Marketplace

CANADIAN MARKET

Quebec brokerage sector a model: Study

Quebec’s brokerage industry is the driving model for damage insurance, notes a new study, sponsored by BMO Bank of Montreal.

The Regroupement des cabinets de courtage d’assurance du Québec commissioned Raymond Chabot Grant Thornton to provide an overview.

Key findings include that in Quebec, the brokerage sector is the primary distribution model for damage insurance, representing 52.28% of the Quebec market, or $4.48 billion in premiums; and the annual economic benefits associated with the industry amount to $657 million and are supported by 10,356 direct and indirect jobs.

RSA to soon offer telematics for auto insurance customers

RSA Canada plans to launch towards the end of 2015 telematics for auto insurance customers across the country, Donna Ince, senior vice president of personal lines, said at a company event for brokers in downtown Toronto.

“At RSA, we are fortunate that our global footprint has allowed us to see first hand the benefits of telematics,” based on the experience in other markets, including the United Kingdom and the United States, Ince said.

Several Canadian insurers are already providing usage-based insurance using telematics technology.”Our overarching strategy in Canada remains unchanged,” Rowan Saunders, RSA Canada’s president and chief executive officer, said during the same broker event in early March. “We remain completely committed to the broker channel. We have no plans to exit any segments of our business and, in fact, we are seeking opportunities to build and develop more,” Saunders said.

Ingenie rolls out auto insurance for young drivers in Ontario

Ingenie Canada Inc.’s new auto insurance offering in Ontario, which uses telematics technology and targets drivers aged 24 and younger, allows for discounts of as much as 25%.

“Young drivers insured by ingenie install a Smartbox in their car, which builds a picture of their driving style based on indicators such as speed, acceleration, braking and cornering,” the company reports. Ontario customers will receive feedback every 10 days, either through a mobile app or via the ingenie website.

Underwritten by Pilot Insurance Company, part of Aviva Canada, the telematics product is being offered directly through ingenie.ca. It is also being rolled out at Ontario brokerages through Insurance Brokers Association of Ontario.

New privacy, network liability coverage for Canadian companies

ACE Group has announced the availability of privacy and network liability coverage for private companies in Canada.

The new offering includes the option to add the same broad privacy and network liability coverage that ACE offers on a standalone basis.

Highlights of the coverage include privacy liability, data breach fund, network security liability and options for network extortion, business interruption and digital assets coverage.

Suite of flood analytics launched for Canadian insurance market: Willis

Willis Re reports that it has unveiled a “new suite of flood solutions offering unprecedented analytical capabilities that will enable insurers to proactively manage Canada flood accumulations.”

The new solutions include a range of tools that deliver the ability to develop and enhance underwriting and risk transfer strategy, manage and monitor portfolio accumulations, and calculate probable maximum loss estimations. “Market demand in Canada for a high-quality, high-resolution flood solution has never been greater,” suggests Geoffrey Lubert, managing director of Willis Re Canada. “Insurers need to leverage the latest science and analytical methods to evaluate and manage local and regional flood exposure.”

REGULATION 

Draft regulations issued for demutualization of P&C companies

Canada’s finance department has issued long-awaited draft regulations for the demutualization of Canadian property and casualty insurance companies.

Available online at the Canada Gazette website as of February 27, there are two sets of draft regulations, one for insurers with only mutual policyholders and one for insurers with both mutual and non-mutual policyholders.Economical Insurance, which has been pursuing demutualization for four years, called the announcement a “significant milestone,” since the regulations are needed to allow p&c companies that wish to change their corporate structures to become companies with share capital.

“With the greater access to capital that demutualization can bring, Economical could make the significant investments it needs to compete on an equal footing with other p&c companies that do not face the same constraints on financial flexibility imposed by the mutual structure,” says Gerald Hooper, chair of Economical Insurance’s Board of Directors.The draft regulations are subject to a comment period ending March 30. Once final regulations are in force, companies may formally begin the demutualization process.

Inspection powers under Ontario bill in force

Sections of an Ontario law aimed at reducing auto insurance claims costs, which would give inspectors power to enter premises without a search warrant and remove records for review, took effect April 1.Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, is an omnibus bill passed into law November 20. Not all provisions have taken effect, but a section changing the Consumer Protection Act to provide for the appointment of inspectors and inspection powers came into force April 1.The bill notes a provincial inspector “may, without a warrant, enter and inspect any place in order to perform an inspection to ensure this Act is being complied with.” In addition, an inspector may “require the production of a record or other thing that the inspector thinks may be relevant to the inspection” and to “remove for review and copy a record or other thing that the inspector thinks may be relevant to the inspection.”

RISK

Alberta government must update flood mapping guidelines

Alberta’s Office of the Auditor General reports the province’s environment and sustainable resource development department produces “technically sound flood hazard maps,” but the maps are not always up to date.

The comments come almost two years after June 2013 floods in southern Alberta caused Canada’s most expensive natural disaster, approximately $1.7 billion in insured losses.

The department, which is responsible for flood mitigation in Alberta, “does not have historical information on the consequences of previous floods, such as lives lost, injuries, property damage and business interruption,” notes the auditor general’s report.

Although the department produces technically sound flood hazard maps, its “mapping guidelines have not been updated to deal with all types of flood hazards,” including geo-hazard events such as debris flows or debris floods or the risk that erosion and rapid channel change will cause flooding.

A recent review of Canadian floodplain mapping programs estimates that Alberta requires another 770 kilometres of river mapping to document its flood hazard areas, the report adds.

Manitoba to install sprinklers in personal care homes

The Manitoba Office of the Fire Commissioner plans to spend $7 million to install sprinklers and other fire safety improvements in 24 personal care homes and hospitals across the province.

Provincial labour minister Erna Braun, who is also responsible for the Office of the Fire Commissioner, reported in mid-March that the provincial government is accepting all the recommendations of the Fire Safety Task Force report on ways to improve fire safety in care and treatment facilities, and has started implementation on some changes.

The report estimated the cost of implementing all rec
ommendations would be approximately $125 million, with the government committing more than $70 million for fire and life-safety upgrades over 10 years.

TECHNOLOGY

Technology provides up-to-date view on global terrorist attacks

Impact Forecasting, Aon Benfield’s catastrophe model development team, is applying a new blast engineering approach to provide a more realistic understanding of the potential range of losses from a terrorist attack.

The company reports that its terrorism risk experts utilize computational fluid dynamics (CFD) software developed over many years in conjunction with the United States military and government to define an explosion and how it moves within a 3D urban environment.

The new approach breaks from traditional blast radius modelling by taking into account a number of nuances that are absent in current blast analysis that can have a substantial impact on losses.

“We can now apply CFD analysis to any city across the world upon client request, quantifying the effect of location and blast size uncertainties to highlight the variation of the possible impacts,” says Mark Lynch, who leads political risk model development at Impact Forecasting.

REINSURANCE

Extreme cold in North America fourth most costly nat-cat in 2014

The unusually cold winter last year in the eastern United States and Canada was the insurance industry’s fourth costliest natural catastrophe worldwide in 2014, Munich Re reports.

The winter damage both north and south of the border amounted to overall losses of US$2.5 billion and insured losses of US$1.7 billion.

“Although temperatures moderated somewhat by mid-January, the persistent ridge over the northeast Pacific kept forcing Arctic air southward over eastern North America for the next three months, resulting in one of the coldest winter seasons in decades,” Munich Re notes.

Among the 50 major loss events for the insurance industry in 2014, the report notes, was the hailstorm in Airdrie, Alberta, the severe storms August 7 to 8 in Alberta, and the severe floods and severe storms in Canada from June 28 through July 1.