2019 Executive Outlook | Don Forgeron, IBC
January 2, 2019 by Canadian Underwriter
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Canadian Underwriter approached Canadian P&C industry executives with two questions:
1) What is the single most important change the industry must make looking forward into 2019?
2) How might this change be brought about?
Their answers, featured in our 2019 Executive Outlook, may provide you with insight as you set your own agenda for change.
Don Forgeron, President & CEO, Insurance Bureau of Canada
Auto insurance systems across the country are broken. Escalating claims costs are putting pressure on insurers in a number of markets. Governments need to work with the industry to address rising claims costs.
In 2019, our industry’s top priority will be to work with provincial governments to fix these broken systems. The existing rate regulation systems in Alberta, Ontario, Nova Scotia, and Newfoundland and Labrador are inefficient relics that benefit no one.
Our message to the provincial governments is loud and clear: reduce the regulatory burden so insurers can better serve their customers and build a more innovative industry. In Ontario, we are continuing to advocate for the changes that David Marshall prescribed in his 2017 report.
In Newfoundland and Labrador, the industry is playing an active role in the province’s review of the auto insurance system. In Nova Scotia, we are advocating for changes in rate regulation and for measures to control the cost of injury tort claims, which have been rising steadily since 2010.
Convincing governments to implement substantive reforms requires massive political capital. And it certainly isn’t easy. But we’ll endure because consumers deserve affordable, stable auto insurance products.
Canadian Underwriter’s two questions on auto insurance is evidence enough that the current “insurance” system has tried and failed yet despite a chorus of cries of disenchantment from right-thinking consumers that general pricing is, for one thing, preventing the purchase of higher and more meaningful injury coverage, it continues with a life of its own.
“Insurance” for vehicles is outdated, inequitable and unfit. How much better to revert to an “indemnification” basis where it could be seen that reimbursement would be after the fact of conscientious cost control, and a probable lessening of fraudulent activity by the imposition of unilateral financial responsibility. The democracy of “insurance” is allowing license for unaccountable usage, all to the detriment of the insurer. If premiums are ‘high’, they have to be. The current system is in lock-step with the demands of its culture, until a better one comes along.