“I kind of assumed they would add a rider to my insurance and add 10 or 20 bucks or whatever,” he recalled.

Read more

The world, in reinsurance. Who pays for Fort McMurray?

Excerpted article written by Brad Kading | The Globe and Mail

Fires, floods, earthquakes. Once the realm of nightmares or fiction, worst-case natural disasters are increasingly becoming real-life headlines for Canadians. Even while May’s devastating Fort McMurray inferno remains a fresh memory, climate scientists warn of more frequent flooding and wildfires as rainfall patterns change.

The Alberta fire, estimated to have generated insured losses of $3.6-billion, is now listed as Canada’s costliest natural disaster. That more than doubles the previous record of $1.7-billion in insurable damages set just three years ago, also in Alberta, by catastrophic flooding. Moreover, a terrible earthquake, predicted by geologists as inevitable for British Columbia, could set horrible new records if it occurred near Metro Vancouver. The obvious question is, who pays in the aftermath? The simple answer: Consumers pay insurance premiums, insurance companies pay claims and economic losses that are not insured come out of government and public pockets in other ways. Someone has to pay. But invisible to most Canadians is the role international reinsurers play in absorbing such massive losses.

Reinsurance is essentially insurance for insurance companies. A Canadian insurer that looks at its customer accounts and believes it has too much catastrophe exposure compared with its capital buys reinsurance for that share of the risk.

From that corporate need has evolved a specialty business that sees global reinsurers assuming the risk of Canadian fires and floods, then pooling it with U.S. hurricanes, British floods, European windstorms and earthquakes in New Zealand, Chile and Japan. These are all catastrophes in the making, and to a reinsurance actuary, they have some common elements – such as sudden or not-predictable events, or those that have an unpredictable loss size. By combining them on a reinsurer’s balance sheet, potential losses are spread globally, the risk is diversified and capital can cover catastrophes when they occur.

The larger the loss event, the bigger the reinsurance payout. New York’s World Trade Center tragedy was 60-per-cent reinsured; Louisiana’s Hurricane Katrina 40 per cent. The same holds true for Fort McMurray. According to published reports, many Canadian insurers ceded large portions of their wildfire loss to foreign reinsurers – some say as high as 85 per cent.

According to published reports, insurers have now disclosed a total of $2.57-billion in losses. Of that, reinsurers in Bermuda, Germany, Switzerland and the United States are paying the largest shares, with European companies undertaking nearly half, about 47 per cent. Bermuda comes next, covering nearly a quarter – $556-million in payments – of Canada’s wildfire claims.

Why Bermuda? The mid-Atlantic island is just 54 square kilometres, with a population almost exactly mirroring Fort McMurray’s (about 62,000). While tiny, Bermuda is a sophisticated heavyweight in the world of reinsurance, its market rating third-largest after London and New York. Well regulated financially, with tax information exchange agreements in place with Canada and 90 other countries worldwide, Bermuda is home to 15 of the top 40 global reinsurance corporations and boasts a 45-year track record in its commercial claims-paying ability. Notably, its property-catastrophe reinsurance market is now No. 1.

Reinsurance’s economic benefit to Canadians is clear: lower insurance premiums. By spreading catastrophe risk globally, consumer rates are less affected, as the bulk of capital to pay claims after fires and other tragic events is imported from overseas. In this way, it’s the shareholders of reinsurance companies who suffer the losses – not the customers of Canada’s leading insurers.

Children IBC partners with Child Safety Link to kick off Child Passenger Safety Week 2016

Insurance Bureau of Canada (IBC) is pleased to team up with Child Safety Link to help launch Child Passenger Safety Week 2016 in Atlantic Canada, which runs from September 18-24. This year’s theme is “You’ve got this!” and focuses on empowering parents and caregivers with resources to properly buckle their child in the right seat on every ride.

Amanda Dean, Vice-President, Atlantic, IBC, will be joined by representatives from Child Safety Link and other partners as they launch this year’s edition of Child Passenger Safety Week. Participants will be on-site to speak with media following the event.

Date:

 Thursday, September 15

Time:

10:30am AST

Location:

Early Childhood Family Resource Centre
86 Ste-Thérèse Street
Dieppe, NB
E1A 1S7

Participants:

 Amanda Dean, Vice-President, Atlantic, IBC
Claire LaBelle, Executive Director, Early Childhood Family Resource Centre
Sandra Newton, Manager, Child Safety Link
Katherine Hutka, Health Promotion Specialist, Child Safety Link

 

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $49 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and@IBC_Atlantic or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

About Child Safety Link
Child Safety Link is the child and youth injury prevention program of the IWK Health Centre in Halifax, Nova Scotia. We are a team of health promoters and communicators dedicated to supporting caregivers and professionals in the Maritimes with the reliable information they need to keep children safe at home, on the road and at play. We do this by sharing the latest information on topics such as home safety, car seat safety, poison prevention, playground and helmet safety…and much more!

Our Mission: To reduce the incidence and severity of injury to children and youth in the Maritimes. Our Vision:  The Maritimes are a safe community where children and youth can grow to reach their full potential.

SOURCE Insurance Bureau of Canada

Insurance industry struggles with increasing costs of natural disasters

By Ian Bickis

THE CANADIAN PRESS

CALGARY _ Canada’s insurance companies, are grappling with an increase in environmental disasters and say property owners most at risk are likely going to have to pay more.

Craig Stewart, vice-president of federal affairs at the Insurance Bureau of Canada, says the industry sees severe weather as a top priority nationally.

“There are clear trends towards a warming atmosphere that have resulted in more significant losses from flooding… and as we’ve seen recently wildfire,” he said.

The industry is still tallying up the cost of Alberta’s Fort McMurray wildfire, but with claims estimated at $3.6 billion, the costliest natural disaster in Canadian history is already hitting insurers.

Joel Baker, president of MSA Research Inc., says this year will likely go down as the worst in decades for Canada’s general insurance sector, which excludes life insurance.

He said that in the first six months of 2016 Canadian insurers reported a $1.08-billion underwriting loss, compared with a $1.05-billion gain for the first six months of 2015.

Much of those losses will, in turn, be covered by reinsurance companies, which provide insurance for the insurance industry itself. But with a clear trend of increased natural catastrophes, insurance companies are looking for ways to better manage the risk.

Ulrich Kadow, head of Canadian operations at insurer Allianz Global Corporate & Specialty, says the industry is working to improve modelling and catastrophe exposure management to deal with the increased risk and volatility.

“The significance of these fires as a result of climate change is huge,” said Kadow.

“We need to make sure that we are on top of all these trends that evolve and develop.”

He said the industry is responding by looking at adjusting pricing, but hyper competition in the industry means companies have been limited in how much they can increase rates.

Kadow says the insurance industry is also being squeezed by low returns on investment, a key pillar in the industry’s financial health.

“It’s a double whammy,” he said. “On the underwriting side investments have been squeezed, and on the investment side the picture isn’t much rosier, either.”

Stewart says the industry has been adapting to lower rates for years, and can sustain a hit like the Fort McMurray wildfire, but longer term there are concerns.

“The industry’s well equipped to handle events such as Fort Mac. We can absorb it in any given year,” he said.

“It’s the cumulative effect of these events that can take a toll, year after year after year.”

He said partnerships with government at all levels is key to reducing future costs of natural disasters, and that IBC has been pushing the federal government to prioritize a national flood strategy as part of the upcoming national climate strategy.

Property owners also need to learn how to protect themselves, whether it’s through fire-resistant shingles or better planning of greenery around the home, while communities also need to plan more for flood and fire mitigation.

“People need to know what their risk is, and they need to be empowered to protect themselves,” said Stewart.

As natural disasters and costs to the industry increase, he says there won’t necessarily be industry-wide rate increases, but companies will have to adjust premiums when they identify areas of greater risk.

“Generally, homeowners will start to pay out of pocket as climate impacts become less of a future and more of a present danger,” he said.

canada-press

Edited for ILSTV.com

Fort McMurray wildfire recovery ‒ do you need answers?

Most insurance claims from the Fort McMurray wildfire – the largest natural disaster in Canadian history – are progressing well. However, Insurance Bureau of Canada (IBC) is aware that a few people are dissatisfied with the decisions that have been made on their claim or with the pace of the recovery process.

Bill Adams, Vice-President, Western and Pacific, IBC, reaffirms the home, car and business insurance industry’s commitment to the residents of Fort McMurray. “We’re here to stay until the job is done,” he said.

Every insurance company that writes policies in Alberta has had extra staff – claims adjusters and customer service representatives – working to help Albertans recover from the fire. In fact, more than 5,000 insurance company personnel have been deployed to work on these claims. “This is an historic undertaking,” Adams said. “It’s inevitable that, in a disaster of this size, some people will not agree with the claims decision. Consumers have appeal options in these situations.”

Consumers have the following options:

  • Ask your claims adjuster for an explanation. If your claim has been declined, you have a right to know why. Ask for a clear explanation, in writing if possible. You can also request to speak with the company’s claims manager.
  • All Alberta-licensed home, car and business insurers have an ombudsperson and a dispute-resolution mechanism in place, including a complaints liaison officer. This information should be available on your insurance company’s website, or consumers can visit the Alberta Superintendent of Insurance, which also has a dispute-resolution process.
  • Call IBC’s Consumer Information Centre at 1-844-2ask-IBC (1-844-227-5422). Consumers can get unbiased advice from an insurance industry professional. You can also email us at fortmacfire@ibc.ca.

If you have exhausted the above options and still have not resolved your complaint, you can use this step:

  • The General Insurance OmbudService (GIO) is an independent, regionally based consumer dispute resolution system for the insurance industry. They provide consumers with a free, independent and impartial process to resolve complaints about home, car or business insurance. Call toll free: 1-877-225-0446.

For more information on insurance, your rights as a consumer and the complaint resolution process please visit ibc.ca.

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $49 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and@IBC_West or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

If you require more information, IBC spokespeople are available to discuss the details in this media release.

SOURCE Insurance Bureau of Canada

The Co-operators launches new national brand campaign focused on resilience

Building resilience against the risks that Canadians and their communities face has never been more important. As a society, we can rise to the challenge by raising awareness, fostering understanding and working collaboratively to manage risk. This is the theme of a new national brand campaign launched today by The Co-operators, which will run through 2018.

The first commercial, running across the country with the exception of Quebec, begins today across a mix of media, including broadcast and specialty television and digital platforms. An animated ad, it seeks to spark a conversation about building resilience, raising the important issues of distracted driving, mental health issues and flooding.

“We are a different kind of insurance company and that comes through in this campaign. It’s not about selling products or services; it’s about starting a conversation and encouraging people and organizations to take action to better protect their property and their loved ones,” explained Rob Martin, senior director, corporate marketing for The Co-operators. “Issues like climate change, emotional wellness and distracted driving are important and complex societal issues that we are engaged in, but they are also beyond the capacity of any one person or institution to fix. Everyone from the federal government to individual homeowners has a role to play in making our communities more resilient, and our goal is to boost engagement and help find solutions.”

The first commercial of the brand campaign begins today and will run until December 5, with others to follow through 2018. The campaign and the conversation about resilience will be supported by social media and other communications and advocacy work focused on building resilience.

About The Co-operators:
The Co-operators Group Ltd. is a Canadian co-operative with more than $44 billion in assets under administration. Through its group of companies it offers home, auto, life, group, travel, commercial and farm insurance, as well as investment products. The Co-operators is well known for its community involvement and its commitment to sustainability. The Co-operators is listed among the Best Employers in Canada by Aon Hewitt; Corporate Knights’ Best 50 Corporate Citizens in Canada; and the Top 50 Socially Responsible Corporations in Canada by Sustainalytics and Maclean’s magazine. For more information, visit www.cooperators.ca.

SOURCE The Co-operators

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest