February 14, 2018 by Jason Contant
Restrictions imposed on how insurers price usage-based insurance pricing (UBIP) are hampering innovation in the insurance industry, the Insurance Bureau of Canada (IBC) told Canadian Underwriter Monday.
Canadian Underwriter asked IBC on Monday for examples of red tape that could be cut in the industry to help increase innovation. One example is that Ontarians should have access to “dynamic insurance products and services,” including UBIP, says IBC’s director of media and digital communications, Steve Kee.
UBIP customizes the price of insurance based on a person’s driving habits, rewarding good drivers with lower premiums. It generally consists of a device that a customer installs in his or her vehicle, or it can be an application installed on a smartphone, either of which allows an insurer to track distance driven and driving behaviours. The devices collate the information, which is then sent to the insurer to determine a price for insurance.
Ontario’s insurance regulator, the Financial Services Commission of Ontario (FSCO), imposes restrictions on insurers’ use of UBIP through Bulletin No. A-16/16. The restrictions in the bulletin include the ways in which consumers can be enrolled in UBIP, and the ways in which insurers can use the data collected through the UBIP device. Proposed UBIP models may first be reviewed by FSCO for comment, following which an insurer would make a formal filing for the Superintendent’s approval.
Insurer UBIP filings must include: