Toll Free: 1.877.225.0446

Tesla argues for setting premiums based on technology

The United States electric car manufacturer Tesla is in favour of pricing auto insurance based on vehicle technology that promotes risk reduction, says data analysis firm GlobalData.

“The exponential advances in technology have made drivers much more cautious, as the potential for driver errors is reduced when Tesla’s autopilot function is up and running,” said Daniel Pearce, a senior financial analyst. GlobalData. Collision rates for all Tesla models have dropped 40% since the introduction of the autopilot system. However, when owners wish to insure their Tesla, this is not reflected in the premiums. “

The automaker’s solution has been to partner with insurers in 20 countries to set up the Insure my Tesla program. GlobalData indicates that this program wants to offer insurance vehicle owners insurance products that reflect the increased safety offered by the technology included in their car.


What is the value?

Marc Cohen, who will be taking charge of the Hub International insurance brokerage firm on January 1, 2018, expects digital technology to play a major role in the transformation of insurance for both individuals and businesses.

The change will primarily affect the simplicity and ease with which the consumer will transact. “We will have to go through a multichannel approach. This will combine both the digital and a physical place around the corner. Technology and innovation will intertwine. It will look like what banks have experienced. The insurance must be delivered to meet the needs of the consumer. Innovation will come from the voice of the consumer.”

This new interaction will generate innovation, he says. But for that, brokers must innovate. Acting as the intermediary doer today will not be enough tomorrow, says Cohen.


Collision frequency continues to climb

Collision frequencies continue to grow at an overall rate of 2.5%, according to the Allstate Canada Safe Driving Study. In addition, the results of the study reveal that the most serious type of collision is that involving pedestrians or cyclists, followed by frontal collisions.

“It is certainly encouraging to see a drop in the frequency of collisions in some parts of the country. However, the overall frequency of collisions is on the rise, which we find all the more disturbing as the most serious collisions involve cyclists or pedestrians,” says David MacInnis, Vice President, Product Management at Allstate.

These results show that there is still much to be done to reduce the number of accidents, especially as we approach the most dangerous season on the road.


It is time to consider marijuana-proofing policy wording

An insurance defence lawyer is encouraging the industry in Alberta to check their policy wordings after the province’s proposed new sanctions for cannabis-impaired and cannabis/alcohol-impaired driving offences.

Insurance professionals will need to conduct an immediate review of all policy wordings in order to ensure that their insurance products appropriately cover the risk and claims that will come with the changes in the legislation.

The impact of the changes to the Traffic Safety Act will be far-reaching, possibly affecting claims in the homeowners’ personal lines and commercial general liability contexts, as well as for product liability and directors and officers liability.

Also, there is still doubt about testing for marijuana – impaired driving. We can expect there to be many initial challenges to impaired charges on the basis of the accuracy of testing


Are you prepared for the Digital Privacy Act changes?

For Canadian organizations, as well as organizations doing business in Canada, a dramatic shift to privacy and cyber security regulations is looming. The amendment to Canada’s Personal Information Protection and Electronic Document Act (PIPEDA), the federal privacy law for private-sector organizations, is expected to take effect in late 2017.

Under this amendment, also known as The Digital Privacy Act, organizations that experience a data breach but neglect their responsibilities as outlined in this act could quickly find themselves in hot water with regulators and customers alike, not to mention facing steep fines.

If you aren’t up to date on what’s happening with PIPEDA and The Digital Privacy Act, this article highlights the implications of the new regulations on businesses. Then ask your broker or insurance company agent about cyber insurance to determine if your risks are being properly managed.


How has Harvey affected global reinsurance rates?

Global reinsurance rates are likely to remain low despite Hurricane Harvey’s impact on parts of Texas and Louisiana. Reinsurance provides some of the financial capacity for insurance companies.

The main differentiator between Harvey and other devastating US storms is the amount of flood damage Harvey has inflicted. This has had considerable impact on economic and insured loss estimates.

There are a number of factors affecting the potential size of these losses. Underinsurance plays a big part on the personal lines side. Not many people take out personal lines flood insurance, so this area is likely to see higher economic losses than insured losses.

Despite Harvey’s significant size, Fitch Ratings is not predicting a huge impact on pricing. Harvey is not large enough to cause a widespread turn in pricing, so global rates are likely to remain low.


Here’s why you should pay attention to flood insurance

Flood insurance in Canada is in a state of flux. The Calgary flood of 2013 changed everything. Increased severe weather events across the country continue to shape the private flood insurance landscape.

At the National Insurance Conference of Canada, held in Quebec City the first week of October, a panel of industry experts sat down to discuss the state of the flood insurance market.

IBC consultant and former TD Insurance CEO, Alain Thibault, said there are still glaring gaps in the coverage offered. There’s no solution yet for high-risk properties and we don’t yet have the products that people need.

President of Direct-Line Insurance brokerage and past-president of the Insurance Brokers Association of Alberta, Gord Enders, said a potential problem was the point at which insurance would take over as the default protection, and when and how Government relief funds would cease being a “back stop.”

IBC vice president of federal affairs, Craig Stewart, said discussions between the IBC and Government continued, but more stakeholders needed to begin having a seat at the table. Mortgage lenders and realtors needed to be better informed and have a voice in the discussions.


It is important to be prepared for worsening flood risks

Don Forgeron, president and CEO of the Insurance Bureau of Canada (IBC), has said: “Collectively, we simply need to do a better job to face this risk head on.” He added, “We can start by working together to educate and empower consumers.”

And that is what Canadian authorities and insurance leaders have set out to do – starting with a roundtable, to move the conversation towards improving flood insurance for Canadians.

Planning how to better educate the public on flood risk will be the main objective for the experts at the roundtable. The focus will be on working to help Canadian homeowners understand their flooding exposures.


Usage-based insurance could encourage better driving behaviour

Researchers at the University of British Columbia (UBC) recently conducted a study on usage-based auto insurance and found that the use of telematics to monitor driver behaviour and to help adjust rates could lead to better drivers overall.

The study, which looked at data from 30,000 drivers, suggested that usage-based insurance (UBI) is expected to be used by 142 million by 2023.

“What we found is that women, compared to men, seem to improve their behaviour more, and younger people, compared to older people, also tend to improve their behaviour more,” said Charles Weinberg, UBC marketing professor.

Usage-based insurance allows drivers to receive immediate feedback on their driving behaviour, giving them opportunities to adjust their driving accordingly.


Truck-related fatalities are on the decline

Although collisions related to trucks in Ontario have increased recently, resulting in higher costs for insurance companies, provincial figures show that fatalities have actually decreased.

The latest data from Ontario’s Transportation Ministry found that the number of truck-related fatalities on provincial highways is falling – down 3% between 2010 and 2014. This is despite the fact that the number of trucks on the road climbed by 12% over the same period.

The Ontario Trucking Association (OTA) hopes to address both mechanical issues and driver error to further reduce collision casualties. The OTA has proposed that the provincial government makes electronic trucker driving logs mandatory to help improve the roads.