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Ontario auto reforms have yet to meet expectation of a simplified claims process for insurers: CEO


April 26, 2011   by Canadian Underwriter


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Ontario’s auto reforms have followed insurers’ expectations in many respects, but that doesn’t appear to include a simplified, less expensive process for insurers.
Speaking at the Insurance Bureau of Canada (IBC)’s Financial Affairs Symposium on Apr. 21, Aviva Canada president and CEO Maurice Tulloch gave a slide presentation on ‘An Insurer’s View’ of the Ontario auto insurance reforms implemented on Sept. 1. 2010.
One slide included Tulloch’s answer to the question, ‘Did we get what we expected?’ (i.e. as a result of the reforms).
The reforms reduced mandatory coverage for medical-rehab benefits from $100,000 to $50,000; converted housekeeping and caregiver benefits into optional benefits; and applied a $3,500 cap to all injuries falling under a new (interim) Minor Injury Guideline (MIG).
Tulloch’s presentation said insurers expected a “simplified process for insurers” as a result of the reforms, but to date this has not been the reality for Aviva Canada. “We have incurred significant internal cost,” his notes for the presentation read.
Tulloch said Aviva is off to “a good start” adapting to the MIG component of the reforms. But based on the “huge internal costs” required for success, he wondered whether the benefits to insurers of the MIG would be “sustainable.”
In particular, he noted Aviva had to totally change its claims-handling process. Also, accident benefit workers were still under pressure because the “magnitude of submissions is still a challenge,” Tulloch noted. And insurers still have to make a significant investment to educate health care providers about the changes.
Tulloch said some insurers are “struggling to make [the MIG] work,” particularly if they don’t already have a preferred health care provider in place.
Several of the insurers’ expectations were realized, however.
Tulloch noted insurers expected to see an acceleration of medical claims prior to the Sept. 1, 2010 implementation date of the reforms (e.g. so the claims would be subject to the old regime). And in fact, “claims spiked significantly in the months leading up to Sept. 1,” his slide notes.
Also, insurers assumed a high percentage of customers would choose the new standard product. And in fact “on average, only 4% of customers are selecting optional coverages,” Tulloch’s slide presentation says.


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