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5 urgent problems to property and casualty insurers

by

Aurélia Morvan

25 September 2019 13:30

Don Forgeron | Photo : Mark Cooper

Don Forgeron, president and ceo of Burein the insurance of Canada (IBC) estimates that the insurance industry will face no less than five “urgent problems” by the end of the year 2020. He has incurred on the occasion of the National Insurance Conference of Canada (NICC), held in Montreal, on September 23 and 24. While remaining realistic, it has advanced scenarios ideal for responding to these major challenges, which revolve around the climate, of the digital and automotive industries.

Car insurance

Between the British Columbia automobile insurance premiums the most expensive, Ontario, which saves the cost of claim is the highest in this segment, or even Alberta, and its lack of competition, the canadian system of auto insurance is in trouble, writes Don Forgeron.

To overcome the problem in British Columbia, the BAC would like to see down the monopoly of the Insurance Corporation of British Columbia (ICBC), in relation to which it is very critical. In Ontario, Alberta and the Atlantic provinces, the BAC wants to ” reform concrete and constructive to stabilize the costs of claims in the short term and reduce the long-term.”

In other words, the LAC argues that the various governments of Canada provide more flexibility to insurers by the end of 2020. That said, Don Forgeron is particularly “optimistic” in regards to Alberta and Ontario, where the government has already promised a reform, although the conversations in Nova Scotia and New Brunswick are ” encouraging “. In British Columbia, he ” suspected that the government would await the application of its recent reforms, before taking any decision about the future of the monopoly of ICBC “.

Fraud

“They cheat, we pay. “While the fraud is another major issue in the industry, Don Forgeron place the fraud to auto insurance in the top of the heap of scams. “Its consequences are enormous,” he said, claiming that ” if you drive and own an auto insurance policy, you are a victim “. Engaged in the fight against fraud, the TRAY has a Bureau of the fight against serious fraud in Ontario, where the fraud will also be addressed by the new Authority ontario regulation of financial services (ARSF).

To counter the problem, Don Forgeron demand three things. “Greater involvement of law enforcement in order to prosecute perpetrators of insurance fraud “, the “penalties higher against those who commit” and that insurers have ” a greater freedom to share data in order to prevent and detect fraudulent activities “.

Aware of the sensitivity of this last point, the fact of the need to protect the privacy of Canadians, Don Forgeron believes that “real progress” to be made in terms of information sharing, in Ontario in particular.

Autonomous vehicles

The automobile is also at the heart of the third challenge facing the industry over the next few months. While the “nature of conduct” exchange, the “nature of risk” evolves, ” said Don Forgeron. Before entering the” age of the autonomous vehicle “, the insurance industry will spend the next 20 years in a between two, where the road will be shared by autonomous vehicles and traditional. Dominated by the issue of responsibility, ” the transition will be difficult “, said the chief of the TRAY.

“In a perfect world, governments would begin to examine the implications of the changes to come, and would begin to update the insurance laws to ensure compensation is fair and prompt in the aftermath of the collisions of automated vehicles,” says Don Forgeron. As a first step, however, will be reached in 2020, with the consultation on the autonomous vehicles conducted by the canadian Council of regulators of insurance (CCIR).

Don Blacksmith, however, is convinced : “The governments will be slow to act “, except in Nova Scotia, where legislation to regulate autonomous vehicles and has already been adopted.

The challenge of regulation

Regulation is the fourth challenge mentioned by Don Smith. It occurs in the digital domain, in particular. While electronic proof of auto insurance now accepted in several provinces, including Quebec, the insurance industry is lagging behind compared to other industries with regards to the offers cloud. “We need to be like a dinosaur” jokes, and Mr. Smith.

Ideally, “governments and regulators across the country should be aware of, and give insurers a greater freedom of communication with their customers,” says the head of the TRAY. From there, that this will be within the next 16 months ? “May-be in Ontario, or Alberta, or both “, avance-t-il.

Natural disasters

With climate change and the increasing number of natural disasters, the insurance industry will have to take part in the ” challenge of adaptation “. Last June, the BAC has also presented its solutions for protecting Canadians against flooding. “We have clearly indicated to the government that Canada needed a national action plan against flooding” that is expected to rise by ” a better mapping of flood zones “, ” better education of consumers “, “a better planning of land use” and a “plan to financially assist Canadians highly exposed to this risk,” says Don Forgeron.

Although it is “a significant transformation, which may take a generation or more to be fully realized,” Mr. Blacksmith believes that, in the short term, the dialogue will continue and that a proper plan be put in place at national level in the future.

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