Annual Industry Update Vice President, Western & Pacific Feb 15, 2017 Bill Adams

The Year of Fort McMurray

Affordable auto insurance under threat

IBC’s strategic priorities Ontario Auto Natural Catastrophe Floods, Earthquake Regulatory Balance Alberta Auto

Average auto insurance premiums in Alberta – 1999 to 2004 Source: IBC with data from Baron Insurance Services.

Inflation over same period = The cap era Average Auto Premiums 2004-2015 Increase over 11 years = $105.24 or 9.8% Inflation over same period = 26%

$42,432 Average settlement for a minor sprain or strain claim UPDATE Non-cap $42,432 Cap $5,478 Source: IBC closed claims study, 2014

Auto insurance loss ratio Auto Loss Ratio by Province Source: IBC with data from GISA. GISA reports data on an accident-year basis. Accident-year results indicate the cost of claims from collisions that occurred in a given year and the price of the corresponding insurance policies. Loss ratio is the percentage of each dollar earned that goes to pay claims.

The difference is a saving of $2,446 Pre-judgment interest costs UPDATE $2,869 $390 At 4%, the average interest paid on non-pecuniary damages is $2,836. If the rate of 0.55% was used instead, the payment would be $390 The difference is a saving of $2,446

Troubled economic times

Recommendations for Reform Proposals: Amend the cap on pain and suffering damages so that it applies to everyone who has a minor sprain/strain Reduce the prejudgment interest rate on pain and suffering damages from 4% to align with prevailing market interest rates Change the start of the accrual period for prejudgment interest from the date of the collision to the start of the tort action

Evacuation route

Waiting for Spring

Flow of traffic

Managing Expectations

Preparation Matters

Lessons of Fort McMurray 1) Embed Early at Emergency Ops Coordinate information/avoid duplication Connected the industry with provincial government & community Strengthened relationships with NGOs and others

Lessons of Fort McMurray 2) Early mobilization of insurers and IBC staff Well placed to aid residents in evacuation centres and in back in the community Allowed for early entry by adjusters

Lessons of Fort McMurray Need for proactive communications Everybody needed accurate and timely information Multidisciplinary team formed Extensive use of social media

IBC and Social Media 21 million impressions on Twitter More than 360,000 impressions on Facebook 37,000 visits to IBC’s FMM Page Personal responses to more than 350 Facebook inquires

Communication is critical

Collecting white goods

12,000 appliances disposed of

Clearing debris

Insurance Bureau of Canada Thank You Questions?