Over 150 Attendees Already Confirmed to Attend Insurance Telematics Canada Conference 2014

With nearly all of the nations insurance carriers represented in the audience and on stage (C-level officials from RSA Group, Desjardins and The Cooperators are involved in presentations and panel sessions), the 2-day Insurance Telematics Canada conference (May 28-29) will allow telematics service providers such as iMetrik, Octo and IMS; technology consultants such as IBM, Towers Watson and CGI; and insurance regulators such as Financial Services Commission of Ontario and the Alberta Treasury Board and Finance to gain a priceless insight into how insurance carriers seek to utilise the strategic benefits that UBI can deliver. A sample of the delegates can be found here - http://www.telematicsupdate.com/insurance-telematics-canada/attendees.php.


http://www.12newsnow.com/story/25380970/over-150-attendees-already-confirmed-to-attend-insurance-telematics-canada-conference-2014

Source:  http://www.fairassociation.ca/

Motor Mouth: The cost of cheaper insurance is your privacy

Usage-based insurance could be the slippery slope that leads us all into an Orwellian driving future 

How cheaply do we surrender our freedoms?

The nightmare of Big Brother — at least how I’ve always understood it — has always been one that is forced upon its citizenry. To be sure, the methods are always insidious, the doublespeak always cloaked in soothing palliatives and the promise of a Utopian society, not to mention the occasional financial incentive. But, as much as the process of being constantly surveilled is stealthy and surreptitious, it is always forced upon us. We would not, in a million years, volunteer for an Orwellian future, right?

Oh, if only that were true.

It turns out that, in the last few years, some six million motorists — mostly in the United Kingdom and the United States — have volunteered to have a black box installed in their automobile that monitors their behaviour behind the wheel, with all of the data from every kilometre of their driving fed right back to their insurance companies.

The lure is that, should you drive according to the insurer’s guidelines, you could actually have your monthly insurance premium reduced. Each insurer differs as to what they actually measure and what specific limits they pose, but the premise is always the same: drive in a “normal” manner — i.e. as if you were a little old lady from Pasadena driving a Suzuki Sprint with one spark plug missing — and you will see savings.

Motor Mouth: Surrendering our driving freedom $50 at a time

How significant are these savings? Well, it depends on whom you talk to. Desjardins’ new Ajusto black-boxed insurance program being offered in Ontario and Quebec promises as much as 25% savings if you respect their limits of not accelerating harder than 13 kilometres per hour per second or braking more than 15 km/h/sec. In Quebec — where the RCCAQ (Le Regroupement des cabinets de courtage d’assurances du Québec) is estimating that up to 30% of drivers may opt for such telematics-based insurance by 2017 — the median savings is said to be about 12%. For a little more perspective on that, remember that Quebec automobile insurance is partially subsidized, the average consumer paying about $650 annually for their supplementary property damage insurance. Do the math and the costs savings to the average Ajusto customer in Quebec is about seven bucks a month. Even for someone in Ontario currently paying $2,000 a year, that net savings would translate into but $20 a month, not enough to buy you a 12-pack unless The Beer Store is having a fire sale.

The Ajusto wireless device from Desjardins Insurance is installed into a vehicle’s diagnostic port and measures distance travelled annually, frequency of hard braking and acceleration, as well as time of day the vehicle is driven to determine savings on insurance rates.
Handout, The Canadian Press

A few other companies in Quebec offer greater savings. Industrial Alliance’s Mobiliz, for instance, targets drivers between the ages of 16 and 24, generally acknowledged as those most at risk for traffic accidents. According to the company, the average young adult saves about 25%. Of course, only the most law-abiding of teenagers signs up for the program, especially since Mobiliz is the only black box insurer that will actually raise your rates — by up to 100% if you’ve been particularly naughty — if you speed too dramatically or too often (for instance, every instance of “extreme speed” will result in a premium of $10 being added to your monthly bill). So that the insured can immediately see the result of their driving behaviour, Mobiliz’s premiums are adjusted monthly meaning their premiums could fluctuate dramatically.

Nonetheless, the lure of lower insurance rates is finding traction. According to Towers Watson, a consulting firm in the U.S., about 200,000 Americans a month are signing up to have said black boxes installed in their cars. The organization also says that “nearly 90% express openness to buy a UBI (usage based insurance) policy in the U.S. if there is no risk of premium increasing.” Canadian Business, on the other hand, reports that a Deloitte survey here in the Great White Frozen North revealed that 61% of Canadians would not be interested in such surveillance devices in their cars.

Motor Mouth: Missing jet a sobering reminder of tech’s faults

In this 2006 file photo, Adam Gordon, of Saint Paul, Minnesota, displays the wireless device that his auto insurance provider uses to monitor his driving speed, distance, braking and accelerating, and what time he’s driving. In exchange, Gordon gets a 15% savings on his auto insurance premiums.
Archive photo, Craig Borck/St. Paul Pioneer Press/

That would seem to put us in a more independent mindset than our Yankee friends, usually the last bastion of personal freedoms and privacy. Nonetheless, I would still want to know why a seemingly incredible 39% of Canadians think volunteering for such a program is a good idea? Indeed, forget about the plight of the scofflaw motorist for a moment; why would anyone volunteer to supply evidence of malfeasance of any kind that might be used against them? This is akin to volunteering for a tax audit. Or videotaping your business hotel room for your spouse so that they might witness first-hand the nonsense you get up to when they’re not around. Surely, even those of you smugly sitting in your Toyota Priuses, comfortable in the knowledge that you’ll never speed, understand that opening up every part of your personal life to constant scrutiny — data loggers in your trousers and breathalyzers for everyone! — is never a good idea.

So far, the push for the installation of these black boxes have been rather modest campaigns by private insurance companies, all — at least in Ontario — assuring that the information won’t be used for nefarious purposes (i.e. raising your rates). Imagine, however, if the political class gets involved. The Wynne government is already desperately looking for ways to fulfill their promise to lower Ontario’s insurance rates. And, what if politicians in B.C., Manitoba and Saskatchewan — provinces where the entire insurance programs are government run — get behind this constant monitoring of motorists? How long do you think it will be before such schemes become mandatory and a cash cow for beleaguered governments?

All this for as little as seven bucks a month. If we do end up in some brackish Orwellian dystopia, we will have no one else to blame but ourselves.

Could our driving data fall into to the wrong hands?

So far, the discussions regarding the privacy of the information culled from owners’ black boxes has focused on who owns the data. To their credit, virtually everyone in the insurance industry seems to agree that the information must remain the property of the owner (Quebec’s RCCAQ has asked for guidelines to be established that all information collected remains the property of the insured and such policies are already in place in Ontario). That said, the big insurance companies aren’t the ones actually collecting the data; that generally rests with third party data collection firms. And, depending on which company is doing the information gathering, your particulars could be housed in Canada, the United States, or even Italy. With the porosity of data security now being top-of-the-fold headline material these days, do we really need more Heartbleed leaks to understand that data mining is the playground of the modern scoundrel?

Source:  http://driving.ca/auto-news/news/motor-mouth-bowing-down-to-big-brother-for-cheap-insurance By David Booth Originally published: April 25, 2014

Desjardins' State Farm Canada combo a 'distribution play around financial services' former Dominion CEO Cooke says

The acquisition by Desjardins Group of the Canadian operations of State Farm is not just about insurance, a former chief executive officer of The Dominion of Canada General Insurance Company said Friday.

"It's going to be a play of some kind around combining financial services types of products into one distribution model," said George Cooke, president Martello Associates Consulting, of the Desjardins agreement with State Farm.
"One has to believe that this is a distribution play around financial services, and what you will see coming out of this, post-2015 when the deal is complete and the integration is somewhat underway, is that infrastructure is going to be use to sell more than just auto insurance and home insurance."
Cooke made his remarks during a presentation at the AudaVision Toronto 2014 symposium, held by auto claims technology vendor Audatex Canada. In addition to being a former Dominion CEO, Cooke is an independent chair of the Ontario Municipal Employees Retirement System (OMERS) Administrative Corporation (OAC) and a former director of the Insurance Bureau of Canada.
During his presentation Friday, Cooke said consolidation in the insurance industry will be one of three of the most important trends in the industry. A prime example is the agreement, announced Jan. 14, by Levis, Quebec-based Desjardins to acquire the Aurora, Ont.-based Canadian businesses of State Farm, including its P&C, life insurance, mutual fund, loan and living benefits.
"If somebody had asked me month ago what I thought the chances were of Desjardins buying the Canadian assets of State Farm, I personally would have said 'There's no chance at all,'" Cooke said. "I didn't see that one coming. I don't think most people in the industry saw that one coming."
Desjardins General Insurance Group already provides auto, property, pet, motorcycle and recreational vehicle coverage in Ontario, Alberta and Quebec. Desjardins Group owns Western Financial Group Inc. of High River, Alta., whose operations include a broker network with more than 100 offices in Western Canada.
Desjardins Group's other financial services include personal and business banking, a full services brokerage, mutual funds and mortgages.
"It's going to be a play of some kind around combining financial services types of products into one distribution model," Cooke said of the State Farm Canada acquisition. "I would have never guessed that State Farm, particularly with its structure, being a Canadian piece of an American company, with a mutual background and a particular distribution approach, would be acquired by Desjardins, and quite frankly, in an environment where the principal product line is Ontario auto, given the circumstances that are inherent with the regulatory scheme in this province."
Although Desjardins offers telematics-based auto insurance in Ontario, Cooke suggested that a different telematics offering -  Mobiliz – is "the way the future will unfold."
Mobiliz is provided by Industrial Alliance Insurance and Financial Services Inc.
"You put the device in the car and a lot of the historical rating variables and the data associated with it become irrelevant," he said. "Claims history is irrelevant, convictions are irrelevant. How you accelerate, if you have lane drift, or if you're speeding in a school zone, the conditions that you drive in. You can  overlay weather data. There are all kinds of great things that you can do to get at the actual risks associated with driving the vehicle."
By contrast, he noted, with Desjardins, “you use the device for a period of a few months to get information from it, you score it, and the output becomes a rating variable that's mixed in with everything else that has been there traditionally: Claims, convictions, type of vehicles, those sorts of things."

source:  By: Greg Meckbach, Associate Editor 2014-02-03 http://www.canadianunderwriter.ca/news/desjardins-state-farm-canada-combo-a-distribution-play-around-financial-services-former-dominion-ceo/1002895911/?&er=NA

Intact to launch usage-based auto insurance in Ontario in April

Intact Financial Corp. stated Wednesday it plans to launch usage-based insurance in Ontario in April and will drop rates, by 5% on average, by targetting discounts to safe drivers.

In the management discussion and analysis of its 2013 financial results released Feb. 5, Toronto based Intact referred to the Ontario government’s mandated 15% reduction, over two years, in private passenger auto insurance rates.
Intact stated it "will be reducing rates by 5% on average, targeting discounts to safe drivers” in Ontario, and that “one strategy to identify safer drivers will be our launch of usage based insurance in Ontario in April 2014.”
The MD&A did not provide further detail on how exactly it will distribute usage-based insurance in Ontario, but last November, Intact had announced plans to launch telematics-based auto insurance in Quebec and that it would roll out similar programs in other jurisdictions in subsequent months.
Intact sells insurance under its own brand through brokers and through its BrokerLink subsidiary. It also sells non-standard auto in Ontario under the Jevco brand, and directly to consumers under the belairdirect and Grey Power brands.
Intact released Wednesday its financial results for the 2013 calendar year, reporting a 244% increase from 2012 in fourth-quarter catastrophe claims, a slight drop in expense ratio year over year and a drop in commercial property and casualty premiums due to a reduction in earthquake exposure.
In its MD&A, Intact noted its direct premiums written increased 7% year over year, from $6.868 billion in 2012 to $7.319 billion in 2013. Fourth-quarter DPW increased 1% year over year, from $1.69 billion in the three months ending Dec. 31, 2012 to $1.702 billion in the fourth quarter of last year.
Current-year catastrophe claims were $55 million in the fourth quarter of 2013, up 244% from $16 million during the last three months of 2012. Those losses were "attributable primarily to the December ice storm and an early-November wind and rain storm," according to the MD&A.
Intact Financial reported its combined ratio for the full year increased from 93.1% in 2012 to 98.0% in 2012. For the fourth quarter, the combined ratio increased from 92.1% in 2012 to 96.3% in 2013.
"2013 was marked by severe weather events, resulting in $781 million of insured losses from catastrophes or $530 million net of reinsurance," Intact stated in a press release. "As a result, net operating income for the year was $500 million, down $175 million from 2012."
In its MD&A, Intact reported that its total net claims were up 16%, from $4.0052 billion in 2012 to $4.692 billion in 2013. Fourth-quarter net claims were up 15% year-over-year, from $1.052 billion in 2012 to $1.209 billion in 2013.
The claims ratio for the full year 2013 was 66.9% (up from 61.6% in 2012), while the expense ratio in 2013 was 31.1%, down from 31.5% in in 2012. In Q4 2012, the expense ratio was 31.7%, dropping to 29.3% in the three months ending Dec. 31, 2013.
In personal lines, total direct premiums in 2013 were $4.994 billion, of which $3.373 billion was in auto and $1.621 billion was in property. In commercial lines, Intact recorded $2.325 billion in direct premiums written, of which $612 million was in auto and $1.713 billion was in property and casualty.
"Commercial P&C DPW declined 1% in Q4-2013 versus the same quarer of 2012 as our efforts to reduce the earthquake exposure of our portfolio were successful," Intact stated in its MD&A.
The combined ratio in commercial auto was 93.3% in 2013, up 11.8 points from 81.5% in 2012. In commercial P&C, the combined ratio was 103.9%
"A $117 million increase in catastrophe losses and a $73 million reduction in favourable prior year claims development drove the 12.3 point increase in the combined ratio," Intact stated of its commercial results for the full year.
In personal auto, Intact reported a combined ratio in 2013 of 93.2%.
Net investment income was up 4% year-over-year, from $389 million in 2012 to $406 million in 2013. Net income dropped 25%, from $571 million in 2012 to $431 million in 2013. Fourth-quarter net income dropped 40%, from $177 million in 2012 to $107 million in 2013.

Source: DAILY NEWS Feb 5, 2014 12:13 PM

News March 5 2014

570 News March 5 2014 - Great comments!

http://www.570news.com/2014/03/05/wednesday-mar-5-2014-12pm/

Steven Del Duca, Parliamentary Assistant to the Minister of Finance, Re: Ontario’s governing Liberals have introduced legislation that they say will help reduce auto insurance rates, even though they’re not mandating a cut to premiums. Finance Minister Charles Sousa says rates have dropped 5% on average across Ontario and will fall further to the 15% target if the bill passes. He says the legislation will combat fraud, make it easier to settle disputes and curb costs. Critics point out Ontario made regulatory changes in 2010 that greatly reduced costs for the insurance industry, but those savings have not been passed along to drivers.

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570 News Tuesday Mar. 4, 2014 

http://www.570news.com/2014/03/04/tuesday-mar-4-2014-11am/

Rick Dubin, Vice President of Investigations at Insurance Bureau of Canada, Re: March is Fraud Prevention Month and the IBC is taking aim at a number of issues that hurt insurers and Canadians. Staged collisions.  Unscrupulous auto repair shops.  False medical claims. Fake auto theft.  Padding an otherwise legitimate claims. These are just some of the insurance scams that criminals commit.

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Sprint partners with Ontario 'connected car' company on usage based insurance

http://www.canadianunderwriter.ca/news/sprint-partners-with-ontario-connected-car-company-on-usage-based-insurance/1002947726/

Policyholders who use the program from Sprint through their insurers have data transmitted over the Sprint wireless network to a cloud-based system that analyzes the information with driver-scoring software.

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Financial Services Commission of Ontario Launches Fraud Prevention Month Campaign

http://www.newswire.ca/en/story/1317525/financial-services-commission-of-ontario-launches-fraud-prevention-month-campaign

Source: 

Should Your Genetics Be Available to Insurance Companies?

Ontario is proposing a change to the Ontario Human Rights Code aimed at protecting people's genetic information from being used by insurance companies and employers. This would allow more people to have genetic testing done, for health or research purposes -- testing they would possibly not do if they had to disclose the test results to insurers.
Supporters of the change in the Code refer to insurers as discriminating against those applying for coverage on the basis of an individual's genetic traits. And since scientists are still a long way from figuring out what the direct health implications of various genetic traits may be, the possibility for discrimination on the basis of inaccurate assumptions may indeed have a concrete basis.
The proposed privacy regulations sound like a positive move for society -- a policy slam dunk. But, one can expect the insurance industry to oppose such legislation with some fairly logical and fundamental arguments. They will argue that within this possible legislation, there is a great risk of "unintended consequences." And they'll be right.
The insurance mechanism is dependent on being able to group like risks into underwriting classes and then price them according to the expected costs they bring to their pool. Today, young drivers pay more than mature drivers for car insurance. Smokers pay more than non-smokers for life insurance. This is based on huge data pools showing connections between certain personal traits and ultimate claims (either as to timing or size of claim).
We expect more frequent or larger claims from young drivers than from mature drivers. Actuaries call this actuarial equity and the overall process 'fair' discrimination (similar to prohibiting drinking until age 19).  These principles have been tested many times in the courts and virtually always upheld. If and when genetic evidence creates the same irrefutable knowledge regarding health and longevity risks, insurance companies don't want to lose out on 'fair' discrimination.
Another essential element of the insurance contract is that the two parties (the insurance company and the policyholder) have and share equal information.  It is easy to understand that a person who knows he or she is very sick would be more apt to apply for insurance (and larger amounts thereof) than a person who knows he or she is very healthy.
For the contract to be fair, the insurer must be allowed to gather an equal understanding of the risk the applicant is going to bring to the insurance pool. Otherwise, poorer risks will cause claim payouts to be larger or to be paid earlier, thus raising the average claim cost and inevitably raising the premiums to be paid by all. Every applicant for insurance must disclose all known relevant information for the contract to be fair and for all policyholders to pay a price for their coverage that is fair for them. This is the good faith part of the contract and is essential.
Insurance companies cannot print money. All claims and expenses are paid by the premiums collected from the group of policyholders who have agreed to share the overall risk with the other members of their risk pool. If claim costs go up, so must premiums for all policyholders in the pool in the future.
Are there other alternatives?
Canada has abandoned private insurance as an alternative for paying for access to physicians and hospitals in favour of a single payer system (federal-provincial governments via the Canadian taxpayer); the cross subsidization of healthy Canadians paying the healthcare costs of unhealthy Canadians is how the system currently operates. However, for access to drugs, homecare and such things as life insurance, most Canadians continue to rely on private insurers.
So, while changing the Human Rights Code may sound like a logical slam dunk, an unintended consequence could be the very serious erosion of one of the basic tenets of insurance which could endanger its wide availability.
Obviously, we have two schools of thought on genetic testing and its inherent privacy. Both arguments have logical foundations. We need to start a full and open dialogue around the very real issues that these arguments create. We have the time before genetic testing becomes overly popular and commonplace.  Let the conversation begin.

_{Source: huffingtonpost.ca Robert L. Brown is an expert advisor with EvidenceNetwork.ca and a Fellow with the Canadian Institute of Actuaries. He was Professor of Actuarial Science at the University of Waterloo for 39 years and a past president of the Canadian Institute of Actuaries.}