Industry putting $2 million towards winning public confidence

Canadian p&c insurers have earmarked $2 million to invest in strategies to win back public confidence following recent years of consumer backlash against the industry, says the outgoing chair of the Insurance Bureau of Canada (IBC).
State Farm Insurance Cos. senior vice president Robert Cooke, in his final address as chair at the IBC’s annual general meeting in Toronto Wednesday, says the industry’s key goal in the coming years will be to learn how to better communicate with the public. The $2 million will go to initial research into how this might be accomplished, including three pilot projects planned for this winter to test consumer education and injury prevention programs as alternatives.
“Though the worst of the hard market is now behind us, we cannot simply hope that consumers will forget their anger,” says IBC CEO Stan Griffin. “This is a time of intense scrutiny for our industry. Governments are taking a hard look at all aspects of our business.”
Fast on the heels of government auto insurance reforms in almost every private market province, the industry is now contending with spillover from the U.S. broker compensation scandals. Griffin and Cooke both highlighted the swift action taken by the IBC and broker associations to address the public’s concerns through a new “consumer bill of rights”.
At the same time, insurers continue to struggle with the auto insurance issue, specifically in Alberta and Newfoundland where existing reforms are not seen as financial sustainable alternatives for the industry. “We, both out industry and the government, must recognize when changes are needed but we must avoid the desire to bring in speedy stop gaps at the potential expense of long lasting, effective results,” Cooke stresses.
“Unfortunately for the industry, it is still not “politically correct” for governments to listen to us, a fact that hampers long-lasting, effective reform,” says Griffin. “Also, it is increasingly clear that we need to better educate decision-makers about how we assess risk, and why these measures are not discriminatory, but in fact the most equitable and financially responsible method of setting rates.”
He refers to movement by several provincial governments to do away with traditional auto rating factors such as age and gender.
As Cooke departs the chair’s role after two years, an IBC spokesperson says it is expected Aviva Canada CEO Igal Mayer will be named the new chair for a two-year term. Mayer has most recently served as chair of IBC’s Ontario committee.