MarketPlace

Canadian Market

Auto personal accident lines improve after Ontario auto reforms

Automobile personal accident lines showed a huge improvement in 2011 Q3 compared to the same period last year, according to figures released by the Office of the Superintendent of Financial Institutions (OSFI).

During the third quarter of 2010, Canadian insurers automobile private passenger personal accident lines stood at 125.4%. Over the same period this year, after Ontario introduced its auto insurance reforms, the claims ratio had been shaved down to 75.67%

Foreign insurers had a claims ratio of 220.57% in auto personal accident lines in 2010 Q3, a figure that had almost been halved (to 129.16%) in 2011 Q3.

Claims

Alberta windstorms cause $200 million in damage

Estimated insured damage caused by windstorms that hit southern Alberta in November amounts to at least $200 million, Insurance Bureau of Canada (IBC) reports, citing a preliminary estimate reported by Property Claim Services Canada (PCS-Canada).

Data collected by PCS-Canada, a service that tracks insured losses arising from catastrophic events in Canada, confirms that thousands of claims have been filed for damage to homes, cars and businesses in the wake of the storm.

“Thankfully, there were no serious injuries, and insurance should cover most of the damage,” said Doug Noble, IBC vice president of Alberta. “There is no doubt that we are seeing more and more the impact of severe weather in Alberta.”

Over the past three years, Alberta insurers have paid out approximately $2 billion in damages resulting from five disasters.

Munich Re, SCOR estimate  Thai flooding to be more than $800 million

Munich Re and SCOR have estimated their losses due to Thai flooding to be roughly Cdn$674 million net before tax (Munich Re) and Cdn$188.5 million, net of retrocession and before tax (SCOR).

In view of the marginal penetration of flood insurance for residential properties in Thailand, the losses caused by this event will come almost entirely from manufacturing and supply chains, a SCOR release says.

The floodwaters are still slowly draining away in some of the industrial areas with the highest exposure, creating difficulty for adjusters to access the affected areas.

“A large number of electronic key component manufacturers were affected, leading to production delays and disruptions at client businesses,” SCOR said. Munich Re said “approximately 25% of the world’s supply of components for computer hard drives is manufactured in Thailand and was thus directly impacted by the floods.”

Psychological and physical impairments can be combined to determine catastrophic impairment: Ontario Appeal Court

Psychological and physical impairments can be combined for the purpose of determining whether or not an injured person has a catastrophic impairment, the Ontario Court of Appeal has ruled in Kusnierz v. Economical Mutual Insurance Company. The appellant in the case, Robert Kusnierz, was involved in a serious single vehicle accident 10 years ago (he was 29 years old at the time). He suffered numerous physical and psychological injuries as a result of the accident, including the loss of his left leg below the knee and clinical depression.

The Ontario Superior Court ruled that his psychological injuries should not have been combined with his physical injuries in the assessment of whether he met the 55% threshold for a whole person catastrophic impairment.

But in a unanimous decision by a three-judge panel, the Appeal Court decided Kusnierz in a manner consistent with the Ontario Superior Court’s decision in Desbiens v. Mordini. In Kusnierz, the Appeal Court quoted extensively from
Desbiens in support of its finding that psychological impairments can be combined with physical impairments in determining catastrophic injuries under the SABs.

“The text of the regulation itself indicates that the drafters clearly intended the definition of ‘catastrophic impairment’ to be inclusive rather than restrictive,” the Appeal Court wrote, quoting from Desbiens.

Regulation

B.C. requires insurers to become members of GIO

B.C. has passed regulations under the Insurance Act requiring companies transacting home, auto and business insurance — with the exception of ICBC and mutual companies — to be members of the General Insurance OmbudService (GIO).

The regulations come into effect July 1, 2012.

GIO has operated across Canada since 2002 in cooperation with federally ordered insurers that are required to belong to an independent complaints resolution service.

GIO provides consumers with cost-free, independent and impartial services to resolve their complaints about car, home and business insurance, applying best practices in cooperation with member companies, consumers and governments.

“GIO’s consumer service officers work hard to provide the best assistance to consumers,” added GIO executive director Brian Maltman. “The decision of the B.C. Government is a welcome endorsement of our efforts.”

New Brunswick proposes draft regulations for banning credit scoring in all insurance lines

New Brunswick’s department of justice has posted draft regulations for public consultation that would ban credit scoring in residential, property and auto insurance lines.

In addition, the draft regulations would not allow insurers to decline to issue, refuse to renew or terminate coverage on the grounds of a person’s age, gender or marital status.

The draft regulations would also prohibit insurers from refusing coverage to:
•    applicants who have been insured by the Facility Association;
•    applicants who were declined insurance or refused a renewal by another insurer;
•    people who have experienced a lapse in coverage for a period of less than two years, or
•    people who have made a claim in the past for which they were at fault.

Finally, the draft regulations state an insurer would not be allowed to decline to issue, refuse to renew or terminate auto insurance on the grounds of a vehicle’s age. Exceptions to this include antique vehicles, reconstructed vehicles and vehicles “substantially modified for enhanced performance.”