Manitoba. Ontario. Toward a Safer Ontario

Transcription

1 Manitoba Qu Ontario Toward a Safer Ontario

2 The year 2013 posed a tremendous challenge to Canadians, with catastrophic floods in Alberta and Ontario, a deadly train derailment in Quebec and an ice storm that left central and eastern Canada without power. The property and casualty (P&C) insurance industry responded quickly to help people recover from these events. Insurance Bureau of Canada (IBC) the voice of the P&C insurance industry takes seriously its leadership role in making communities more resilient. To advance our work, we collaborate with federal, provincial and municipal governments and other stakeholders. The launch of IBC s municipal risk assessment tool (MRAT) and an IBCcommissioned earthquake impact study are examples of the industry s efforts to help Canadians prepare for the biggest risks they face. Beyond managing risk, providing peace of mind and paying billions of dollars in claims, the P&C insurance industry employs tens of thousands of Canadians and promotes economic development. The industry also advocates for improvements in financial literacy, emergency preparedness and severe weather adaptation. We take pride in sharing in the collective responsibility to keep people safe, whether they are at home or on the road. Ralph Palumbo, Vice-President, Ontario This publication provides a brief summary of our efforts to help build a stronger, safer Canada. 2

3 MAKING STRIDES IN Ontario Car Insurance The subject of fraud comes up in any discussion of Ontario car insurance. And with good reason: Ontario drivers pay the highest average premiums in Canada as a result of overuse and abuse of the province s insurance benefits. Yet, we made great strides in the battle against fraud and high premiums last year: The Ontario government implemented recommendations from its Anti-Fraud Task Force. Insurers established the Canadian National Insurance Crime Services (CANATICS) to identify suspicious claims in industry-pooled data using the most current analytical tools. IBC proposed suggestions to allow for cost reductions that would support the government s cost-and-rate reduction strategy to cut premiums by an average of 15% by Several reforms were enacted. IBC, insurance company investigators and police departments across the province worked together to crack down on auto theft, fraud and organized crime rings. IBC is dedicated to collaborating with the Ontario government and other stakeholders in the pursuit of an effective insurance product that works for everyone. ENGAGING ONTARIANS: IBC s Time to Talk community mall tour invited consumers to have a say about their auto insurance product. 3

4 ADAPTING TO Severe Weather and Natural Disasters Severe weather took a devastating toll on Canadians in 2013, with the Alberta floods being the costliest natural disaster in the country s history. In Ontario, an unprecedented rainfall in July resulted in almost $1 billion in insured losses, the highest ever in the province. As the year drew to a close, an ice storm damaged homes and vehicles and left thousands of Ontarians without power for days. After each crisis, the insurance industry worked quickly to process and settle claims to help people recover. To help Canadians build resilience in the face of natural disasters, the P&C insurance industry focuses on preparing before a crisis as well as responding afterward. In 2013, the industry achieved two milestones in collaboration with provincial and municipal governments: IBC launched MRAT (for municipal risk assessment tool ), which is a new technology to help municipalities identify sewer and stormwater infrastructure vulnerabilities that could result in sewer backups and basement flooding. Municipalities will use the MRAT information to plan and prioritize infrastructure repairs. Hamilton is one of the MRAT pilot cities. IBC released a scientific study on the economic impact of a major earthquake in Canada. Parts of eastern Ontario, including Ottawa, were within the eastern seismic zone studied. IBC, along with the P&C insurance industry, is dedicated to working closely with governments, the financial services industry and non-governmental organizations toward the development of a national response framework. 4

5 Ontarians are increasingly under siege from water. Last April, a huge swath of central Ontario, from Huntsville to Bancroft and south to Peterborough, was inundated by flooding as a result of spring runoff. Several communities were forced to declare states of emergency. Toronto was hit in July with torrential rains that flooded thousands of basements. Even one commuter train was halted, forcing passengers to be rescued by boat. Then in December, freezing rain toppled trees and power lines, causing extensive damage to homes and cars and leaving hundreds of thousands of Ontarians literally freezing in the dark. THE P&C INSURANCE INDUSTRY HAS A FRONT ROW SEAT ON THE EFFECTS OF THIS SEVERE WEATHER. Along with responding swiftly to customers, the industry is proud of its role in assisting communities in need. In 2013, through IBC, the industry donated $25,000 toward the provincial government s ice storm relief efforts and $5,000 each to the towns of Minden, Kawartha Lakes and Bancroft to help those affected by floods. CLEANING UP AFTER THE STORM: The worst ice storm to hit Ontario in recent memory cut a wide swath of destruction. 5

6 Empowering Consumers When Canadians know how their insurance works and have the right coverage, they can better protect themselves, their families and their property. IBC is committed to being a trusted source of insurance information. Here are some of our efforts in 2013 to help Canadians understand their insurance: Answered more than 66,000 inquiries at five consumer information centres across the country. Issued 86 media releases and generated 9,599 articles. Made effective use of social media, resulting in more than 37 million Twitter impressions and over 1 million visits to ibc.ca and getintheknow.ibc.ca. Responded to 884 media calls and participated in 124 events, speaking engagements and sponsorships. Used both traditional and social media to promote timely reminders about severe weather preparedness, water damage prevention, winter driving, insurance literacy, how to fight fraud and more. Partnered with police forces and other organizations across the country, such as Crime Stoppers, to fight fraud and other insurance crimes. Conducted consumer outreach campaigns, such as IBC s Time to Talk 2013 mall tour. The tour visited Brampton, Hamilton, Scarborough, Welland, Vaughan and Pickering to help approximately 15,000 residents better understand their car insurance. 6

7 Giving Back The P&C insurance industry has a proud tradition of volunteerism and community involvement. HELPING HANDS: IBC employees sort through food donations for a United Way Day of Caring at the Good Shepherd Ministries in downtown Toronto. The centre provides food, shelter and clothing for people in need. CARING FOR COMMUNITIES: In November, IBC donated $5,000 to help the Stoney Creek Community Food Bank stock its shelves for the holiday season. PICTURED FROM LEFT: MPP Paul Miller, IBC s Doug DeRabbie and food bank staff members Debbie Col and Debbie Lockhart. Whether via industry-wide support of a charitable cause, a corporate community investment program, or sponsoring a local sports team, insurance professionals support their communities. IBC partnered with the Ontario Community Newspapers Association to sponsor the Community Award in memory of Mary Knowles, a dedicated newspaper employee and active community member who died in This award is presented each year to recognize the volunteer contributions and involvement of dedicated newspaper staff within their communities. Hundreds of insurance industry staff from across Ontario participated in the 2013 WICC Relay for Life event in Toronto, raising $383,300 for the Canadian Cancer Society. The insurance industry is a long-time corporate supporter of United Way. IBC s United Way staff campaign raised $51,864. 7

8 Keeping Communities Safe The insurance industry is dedicated to the safety of Ontario communities and residents. Some examples of the industry s work in 2013 include: PROTECTING FAMILIES AGAINST THE SILENT KILLER IBC supported MPP Ernie Hardeman s bill to make carbon monoxide (CO) detectors mandatory in Ontario homes built before By the end of 2013, IBC had donated nearly 1,000 CO detectors to fire departments for distribution to residents in several communities, including Minden, Mount Forest, Stratford, Trenton and Tillsonburg. ADVOCATING FOR TOUGHER PENALTIES FOR DISTRACTED DRIVING According to Ontario Provincial Police statistics, distracted driving is outstripping impaired driving as a cause of road fatalities. IBC supported calls by MPPs Lisa MacLeod and Bas Balkissoon for demerit points and stiffer fines for drivers caught using their phones at the wheel. PRESSING FOR BETTER REGULATION OF THE TOWING INDUSTRY Though there are many reputable operators, the towing industry is rife with fraudsters who take advantage of Ontario drivers and the insurance system. IBC works with several municipalities to improve by-laws relating to the towing and storage industry and fully supports the government s work to implement province-wide regulation of the towing industry. HELPING TO SAVE LIVES: Last fall, IBC donated carbon monoxide detectors to fire services and departments across the province. PICTURED FROM LEFT: MPP Randy Pettapiece, IBC s Doug DeRabbie, Stratford Fire Inspector Roddy MacDonald and MPP Ernie Hardeman. 8

9 Demystifying Insurance Despite the importance of insurance to their financial security, consumers are often unsure about what a premium represents and how it is calculated. An individual s premiums are not kept in a personal account in case of a loss but are pooled with those of many policyholders to cover the losses claimed by the few in any given year. Here are some factors that help insurers set premium rates. SOME FACTORS AFFECTING CAR INSURANCE PREMIUMS: Claims history of policyholder Driving record of policyholder and other household drivers (at-fault collisions, moving violations, etc.) Vehicle type (make, model, year, etc.) Vehicle repair cost and/or replacement value Collision and crime rates where vehicle is usually parked Driving distance and frequency Additional coverage, deductible and discounts DISCOUNTS MAY BE OFFERED FOR: Cars with loss prevention devices Drivers who have graduated from approved driving training courses Insuring two or more private passenger vehicles in the same household Combined coverage for existing insured clients (for example, car and home insurance) SOME FACTORS AFFECTING HOME INSURANCE PREMIUMS: Age, size and location of residence Types and quality of finishes and materials Residence type (single-family dwelling, apartment, etc.) Residence construction material used (brick, cement, etc.) Distance from fire hydrant and fire station Claims history of policyholder Crime rate of residence location Additional coverage, deductible and discounts Policyholders who have never filed an insurance claim Drivers over the age of 55 Cars not used in winter Loyalty for policy renewals by existing insured clients, subject to insurer s criteria 9

10 Contributing to the Economy The P&C insurance industry plays a vital role in Canada s economic health. By absorbing financial risk, particularly in a world of emerging new risks and changing needs, and investing in Canadian bonds and securities, insurers help to create and promote growth, development and employment. Here are highlights from 2012, the year for which most recent data are available : The P&C insurance industry employed 118,600 people across Canada with more than half in Ontario alone. The P&C insurance industry had $104 billion in invested assets, to support economic growth and stability. Insurers paid out $27.8 billion in claims to victims of collisions, disasters and other losses. In Ontario, there are more than 6,000 insurance firms in the home, auto and business industry. Canadian insurers paid more than $7.5 billion in taxes and levies to federal and provincial governments. The P&C insurance industry paid $2.1 billion in taxes to the Ontario government. Source: IBC with data from MSA, SCOR, AMF 10

11 Investing Wisely The P&C insurance industry offers the key service of risk management and is committed to covering losses when they occur. Providing these services necessitates the careful and safe investment of resources, to ensure that funds are available when needed. With the bulk of its investment portfolio in secure bonds, the insurance industry is far less vulnerable to stock market fluctuations than other industries. This is why P&C insurers historically weather an economic crisis better than others in the financial service sector. BREAKDOWN OF P&C INSURANCE INDUSTRY INVESTMENTS CANADA-WIDE DATA ACROSS ALL P&C INSURANCE LINES WHERE DOES EACH DOLLAR RECEIVED BY INSURERS GO? CANADA-WIDE DATA ACROSS ALL P&C INSURANCE LINES How insurers spent each dollar of revenue averaged over seven years from 2006 to 2012: 80.7% Bonds* 12.7% Shares 3.8% Term deposits 2.1% Other investments 0.7% Mortgage loans *Mostly federal, provincial and municipal bonds Source: IBC, MSA, SCOR, AMF 54.0 Claims paid out to policyholders 20.5 Operating costs 16.1 Taxes and levies 9.4 Profit margin In 2012, the profit margin for Ontario private passenger auto was 6.4%. Source: IBC, MSA, GISA 11

12 Questions? We re here. Insurance Bureau of Canada s Consumer Information Centre Tel: Toll-free: Hours: M F 8 a.m. 5 p.m. or visit ibc.ca For additional copies of this booklet, please contact: Insurance Bureau of Canada s Member Services memberservices@ibc.ca Insurance Bureau of Canada is the national industry association representing Canada s private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. Data in 2014 State of the Industry have been gathered from several national and international sources, including IBC. Data are from 2011, 2012 or 2013 depending on when sources release their information. In some instances, figures may not add up to 100% as a result of rounding. Also because sources collect data in different ways, there may be small differences among similar data. 02/2014