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

2. The Year of Fort McMurray

3. Affordable auto insurance under threat

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

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

6. Inflation over same period =
The cap era
Average Auto Premiums
Increase over 11 years =
$ or 9.8%
Inflation over same period =
26%

7. $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

8. 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.

9. 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

10. Troubled economic times

11. 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

12. Evacuation route

13. Waiting for Spring

14. Flow of traffic

15. Managing Expectations

16. Preparation Matters

17. 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

18. 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

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

20. 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

21. Communication is critical

22. Collecting white goods

23. 12,000 appliances disposed of

24. Clearing debris

26. Insurance Bureau of Canada
Thank You
Questions?