Protecting our Communities

As weather patterns change and storm damage rises, I am becoming increasingly concerned about insurance companies’ ability to adequately protect our communities. Water-related damage is increasingly one of the most frequent types of home insurance loss in Canada. And, according to our research, it is the least understood by policyholders. All too often clients learn what is — and is not — covered in their policy after they have suffered a water-related loss. As we understand all too well, surprises of this sort create animosity and distrust toward the industry as a whole. If water damage continues to increase both in frequency and severity, as is the current trend, our industry may be in for a flood of resentment.

There is a crucial need for continued research, as well as infrastructure and planning improvements, to boost our capacity to mitigate the risks of 21st century weather. Storms are a time for insurance companies to prove their worth. Too often we cannot do so, either because we increasingly don’t write certain risks in a particular area or because of policy exclusions. It’s not uncommon to see a third of all claims denied following major water-related events.

Perhaps it’s time we consider a different approach. Whether it’s an industry pool, a partnership with government or some other alternative, we should explore ways to better protect homeowners.

The volatility and softness of the market is also of concern as we head into 2008. The impact of downward pressure on commercial rates and underwriting results will be felt, and require action at a time when significant court challenges to the auto legislation regime are underway. Add to that fair value accounting and skittish investment markets and it becomes apparent pricing discipline should be the order of the day.

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Apology/Correction

Canadian Underwriter would like to apologize to The Co-operators president and CEO Kathy Bardswick, who submitted a piece to the magazine for publication in December 2007. Due to editorial oversight, the piece was omitted from our cover feature, which presented the 2008 market outlook from primary insurers. We are pleased to present Bardswick’s viewpoint here in its entirety.

Correction: In our December 2007 cover feature, we incorrectly identified Charles Brindamour as the incoming president and CEO of ING Insurance Company of Canada. In fact, he is the president and CEO of ING Canada and not ING Insurance Company of Canada, as indicated. ING Insurance Company of Canada is a subsidiary of ING Canada and Derek Iles assumes the presidency of this subsidiary. Canadian Underwriter apologizes for this error.