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Annual Industry Update
Vice President, Western & Pacific Feb 15, 2017 Bill Adams
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The Year of Fort McMurray
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Affordable auto insurance under threat
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IBC’s strategic priorities
Ontario Auto Natural Catastrophe Floods, Earthquake Regulatory Balance Alberta Auto
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Average auto insurance premiums in Alberta – 1999 to 2004
Source: IBC with data from Baron Insurance Services.
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Inflation over same period =
The cap era Average Auto Premiums Increase over 11 years = $ or 9.8% Inflation over same period = 26%
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$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
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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.
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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
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Troubled economic times
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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
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Evacuation route
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Waiting for Spring
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Flow of traffic
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Managing Expectations
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Preparation Matters
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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
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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
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Lessons of Fort McMurray
Need for proactive communications Everybody needed accurate and timely information Multidisciplinary team formed Extensive use of social media
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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
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Communication is critical
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Collecting white goods
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12,000 appliances disposed of
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Clearing debris
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Insurance Bureau of Canada
Thank You Questions?
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