,000 independent broker partners. Aviva Canada Inc.’s products and services are delivered across the country through its operating entities: Aviva Pilot; Aviva Traders; Aviva Elite; Aviva Scottish & York; Aviva Insurance Company of Canada; and S&Y Insurance Company. Aviva Canada Inc. is a wholly-owned subsidiary of UK-based Aviva plc, the world’s fifth largest insurance group. Please visit us at www.avivacanada.com
February 2010 Canadian Underwriter
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The First Annual Pink Ladies Spaghetti Dinner, organized by the women of Worden Insurance, was held on Oct. 6, 2009 at Remezzo’s Italian Bistro in Scarborough. Sixty women dressed in pink pajamas and slippers; some even sported curlers to complete their attire. The event drew generous donations, with all proceeds going to the Women in Insurance Cancer Crusade (WICC). Thanks to the event’s 42 sponsors, some lucky participants won travel vouchers ranging in value from $500 to $1,500. Marie Poce, the evening’s guest speaker, offered a heartfelt speech about her battle with breast cancer.
Women in Insurance Cancer Crusade (WICC) platinum sponsor Cunningham Lindsey has launched an innovative fundraising event, 'The Biggest Losers,' that intends to turn personal losses into WICC’s gains. Employees Martin Moran, Albert Poon, John Seyler, Kenny Huang and Mike Laberge have accepted a challenge to lose weight over the next six months. Each will try to lose the largest percentage of body weight by Jun. 30. The contestant who loses the least must treat the other ‘biggest losers’ and their spouses to a lavish sushi dinner. In the spirit of healthy competition, the contestants are accepting 62
Canadian Underwriter February 2010
$5 pledges, which will be donated to WICC. Those who pledge money will also be asked to submit their best guess as to the percentage of body weight a participant will lose. The Top 5 guesses that come closest to the actual results will win one of five bottles of wine donated by Cunningham Lindsey. So far, Cunningham Lindsey employees have raised more than $500. The ‘Biggest Losers’ will continue to accept pledges through to the end of June 2010 and everyone is welcomed to participate. If you are interested in weighing in with your guess and $5 donation, contact Martin at 905-8968181 or mmoran@cl-na.com.
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
MD&D’s Annual American Thanksgiving once again attracted industry guests to an afternoon of football, food and socializing. On Nov. 6, 2009, Montana’s M Lounge was filled with industry delegates watching football and catching up with old friends and enjoying tasty treats.
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Canadian Underwriter February 2010
APPOINTMENT
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The weather outside was frightful, but attendees enjoyed a delightful time at the Christmas function jointly held by the Northern Alberta Chapter of the Risk and Insurance Management Society (NARIMS) and the Insurance Institute of Northern Alberta (IINA). The event was held at the Royal Glenora Club in Edmonton. Dianne Brown, campaign director of the Christmas Bureau of Edmonton, gratefully accepted an $1,800 donation raised by NARIMS and IINA through the inaugural joint Christmas event. Many said they were looking forward to the RIMS Canada Conference to be held in Edmonton in September 2010.
John R. Mulvihill President and C.E.O
The Company is pleased to announce that John R. Mulvihill has been appointed President and Chief
Executive Officer
effective February 1, 2010. Mr. Mulvihill joined BI&I in 1990. He has held various managerial and executive roles, most recently serving
as
Chief
Operating
Officer and Senior Vice President. Mr. Mulvihill has an MBA and a BASc from the University of Toronto. He is a Professional Engineer, a Chartered Insurance Professional and a graduate of the Director Education Program of the Institute of Corporate Directors. BI&I is Canada’s leading equipment breakdown insurer. BI&I helps insurance partners and brokers reduce policy holder risk through a unique combination of specialty insurance, engineeringbased risk management and loss control services.
February 2010 Canadian Underwriter
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
SCM Insurance Services hosted 250 friends and colleagues at its SCM Toronto Holiday Party. Guests were treated to an oyster bar, cocktails, hors d’oeuvres and holiday cheer at the Market Kitchen in the historical St. Lawrence Market.
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Back again to our series of “Did You Know” facts and figures about the Ontario Chapter of RIMS. This time, we thought we would share with you all of the past winners of the Donald M. Stuart Award. This prestigious award recognizes outstanding contributions to Risk Management in Canada. Our Chapter established this award in 1979 in honour of one of our founders and most dedicated members. And the winners were ... ••••••••••••••••••••••••••••••••••••••••••
1979 Douglas A. Barlow
1995 Keith R. Gibson
1980 Carol A. Caswell
1996 Robert Patzelt
1981 Benjamin M. Eisenstat
1997 Barry Shakespeare
1982 Harold Quinn
1998 William (Bill) H. McGannon
1983 Ladis J. Vegh
1999 Wayne Hickey
1984 Reginald A. Pitchford
2000 Robert Wheeler
1985 Gord Hird
2001 Susan Meltzer
1986 Dan Sullivan
2002 Richard Whitehouse
1987 George Wilkinson
2003 John Rislahti
1988 Lloyd Hackett
2004 Joe Restoule
1989 J. Allan Swift
2005 Nancy Chambers
1990 Tony Bridger & Marc Darby
2006 Kim Hunton
1991 Gary Vamplew
2007 Nowell Seaman
1992 William S. Tully
2008 George Simpson
1993 J.A. Yvon Menard
2009 Janice McGraw
1994 John Harris
www.ontario.rims.org
February 2010 Canadian Underwriter
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The Ontario Chapter of the Risk & Insurance Management Society (ORIMS) held its Christmas Luncheon on December 16 at the Royal York Hotel in Toronto. More than 650 attended. In keeping with the spirit of giving, the ORIMS executive chose to raise funds for The Daily Bread Food Bank. ORIMS president Steve Pottle presented a cheque for $10,000 and more than 1,500 lbs. of food to the food bank in support of its fight to eliminate hunger in and around Toronto.
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conttinued on page 70... February 2010 Canadian Underwriter
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GALLERY ...ORIMS Christmas Luncheon, continued from page 69.
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See all photos from this event at www.canadianunderwriter.ca/gallery
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
TAKE A PEEK... at our redesigned website!
February 2010 Canadian Underwriter
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The CIP Society – Ontario Division presented Carla Blackmore with its GTA Fellow of Distinction Award on Jan. 14, at the National Club in Toronto. Blackmore, the recently retired director of commercial programs with Zurich Canada, was recognized for her contributions to both the insurance industry and the charities it supports. Her career with Zurich spanned more than 30 years. Outside of the office, she was heavily involved with the Insurance Institute. She has served as a director for WICC Ontario since 2001 and has been a cochair of the Starlight Insurance Gala since 2007. The evening also recognized the recent graduates of the CIP Society–Ontario Council’s fellows program.
ADVERTISERS’ INDEX ACE INA Insurance Aviva Canada Inc. BI&I canadianunderwriter.ca Canada WorldWide Underwriting Agencies Inc. CanAm Insurance CNA Compu-Quote, Inc. Crawford & Company (Canada) Inc. Cunningham Lindsey Canada Custom Software Solutions e2Value Inc. The Economical Insurance Group Fortify Network Solutions Inc. The Guarantee Company of North America Great American Insurance Group 2 Insurance Institute of Canada Intact Insurance iv3 Solutions Keal Systems Ontario Insurance Directory (2010) ORIMS PolicyWorks RIMS 2010 Conference, Boston Starlight Starbright Gala Tritech Financial Systems Xactware
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7 61 65 71 25 75 53 57 17 9 27 35 19 64 47 (IFC) 5, 15, 29, 43, 49 76 (OBC) 39 23 60 67 13 45 63 31 41
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
February 2010 Canadian Underwriter
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
McCague Borlack LLP hosted its annual ‘Christmas in January’ at the Design Exchange on Jan. 20. More than 300 guests enjoyed the opportunity to share drinks, discussion and celebrate the occasion.
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TravelRater
Yes. It’s already been a year. (Okay, give or take 200.)
The year began with a promise. A promise that words like transparency, simplicity and openness would redefine how we work together. A promise to make you a vital part of the advertising that launched our new brand, because protecting a customer starts with you. And a promise of new solutions to help grow your business, because when you succeed, we succeed. Have we delivered? You tell us, because after 201 years we know, you’re only as good as the promises you keep. Here’s to a great 2010 together. It already looks very promising.
Certain conditions, restrictions and exclusions may apply. Services are not available in Saskatchewan or Newfoundland. The BIP logo is a registered trademark of the Insurance Brokers Association of Canada (IBAC) used with permission. All other trademarks are properties of Intact Financial Corporation used under license. © 2009, Intact Insurance Company. All rights reserved.