What's New

Welcome to our What’s New section. We will be updating this section regularly with news from within our company, and the insurance industry. So feel free to visit regularly!

What You Should Know About the Business of Insurance We are currently witnessing challenging times in Canada. Among many things, the Canadian consumer has been dealing with an ailing economy, now roll in a “hardening” (increased insurance premiums, less availability of coverage) insurance market. The ripple effects of the current economic environment continue for everyone. Could the timing be any worse for increased insurance costs, or any costs for that matter? There are many determining factors that contribute to the pricing of all insurance products, including home and automobile.  Many speculate on the cause for the current increases being experienced. Industry executives however have advised us that there is one simple answer for the cost increase – escalating claims costs. Not because of the economic downturn causing decreased financial results of the insurers. The Canadian property and casualty are highly regulated in many ways. They have very high capital standards. In other words the Canadian Insurers are heavily regulated and thus they are restricted in what they can and cannot invest in. As a result the effects of the economy have been slightly muted for them.  In the April edition of the Canadian Underwriter the following was written: “Underwriting auto insurance accident benefits in Ontario is now officially a money-losing venture, according to almost all relevant sources, including the insurers’ trade organization, the Insurance Bureau of Canada (IBC), MSA research and federal solvency regulator, the Office of the Superintendent of Financial Institutions (OFSI). This is a major concern for the property and casualty industry, because no less than a quarter of all of the premium in the country comes from underwriting Ontario auto insurance”. How bad has it been? Obviously the results will vary with each insurer, but they report automobile claim payouts of $1.03 to $1.79 for every $1.00 received in premium. The regulators are trusted with the task of looking out for the consumer, but also to ensure that the industry remains healthy with appropriate premium levels. In Ontario, automobile insurance coverages are drafted by the law makers and given to the insurers to distribute and administer. There is presently a five-year review of the Ontario automobile system and as a result the Minister of Finance is seeking submissions from the Financial Services Commission of Ontario, the public and other agencies. As you are aware there are many factors to consider when creating an insurance strategy that best suites your individual needs, situation and budget. We will continue to provide you with the independent, professional advice that you have come to expect from our staff when making your insurance decisions.