Marketplace

TECHNOLOGY 

Potential economic benefit of driverless cars $65 billion annually

Automated vehicles (AVs) – or self-driving cars – could be on Canadian roads between 2020 and 2025, with the economic benefits being more than $65 billion annually, reports the Conference Board of Canada.

That benefit could be seen through collision avoidance, fuel cost savings and avoiding congestion, states the report conducted with the Van Horne Institute and the Canadian Automated Vehicles Centre of Excellence.

“Self-driving cars could free up driving time, significantly reduce the number of car accidents, minimize road congestion and reduce the amount of fuel that we consume,” says Vijay Gill, director of policy research at the conference board.

Overall, the report notes economic benefit are as follows: fewer collisions, $37.4 billion; saving drivers’ time, $20 billion; fuel cost savings, $2.6 billion; and reduced traffic congestion, $5 billion. “There will be new business opportunities for the auto and technological industries related to the design and manufacture of sensors, software, etc. for AVs.”

App seeks to familiarize directors, officers with liability issues

Reinsurer Munich Re has announced the availability of a mobile app for Apple iOS devices designed to provide corporate managers with information on directors’ and officers’ (D&O) liability.

The app allows corporate directors and officers to “quickly gain an overview of their personal risk,” Munich Re reports. Beyond providing background information on D&O liability, it “asks about and evaluates the most important factors that influence a manager’s risk.”

The risk assessment “does not apply to any specific territory or legal environment, but can be applied to most of the concerned territories,” notes a company spokesperson.

Users can find contact information for primary insurers with global know-how, the company reports. Those companies “are mostly licensed in Canada as well,” the spokesperson adds.

The app is available from the Apple Store. A version for devices running on Google Inc.’s Android operating system is under development. 

Time-based telematics offering for commercial fleets launched

Calgary-based insurance brokerage InsureMy Ltd. has launched a new time-based insurance (TBI) product for commercial drivers and fleets in Alberta and Ontario.

Called the first such offering of its kind, it uses telematics technology from Intelligent Mechatronic Systems (IMS), allowing fleet operators and managers to receive insurance premium refunds based on actual vehicle usage.

The company reports commercial vehicle operators pay regular insurance premiums based on traditional rating criteria, but with the TBI product, they can receive a refund at the end of term for vehicle inactivity. Operators can also receive a premium refund based on use while receiving full-term coverage.

Pricing for e-signature product available to IBAO members

The Insurance Brokers Association of Ontario now has an affinity partnership with the electronic signature vendor, Silanis Inc.

The service allows users to capture signatures on their websites, at a point of sale, or while using desktop, laptop and mobile computers.

“Signers are not required to download anything and can e-sign using only a standard web browser,” Silanis reports.

CANADIAN MARKET 

XL Group announces offer to acquire Catlin Group for US$4.1 billion

XL Group plc is seeking to acquire all capital stock of Catlin Group Limited, a move that, if approved, will create a Top 10 reinsurer with expanded alternative capital capabilities.

XL Group has entered into an agreement under which it will offer to acquire all of Catlin Group’s common shares for “consideration of 388 pence in cash and 0.130 share of XL for each Catlin common share.”

Based on the closing price of an XL Group share at January 8, 2015 of US$35.42, “the offer values Catlin at 693 pence per share. This represents a transaction equity value of approximately US$4.1 billion.”

The name of the parent company of the combined group will remain XL Group plc, while the newly combined company will be marketed as XL Catlin, reflecting the strong reputation of both brands. Structured as a scheme of arrangement, the transaction is expected to close mid-2015.

Stephen Catlin, chief executive officer of Catlin Group, is expected to serve on the XL Group board as executive deputy chairman.

CNA expands specialty lines in Canada

CNA began offering specialty products in Canada as of January 1, 2015 through its Specialty Lines business.

“By tapping into the company’s deep expertise and the strengths of our current products and services, we were able to create an insurance solution that is tailored specifically for Canada,” says John Hennessy, president and chief operating officer for CNA Canada.

The company notes that, in Canada, CNA Specialty will begin accepting submissions for management liability and professional liability.

CLAIMS

November storm tops $90 million in insured damage: IBC

A preliminary estimate from Property Claim Services indicates the late-November storm that brought with it heavy rains and winds across Ontario and Quebec caused $90 million in insured damage, reports the Insurance Bureau of Canada (IBC).

The storm November 24 to 25 featured wind gusting as strong as 100 kilometres/hour, resulting in widespread damage when trees fell on buildings and vehicles, and downed hydro lines caused power outages, IBC notes.

“In 2014, weather-related insured damage in Ontario hit $200 million; that includes claims from the Burlington floods and the tornado in Angus,” says Ralph Palumbo, IBC’s vice president, Ontario.

In the United States, the Insurance Information Institute reported in November that 2014 insurance losses from winter storms could reach US$2.5 billion, making 2014 the fourth costliest year on record for winter storm losses.

CIAA, PCS partnership aims to improve Cat info sfor adjusters

The Canadian Independent Adjusters’ Association (CIAA) and Property Claim Services (PCS), part of Verisk Analytics, have partnered to allow CIAA members access to PCS’s cat loss information.

The access “will help independent adjusting firms plan for catastrophe events, allocate resources more effectively, and reduce cycle time, ultimately contributing to lower loss adjustment expense,” PCS reports.

The CIAA, for its part, will provide post-cat event insights, photos, videos and commentary from adjusters on the ground. It will also collaborate with PCS for an enhanced PCS Canada app that allows adjusters to upload, share and view  content from cat sites.

RISK

Canadian CEOs concerned about data security: PwC

About two-thirds of Canadian chief executive officers taking part in a survey by PricewaterhouseCoopers (PwC) LLP identified cyber threats as a concern, while 75% identified cyber security as “strategically important.”

In the Canadian results of PwC’s 18th Annual Global CEO Survey, 84% of polled CEOs also cited “mobile technologies for customer engagement” and 59% identified the “Internet of things” as strategically important.

Survey results reflect interviews with 1,322 CEOs from 77 countries, including 44 from Canada.

“Compared to last year, Canadian CEOs are more concerned about the cost of regulation, the threats of cyber security and changing customer preferences,” notes Bill McFarland, CEO and senior partner at PwC Canada.

“Technology matters lead the way when it comes to business threats to Canadian organizations,” PwC reports.

“Cyber threats, including lack of data security (64%) and the speed of technology change (64%) were identified equal ly as a concern by Canadian CEOs, although substantially more U.S. CEOs, 86%, voiced concern about cyber threats.”

REINSURANCE

Federal commitment to better flood mitigation welcomed: IBC

The Insurance Bureau of Canada (IBC) has welcomed Ottawa’s move to make

$200 million available for flood mitigation projects.

“We have seen how the world has changed in recent years and understand how severe weather events are hurting Canadian families,” says Don Forgeron, IBC’s president and chief executive officer.

“We also believe it is vitally important that the government work toward mitigating risks of earthquake in Canada.”

Insurers must cover more cats worldwide

Property and casualty insurers must work toward covering more catastrophes worldwide, or risk marginalizing the industry, Phil Cook, chief executive officer of Omega Insurance Holdings, said recently in Toronto.

“This is a huge problem for our industry,” Cook said.

2014 was benign in terms of insured losses from catastrophes, he noted. Still, that “US$34 billion only represents about 20% of the actual economic damage suffered around the world, excluding loss of life.”

Echoing a recent report from the Geneva Association, Cook said that ideal insurance penetration should be 10% of gross domestic product, but at present, the global penetration is at just over 6%. This underinsurance problem is even more evident in emerging countries.

Canadian quake could cause half of losses in 100-year return period

AIR Worldwide estimates the current 1.00% exceedance probability loss – or the 100-year return period loss – is US$231.5 billion, while the long-term average annual loss from natural cats and terrorism is US$72.6 billion.

AIR notes that figure compares to US$219.4 billion for the 100-year return period in 2013, and US$205.9 billion in 2011.

“A single North America earthquake – an M6.7 earthquake that strikes just 7 miles outside downtown Montreal and damages properties in parts of Ontario and Quebec provinces in Canada, as well as parts of New York and Vermont in the United States – accounts for US$115.3 billion, fully 50% of the global insured loss total for all perils.”