Risk

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Moments In Time (May 01, 2004)

Each month of this special 70th anniversary year, Canadian Underwriter will look back at a pivotal period in the industry's history. These are the people, events and issues that have shaped Canadian Underwriter and the insurance industry for seven decades.

April 30, 2004

4 min read

End of the “Dark Ages”?

Analysis of the 2003 financial returns of Canadian and U.S. insurers reveals several interesting differences in how companies in each of the marketplaces got to their current position. The main fact is that insurers in Canada and those south of the border appear to have now moved onto more solid ground financially after what Robert […]

April 30, 2004

4 min read

FA Losses Near Half Billion Dollars

The Facility Association (FA) – the industry’s pool for high-risk drivers – produced a loss exceeding $490 million for 2003. Speaking at the FA’s recently held AGM, CEO David Simpson notes that premium volume for 2003 rose year-on-year by more than 300% to almost $1.1 billion, thus boosting the FA’s countrywide share of the auto […]

April 30, 2004

2 min read

Auto Reform: All The King’s Horses…

The auto insurance battlefield lies pockmarked by smoldering wreckage with the public’s view of insurers currently at what many regard as being at an all-time low. Skyrocketing rate adjustments introduced by insurers in response to the dramatic upward spiral in loss costs of recent years invoked a broad outcry from consumer groups and politicians which […]

April 30, 2004

13 min read

Ontario Auto, Setting the Course

What is wrong with Ontario's auto insurance system? The answer to that question has been haunting the insurance industry for many years, but more recently has stolen the public spotlight. During the most recent provincial election, auto insurance was front and center, and with the election of a Liberal majority government, Mike Colle found himself in the eye of the auto insurance storm. Now, the parliamentary assistant to the Minister of Finance says industry and government are working together to rebuild the system for the benefit of policyholders.

April 30, 2004

6 min read

The Disarray of Auto Insurance

The insurance industry in Canada and regulators have never faced an auto market with so much confusion as we have in Canada at present. Unfortunately, there is no end in sight since regulators in many provinces have no idea of a solution and are not interested in the advice of the industry. All they want is lower rates but have no interest in properly controlling the claims costs or designing a product that will work efficiently.

April 30, 2004

6 min read

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Ontario Auto – Looking for Rate Savings

Ontario's new provincial government has made it clear that pressure will be maintained to reduce auto insurance rates. The government's immediate goal is a 10% across-the-board rate reduction, while insurers remain adamant that the auto line's combined ratio is still exceedingly high as claims costs continue to grow in the double-digit range. So, how will insurers find room to reduce premiums by 10%? An obvious starting point would be to eliminate interest charges on monthly premium payments - a practice that will likely be acted on by the government in its ongoing reforms should insurers not take action first.

April 30, 2004

4 min read

Auto Outlook: Dodging Bullets

There is clearly great misunderstanding in the general public with regards to insurance overall, but specifically auto insurance. A recent furniture store advertisement depicting a couple gleefully defrauding an insurance company illustrates the opinion floating among some consumers. There is an anti-insurance industry sentiment right now, and it is not likely to dissipate any time […]

April 30, 2004

4 min read

How Bad Can a 5% Rate Reduction Really Be?

How bad can a 5% rate reduction really be? The first issue is leverage. Imagine a mythical commercial lines insurer operating with a 10% margin. For every $100 in premium, the combination of underwriting and investment income, net of operating expenses, is enough to generate $10 in earnings before tax. We are not trying to […]

April 30, 2004

3 min read

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Commercial Rates Dropping: RIMS Survey

Commercial insurance buyers report falling rates in property and general liability lines, signaling signs of a softening market, according to the first-quarter 2004 edition of the “Risk and Insurance Management Society (RIMS)/Advisen Benchmark Survey”. Property rates fell by 1.5%, RIMS members say, while general liability dropped 1.4% in the first quarter. While the decreases in […]

April 30, 2004

1 min read

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