Jan. 6, 2020 — THIS YEAR is shaping up to be a challenging one for the p&c industry but the president and CEO of the Insurance Bureau of Canada says he expects there will also be bright spots.
Don Forgeron told Thompson’s he believes there are reasons to be optimistic about auto insurance, despite the need of reform in several provinces.
In B.C., he said, consumer advocacy efforts appear to be paying off with thousands of drivers in the province voicing concern about the monopoly over basic auto coverage held by the Insurance Corp. of B.C., the government-owned auto insurer.
Almost 14,000 drivers have joined a campaign called DrivingChoice which is advocating to bring choice to the province’s basic auto insurance market.
In Alberta, the government has allowed a cap on auto rate increases to expire and Mr. Forgeron noted that the province has recently become the first to provide customers with the option of a fully digital insurance experience.
And, as reported this week on page 1, the Alberta government announced the creation of an advisory committee that will review the auto insurance system.
“I’m optimistic that the new year will bring additional changes to give consumers more choice and stability,” he said.
Turning to Ontario, Mr. Forgeron said there is reason to be bullish about auto insurance in the province for the first time in a long time.
“In the government’s fall economic statement, it reaffirmed its commitment to reforming the auto insurance system and cutting system costs in a sustainable way. The Financial Services Regulatory Authority of Ontario, which became operational in June 2019, announced a new standard rate filing process that insurers have long been advocating for.”
He said he is also impressed by the progress the province has made in addressing insurance fraud, and he is expecting some real progress will be made on the issue in 2020.
Meanwhile, he said, reforms are needed in Nova Scotia and New Brunswick to provide more than short-term relief to escalating costs for auto insurance there.
In Newfoundland and Labrador, recently passed legislation means 2020 should see a more efficient rate regulation process, he said.
On the topic of a continuing hardening commercial insurance segment, Mr. Forgeron said the industry’s role is to demonstrate that the market is responsive, adaptable and able to handle issues without intervention or strict guidelines.
He said the hardening of the commercial market has been a long time in coming, and is the result of many years of poor results.
“We know that cycles come and go and this one, too, shall pass at some point,” Mr. Forgeron said.
“In the meantime, IBC will work with governments and stakeholders to provide the type of risk management advice that we are known for and which will assist those risks having trouble accessing affordable coverage.”
He said the bureau will likely form a task force to review issues with the hardening market with other stakeholders.
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