As provincial economies re-open, insurers eye their auto claims frequencies

As if it weren’t enough with all of the recent news reports about natural catastrophe losses in Alberta, and claims against insurers for business interruption losses due to the COVID-19 pandemic, there is another, more familiar risk looming on the horizon for insurers — auto insurance losses.

As employees start to migrate back to the office and schools prepare to open in September, Canadians are becoming mobile again, data from Apple Maps show. And that means P&C insurance companies are gearing up once again for auto claims frequencies to increase.

Aviva Canada CEO Jason Storah talked to Canadian Underwriter about the re-emergence of the familiar auto claims exposure in an interview Thursday, while he was discussing Aviva Canada’s half-year financial results.

“Insurance is in the long game,” Storah said, when covering off some of the major exposures facing P&C insurers right now. “There is a bit of noise around the [business interruption] losses at the moment, and there is also noise around the natural catastrophes. And I am sure at some point in the future, we’ll be talking about auto [claims] frequency going up again as well.”

Canadian P&C insurers may once again be facing the auto claims issue sooner rather than later, if the latest Mobility Trends Reports by Apple Maps is anything to go by. The Mobility Trends Reports show the percentage increase in the number of requests for directions in Apple Maps on any given day, tracking the changes in route requests since Jan. 13, 2020.

Daily requests for directions using Apple devices are mapped against an unspecified baseline of requests. Apple says only that: “the availability of data in a particular country/region, sub-region, or city is based on a number of factors, including minimum thresholds for direction requests per day.”

Still, the overall direction of the graphs is clear: Canadians are driving more often now, as the provinces limit restrictions on movement that were established to slow the spread of the novel coronavirus. In every single Canadian province, requests for driving directions increased between the range of 18% (in B.C.) to as high as 296% (in P.E.I.), as of Aug. 8, 2020.

By contrast, in all Canadian provinces, during the period when most provincial lockdowns took effect (late March 2020 to April 2020), requests for driving directions ranged between a 58% decrease to a 65% decrease.

Most Canadian provinces bounced back to baseline between mid-April (Montreal, Halifax, New Brunswick, Manitoba, and Saskatchewan) and mid-June (Vancouver and Toronto), depending upon where the regions were during their re-opening phases.

Here is a list of Canadian cities or regions and the percentage above the baseline they were for driving directions requests as of Aug. 8, 2020:

• Vancouver: +18%
• Calgary: +24%
• Saskatchewan: +89%
• Manitoba: +85%
• Toronto: +31%
• Montreal: +30%
• New Brunswick: +159%
• P.E.I.: +296%
• Halifax: 64%
• Newfoundland & Labrador: +136%