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Smartphones are problems, but here’s how they can help reduce driving risk

Experts predict that 2021 could be the year telematics driving data actually provides meaningful information — and change — to insurers and drivers alike, allowing risk to be underwritten more accurately. To pull that off, smartphones will be a critical tool despite their drawbacks.

Clients’ driving data has been available in some form for a number of years now, whether installed as a black box type of device in Europe or as a dongle through the OBD-II port in North America, but it hasn’t been necessarily easy to manage or put to great use, explained Ryan McMahon, vice president of insurance and global affairs at Cambridge Mobile Telematics during a recent P&C in 2021 – Market Catalysts webinar.

Telematics has been merely a data collection tool to this point. Going forward, it can be used for much more, such as providing feedback to the driver about their driving habits. That makes it much more helpful in terms of changing driving habits.

And it’s all thanks to one piece of technology: Smartphones. While they’ve created their own set of problems in regards to driving behaviour, McMahon said they’re changing the game when it comes to telematics and data usage.

“With the advent of smartphones, you have the ability to have that two-way conversation with a driver and provide feedback and that incentive to them,” Ryan said during the webinar. “And that has really changed the business model for a lot of carriers because they’ve moved away from a short-term monitoring period and gone to a continuous engagement-type program.”

The incentives part is crucial for the two-way discussion because the driver needs something in return for giving up their driving behaviour and having insurers, in essence, watching them, Mike Zaremski, P&C and insurtech investment analyst at Credit Suisse, said during the webinar. That financial reward can also be an incentive for them to change their driving behaviours.

McMahon agreed, saying that incentives can be regularly updated to match the desires of customers.

To find out more, visit: https://www.canadianunderwriter.ca/insurance/smartphones-are-problems-but-heres-how-they-can-help-reduce-driving-risk-1004202841/

P&C industry needs better data about distracted driving

According to a recent webinar panel, there’s a fairly significant gap between what government agencies have to say about distracted driving and what data companies are able to capture, and that is playing a role in the ineffective portrayal and messaging around the seriousness of people using their phones while operating vehicles.

In 2019, about one-third of all trips showed “significant phone distraction,” according to Cambridge Mobile Telematics’ (CMT) own data gathered through its applications. In 2020, which included nine months during the global pandemic, the number of trips where the driver was distracted by their phone went up to 40%.

In comparison. the U.S.-based National Highway Traffic Safety Administration reported in late 2019 that the percentage of passenger vehicle drivers talking on handheld phones increased from 2.9% in 2017 to 3.2% in 2018. Those visibly using headsets while driving dropped from 0.45% to 0.35%, while visible manipulation of handheld devices went up from 2% to 2.1% in the same time period.

According to the National Safety Council, about a quarter (26%) of all car crashes involved phone use, even hands-free devices. CAA reported in 2020 that its polling found that 47% of Canadians admitted to typing or using a voice-to-text feature to send a message while driving, whereas 33% said they did it at a stoplight. Furthermore, InsuranceHotline.com reported that 26% of drivers have checked messages while operating a car in motion while another 41% of Canadians said they are at least somewhat likely to check messages when stopped at a traffic light.

All of this suggests that government and advocacy agency data and telematics company data are far apart. If insurers want to see risk decrease, gathering better data and improving messaging around the perils of distracted driving is a must.

To review the full report, visit: https://www.canadianunderwriter.ca/insurance/pc-industry-needs-better-data-about-distracted-driving-1004203087/

Canadian auto and property insurance rates headed in opposite directions

According to the latest results from Applied Systems’ premium rate index, average personal auto premium rates in Canada decreased 2.6% in late 2020 compared to the same period in 2019. During the pandemic, rate decreases may have also been attributed to reflect the fact that fewer Canadians are on the roads as a result of government lockdowns to prevent the spread of COVID-19.

But not all areas of Canada saw auto insurance rate decreases. The report highlights: “Alberta and the Atlantic provinces experienced the most significant increase in premium rate change year-over-year for the fourth quarter in a row, at 8% and 2.6, respectively. Quebec experienced a modest increase of 1.6%, while Ontario saw premium rate change decrease [by 3.2%] year-over-year.”

In the personal property line, all provinces saw premiums increase by an average of 3.6% in 2020 Q4 versus 2019 Q4. From the third quarter of 2020 to the last quarter of 2020, rates increased by 2.8%.

“At the end of 2020 Q4, our data indicates that the market continued to harden as premium rates for personal property increased compared to 2019,” said Steve Whitelaw, vice president of industry and partner relations with Applied Systems. “Alternatively, the market for personal auto has softened, as premium rates decreased at year-end 2020 relative to 2019.”

Contact your insurance agent or broker if you have questions about your policy. To read the full report, visit:

https://www.canadianunderwriter.ca/insurance/canadian-auto-and-property-insurance-rates-headed-in-opposite-directions-1004203234/

IBC reveals the latest trends in auto theft

Electronic auto theft, high-end vehicles stolen for shipment overseas, and street racing: are the top 3 emerging trends coming out of Insurance Bureau of Canada’s (IBC) list of Top 10 stolen vehicles in 2020.

The first emerging trend from their survey shows that electronic auto theft is on the rise across the country, as more vehicles are equipped with technology like keyless entry remotes, according to Bryan Gast, national director of investigative services with IBC. Gast noted that auto thieves can use a wireless transmitter device to capture the signal between a key fob and vehicle and then use that information to unlock and steal a vehicle.

Another trend involves stolen vehicles that are being used to commit other criminal offences, such as armed robberies, while others are being stripped for parts, netting the criminal a lot of money.

A third emerging trend, especially during the COVID-19 pandemic, is the rise of dangerous activities such as street racing and illegal gatherings for “drifting” events, IBC reported. Drifting describes a driving technique in which the driver intentionally oversteers a car, and then countersteers to regain control of the car. Such racing events are providing a market for stolen small, speedy vehicles.

For IBC’s 2020 Top 10 stolen vehicles in Canada, the 2018 Honda CR-V (4DR AWD) SUV tops the list. And there are major differences across the country in which vehicles are stolen.

For example, in Alberta, Ford F-series and Dodge Ram trucks are the most popular vehicles to steal. In Ontario, Lexus and Honda vehicles dominate the list. Some were stolen for export by organized crime groups, while others have been identified in street racing rings. In Atlantic Canada, the Chevrolet Silverado is the most-stolen vehicle. Typically, vehicles like this are targets for export to foreign countries

To review the full list, visit:

https://www.canadianunderwriter.ca/insurance/ibc-reveals-the-latest-trends-in-auto-theft-1004200998/

A sign that insurers are actually investing in technology

Insurers have talked about the need to be more digital for years now but there is one clear sign that they are actually following through on their plan.

According to a KPMG insurance expert, a significant number of insurers are investing in ‘insurtechs’ so much that it has become an “incredible trend,” said Laura Hay, global head of insurance at KPMG International. The fact that so many insurtechs are seeing more investments is a signal that insurers are turning to them to help boost their digital offerings.

According to its research, KPMG found that “the third quarter of 2020 showed incredible insurtech spending” as 73% of insurtechs raised capital in the quarter, she reported. It is the first time those numbers have reached such heights.

KPMG also gauged customer sentiment in a series of what Hay called “touchpoints.” Within this latest round of surveying customers, “40% said they want efficient processing of claims, which is really screaming for the digital agenda.” And it appears their calls are being answered: insurers seem to be placing their focus on claims processes.

It is an area that saw a surge as the pandemic hit, primarily in terms of inquires and claims submissions. “And it really highlighted the need for claims processes, in particular, to be more streamlined, or digitally enabled,” Hay said.

Jason Storah of Aviva commented that the transactional administration part of the insurance buying process is a big timewaster as far as he’s concerned. That time could be better spent understanding the coverage they are buying or exploring other options they may need.

The pandemic has created opportunities but also threats and accelerated trends. It is going to require a really strong understanding for insurers around their strategy, their purpose and their operating model. To review the findings, visit:

https://www.canadianunderwriter.ca/insurance/a-sign-that-insurers-are-actually-investing-in-technology-1004201172/

Will Alberta Move to a Pure No-Fault Auto Insurance System?

An Alberta auto insurance advisory committee has recommended the province move to a pure no-fault system delivered by private insurers, a change that the Insurance Bureau of Canada (IBC) does not feel would be in the best interest of drivers.

One of the recommendations of the advisory committee’s report was the move to a pure no-fault system, “but the changes the government made were actually just updates to the current system, which is more just a hybrid between tort and a no-fault system.”

The report recommendations were announced when the government introduced Bill 41, the Insurance (Enhancing Driver Affordability and Care) Amendment Act, Oct. 29. The bill passed second reading Nov. 18.

The government introduced a “direct compensation for property damage” framework into the system, which is in every other private auto sector jurisdiction across the country, said Celyeste Power, vice president of IBC’s Western region. This is a first-payer system (not a no-fault system) for physical vehicle damage.

Other proposed changes under the bill and through new Orders in Council, among others, expand the number of injuries under the minor injury regulation and limit the number of expert witnesses that could be used in motor vehicle accident injury claims.

For further information, visit https://www.canadianunderwriter.ca/insurance/will-alberta-move-to-a-pure-no-fault-auto-insurance-system-1004200335/

Insurers Are Now Treating Distracted Driving as a Major Conviction

In keeping with actions previously taken by Canada’s auto insurers, Northbridge General Insurance Company will start treating driving while using a hand-held communication device as a major conviction for the purpose of setting insurance rates in Nova Scotia.

The change takes effect Jan. 4, 2021 for new business and Feb. 4, 2021 for renewal business, the Nova Scotia Utility Review Board announced in a decision released Nov. 13. The change applies to both Northbridge General and Zenith Insurance Company.

In approving the change, NSURB noted many other insurers also treat distracted driving as a major conviction.

The three categories of conviction are minor, major and serious. Northbridge treats each classification differently, with respect to how many are allowed before the risk is no longer written and what level of surcharge applies, NSURB member Jennifer Nicholson wrote.

Speak to your broker or agent to see if this change will apply to your policy in the near future.

For more information, read the article at: https://www.canadianunderwriter.ca/legislation-regulation/insurers-now-treating-distracted-driving-as-major-conviction-1004200002/

New Study Finds that Majority of Cybersecurity Executives Expect to budget More to Cope With COVID

A new study estimates over half of executives responsible for cybersecurity expect to grow their budgets in response to new challenges raised by the COVID-19 pandemic.

A poll of 3,000 global executives found that 55% expected to budget more for security, with Canadian responses about the same. But only 34% of the 100 Canadian participants in the survey were confident their cyber budgets are being spent correctly, compared with 44% globally.

The concern raised most often by the Canadians is their ability to prepare for with security events that are unlikely to happen but of high impact if they do occur.

Another top issue related to COVID, both for the Canadian respondents and globally, was being able to take cybersecurity and privacy into consideration with every business decision.

To find out more, visit https://www.canadianunderwriter.ca/insurance/majority-of-cybersecurity-executives-expect-to-budget-more-to-cope-with-covid-study-1004200921/

The COVID-19 Pandemic is Taking its Toll on Canada’s Economy and Insurance Industry

According to a recent report, Canada’s property and casualty insurance industry has so far fared better than their life counterparts amid the volatile economic and market dynamics created by the COVID-19 pandemic.

In its Best’s Market Segment Report, titled “COVID-19 Taking Its Toll on Canada’s Economy and Insurance Industry,” AM Best states that the country’s overall insurance industry remains well-capitalized.

However, for Canada’s life insurance industry, top-line growth has been materially affected, as consumers reacted to COVID-19-fueled economic strain, and agents and life insurance representatives transitioned with varying degrees of success to a digital sales environment. Life insurers’ operating earnings also have been impacted because of the market dynamics and asset valuations, and earnings likely will be pressured by the prolonged volatility in the equity markets and low interest rates, leading to lower fee-based revenue as well.

Canada’s property/casualty companies continue to show that they have the ability to remain profitable and meet the challenges presented by COVID-19, on top of those presented by increasingly volatile weather and climate conditions, fire and seismic activity, as well as economic volatility and competitive and regulatory issues.

The personal auto insurance line remains a soft spot, however, as performance deteriorated again in 2019, and experienced a 10-point rise in the loss and loss adjustment expense ratio, reversing two years of improvement. All auto lines remain exposed to loss frequency brought on by factors such as distracted driving and more miles driven.

In addition, inflation and a continual increase in loss severity due to rising repair costs are still affecting the auto lines. Early indications are that frequency trends will be down significantly in 2020, as shelter-in-place requirements, business closures, and remote working arrangements have caused a steep decline in miles driven across the country. AM Best maintains a stable outlook on Canada’s property/casualty segment.

Read the full story at: https://www.insurance-canada.ca/2020/09/14/best-market-segment-report-covid19-its-toll-on-economy/

Identity theft is on the rise and Canadians are uncertain about the warning signs

As instances of fraud and identity theft have been on the rise with COVID-19, Canadians are equally split on knowing how to spot it.

According to a recent survey commissioned by Johnson Insurance, over half (52 per cent) of Canadians are unable to identify all of the warning signs that they have become a victim of identity theft, when provided with a list of the signs.

Further findings show that 27 per cent of Canadians have noticed an increase in suspicious COVID-19-related activity on fraudulent websites and online advertisements, as well as increased suspicious emails (23 per cent), and text messages or phone calls (20 per cent).

“COVID-19 has created new avenues for identity theft – including applications for the CERB in the name of an identity theft victim,” says Alex Rafuse, Vice President, Home & Auto, Johnson Insurance. “With more people working from home during the pandemic – answering home phone calls or disposing of personal and work-related documents in residential recycling bins – there is a higher than normal susceptibility to fraud.”

The first line of defense against identity theft is prevention. Canadians can take steps to help protect themselves from identity theft with some of the following tips:

Online

  • Use secure passwords that include a combination of letters, numbers, and symbols.
  • Use different passwords for all of your accounts, and change them often.
  • Be wary of unsolicited emails that ask you to follow links, login to accounts, or provide personal information.

On the Phone

  • Never provide personal information over the telephone unless you initiate the call, and never provide information via text message to an unknown sender.
  • If asked to call someone back, call the organization the person claims to belong to and confirm that the person works for them.

Around the Home

  • Avoid keeping a written record of your bank account, PIN number(s), social insurance number or card, and computer password(s) out in the open or in a wallet or handbag.
  • Remove mail from the mailbox immediately or keep the mailbox locked.
  • Shred or destroy all personal or sensitive documents before placing them in the recycling bin.

For additional information on identity theft coverage, speak with your broker or agent.

Read the full findings at: https://www.insurance-canada.ca/2020/10/01/johnson-insurance-rsa-identity-theft-survey/