May 11, 2020 by Greg Meckbach
Canada’s largest property and casualty carrier observed a 50% drop after the middle of March in the distance driven by its auto clients, but the insurer’s usage-based telematics data suggest driving has started to pick up in recent weeks at a pace faster than expected, Intact Financial Corp. officials suggest.
“In the past couple of weeks, we have seen that driving started to pick up in the 10% to 20% range from the bottom of the lockdown,” Intact CEO Charles Brindamour said during a May 6 earnings call. “And with good weather, we expect that to gradually increase. We were surprised to see the driving pick up so quickly.”
He was asked during the call (which discussed Intact’s first-quarter financial results) about the impact of the COVID-19 pandemic on Intact’s auto insurance line. “The impact of the lockdown was most acute towards last week of March and the first few weeks of April,” Brindamour said. “All in all, I would say at the depth of the lockdown, we saw a drop in driving of about 50%.”
The World Health Organization declared COVID-19 to be a pandemic on Mar. 11. Shortly after that, several Canadian provinces declared states of emergency. Based on its telematics data and claims frequency, Intact saw a drop of close to 50% both in claims frequency and kilometres driven.
Brinadmour was asked whether he foresees any impact on kilometres driven now that people have become accustomed to not working in office settings.
“If I think about it mid- to longer-term,” he said. “I think it is a matter of looking at how people will move in relationship with coming to work, for those who come to work, versus how many more people work from home. I think, in aggregate, it is probably fair to assume that there will be a fair bit less driving in the long run. However, if people don’t feel the pressure to live close to the city and if people don’t use public transportation as much, I think that’s an offset here.”
The Canadian Press reports that the Toronto Transit Commission has temporarily laid off 1,200 employees amid an 85% drop in ridership. CP quoted Meghan Winters, an associate professor of health sciences at Simon Fraser University in Burnaby, B.C., as saying “the biggest challenge that will face our cities is that we’re not going to recover in terms of transit.”
Feature image via iStock.com/redtea