What’s fair when it comes to setting automobile insurance rates?

2018.11.06 – If adjustments are to be made to the way automobile premiums are calculated, there will be winners and losers. It would be disingenuous for anyone to suggest that there is room in the system as things stand now for automobile premiums to be reduced in one territory without taking an increase somewhere else.

The long term outlook for automobile insurance in Canada

2018.06.29 – In a recent online article, Canadian Underwriter magazine asked the question, Is the sun setting on auto insurance in Canada? In my view, it may be late afternoon for the automobile insurance market, but I think it will be a while yet before the sun fully sets on this line of business.

The challenges of being a small regional insurer

2018.05.24 – The strategic question for smaller companies, especially small regional personal lines insurers, is how to compete with the ‘behemoths’ so as not to get left behind. A small insurer that relies too much on its own in-house resources could find itself shut out of the advantages enjoyed by the larger players that have the resources to invest in advanced analytics and fintech.

Having a full discussion about Ontario auto insurance pricing

2018.01.05 – A provincial election in Ontario is expected to take place within the next six months. In the lead up to that election, it is a safe bet that all three parties will make a number of promises as to how they will reduce the cost of automobile insurance if the election goes their way. As Ontario gears up for a provincial election, here’s hoping for an informed discussion about the cost of insuring Ontario drivers.

Potential pitfalls awaiting insurers and consumers who spurn telematics.

2017.12.21 – Not everyone has embraced telematics. What, though, are the risks facing insurers and consumers who turn their backs on this technology?

Why an insurer might pay more for a brokerage than what another buyer would offer.

2017.11.07 – When it comes to the valuation of insurance brokerages, is the going rate driven up by the presence of insurance companies as potential purchasers? I think there are valid reasons to explain why an insurer might pay more for a brokerage than what another buyer would offer.

Is technology about to render brokers obsolete?

2017.10.31 – A recent press release from a B.C. brokerage was entitled, Automated online office insurance “could make brokers redundant”. It’s not clear whether the brokerage authored the title of the press release or whether this was the work of the wire service. Nevertheless, the title does raise the question as to whether, in this digital age, there is a future for insurance intermediaries.

When is a road-building machine not a road-building machine? Ontario brokers need to know.

2017.05.02 – Effective July 1st, the Highway Traffic Act in Ontario is being amended to change the definition of a road-building machine. As a result of the new regulation, certain types of vehicles will no longer be considered road-building machines. Of primary importance to insurance intermediaries is that these vehicles, currently insurable as contractors’ equipment, will now require automobile insurance.

Fintechs as a potential disruptor or enabler for the insurance industry

2017.02.13 – Whenever a new technology emerges, there is always the question as to whether it will assist or threaten existing industries. With the surge in activity from fintechs, the property and casualty insurance industry is facing this question on a number of fronts.

Blockchain. The next big thing?

2016.12.20 – Until it becomes clear whether this technology will live up to its early promise, insurers are well advised to at least monitor where things are heading. Insurers that ignore this technology risk putting themselves at a competitive disadvantage.

When do the changes to SABS take effect? It depends who you ask

2016.10.19 – The changes to the Ontario Statutory Accident Benefits Schedule introduced on June 1st, 2016, were complicated enough. Now, to make matters worse, there are mixed messages coming from the industry as to when policyholders are affected by these changes.

Competing effectively in a digital world

2016.10.03 – A recent study discusses how savvy insurers and brokers are using digital capabilities to add value to their offerings and, in so doing, avoid getting sidelined into the lower-value role of a utility.

Earthquake: The risk that could take the industry down

2016.08.23 – The science of tectonic plates is well understood. What cannot be predicted with any certainty is when and where a major event will take place.

An Accident Benefits option that’s well worth considering

2016.06.07 – In light of the recent changes to the Ontario automobile insurance wording, an increase in limits may be particularly advisable when it comes to the medical, rehabilitation and attendant care benefits for non-catastrophic injuries. 

Changes to Ontario Accident Benefits: The E&O implications for agents and brokers

2016.05.20 – Brokers who fail to offer their customers sound advice, or who offer the advice but fail to document their files properly, run the risk of finding themselves on the wrong end of an Errors and Omissions lawsuit.

The launch of Sonnet Insurance. A game changer?

2016.05.10 – Economical Insurance has now launched its direct digital brand, Sonnet. This new product offering could well be poised to win a significant number of consumers. In fact, given its heavy reliance on data analytics, the launch of Sonnet could be a game changer.

A great opportunity to show the value brokers can offer consumers

2016.04.15 – A new standard automobile insurance policy will come into effect in Ontario on June 1st, 2016. This is an opportunity for brokerages to demonstrate the value they offer the public by dispensing expert advice.

As the direct channel expands, how should brokers respond?

2016.02.05 – If the broker distribution model is to remain dominant in the face of an expanding direct channel, brokers will need to find a way to distinguish themselves from direct writers in something other than price.

Soft market conditions: No end in sight

2016.01.25 – To the extent that insurers take their underwriting cue from reinsurers and that insurance pricing is to some extent driven by the cost of reinsurance, the continuing softness in the international reinsurance market suggests that anyone waiting for a hardening in the insurance market place should be prepared for a long wait.

Hold ’em or fold ’em?

2015.11.27 – At the moment, brokerages are being sold at historically high multiples of commission income. Among the questions facing potential buyers and sellers is whether these multiples will continue to rise, whether they will plateau or whether they will start to decrease.

Have we hit the ceiling for the sale price of insurance brokerages?

2015.11.23 – The market remains robust for insurance brokerages. The question at hand is how long these heady days can last. 

Rough road may await Ontario auto insurers

2015.10.19 – It is fair to say that the profitability of many Canadian insurers is largely influenced by their Ontario automobile results. With this in mind, the industry may be in for a rough ride. 

Advantages of Risk Management Approach to clients

2015.09.21 – For a broker interested in writing and retaining commercial accounts, there is a lot to be said for conducting a thorough review of a business owner’s operations, making recommendations for appropriate limits and types of coverage, and then ensuring that the client understands what is – and isn’t! – covered under the insurance programme he or she selects. 

The challenges small companies face when bringing a new employee on board

2015.08.31 – Compared to what happens at a large employer, it can be very challenging for a small company to welcome a new employee on board successfully. Although integrating a new hire into the company’s culture can be difficult, the benefits of doing it well, and the costs associated with it doing it badly, make it worth the time and effort.

The continuing challenge of insurance for Uber and its drivers

2015.07.13 – A few days ago, an Ontario judge ruled that Uber is not operating as a taxi broker and that it has not breached any city bylaws. While this is a victory for Uber, this ruling does nothing to solve the insurance problems of Uber’s drivers.

Overland flooding coverage: An E&O minefield for brokers?

2015.06.10 – If a broker does not make arrangements for this coverage to be added to a client’s personal property policy and the client has an overland flooding claim, it leaves open the possibility that the broker will wind up on the wrong end of an Errors and Omissions claim.

Coverage for overland flooding now available – and not a moment too soon.

2015.05.27 – A major complaint levelled against the insurance industry is that it has failed to provide coverage for consumers who, through no fault of their own, have seen their homes and belongings destroyed by flood. With the announcement by Co-operators that insurance coverage will now be made available for overland flooding, let us hope the critics will be silenced.

Practising safe  job-searching

2015.05.15 – We all at some point wonder if the grass is greener on the other side. Ideally, this can be done without jeopardizing your current job. There is no way of absolutely guaranteeing that word of your job search will not leak out. Still, it makes sense to take steps to lessen the chance of this happening.

Demutualization: Proposed regulations don’t please everyone

2015.03.30 – Almost four years after launching public consultations, the federal government has published proposed regulations governing the demutualization of property and casualty insurance companies. As suggested in an earlier blog, the release of the draft regulations has not pleased everyone.

An Uber-challenge to automobile insurance coverage

2015.02.24 – Using the family car to drive for Uber carries the potential for serious consequences in terms of inadequate insurance protection. Until the legal issues surrounding Uber’s business model are resolved, it doesn’t appear likely the industry will come up with a solution.

No reason to expect a hardening of the market anytime soon

2015.01.26 – For anyone waiting for the underwriting market to harden, it would appear they’ll be waiting a little while longer. One of the events that can trigger a tightening of the primary market is a tightening of the reinsurance market. Two reports published earlier this month suggest that no such tightening is on the horizon.

Meeting regulatory requirements: Sometimes size matters

2014.12.22 – As insurers face the challenges of legislative and regulatory compliance, there is an argument to be made that large insurers will be in a better position to meet these challenges. 

Chief Digital Officer: The next big thing?

2014.11.27 – There was a time when the only C-suite title was Chief Executive Officer. Eventually new titles emerged such as Chief Operating Officer, Chief Financial Officer, Chief Marketing Officer, and Chief Information Officer. One of the latest C-suite titles to emerge

Demutualization: No way to make everybody happy

2014.10.14 – In trying to draft a legislative framework in response to Economical Insurance’s request to demutualize, the federal government finds itself caught between strongly opposing views from the industry. Not unlike sailors trying to navigate a safe course between the mythological

More merger and acquisition activity may be on the horizon

2014.09.05 – Two weeks ago, Insurance Thought Leadership (ITL) published an article predicting a surge of merger and acquisition activity in the claims and technology sector.  As if on cue, there was an announcement a week later that SCM Insurance Services had…

How the rise of catastrophe bonds may change our industry

2014.07.14 – In its Second Quarter 2014 update, Aon Benfield Securities reported that catastrophe bond issuance hit a record high US$ 4.5 billion – the most of any quarter in the history of the insurance-linked securities (ILS) market. The growth of the

Telematics changes the dynamics of the automobile insurance industry

2014.06.05 – There has been much discussion about the introduction of vehicle telematics to the Canadian insurance marketplace. The idea of usage-based insurance (UBI) is that a driver’s behaviour is monitored in real time while the person drives. This information is then

The worst of both worlds

2014.05.04 – When Ontario’s Lieutenant Governor David Onley granted Premier Kathleen Wynne’s request to dissolve the legislature, it wasn’t only the proposed budget that was put to the sword. Work also stopped on a key piece of legislation designed to reduce automobile

Ontario automobile pricing and product reform: Something has to give

2014.04.30 – The Insurance Brokers Association of Ontario (IBAO) has come out in favour of Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act. The IBAO’s position, as quoted in their press release, is that unless Bill 171 is passed

Canadian natural catastrophes being noted on the world stage

2014.04.14 – The impact of natural catastrophes is having an ever-increasing impact on the results of insurers around the world. According to a recent report from Aon Benfield’s catastophe model development arm, natural catastrophes caused roughly $7 billion in insured losses globally

Courts to consider what is required of an insurance intermediary to ensure a client’s policies are adequate

2014.03.24 – In 2008, thieves stole approximately $2 million dollars worth of jewellery, including two Stanley Cup rings, from the home of Paul and Judy Bronfman. As it turned out, the couple’s insurance policy contained sub-limits of $10,000 for jewellery and $1,500

Mergers and acquisitions in the insurance industry

2014.07.07 – Anton Tchajkov, a corporate lawyer at Norton Rose Fulbright Canada, has published an article on the subject of mergers and acquisitions within the insurance industry. The opportunity for growth is cited as the main driver for many of these transactions.

Prospects for overall growth in the P&C industry

2014.02.28 – The Canadian property and casualty insurance industry does not operate in a vacuum. It is part of the Canadian economy. It is hard to imagine the p&c industry enjoying robust growth unless it goes hand-in-hand with a significant expansion of our

An expensive peril challenges the traditional process of rating property insurance

2014.02.26 –  The impact of water damage on property insurance results has drawn the attention of the Canadian Institute of Actuaries. As noted by the Insurance Bureau of Canada, one out of every two dollars paid for homeowners insurance goes to cover