C A N A D A’ S I N S U R A N C E A N D R I S K M A G A Z I N E . C A N A D I A N U N D E R W R I T E R . C A
A P R IL 2 0 1 7 PM#40063170
Patchwork Cover BY GREG MECKBACH
Data Shake-up BY BRENDA ROSE
Aerial View BY JEFFREY McCANN
A CLAIMS DEPARTMENT THAT LOVES TO KEEP PROMISES.
We see a covered claim as an opportunity to keep a promise. So, if you’re looking to build a trusting partnership with a Canadian carrier who will help you get from Stop to Go, talk to us.
“Highest Customer Satisfaction among Large Commercial Insurers” XL Catlin, the XL Catlin logo and Make Your World Go are trademarks of XL Group Ltd companies. XL Catlin is the global brand used by XL Group Ltd’s (re)insurance subsidiaries. In Canada, coverages are underwritten by XL Specialty Insurance Company—Canadian Branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of XL Catlin. Coverage may not be available in all jurisdictions. XL Catlin received the highest numerical score among 11 insurers in the J.D. Power 2016 Large Commercial Insurance Study, based on 1,484 total responses, measuring the opinions of risk professionals in the U.S. and Canada with commercial insurers, surveyed April-July 2016. Your experiences may vary. Visit jdpower.com.
XLCatlin_CanadianUW_Apr2017_claims-heart.indd 1
3/27/2017 2:51:02 PM
CANADIAN UNDERWRITER
VOL. 84, NO. 4, APRIL 2017 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY NEWCOM BUSINESS MEDIA INC.
www.canadianunderwriter.ca
COVER STORY
Patchwork Cover
28
Brokers should advise commercial clients that commercial property and liability insurance generally exclude losses arising from terrorism. Although special stand-alone coverage is available, the bigger challenge may be the client mindset and an apparent lack of concern over potential related risks. BY GREG MECKBACH
FEATURES
12
39
Data Technology
Broker Technology Forum
Brokerages must stay current with broker management system software to access new connectivity capabilities and offer the data that is required by insurers.
As quickly as technology is changing for brokers — driven in part by customer demands — is the breadth of options available to sample.
BY BRENDA ROSE
21
BY JASON CONTANT & ANGELA STELMAKOWICH
43
17 Cyber Insurance
47 CatIQ Conference
Organizations and companies looking to protect themselves from the many forms that cyber crime can take would be well-advised to carefully examine policy wording.
Cats continue to capture the attention of the insurance industry. Gathering critical info will allow stakeholders to better herd straggler facts into a usable form.
BY HERSHEL SAHIAN &
BY ANGELA STELMAKOWICH &
ANDREW COTTREAU
GREG MECKBACH
25 Climate Index An updated climate index shows some Canadian regions are among those with the highest index values, indicating the largest deviations in extreme weather events and sea levels from historical values. BY CATERINA LINDMAN & DOUG COLLINS
Higher Education Risks
Drone Requirements
Risks associated with higher education institutions are many, ranging from targeted violence to indiscriminate severe weather.
Brokers will play a key risk management advisory role with drones. Customers need to understand coverage, including current limitations.
BY DAWN H. PURO & VICTOR IP
BY JEFFREY MCCANN
April 2017 Canadian Underwriter
3
(416) 510-6793 Twitter: @CU_Harmeet @InsuranceMedia Gary White the industry, providing marketers aTwitter: range ofinformation specialized to providing the most and with relevant news, (416)timely 510-6800 astelmakowich@canadianunderwriter.ca steve@canadianunderwriter.ca hsingh@canadianunderwriter.ca -6793 Twitter: @InsuranceMedia Editor (416) 510-6800 Editor 442-5600 Senior Publisher (416) ext. 3652 ve marketing communications opportunities. the industry, marketers with a rangeService of specialized (416) 510-6760 (416) 510-6793 Twitter:providing @InsuranceMedia Associate Editor Subscriptions/Customer National (416) 510-6800 ckbach Art Director and effective marketing communications Twitter: @CU_Harmeet Angela Stelmakowich Steve Wilson andhighly resources to insurance professionals from allopportunities. segments of Editor (416) 510-6800 Editor Greg Meckbach Senior Publisher Art Director h@canadianunderwriter.ca Gail Page Gerald Heydens and highlysteve@canadianunderwriter.ca Associate Editor effective marketing communications opportunities. astelmakowich@canadianunderwriter.ca ckbach (416) ext. 3652 Claims Art Director Associate Publisher Angela442-5600 Stelmakowich gmeckbach@canadianunderwriter.ca Steve Wilson Gerald HeydensSubscriptions/Customer Service CU_Greg Greg Meckbach Art Director (416) 510-6793 Twitter: @InsuranceMedia the industry, providing marketers with a range of specialized gpage@bizinfogroup.ca h@canadianunderwriter.ca Gerald Heydens Art Consultation astelmakowich@canadianunderwriter.ca Twitter: @CU_Greg steve@canadianunderwriter.ca Paul Aquino -6796 gmeckbach@canadianunderwriter.ca Gerald HeydensGail Page (416) 510-6800 Art Consultation Manual CU_Greg Sascha Hass 510-6793 (416) 510-6796 Associate Publisher Twitter: @InsuranceMedia Associate Editor (416) 510-5187 Art Consultation Twitter: @CU_Greg and highly effective marketing communications opportunities. Sascha Hass paul@canadianunderwriter.ca gpage@bizinfogroup.ca -6796 tor InsuranceMarketer.com VOL. 84, NO. 4, APRIL 2017 (416) 510-6800 Art Consultation Greg Meckbach Director Paul Aquino Sascha Hass Canadian Underwriter’s Insurance Media Group is committed (416) 510-6796 Production Manager Associate Editor Online Editor Singh Sascha Hass gmeckbach@canadianunderwriter.ca Canadian Underwriter’s Insurance Media Group 510-5187 is committed Gerald Heydens Twitter: @InsuranceCanuk Production Manager (416) Circulation Manager tor Gary White Gregthe Meckbach Harmeet Singh Art Director to providing most timely and relevant news, information paul@canadianunderwriter.ca anadianunderwriter.ca Production Manager Online Twitter:Editor @CU_Greg Gary White to providing the most timely and relevant news, information Singh (416) 510-6788 (416) 510-6760 gmeckbach@canadianunderwriter.ca hsingh@canadianunderwriter.ca Gerald Heydens Production Manager Art Consultation Mary Garufi PROFILE to insurance from all segments of CU_Harmeet and resources Gary professionals White Harmeet Singh (416) 510-6796 Managing Director, (416) 510-6760 Editor Twitter: @InsuranceCanuk Senior Publisher Circulation Manager anadianunderwriter.caTwitter: and resources to insurance professionals from all segments of @CU_Greg @CU_Harmeet Gary White Sascha Hass -5600 ext. 3652the industry, providing marketers with a range of specialized Mediamgarufi@bizinfogroup.ca Group (416) 510-6760 Angela Stelmakowich hsingh@canadianunderwriter.ca Subscriptions/Customer Service Steve ArtInsurance Consultation Angela Stelmakowich Wilson National CU_Harmeet National (416) 510-6788 510-6796 (416) ext. 3652the industry, providing marketers with Mary a range ofGarufi specialized (416) 510-6760 Online442-5600 Editor Account Manager Subscriptions/Customer National astelmakowich@canadianunderwriter.ca the Service insurance industry’s social network Ian Portsmouth Twitter: @CU_Harmeet Gail Page Sascha Hass Canadian Underwriter’s Insurance Media Group is committed and highly effective marketing communications opportunities. astelmakowich@canadianunderwriter.ca steve@canadianunderwriter.ca Production Manager Claims -5600 ext. 3652 Claims (416) 442-5600 ext. 3545 Publisher Subscriptions/Customer Servicemarketing Harmeet Singh ian@canadianunderwriter.ca (416) 510-6793 Gail Page and highly effective communications opportunities. Michael Wells (416) 442-5600 ext. 3652toClaims gpage@bizinfogroup.ca Online Editor mgarufi@bizinfogroup.ca Associate Publisher (416) 510-6793 Subscriptions/Customer Service Twitter: @InsuranceMedia Gary White providing the most timely and relevant news, information (416) 510-6800 uino Manual Gail Page hsingh@canadianunderwriter.ca Production Manager Account Manager Manual gpage@bizinfogroup.ca Associate Editor Publisher (416) 510-5187 Harmeet Singh Paul Aquino Gail Page (416) 510-6800 (416) 510-6760 Print Manual InsuranceMarketer.com (416) 442-5600 3545 and resources to insurance from all segments of ext. Art professionals Director nadianunderwriter.ca michael@canadianunderwriter.ca gpage@bizinfogroup.ca Production Manager Associate Publisher Twitter: @CU_Harmeet InsuranceMarketer.com Gary White Associate Editor (416) 510-5187 Greg Meckbach uino Michael Wells hsingh@canadianunderwriter.ca paul@canadianunderwriter.ca gpage@bizinfogroup.ca InsuranceMarketer.com Gerald Heydens InsuranceCanuk gmeckbach@canadianunderwriter.ca (416) 510-5187 Paul Aquino Circulation Manager (416) 442-5600 ext. 3652 the industry, providing marketers with a range of specialized (416) 510-6760 Greg Meckbach Art Director Subscriptions/Customer Service 510-5122 National Phyllis Wright nadianunderwriter.ca (416) @CU_Harmeet Twitter: @InsuranceCanuk (416) 510-5187 Circulation Manager (416) 510-6796 michael@canadianunderwriter.ca -6788 Production Manager paul@canadianunderwriter.ca Print Production Mary Garufi gmeckbach@canadianunderwriter.ca Gerald Heydens Gail Page and highly effective marketing communications opportunities.Manager InsuranceCanukINSURANCE Claims Circulation Manager 442-5600 ext. 3652 (416) 510-6788 Associate Publisher Subscriptions/Customer Service Mary the insurance industry’s social network Online KarenGarufi Samuels Twitter: @InsuranceCanuk mgarufi@bizinfogroup.ca Twitter:Editor @CU_Greg Circulation Manager gpage@bizinfogroup.ca (416) 510-5122 National Account Manager -6788 Phyllis Wright Manager President Mary GarufiManual Paul Contant Aquino the insurance industry’s social network (416) 510-5190 Gail Page Art Consultation Jason mgarufi@bizinfogroup.ca National (416) 510-6788 Claims (416) 442-5600 ext. 3545 Associate Publisher (416) 510-6796 Account Manager Mary Garufi industry’s social network (416) 510-5187 DIRECTORY the insurance jcontant@canadianunderwriter.ca Wells mgarufi@bizinfogroup.ca paul@canadianunderwriter.ca Sascha HassManager gpage@bizinfogroup.ca Claims (416) 442-5600 ext. 3545 Creighton Circulation Elliot Ford InsuranceMarketer.com Manual Bruce Manager insBlogs Paul Aquino Michael Wells mgarufi@bizinfogroup.ca (416) 442-5600, Ext. 6893 Account Manager InsuranceMarketer.com Manual canadianunderwriter.ca (416)Production 442-5600 ext. 3545 President Account Manager Mary Garufi Print Manager Twitter: @InsuranceCanuk Online Editor (416) 510-5187 Circulation Manager Wells InsuranceMarketer.com paul@canadianunderwriter.ca michael@canadianunderwriter.ca INSURANCE eford@canadianunderwriter.ca (416) 442-5600 ext. 3545 Production Manager Print Production Manager Account Manager gs mary@newcom.ca -5122 Michael Wells Phyllis Wright Harmeet Singh (416) 510-6788 Mary Garufi Elliot Ford Bruce Creighton insBlogs canadianunderwriter.ca Vice President DIRECTORY Print Production Manager Twitter: @InsuranceCanuk (416) 510-5122 (416) 614-5831 Michael Wells Gary White Circulation Manager instouch.com Phyllis Wright (416) 510-5117 NCE michael@canadianunderwriter.ca hsingh@canadianunderwriter.ca Print Production Manager mgarufi@bizinfogroup.ca instouch.com mike@canadianunderwriter.ca National -5122 Manager Phyllis Wright (416) 510-6788 President eford@canadianunderwriter.ca Account Manager (416) 510-6760 INSURANCE Mary Garufi Print Production Manager the insurance industry’s social network Alex Papanou (416) 510-5122 Twitter: @CU_Harmeet Account Manager TORY (416) 510-5122 Phyllis Wright Claims (416) 442-5600 3545 President Insurance Blogs hosted by Canadian Underwriter rd Vice President Phyllis Wright ext. Bruce Creighton Michael Wells mgarufi@bizinfogroup.ca insBlogs insBlogs DIRECTORY Ontario Manager Manual (416) 510-5117 (416) 442-5600 ext. 3652 President Account Manager Elliot Ford Service Bruce Creighton InsuranceMarketer.com Account Manager insBlogs Subscriptions/Customer Ontario INSURANCE nadianunderwriter.ca Property & Casualty Insurance Newswire Account Manager michael@canadianunderwriter.ca (416)Production 442-5600 ext. 3545Papanou President Print Manager rd Property & Gail Casualty InsuranceAlex Newswire Bruce Creighton Michael Wells INSURANCE eford@canadianunderwriter.ca Christine Hirst Page Vice President DIRECTORY insBlogs -5117
instouch.com
insBlogs Ontario
instouch.com instouch.com instouch.com Ontario
Ontario insBlogs
instouch.com
the insurance industry’s social network
the insurance industry’s social network
Associate Publisher Elliot Ford (416) 510-5122 Ontario gs Bruce Creighton Phyllis Wright Vice President DIRECTORY nadianunderwriter.ca michael@canadianunderwriter.ca (416) 510-5117 gpage@bizinfogroup.ca Print Production Manager insBlogs instouch.com Paul AquinoAlex Papanou eford@canadianunderwriter.ca Insurance Blogs hosted by Canadian Underwriter
christine@canadianunderwriter.ca
erwriter Vice President (416) 510-5114 INSURANCE insBlogs Alex 510-5187 Papanou the insurance industry’s social network -5117 Connect with Canadian insBlogs Underwriter (416) 510-5122 (416) Insurance Blogs hosted by Canadian Underwriter Account Manager Phyllis Wright Vice President President urance Newswire paul@canadianunderwriter.ca (416) 510-5117 Papanou & Casualty InsuranceAlex Newswire DIRECTORY Property Property & Casualty Insurance Newswire Elliot Ford Alex Papanou Bruce Creighton Property &insBlogs Casualty Insurance Newswire Twitter: @InsuranceCanuk Account Manager Manager President InsuranceCirculation Blogs hosted by Canadian Underwriter Connect with Canadian Underwriter INSURANCE eford@canadianunderwriter.ca with Canadian Underwriter twitter.com/CdnUnderwriter (416) 510-6788 facebook.com/CanadianUnderwriter Elliot Ford Mary Garufi Bruce Creighton Connect with Canadian Underwriter Vice President DIRECTORY insBlogs.com (416) 510-5117 Insurance Blogs hosted by Canadian Underwriter insBlogs.com Insurance Blogs hosted by Canadian Underwriter mgarufi@bizinfogroup.ca eford@canadianunderwriter.ca with Canadian Underwriter Alex Papanou tter.com/CdnUnderwriter facebook.com/CanadianUnderwriter Account Manager Insurance Blogs hosted by Canadian Underwriter Insurance Blogs hosted by Canadian Underwriter Connect with Canadian Underwriter Vice President insBlogs twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter (416) 442-5600 ext. 3545 (416) 510-5117 CanadianProperty Underwriter & Casualty Insurance Newswire Michael WellsUnderwriter .ca Papanou Insurance Blogs hosted by Canadian linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter Property & Casualty InsuranceAlex Newswire tter.com/CdnUnderwriter facebook.com/CanadianUnderwriter InsuranceMediaGroup.com .ca michael@canadianunderwriter.ca twitter.com/CdnUnderwriter kd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter facebook.com/CanadianUnderwriter Print Production Manager .ca MediaGroup.com linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter Connect with Canadian Underwriter InsuranceMediaGroup.com (416) 510-5122 Phyllis Wright InsuranceMediaGroup.com linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter kd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter insBlogs.com
insBlogs.com
Ontario insBlogs.com insBlogs Insurance Blogs hosted by Canadian Underwriter
Insurance Blogs hosted by Canadian Underwriter
gs.com insBlogs.com
Insurance Blogs hosted by Canadian Underwriter
insBlogs.com .ca
InsuranceMediaGroup.com
.ca
InsuranceMediaGroup.com www.CanadianUnderwriter.ca/MediaGroup Insurance Blogs hosted by Canadian Underwriter instouch.com/group/CanadianUnderwriter Published linkd.in/CanadianUnderwriter bywith Canadianwww.CanadianUnderwriter.ca/MediaGroup Connect Underwriter Accounttwitter.com/CdnUnderwriter Managerwww.CanadianUnderwriter.ca/MediaGroup facebook.com/CanadianUnderwriter President Insurance BlogsElliot hosted Ford by Canadian Underwriter Bruce Creighton erwriter iswww.CanadianUnderwriter.ca/MediaGroup published INESS MEDIA INC. thirteen times yearly (monthly + the Annual Statistical Issue) by twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter SINESS MEDIA INC. Canadian Underwriter iswww.CanadianUnderwriter.ca/MediaGroup published thirteen timesthirteen yearly (monthly + the Annual(monthly Statistical Issue) NEWCOM BUSINESS MEDIA INC. Canadian Underwriter iswww.CanadianUnderwriter.ca/MediaGroup published times yearly + thebyAnnual NEWCOM BUSINESS MEDIA INC. eford@canadianunderwriter.ca .caStatistical Issue) by linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter NEWCOM MEDIAM3B INC. 2S9 InsuranceMediaGroup.com erwriter at thirteen 80 Valleybrook Drive,BUSINESS Toronto, Ontario, erwriter is is located published times yearly (monthly + the Annual Statistical Issue) by NEWCOM BUSINESS MEDIA INC. Vice President 451 Attwell Dr., Toronto, ON M9W 5C4 Published by
.ca
ranceMediaGroup.com (416) 510-5117 InsuranceMediaGroup.com InsuranceMediaGroup.com Alex Papanou InsuranceMediaGroup.com
442-5600. SINESS MEDIA INC.
Canadian at thirteen 80 Valleybrook Drive,(monthly Toronto, + Ontario, M3B Statistical 2S9 Canadian Underwriter Underwriter is is located published times yearly the Annual Issue) by linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter (416) 614-2200 • MEDIA (416) 614-8861 (fax) Phone: 442-5600. NEWCOM BUSINESS Canadian is at thirteen 80 Valleybrook Drive,(monthly Toronto, + Ontario, M3B Statistical 2S9 Published by Underwriter Canadian Underwriter is located published times yearly the Annual Issue) by rved. Printed in Canada. The contents of(416) this publication may INC. not be reproduced or transmitted www.CanadianUnderwriter.ca/MediaGroup rved. Printed in Canada. The contents of this publication may not be reproduced or transmitted ither in part or in full, includingAll photocopying and recording, the written consent the rights reserved. Printed in without Canada. TheINC. contents of thisofpublication may not be reproduced or transmitted Phone: (416) 442-5600. NEWCOM BUSINESS MEDIA ither in may part any or inpart full,ofincluding photocopying andinrecording, without the written consent the All rights Printed The contents of thisofpublication may without not be reproduced transmitted Chairman and Founder President er. Nor this publication bereserved. stored apart retrieval system of any nature without in any form, either in orininCanada. full, including photocopying and recording, the written or consent of the er. Nor may any part of this publication be stored ininapart retrieval system any nature without and recording, without the written consent of the in any form, either or inpart full,ofincluding photocopying onsent. copyright owner. Nor may any this publication be (monthly stored in + a retrieval system of anyIssue) nature without All rights reserved. Printed inof Canada. The contents of this publication may not be reproduced or transmitted Canadian Underwriter iswww.CanadianUnderwriter.ca/MediaGroup published thirteen times yearly Annual Statistical NEWCOM BUSINESS MEDIA INC. onsent. copyright owner. Nor may any part of this publication be stored in a the retrieval system of any natureby without All rights reserved. Printed in Canada. The contents of this publication may without not be reproduced transmitted prior written consent. NEWCOM BUSINESS MEDIA INC.and monthly as a source of news, technical information and comment, as a link between in any form, either in part or in full, including photocopying and recording, the written or consent of the Connect with Canadian Underwriter prior written consent. monthly as a source of news, technical information and comment, and as a link between in any form, either in may part orValleybrook inpart full, including photocopying and recording, without the written consent of the Vice President, Operations Controller of the insurance industry including brokers, agents, insurance andatofreinsurance companies, © Published monthly as alocated source news, technical information and comment, and as ain link between Canadian Underwriter is 80 Drive, Toronto, Ontario, M3B 2S9 Canadian Underwriter is published thirteen times yearly (monthly + the Annual Statistical Issue) by copyright owner. Nor any of this publication be stored a retrieval system of any nature without ofmanagers the insurance industry including brokers, agents, insurance andofreinsurance companies, © Published monthly as a source news, technical information and comment, and as a linkcompanies, between and consultants. all segments of the insurance industry including brokers, agents, insurance and reinsurance Phone: (416) 442-5600. copyright owner. Nor may part of this publication be stored in a retrieval system of any nature without NEWCOM BUSINESS MEDIA INC. any managers and consultants. all segments ofmanagers the insurance industry including brokers, agents, insurance and reinsurance companies, prior written consent. adjusters, risk and consultants. twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter prior written consent. adjusters, risk managers andinconsultants. All rights reserved. Printed Canada. The contents of this publication may not be reproduced or transmitted Director ofeither Circulation Allany rights reserved. Printed Canada. The contents of this publication may without not be reproduced transmitted in form, in part orininas full, photocopying and recording, the written consent of the and as a link between © Published monthly a including source of news, technical information and or comment, in any form, either in may part any or inas full, photocopying andinrecording, without written consent of the and as a link between time we make our subscription list available to select companies and organizations whose Privacy Notice © Published monthly aofincluding source of news, technical information and comment, copyright owner. Nor part this publication be stored a retrieval systemthe of any nature without all segments of the insurance industry including brokers, agents, insurance and reinsurance companies, copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without vice may interest you. If you do From not wish your contact information to be made available, time to time we make our subscription list available to select companies and organizations whose priorsegments written consent. linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter all of the insurance industry including brokers, agents, insurance and reinsurance companies, prior written consent. t us via one of the following methods: adjusters, riskmay managers and consultants. product or service interest you. If you do not wish your contact information to be made available, © Published monthly as a source of news, technical information and comment, and as a link between adjusters, risk managers and consultants. please contactmonthly us via one ofsource the following methods: © Published as a of news, technical information and comment, and as a link between -668-2374 Fax: 416-442-2191Canadian Underwriter is published thirteen times yearly (monthly + the Annual Statistical Issue) by all segments of the insurance industry including brokers, agents, insurance and reinsurance companies, all segments the insurance industry including brokers, agents, insurance and reinsurance companies, r@businessinformationgroup.ca NEWCOM BUSINESS MEDIA r@annexnewcom.ca Phone: 1-800-668-2374 Fax:INC. 416-442-2191 adjusters, riskofmanagers and consultants. www.CanadianUnderwriter.ca/MediaGroup adjusters, risk managers and consultants. y Officer, 80 Valleybrook Drive, E-mail: Toronto, Ontario, M3B 2S9 jhunter@businessinformationgroup.ca Privacy Notice jhunter@annexnewcom.ca All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted Mail to: Privacy Officer, 80 Valleybrook Drive,subscription Toronto, Ontario, M3Bavailable 2S9 From time to in time wein make our companies in any form, either part or full, including photocopying andlist recording, withoutto theselect written consent of the and organizations whose Privacy Notice GST Registration number 890939689RT0001 ates: 2013 2016 Canada Canadian Underwriter is published times yearly (monthly the Annual Statistical Issue) without by copyright owner. Norwemay any partinterest ofthirteen this publication be stored innot a+retrieval system any nature From time to time make our subscription list available to companies andof organizations whose product or service may you. IfRegistration you doselect wish your contact information to be made available, Second Class Mail Registration Number: 08840 GST number 890939689RT0001 Subscription Rates: 2013 Canada 5 plus applicable taxes NEWCOM BUSINESS MEDIA INC. 2016 prior written consent. product or service may interest you. If you do not wish your contact information to be made available, Publications Mail Agreement #40069240 #40063170 Second Class Mail Registration Number: 08840 please contact usis located via one methods: 1 Year $49.95 plus applicable taxesof the following 5 plus applicable taxes $51.95 Canadian Underwriter at 80has Valleybrook Drive,ofToronto, Ontario, M3Bindustry 2S9 - a monthly magazine please contact us via one of the following methods: © Since 1934, Canadian Underwriter been the voice Canada’s insurance Publications Mail Agreement #40069240 #40063170 2Phone: Years undeliverable $73.95 plusCanadian applicable taxes to: $75.95 Return addresses (416) 442-5600. $10 plus applicable taxes providing the highest quality and most relevant news and insight to insurance professionals from all segments of Phone: 1-800-668-2374 Fax: 416-442-2191 Phone: 1-800-668-2374 Fax: 416-442-2191 Circulation Dept. Return undeliverable Canadian on addresses to: Canada’s property casualty insurance market. Theof magazine is delivered direct-request basis Single Copies $10and plus applicable taxesThe All rights reserved. Printed in Canada. contents this publication may nota be reproduced circulation or transmitted E-mail: jhunter@businessinformationgroup.ca jhunter@annexnewcom.ca Canadian Underwriter Circulation Dept. E-mail: jhunter@businessinformationgroup.ca jhunter@annexnewcom.ca to senior decision nationally, insurance brokers, managers, insurance and reinsurin 15,000 any either in part orValleybrook in full, including photocopying andM3B recording, the written consent of the Mail to:form, Privacy Officer, 80makers Drive,including Toronto, Ontario, 2S9riskwithout 80 Valleybrook Drive, Toronto, Ontario Elsewhere 5 Canadian Underwriter ance company personnel, claims managers and adjusters. Since its beginnings, Canadian Underwriter has been a Mail to: Privacy Officer, 80 Valleybrook Drive, Toronto, Ontario, M3B 2S9 copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without M3B 2S9 80 Valleybrook Drive, Toronto, Ontario with award-winning coverage 1prior Year $73.95 $71.95 link between all segments of the insurance industry, providing insurance professionals written consent. cal Issue GST Registration number 890939689RT0001 Subscription Rates: 2013 2016 Canada M3B 2S9 ofWe industry issues, trends, news, personalities and events written by Canada’s leading insurance journalists. acknowledge the financial support above subscription) Second Class Mailand Registration Number: Annual Statistical Issue 1 $49.95 plus applicable taxes $51.95 © Year Published monthly as a2013 source of news, technical information comment, and as a08840 link between GST Registration number 890939689RT0001 Subscription Rates: Canada of the Government ofsubscription) Canada through 2016 We acknowledge financial support $38 Publications Mail the Agreement #40069240 $39 plus applicable taxes (included withofabove #40063170 2 $73.95 plus applicable taxes including allYears segments the insurance industry brokers, agents, insurance and reinsurance companies, $75.95 Subscription Rates: 2016 Canada GST number 890939689RT0001 the Canada Periodical Fund of the of theRegistration GovernmentSecond of Canada throughMail Registration Number: 08840 Class or separately $38 plus applicable taxes $39 1 Year $49.95 plus applicable taxes $51.95 adjusters, risk plus managers and consultants. Return undeliverable Canadian addresses to:08840 1Year $51.95 applicable taxestaxes Second Class Mail Registration Number: quiries/Customer Service Department Canadian Heritage the Canada Periodical Fund of the Single Copies of $10 plus applicable ISSN Print: 0008-5251 Publications Mail Agreement #40069240 #40063170 Circulation Dept. 2Years $75.95 plus applicable taxes Publications Agreement #40063170 6) 442-5600 ext 3552 16) 614-5831 Subscription Inquiries/Customer Service 2 Years $73.95 plus applicable taxes Department ofMail Canadian Heritage $75.95 ISSN Print: 0008-5251 Elsewhere ISSNCanadian Digital: 1923-3426 Underwriter roup.ca m.ca Bona Lao (416) 442-5600 ext 3552 Privacy Notice Mary Garufi (416) Single Copies $10 614-5831 plus applicable taxes Return undeliverable Canadian addresses to: Return undeliverable Canadian addresses to: 80available Valleybrook Drive,companies Toronto, Ontario ISSN Digital: 1 Yeartime $73.95 $71.95 blao@bizinfogroup.ca From to time we make our subscription list toDept. select and organizations whose1923-3426 mary@newcom.ca Single Copies $10 plus applicable taxes Circulation M3B 2S9 Elsewhere product or service may interest you. If you do not wish your contact information Dept. to be made available, Circulation Canadian Underwriter Annual Statistical Issue 1Year please $71.95 contact us via one of the following methods: We the financial 80 acknowledge Valleybrook Drive, Toronto,support Ontario Elsewhere Canadian Underwriter (included with above subscription) of the 2S9 Government of Canada through M3B or separately $38 plus applicable taxes Phone: 1-800-668-2374 Fax: 416-442-2191 $39Issue Annual Statistical 80 Valleybrook Drive, Toronto, Ontario 1 Year $73.95 $71.95 the Canada Periodical Fund of the E-mail: jhunter@businessinformationgroup.ca (included with above subscription) We acknowledge the financial support Subscription Inquiries/Customer Service M3B 2S9 Department of Canadian Heritage Mail to: Privacy 80 Valleybrook Ontario, M3B 2S9 or separately $39Officer, plus applicable taxes Drive, Toronto, ISSN Print: 0008-5251 of the Government of Canada through Bona Lao Statistical (416) 442-5600 ext 3552 Mary Garufi (416) 614-5831 Annual Issue the Canada Periodical Fund of the ISSNfinancial Digital: 1923-3426 Subscription Inquiries/Customer Service blao@bizinfogroup.ca mary@newcom.ca We acknowledge the support GST Registration number 890939689RT0001 Subscription Rates: 2013 Canada (included with above subscription) Department of Canadian Heritage Mary Garufi (416) 614-5831 Second Class Mail Registration Number: 08840 of the Government of Canada through 1 Year $49.95 plus applicable taxes or separately $38 plus applicable taxes mary@newcom.ca $39 Publications Mail Agreement #40069240 2 Years $73.95 plus applicable taxes
Jim Glionna
Joe Glionna
.ca
10 Survival Instinct Kent Rowe, president of the Insurance Brokers Association of Newfoundland, sees opportunity in change, and technology could prove an excellent vehicle for getting independent insurance brokers where they need to go. BY ANGELA STELMAKOWICH
InsuranceMediaGroup.com Melissa Summerfield Anthony Evangelista Pat Glionna
the Canada Periodical Fund of the Return undeliverableDepartment Canadian addresses Subscription Inquiries/Customer Single Copies $10 plus applicable taxes Service of to: Canadian Heritage Circulation Dept. Member Bona Lao (416) 442-5600 ext 3552 Mary Garufi (416) 614-5831 Elsewhere Canadian Underwriter 80 Valleybrook Drive, Toronto, Ontario blao@bizinfogroup.ca 1 Year $73.95 mary@newcom.ca M3B 2S9 Annual Statistical Issue We acknowledge the financial support (included with above subscription) of the Government of Canada through or separately $38 plus applicable taxes ISSN Print: 0008-525 ISSNPeriodical Digital: 1923-34 the Canada Fund of the Subscription Inquiries/Customer Service Department of Canadian Heritage Bona Lao (416) 442-5600 ext 3552 blao@bizinfogroup.ca
4
Canadian Underwriter April 2017
ISSN Print: 0008-5251 ISSN Digital: 1923-3426
ISSN Print: 0008-5251 ISSN Digital: 1923-3426
SPECIAL FOCUS
7 Editorial 8 Marketplace 52 Moves & Views 54 Gallery
Photo: Amy Fitzpatrick
rio
INSURANCEINSURANCE – – we have it covered. we have it covered. INSURANCE – we have it covered.
Being a modern mutual means making bold moves.
It’s an exciting time at Gore Mutual. We’re an ambitious growing company, transforming our business into a It’s an exciting time at Gore Mutual. We’re an modern mutual. We’re investing more than ever in ambitious growing company, transforming our technology, products, pricing and analytics to help business into a modern mutual. We’re investing brokers compete in the digital world.
more than ever in technology, products, pricing and analytics to help brokers compete inplatforms the digital We have brand new core technology andworld. digital capability, and we’ve already partnered with We haveInsureTech new corestartups technology platformsNow andwe’re exciting like BrokerLift. expanding our in house digital already team to partnered develop thewith next digital capability, and we’ve phase of our strategy to equip brokers with ecommerce exciting InsurTech startups like BrokerLift. Now we’re products and technology expanding our in-house solutions. digital team to develop the
next phase of our strategy to equip brokers with We’re looking products for peopleand withtechnology expertise insolutions. product e-commerce
development, architecture, eCommerce, analytics, content management and UX to join our multi-discipline, We’re looking for digital experts to join our multimulti-location team. If you’re motivated by a fast moving discipline team. you’re motivated byofa autonomy, fast-moving environment withIflots going on and lots environment get in touch. and lots of autonomy, get in touch. TO FIND OUT MORE, VISIT GOREMUTUAL.CA
goremutual.ca
EDITORIAL
Direct Hit What was it about Lola? Girls will be boys; boys will be girls? All good. For Canada’s property and casualty insurance industry, as surely is the case elsewhere, it is a mixed up, muddled up, shook up world as well. Traditional views of what brokers, insurers and reinsurers are — and what they do — is undergoing big changes. Add to the unfolding transformation global economic pressures, the influence of technology and ever-increasing customer demands, and it is little wonder that every link of the insurance chain is looking for ways to not only protect what it now has, but also to establish new connections where it can. That may be one reason announcements by the Insurance Brokers Association of Ontario (IBAO) in January and the Insurance Brokers Association of New Brunswick (IBANB) in March to suspend their sponsorship partnership with Aviva Canada is not surprising. The moves follow the insurer’s announcement to offer “team-branded” home and auto insurance directly to consumers. The partnership with Maple Leaf Sports and Entertainment (MLSE) targets fans of Toronto’s Raptors and Maple Leafs sports teams. Within days of the announcement, IBAO chief executive officer Colin Simpson, noted, “Aviva continues to leverage the Aviva brand for broker-distributed products and direct-to-
consumer products, with an inconsistency around product availability and pricing — a strategy the IBAO believes promotes confusion for consumers.” Arguing that consumer awareness of the insurer brand was built in partnership with the broker channel, he said IBAO “cannot continue to promote Aviva as a supporter of broker distribution in Ontario while it continues to leverage that brand against us.” The “multi-channel use of the same brand name creates confusion among consumers over what Aviva Insurance is and who services the account in the event of a claim,” IBANB added. “Having a business partner compete against you, with the same brand you have helped build, does not sit well with brokers.” The reaction is not surprising. But, perhaps, neither is the move by Aviva Canada. The insurer has reported it remains fully committed to its broker partners. It further pointed out it had communicated its strategy to de-emphasize direct in favour of partnerships like it has with Royal Bank of Canada (RBC) — Aviva Canada has an agreement with RBC Insurance to provide policy administration and claims services — and affinity deals like MLSE. “We are having productive discussions with many brokers about how customers want to buy insurance and we are actively supporting our brokers with a range of
innovative solutions to help them meet the evolving needs of their customers,” a spokesperson said in January. Selling direct is not new. Some Canadian insurers have been doing so for years; others are newer to the game. Simpson noted during a recent talk to brokers, though, that he draws a distinction between Aviva Canada’s strategy and those of Intact Insurance and Economical Insurance, which sell direct through separate vehicles. All is not lost. Both IBAO and IBANB report continuing dialogue with Aviva Canada to try to find a mutually acceptable approach. The hope is the current rift can be smoothed out. But the situation should be viewed by insurers and brokers alike as an opportunity for a possible reset. What are insurers looking for that they are not currently getting from their traditional broker partners? How can brokers better parlay their local connections and vast risk management expertise into something insurers value more? Times are certainly changing, and insurers and brokers may not be the only potential games in town anymore. Disruptors are coming. Having traditional players work more closely together — capitalizing on each other’s expertise, including remaining open to partnerships with new kids on the block — may be one way to maintain the value of the old while adding the potential of the new.
All is not lost. Both IBAO and IBANB have reported continuing dialogue with Aviva Canada to try to find an approach that is mutually acceptable. Angela Stelmakowich Editor Canadian Underwriter angela@ canadianunderwriter.ca
April 2017 Canadian Underwriter
7
MARKETPLACE
Regulation ONTARIO BILL WOULD APPLY 15% CAP TO CONTINGENCY FEES A bill recently tabled in the Ontario legislature by Liberal MPP Mike Colle would limit to 15% the contingency fees of lawyers for personal injury claims. The Personal Injury and Accident Victims Protection Act proposes amending the Law Society Act and Solicitors Act to specify the cap. Insurance Brokers Association of Ontario (IBAO) argues that “prescribing a consumer-friendly and publicly available fee disclosure report should be required by all legal actors in order to protect the interests of the consumer.” Noting that “a major cost driver on the auto insurance product has been zealous litigation incented by contingency and referral fees,” Colin Simpson, IBAO’s chief executive officer, adds “all other parties in auto insurance industries are already required to disclose their compensation.”
RIDE-SHARING EXPECTED IN BRITISH COLUMBIA IN 2017 British Columbia has moved forward with a series of changes for the taxi industry in anticipation of “ride-sharing services coming to British Columbia by the holiday season at the end of 2017.” Proposed improvements relate to, among other things, insurance products 8
Canadian Underwriter April 2017
(Insurance Corporation of British Columbia, ICBC, has been collaborating with the taxi industry to streamline the claims process and make insurance more flexible and cost effective); new app-based technology; crash prevention technology (ICBC will invest as much as $3.5 million in the taxi sector to install crash-avoidance technology in all taxis in the province); and exclusive rights to street hailing for taxis.
N&L LEGISLATION TO REDUCE IMPAIRED DRIVING Newfoundland and Labrador has proposed amendments to help reduce impaired driving in the province. The draft amendments to the Highway Traffic Act seek to strengthen impaired driving laws by expanding the province’s vehicle impoundment program, making it mandatory for a police officer to order the vehicle of an impaired driver to be impounded; and reducing the ability of impaired drivers to commit repeat impaired driving offences. As well, the idea is to have a mandatory ignition interlock program as a condition for a licence reinstatement following an impaired driving conviction, and require drivers under 22 to maintain a blood alcohol content of 0%.
Risk LANDMARK INVESTMENTS FOR DISASTER-PROOFING Insurance Bureau of Canada
(IBC) has voiced the property and casualty insurance industry’s support for the federal government’s move to beef up investments for enhancing resilience by better disasterproofing communities. With the 2017 Federal Budget, IBC reports Ottawa has committed to a significant expansion of disaster-mitigation financing, calling it the most significant disaster-proofing investments in the country’s history. The budget commitment includes $2 billion to be “set aside for a Disaster Mitigation and Adaptation Fund to support the national, provincial and municipal infrastructure required to deal with climate change,” $182 million to be put towards implementing “new building codes to focus on climate resilience,” $73.5 million over five years to launch a new Canadian Centre for Climate Services, and $16.4 million to ensure the country’s “federally managed transportation infrastructure is able to withstand the effects of natural disasters.”
GOVERNMENT BACK-STOP MAY BE NEEDED FOR CERTAIN CYBER RISKS Concern about cyber resilience is on the rise — as are the potential costs associated with attacks — so businesses must “do much more to integrate cyber security into their risk management programs,” notes a new Swiss Re report. “Firms are generally illprepared to cope with cyber risks. Relatively few firms have
integrated cyber security into their mainstream risk management,” Swiss Re chief economist Kurt Karl says. Firms, both large and small, “need to invest more in cyber security architecture to develop robust pre- and post-loss risk management capabilities,” Karl cautions. A cyber insurance market is quickly developing, but to date, “the scope of cover is modest relative to potential exposure,” the report notes. It may be that some cyber risks — especially those related to extreme catastrophic loss events — may be uninsurable. “For such risks, there may be a case for a government-sponsored back-stop,” it argues. “The potential scale of losses from some cyber events could be too great for the private re/insurance sector to absorb, especially peak-loss events such as widespread disruption to critical infrastructure or networks, which could lead to significant accumulated losses.”
Canadian Market CANADIAN P&C INSURANCE NET INCOME DOWN IN 2016: MSA RESEARCH The Canadian property and casualty insurance industry saw big decreases in both net income and underwriting income in 2016 compared to 2015, notes MSA Research. The totals reflect year-end financial data on almost
MARKETPLACE
every insurer in Canada. Net income for 2016 was about $2.4 billion, a 54% decrease from 2015. Also lower in 2016 was underwriting income, which came in at $484.2 million for 2016, down 81% from the total in 2015. Direct premiums written and net premiums written were about $53.2 billion and $48.3 billion, respectively, MSA Research reports.
ECHELON COMPLETES SALE OF EUROPEAN OPERATIONS Echelon Financial Holdings Inc. (EFH) has completed the sale of its European operations, which provide non-standard auto through Qudos Insurance A/S. At current exchange rates, Ontario-based EFH will receive about $5.1 million on closing of the sale, originally announced last August, and an extra $17.2 million prior to December 31, 2017.
CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC TO BUY STAKE IN BROKERAGE Toronto-based Onex Corporation is selling its stake in one of the world’s largest commercial brokerages, USI Insurance Services LLC (USI), to Caisse de dépôt et placement du Québec and other buyers. Onex recently reported that it and its affiliates agreed to sell USI Insurance to an affiliate of private equity firm Kohlberg Kravis Roberts and Co. LP and Caisse de dépôt et placement du Québec “for an enterprise
value of $4.3 billion.” Upon completion of the transaction, Onex Group will have received proceeds of about US$2.1 billion, including a prior distribution of $181 million in 2015.”
Claims LEXISNEXIS EXPLORES “TOUCHLESS” CLAIMS The demand for faster cycle times, reduced expenses and improved customer satisfaction is driving increased automation and an eventual migration from virtual to “touchless claims,” a new report from LexisNexis Risk Solutions contends. A touchless claim is defined as “a claims-handling process that requires no insurance carrier employee intervention at all.” The study included in-depth interviews with 24 senior-level auto insurance executives about the integration of automation into their claims processing workflow and found 79% “recognized the importance of increasing auto claims automation as a critical or top priority.” That said, carriers still rely heavily on traditional claims processes requiring manual inspections, multiple touches and in-field adjusters. In all, however, 38% of the respondents report currently using virtual handling, and 67% of those carriers say that they are open to the adoption of end-to-end technology-based processing or touchless handling.
Technology IBM, SECUREKEY PARTNER TO DELIVER NETWORK BASED ON BLOCKCHAIN IBM and SecureKey Technologies, an identity and authentication provider, are joining forces to “enable a new digital identity and attribute sharing network” based on IBM Blockchain. “When launched later this year, consumers can use the network to instantly verify their identity for services such as new bank accounts, driver’s licences or utilities,” notes Toronto-headquartered SecureKey Technologies. Reporting the network is in the testing phase in Canada, SecureKey Technologies notes that once live, Canadian consumers will be able to opt in to the new blockchainbased service using an app. Consumers, or network members, will then be able to control what identifying information they share from trusted credentials to the organizations of their choice.
PREDICTIVE CRIME ANALYTICS LAUNCHED FOR CANADIAN MARKET Massachusetts-based Location, Inc. has released “the highest resolution crime analytics available in Canada,” providing exclusive United StatesCanadian total, violent and property crime comparisons. For its Canadian crime analytics, raw data reported from 544 “police service areas” was collected. The product seeks to give
Canadian insurers a precise, pre-built solution to help them “compete in a digital marketplace by streamlining operations, eliminating risks in the early stages of the underwriting process, improving in-house or external modelling results, and strategically routing potentially fraudulent claims to special investigative units,” says chief executive officer Andrew Schiller.
Reinsurance THUNDERSTORM RISK TO U.S. PROPERTY AS HIGH AS FROM HURRICANES Severe convective storms (SCS) posed as much risk to property in the United States as hurricanes between 2003 and 2015, with the average annual loss from SCS amounting to US$11.23 billion compared to US$11.28 billion from hurricanes. So concludes a briefing from Willis Re and Columbia University. The 2003 to 2015 figures are based on loss stats from Verisk Analytics’ Property Claim Services. The report explores the impact of El Niño-Southern Oscillation on tornado and hail frequencies. For the past decade, SCS was the largest annual aggregated risk peril to the U.S. insurance industry. “We hope the climateconditioned view of risk can help companies understand, manage and mitigate the regional and year-over-year variability” in SCS losses, says Prasad Gunturi, Willis Re’s executive vice president. April 2017 Canadian Underwriter
9
PROFILE
Survival Instinct Angela Stelmakowich Editor
Kent Rowe sees opportunity in change, and technology can prove an excellent vehicle for getting independent brokers where they need to go. Some brokers are worried; some are excited. Some brokers are trend-setters; some are business as usual. Whatever the current outlook, one thing all brokers must be ready for is change and equipped to adapt to whatever happens, suggests Kent Rowe, president of the Insurance Brokers Association of Newfoundland (IBAN). “It is not the strongest of the species that survives; not the most intelligent that survives. It is the one that is the most adaptable to change.” It is solid advice from no less a source than Charles Darwin. It is also one of Rowe’s favourite quotations and one he believes serves as a timely caution for brokers. “If you’re going to continue to do business in the same way, using the same model you have in the past, then you’re not going to exist,” says the vice president of commercial lines for 10 Canadian Underwriter April 2017
Wedgwood Insurance Limited in St. John’s. That recognition seems to be taking hold, but the challenge may be getting brokers to transform recognition into action in a timely manner. “The landscape in our business has evolved and has changed significantly since I entered the industry (about two decades ago), and probably exponentially in the last five to six years,” Rowe says. Running through that change is the ribbon of technology. “Technology, in today’s market, in our business today, is the most important thing brokers need to understand.” Currently “behind the eight ball,” brokers need to “understand how they can become more efficient and how they can become more available and more attractive using various platforms,” contends Rowe, vice president of the Insurance Brokers Association of Canada (IBAC) and executive sponsor of its Technology Committee. Too many brokers still think “they can continue to do business tomorrow the same way that they did business five years ago. They can’t,” he says. “If you’re not willing to evolve and bring yourself into the 21st century from a technology perspective, most importantly provide your business and your customers with the tools they need to interact with you using technology, you are going to go the way of the dinosaur.”
One reason brokers are behind may be that “we’ve always relied too heavily on insurance companies and other vendors to push the technology envelope on our behalf,” he suggests. “To me, that is a fatal flaw and a fatal error,” he adds, emphasizing that brokers need to be “the masters of their own ship.”
LOCAL GOES NATIONAL Technology is but one of a host of challenges — perhaps, opportunities — that brokers face today.
Too many brokers still think “they can continue to do business tomorrow the same way that they did business five years ago. They can’t.” Each challenge will have its own distinctive local flavour, but many have some sort of link to technology and all need to be addressed. Those issues range from consolidation to the auto book, disintermediation and education. In Newfoundland and Labrador, for example, Rowe says consolidation activity, on both the insurer and the broker sides, is concerning. Noting there are now just four personal lines insurance markets dealing with brokers,
“if one of them pulls out tomorrow, that creates a massive strain on our system here,” he argues. “There’s almost an oligopoly in the market,” Rowe says. “No matter how you do the math, you’re going to have more choice with 12 than you are with four, right?” Having fewer insurers with which to do business, wherever that may be in the country, means “the less choice we have for consumers,” he says. This, in turn, influences the ability of brokers to shape how they service clients and means those insurance companies hold more power “in terms of their ability to shape underwriting decisions and pricing.” There are, however, some key positives flowing from consolidation activity that bode well for the future. “You see increased efficiency from insurance companies, which translates into increased efficiency for brokers. You’re seeing more depth and breadth of product. You’re seeing companies that are acquiring specialty lines or specialty information and classes of business that are able to help niche or targetfocused brokers,” says Rowe. “Consolidation in all of that space has helped really push the technology envelope, which I think is extremely important for our future and for the future of our industry as brokers,” he emphasizes. Also, “disintermediation is a
Photo: Amy Fitzpatrick
PROFILE
huge topic,” Rowe contends. A number of big insurance companies have decided they cannot “reach all the clients they need to reach through the broker channel,” he says, opting to launch direct arms. Although that is technologyrelated to a certain degree, “it also should be a bloody big wake-up call to everybody,” he cautions. “When an insurance company says it doesn’t think that it can get to all the clients using our traditional broker channel, my first question is, ‘Why?’” Brokers will “compete with anybody as long as it’s a fair and level playing field, because we think our value proposition stands true,” Rowe says. “We think that clients are going to continue to see that value proposition as long as we evolve.” Again, technology will play a major role in that regard.
ACCIDENTALLY-ISH Like many of his age in the insurance business, Rowe’s path toward being a broker was not planned. Taking business at Memorial University, his brother — who was in insurance — mentioned he should consider it as an option. Rowe began picking up some “insurance courses on the side and it just piqued my interest.” He began his career, as an account executive, at the same brokerage where he works today. Things were going great, Rowe says, but adds “when I got into the business, I always said that in order for me to fully understand how this business really works, I had to have some exposure on the other side.” He did just that in 2003, when he became business development manager, Atlantic Canada for Aviva
Canada in Halifax. “Being in the business development role, you kind of have your hands in everything. You’re involved when there are claims that go off the rails, you’re involved in underwriting decisions, you’re involved in high-level management decisions and strategic planning with brokers,” he says. “You really get to take a deep dive into what makes insurance companies tick and how important brokers are.” There for three years, Rowe came back to St. John’s, working briefly at another brokerage before returning to Wedgwood Insurance. In 2013, he took on his current role. Much of his volunteering work has been industry-related, including serving for IBAN and IBAC, teaching courses at the Insurance Institute of Newfoundland and Labrador and being a founding
member of the province’s Young Broker Network. Attracting young people to the channel is essential, Rowe says. Part of that goal may be advanced by modernizing broker education. Recognizing this, IBAC is modernizing its education program and how it is delivered. It is also working on “a broker competency profile that’s really going to prove to be the framework for how we look to our educational offerings moving forward, identifying the important skills and competencies needed to be a broker, and building our education around what we identify those competencies to be,” he says. “What’s our business going to look like in 10 years?” Rowe asks. “There are so many unknowns,” he says. “It’s scary, but at the same time it’s exciting,” he notes. “There’s probably more opportunity today than there ever has been, because of all of the potential change on the horizon.” It is also “scary” how open insurance is to disruptors, Rowe says. Although everyone has heard about Amazon and Google, he notes, “I still believe the biggest disruptor is unknown to us at this point.” But one plus to disruptors is “it’s really put us in a position where we finally agree that we have to collaborate,” Rowe says. Insurers, BMS vendors and brokers must work together “to ensure efficient and effective delivery of our products and services.” April 2017 Canadian Underwriter
11
The Great Data Shake-Up
Brenda Rose Vice President and Partner, FCA Insurance Brokers
Major upheavals within many insurers’ underlying systems are necessary to answer the changing needs of the insurance world and the changing demands of consumers. Brokerages, in turn, will need to stay current with broker management system software releases to both access new connectivity capabilities and be able to offer the full set of data required by insurers. Seismic forces are transforming the business landscape. Some landmarks are still visible, but their shapes have been altered. Paths forward that were once smooth and uniform have now been jolted into uneven, unreliable terrain without clear lines of sight ahead.
12 Canadian Underwriter April 2017
Evolving technology is triggering these changes, impacting the work being done and how it is accomplished. Innovation lab launches are commonplace, and every role, purpose and process is subject to re-evaluation. The common, insistent theme is the need for thinking and working differently. In the insurance world, the technology tremors are apparent. Stakeholders are assessing countless innovative ways to communicate and to manage, use and share information, at the same time that insurance buyers are revising their expectations. Prerequisite to change, however, are major upheavals within many insurers’ underlying systems. Legacy software characterized by outdated architecture cannot provide the flexibility or the lean analytics that are currently required. As a result, many insurers are hastening to replace megalithic systems with nimble, modular installations, using non-traditional project management philosophies. One priority for the new systems is improved integration capabilities. Since computers were first deployed in the insurance industry, their users have fantasized about transferring the information from one to another, without laboriously rekeying each and every byte of data.
MAKING A BUSINESS CASE The business case for improving data exchange is obvious. Currently, brokers face limited, bleak choices; either requests and applications must be sent to insurers via memo or email for manual transcription into policy systems, or broker staff must shoulder responsibility to first create brokerage records and then re-enter the identical data into carrier systems through an assortment of bridges and portals. The latter option may appear faster, but is greedily time-consuming for staff in the brokerage, where customer service should take precedence. With the duplicate entry comes a heightened danger of keying errors, not to mention the exacerbated security risks for carriers and brokers alike, with security designs providing Internet access based on individual credentials, rather than on the brokerage’s centralized co-ordinates. Numerous attempts to address the redundancy have been made over the years, with limited success. Today, there is some integrated information transfer for new policies, but minimal automation exists for policy changes. The costs of this inefficiency are substantial. While a given policy is “new business” only once during its life cycle, there may be many endorsements or changes. A portfolio of 1,000 personal lines policies may require some 500 endorsements during the course of a year, but with additional and return premiums offsetting one another, will generate minimal additional revenue. Data entry, even when partially imported electronically, can often take more than half an hour per policy. At a hypothetical average salary of $40,000, unnecessary clerical work costs the industry an extra $5,500 for every 1,000 policies, every year. It is a safe bet that many in the industry agree improved integration would serve not only brokers and insurers, but also consumers. As Jeff Purdy, senior vice president of international operations at Applied Systems Inc. states, “Brokers and insurers need greater connectivity and capabili-
ties to seamlessly exchange more information throughout the insurance life cycle for quoting, underwriting, billing, claims and other data exchange services. Technical innovation, product enhancements and improved insurer-broker integration benefit the entire property
Certainly, it is less costly for all participants to share programming and development costs, but even greater benefits are to be realized from constantly deploying the collective experience of several organizations against questions and potential complications. and casualty insurance industry, helping them run their businesses more efficiently and fulfill the promises they make to their customers every day.” As technology and business imperatives have evolved, however, new possibilities have arisen to challenge assumptions about connectivity roadblocks. The adoption of XML (extensible mark-up language) as a common, ultra-flexible language, coupled with the steady improvement of available speed and capacity through the Internet, has helped to refine thinking. The Insurance Brokers Association of Canada (IBAC) has articulated a number of essential principles for electronic data exchange, which have earned broad acceptance as a frame of reference for integration designs. Then, late in 2015, several insurers implementing one software platform formed a user group and, subsequently, a sub-committee to focus specifically on re-inventing communication to brokers’ systems. That committee’s discussions have spawned a project to design and create a software module to receive standard transaction messages transmitted from brokers’ systems, channel
the data to carriers’ policy installations from that vendor, and then relay standard responses back to document brokers’ records. Once completed, users of different broker management systems (BMSs) will be able to employ a consistent process to transmit new business, inquiry and policy change requests directly to multiple carriers, and immediately deliver the results to clients. Committed carriers Aviva Canada, Wawanesa Insurance, Economical Insurance and Red River Mutual are collaborating on design and testing, working closely with the Centre for Study of Insurance Operations (CSIO) and broker system vendors Keal Technology, Custom Software Solutions and Applied Systems. (IBAC is also participating, with enthusiastic support for a plan that fully incorporates its data exchange principles, see sidebar below). The group pooled resources through 2016 to complete the technical design; then, early this year, construction was launched of the first iteration of the software in a test environment, in a se-
Insurance Brokers Association of Canada’s data exchange principles are as follows: • transactions that start in the broker management system (BMS) must finish in the BMS; • data flows between systems electronically and transparently, without user intervention; • all data transmissions must strictly adhere to Centre for Study of Insurance Operations standards; • XML data that flows to a company’s system is processed and returned in real-time; • workflows must avoid connection to, and a broker’s use of, an insurer’s web portal (and the attendant separate individual passwords); and • translations are addressed on the insurer’s side of the transaction, not on the broker’s side.
April 2017 Canadian Underwriter
13
ries of rapid sprints scheduled through to mid-2017. Parallelling the group’s progress, CSIO recently unveiled a revised standards update process, ensuring that the standard on which effective connectivity relies to encompass all necessary data is regularly and rapidly refreshed.
carriers involved and representing each of the participating BMS systems, have volunteered to assist with testing. The new connectivity will then be introduced for production within the framework of each insurer’s own internal systems implementation schedule.
SHIFT IN METHODOLOGY One of the biggest shifts is the methodology framing the work itself. All stakeholders are sharing a cloud environment for development and testing, donated by one insurer. Participants are not simply meeting and then working on their own separate projects; instead, staff from each stakeholder plot out their work together, share results and confer every day to discuss the work at hand. Certainly, it is less costly for all participants to share programming and development costs, but even greater benefits are to be realized from constantly deploying the collective experience of several organizations against questions and potential complications. The aftershocks from this shift will be far-reaching. Without the cumbersome delays from repetitive data entry, batch processes and password authentication, transactions can be completed with far greater speed and accuracy. Of course, some exceptions will always still require human intervention, such as outof-sequence corrections or requests that fall outside a broker’s binding authority. The objective, however, is for the vast majority of transactions to pass through without referral to underwriters. As Tracy Riley, vice president of business transformation at Wawanesa Insurance summarizes, “BMS-carrier integration will enable us, over time, to reduce manual processes and focus on exceptionbased underwriting, which will result in quicker turnaround time for our brokers and policyholders.” The current initial development will include trial runs of traffic between the participating BMSs and carriers, in the test environment. Brokers from across Canada, who work with the various 14 Canadian Underwriter April 2017
Each insurer has a unique timetable, and may stage switching over to the new systems by region or by line of business.
DETAILED AND VIGILANT In the interim, BMS vendors are working ahead to ensure that necessary functionality is available once carriers are ready. Brokers will then, of course, need to update their systems to the most current versions. It will be crucial that brokerages stay current with BMS software releases, not only to access the new connectivity capabilities, but also the full set of data required by insurers in the most current CSIO version. Brokers can further prepare to leverage connectivity by reviewing, in advance, the data processes and quality control routines within the brokerage. The new data exchange will only work well if accurate and complete information is first present within the broker’s system.
Discipline and consistency are mandatory. It will be crucial that insurance brokers reinforce best practices that previously might have been less critical, such as auditing staff use of BMS capabilities and verifying that policy record details, not only pdf images, are updated and maintained. Even though the current work is exclusively centred on one particular vendor’s licencees, it has far broader implications. Because standard CSIO messages are being used, and a consistent process has been defined for receiving and then answering the information packages from broker systems, the resulting process will be inter-operable. The same design can be applied to any carrier system able to map to CSIO standard data. “As technology progresses and connectivity options improve, there will be more opportunity to optimize insurance transactions, with the end benefit being ease of doing business for the customer — a winning proposition for all involved,” predicts Tom Reid, executive director of digital brokers at Aviva Canada. Perhaps the greatest beneficiary, however, is the consumer. Where brokers find new connectivity eliminating unnecessary work, they will be able to redeploy resources to more meaningful, responsive and client-focused activities. They will be able to provide immediate answers to consumers who now expect instant turnaround. Further, the data resident in brokers’ systems will be more current, and more accurate, delivering better information to consumers more quickly, whether it is exposed through secure client accesses or shared by more traditional means. The long-awaited connectivity shakeup is still in its early stages. Much work remains outstanding for current participants to first complete the pilot project and then for other industry players to adopt the new model. Gradually, however, change is breaking up some of the old, monolithic barriers that have impeded effective communications for so long.
Insurance Insurance doesn’t doesn’t look look like like this this
Yes it does. At Aviva Canada, this is the new way we work; centred on customer Yes it does. At Aviva Canada, this is the new way we work; centred on customer needs with a digital focus. We have put ourselves in the hub of digital innovation needs with a digital focus. We have put ourselves in the hub of digital innovation to connect with and attract brilliant digital minds. And, we are committed to to connect with and attract brilliant digital minds. And, we are committed to working with our broker partners to ensure we are ready to meet consumers’ working with our broker partners to ensure we are ready to meet consumers’ insurance needs in the digital space. insurance needs in the digital space. Why – because customers deserve insurance made easy. This is Aviva Canada. Why – because customers deserve insurance made easy. This is Aviva Canada. Contact your Aviva Business Development Representative to find out more. Contact your Aviva Business Development Representative to find out more.
avivacanada.com avivacanada.com
Insurance – Home | Auto | Leisure & Lifestyle | Business | Surety Insurance – Home | Auto | Leisure & Lifestyle | Business | Surety
Aviva and the Aviva logo are trademarks used under license by the licensor. Aviva and the Aviva logo are trademarks used under license by the licensor.
BrovadaOne Connectivity The better broker workflow BrovadaOne Connectivity is Willis Towers Watson’s real-time broker/ carrier transaction solution. It is currently installed in over 1,500 brokerages and over 50 different insurance companies. BrovadaOne Connectivity handles over 80% of the real-time upload traffic between brokers and insurers in Canada. BrovadaOne Connectivity automates the workflow and entry of data into a multitude of carrier systems, saving time while improving efficiency and accuracy. BrovadaOne Connectivity interfaces with all the major broker management system vendors in Canada. Available transactions include single sign-on; policy, billing and claim inquiries; new business submissions; policy change; and first notice of loss. BrovadaOne Connectivity is now available to brokers at no charge. For more information about BrovadaOne Connectivity, email tw.rcs.brovada.sales@willistowerswatson.com. For training, email tw.contact.training@willistowerswatson.com.
willistowerswatson.com
Cyber Aware Hershel Sahian Partner, Hughes Amys LLP
Andrew Cottreau
Student-At-Law, Hughes Amys LLP Hughes Amys LLP is a member of The ARC Group of Canada, a network of independent insurance law firms across Canada.
Whether or not coverage exists for cyber crime may depend on the method of the crime. Organizations and companies looking to protect themselves from the many forms that cyber crime can take would be well-advised to carefully examine policy wording — before something happens — to clearly understand their coverage. Cyber crime is on the rise. A study released by Juniper Research in mid-2015 projected that by 2019, the global cost of cyber crime will reach more than US$2 trillion, increasing to almost four times the estimated cost of breaches in 2015. Is there coverage for cyber-related losses? Recent decisions in the United States confirm that some cyber-related losses may not attract coverage under computer fraud or cyber insurance policies. To date in Canada, there is a paucity of court decisions on cyber-related coverage. As such, for companies and organizations purchasing cyber insurance, it is important to carefully
examine policy wording to understand what types of cyber-related losses may be covered under a policy.
TYPES OF CYBER CRIME When discussing cyber crime, it is helpful to distinguish between a cyber attack and a cyber breach. Cyber attacks involve an attempt to directly gain access to information possessed by an individual, corporation or government, such as hacking into an organization’s computer system. Conversely, cyber breaches involve an incident in which the confidentiality, integrity or availability of data is compromised without directly accessing a computer system. Common examples of this include an employee losing a hard drive containing client information or when an employee is tricked into releasing confidential information. Generally, many cyber insurance and computer fraud policies may cover cyber attacks. For example, it has been reported that, as a result of the 2013 hacking of personal information collected by the U.S. retailer, Target, about US$90 million of the company’s losses, including legal, critical communication and forensic costs, will be covered by cyber insurance. When it comes to cyber breaches, however, coverage will depend on the policy wording. Consider the 2015 case from the California Central
April 2017 Canadian Underwriter
17
District Court. After a hospital’s patient records were negligently released, the hospital’s insurer denied the claim based on the exclusion focusing on the hospital’s failure to “follow minimum required practices.” Specifically, two types of cyber breaches that may not attract coverage are “phishing” and “whaling” schemes. Both are conducted primarily through email. Phishing emails attempt to dupe the recipient into disclosing confidential information by purporting to be from a reputable source. Spear phishing, which are emails designed to deceive specific employees at a business, rose 55% in 2015, notes the 2016 Internet Security Threat Report released by Symantec. Whaling, however, is a new concern for businesses. It involves a fraudster pretending to be a high-level executive, such as a chief executive officer or chief financial officer, who has requested that an employee release information or conduct a financial transaction on his or her behalf. In such cases, the fraudster does not directly access an organization’s computer system. As the following court decisions indicate, not directly accessing a system is an important distinction that may negate coverage.
COVERAGE The following decisions on cyber crime coverage are limited to the United States, but, nonetheless, raise important coverage issues. In the following, the courts found that organizations are not covered for losses that do not arise from direct cyber attacks. The policies are designed to cover cyber attacks, but not the indirect cyber breaches. In Aqua Star (USA) Corp. v. Travelers Casualty and Surety Company of America, a July 2016 decision of the United States District Court, Western District of Washington, the fraudster used a spoofed email domain to identify itself as a vendor of the seafood company, Aqua Star.The fraudster instructed Aqua Star to change bank account information for future wire transfers. The treasury manager for Aqua Star changed the bank account information, which, 18 Canadian Underwriter April 2017
consequently, ended in defrauding the company of more than US$700,000. The U.S. company was covered under a policy providing coverage for computer fraud. The policy states that it covers “…the Insured’s direct loss of, or direct loss from damage to, Money, Securities, and Other Property directly caused by Computer Fraud.” However, it also contains the exclusion that the policy “…will not apply to loss resulting directly or indirectly from the input of Electronic Data by a natural person having the authority to enter the Insured’s Computer System.” The court found the exclusion applied because the loss was an indirect result
The court noted that while email is used in the scam, the use of email is “incidental.” The U.S. court found it is difficult to envision any fraudulent scheme today that does not involve computer-facilitated communication. of an authorized person, the treasury manager, inputing the new fraudulent information into the computer system. As a result, the court found no coverage under the policy. In Universal American Corporation v. National Union Fire Insurance Company of Pittsburgh, a June 2015 ruling by the Court of Appeals of New York, Universal American is a health insurance company. It has a computerized billing system that allows healthcare providers to enter claims into the system. The company sustained a US$18 million loss after authorized healthcare providers entered fraudulent claims. Universal American claimed under a rider that provides coverage for “… losses incurred from fraudulent entry of data into the insured’s computer program.” The Court of Appeal, however, found no coverage under the policy as the “fraudulent entry” referred to unauthor-
ized access to the computer system and not to fraudulent content submitted by authorized users. The most recent decision is Apache Corporation v. Great American Insurance Company, an October 2016 decision of the United States Court of Appeals, Fifth Circuit. The decision interprets a computer fraud provision under a crime protection insurance policy. Apache Corporation is an oil production company. The company received a call from a fraudster pretending to be one of its vendors. The fraudster instructed a company employee to change the bank account information. When the employee asked for the request to be made on official company letterhead, it was subsequently received by email. Apache Corporation responded by changing the bank account information and forwarded US$7 million to the fraudulent account. The crime protection policy provides coverage when a breach results “directly from the use of any computer to fraudulently cause a transfer” of money or property. The court found no coverage under the policy. The court noted that while email is used in the scam, the use of email is “incidental.” The U.S. court found it is difficult to envision any fraudulent scheme today that does not involve computerfacilitated communication. If the computer fraud provision covers any fraud that involves email, it would become a general fraud provision. Two recently filed claims are examples of insurers denying claims arising from whaling schemes. In Medidata Solutions Inc. v. Federal Insurance Company, a New York Southern District Court decision released in February 2015, fraudsters sent finance department employees an email pretending to be a company executive. The email requested the employees transfer approximately US$4.8 million to a Chinese bank account. The employees completed the request. The insurer responded by denying coverage. Since the policy provides coverage for computer fraud, forgery and funds transfer fraud, the insurer argued
Improving the customer experience will help our brokers grow. Michael Shostak, SVP & Chief Marketing Officer, Economical Insurance
We did our homework. Today’s insurance consumers aren’t confident in their coverage and feel treated like a number. That’s why Economical is making it a priority to support our broker partners with simplified wordings, helpful blogs to share with customers, and business development and marketing opportunities to build customer relationships. Let’s change the way Canadians feel about insurance, together.
Get ready for the future, with us. economical.com/brokers property
|
auto
|
business
Economical Insurance includes the following companies: Economical Mutual Insurance Company, The Missisquoi Insurance Company, Perth Insurance Company, Waterloo Insurance Company, Family Insurance Solutions Inc., Sonnet Insurance Company, Petline Insurance Company. ©2017 Economical Insurance. All rights reserved. All Economical intellectual property, including but not limited to Economical® and related trademarks, names and logos are the property of Economical Mutual Insurance Company and/or its subsidiaries and/or affiliates and are registered and/or used in Canada. All other intellectual property is the property of their respective owners.
2017-Canadian-Underwriter-Michael_v3.indd 1
2017-03-15 5:01 PM
“the policy provides coverage against involuntary transfers effected by hackers, forgers and imposters; not voluntary transfers effected by authorized signatures.” In March 2016, the New York federal judge dismissed duelling motions for summary judgment because of insufficient facts. Similarly, at the Texas State Court, in February 2016, Ameriforge Group Inc. v. Federal Insurance Company was heard. Fraudsters sent fraudulent emails to the company’s director of accounting, posing as the company’s chief executive officer, and instructed the director to transfer US$480,000 to a Chinese bank account. The insurer denied coverage for the loss, arguing that the policy’s computer fraud coverage requires direct hacking and that the funds transfer fraud coverage does not cover funds that are knowingly transferred by an employee. In Canada, there are few decisions on cyber coverage. Aldo Group Inc. c. Chubb In-
surance Company of Canada, a 2016 decision of Quebec’s Cour d’Appel, does not involve a cyber policy, but is instructive as to the importance of policy exclusions when dealing with cyber attacks. After Aldo’s computer system was hacked, its credit card processor, Moneris, charged the company $4.8 million in penalties and costs. The Quebec court, however, found that Aldo’s policy contains an exclusion for liability assumed by contract and, therefore, there is no coverage under the policy.
CONCLUSIONS Cyber criminals and fraudsters are increasingly targeting employees with sophisticated schemes as an alternative to direct hacking. Many cyber and computer fraud policies only cover direct cyber attacks and not cyber breaches. The policies may not cover losses that are caused by employees, who voluntarily, albeit unwittingly, release confi-
dential information or transfer funds. Moreover, many assume that because a fraudulent scheme uses email, it is cyberrelated and will be covered. As illustrated by Apache, however, fraud is not necessarily computer fraud merely because email is used in the scam. Coverage for phishing and whaling schemes are now offered by some insurers in the form of Social Engineering Fraud Endorsements, which are specifically designed to cover occurrences where a fraudster impersonates vendors or executives and tricks employees into releasing funds. In Canada, insurers are now offering coverage of as much as $250,000 per occurrence for social engineering fraud. Depending on policy wording, such endorsements may be needed to ensure coverage for such cyber crime. It remains to be seen how such endorsements are applied and are interpreted, and how they interact with other cyber coverages.
WELDING CONTRACTORS AND CONSULTANTS
Email: contractors@can-sure.com Property | Casualty | Construction | Inland Marine | Professional | Environmental | Hospitality
CDN UW Half Page - Construction - Test.indd 1
20 Canadian Underwriter April 2017
www.can-sure.com
3/16/2017 2:35:29 PM
School of Thought Risks associated with higher education institutions are many, ranging from targeted violence to indiscriminate severe weather. Whether planned or not, both types of events demand a well-conceived emergency response be available. Dawn H. Puro
Senior Vice President, Specialty Casualty, Public Entity Lines, Ironshore
Victor Ip
Vice President, Specialty Casualty, Ironshore Canada
Disruptive events on college and university campuses present challenges for leadership facing unprecedented potential for financial loss. Reports indicate that random acts of violence and episodic occurrences have increased dramatically in recent years. Potential risk of unexpected disruption demands that educational institutions dedicate attention to preparedness with safety protocols to protect faculty, staff and students, as well as implement operational logistics to regain normalcy as expediently as possible. Timely, responsive action by educational institutions victimized by acts of violence or faced with nature’s wrath can establish the basis for sound risk management practices that, ultimately, influence longer-term risk mitigation. Senseless individual acts of terror erupting on the national stage place educational institutions in a perilous position to uphold the integrity and reputation of their schools as “safe havens.” Campus violence involving an active shooting or lone-wolf attack has soared in frequency within the United States. Mass shootings in Canada are rare compared with the U.S., perhaps because of stricter gun control laws. Natural weather-related disasters, such as hurricanes, flooding and other severe events, for their part, can occur anywhere at any time.
ACTS OF CAMPUS VIOLENCE School violence events are broadly considered to be any random criminal act or series of actions, including active shooting or use of physical weap-
ons, and explosive devices that result in personal injury to administration, faculty, personnel and students. An active shooter — or lone-wolf attack — has been defined as an individual(s) engaged in killing or attempting to kill people in a confined, populated area. In the U.S., the Federal Bureau of Investigation (FBI) tracks shooting occurrences when four or more people are wounded or killed, including the attacker. The latest FBI statistics, included in a report released in June 2016, revealed that the number of incidents was the highest annualized average within a two-year period, totalling 136. This compares with 20 active shooter events in 2014 and 2015, a staggering increase from 2000 when the FBI listed only one such attack. These acts occurred in 26 states, involving more than 150 causalities, with seven out of 10 incidents taking place in schools and businesses. The campus attack at Ohio State University in November 2016 with the assailant wielding a machete represented the latest such incident, following more than two dozen other events at educational institutions in the U.S. last year. In Canada, the gun violence scenario is in stark contrast to the U.S. Approximately one-fifth of police-reported violent crimes involved youth on school property. Yet, there have only been four attacks on Canadian colleges and universities in the past six years. In 2016, two people were killed and seven injured when a 17 year-old student opened fire inside the La Loche Community School located
April 2017 Canadian Underwriter
21
in La Loche, Saskatchewan. Canada’s most notorious school shooting was the Ecole Polytechnique massacre in Montreal in 1989. Labelled as a hate crime against women, the 25-yearold attacker embarked on a shooting spree with a legally obtained semi-automatic rifle and hunting knife. Fourteen women were killed and an additional 10 women and four men were injured before the attacker killed himself.
SOFT TARGETS Educational institutions are among “softtarget” entities that are increasingly vulnerable to attacks. Any open public space — such as restaurants, movie theatres, malls, nightclubs and governmental properties — face heightened exposure to risk and subsequent consequences. Higher education institutions recognize the driving need to take precautionary measures to protect, first and foremost, their students, as well as other campus personnel. Almost 70% of active shootings, as an example, are five minutes or less in duration and the majority are over before law enforcement or first responders arrive on the scene. Greater understanding and preparedness to confront exposure to violent risk are taking centre stage. More than two years ago, a collective of Alberta universities, including the University of Alberta and the Southern Alberta Institute of Technology (SAIT), introduced an awareness campaign to educate and inform its institutional communities in the event of an activeshooter incident on campus. Alberta’s initiative has been cited as the first to launch a co-ordinated effort throughout a province. The training and preparedness program mirrored the plan developed for colleges and universities by the U.S. Department of Homeland Security. Such efforts underscore the realization that the probability of a campus attack is today’s reality. Educational institutions, therefore, are becoming more proactive to reduce and mitigate the risk. Threat assessment teams, emergency notice protocols, training and notification systems, as well as social media, are being institution22 Canadian Underwriter April 2017
alized for expertly managing campus safety and response.
SEVERE WEATHER Weather-related risks, while often difficult to predict, require similar attention. Several high-profile, widely reported weather events shine a spotlight on the tentacles of consequence triggered by severe natural disasters. Most notably in the U.S., Hurricane Katrina made landfall in New Orleans in 2005. Tulane University, with a student body of more than 13,500, is located in
the heart of New Orleans Garden District spanning over 110 acres. While advance preparations anticipated the worst-case scenario, the sudden breach of the city’s levees sparked the most catastrophic natural disaster in the history of the country. Unexpected event-related expenditures incurred during and in the aftermath of the devastation posed significant financial loss to the university. Various methods and procedures were utilized to inform and update the student body, faculty, staff, personnel and leadership throughout its far-reaching institutional footprint during what would become days and weeks of damage control. For weather events, while perhaps not the magnitude of Hurricane Katrina or other natural adversities, evacuation planning is a core priority. An evacuation event requiring insurance coverage reimbursement is the deliberate and controlled relocation of the institution’s
students, faculty, personnel and others on campus properties. Expenses associated with necessary transportation, relocation, lodging alternatives, food stipends and emergency packages are integral for responsible evacuation plans. Notably, Canada withstood a sustained monster disaster in last year’s Fort McMurray wildfires in Alberta. Numerous communities in the disaster’s path were forced to relocate as a result of the evacuation of entire towns and cities, thus ending the school year for many students. Many affected individuals and families moved to new neighbourhoods across the city or even outside the province. Students were transferred to attend different schools. Northern Lakes College situated near the Town of Slave Lake, hard hit during the Slave Lake fire in 2011, was converted into a make-shift Red Cross centre for displaced residents. In the aftermath of the fires, towns focused on redevelopment to establish a sense of normalcy. Many school boards, though, were concerned that the return would incite traumatic memories of the fire for some deeply affected students. Educators, therefore, were trained to help students deal with the anxiety and stress caused by the harrowing after effects of the wildfires on their lives.
RISK MITIGATION PRACTICES Preparedness can be a vast undertaking. Timely and efficient response can be a paramount mitigating factor, enabling the educational institution to withstand the repercussions of a disruptive event and to facilitate operational recovery. A plan of action to address a violent attack or weather episode that may require evacuation can subdue the fear of chaos among students, faculty, personnel and the extended community of parents, adjunct professors, part-time employees and commuters. Insurance coverage for financial loss exposure provides reimbursement for expenditures resulting from on-campus disruptive events impacting university operations. Costs associated with a campus disturbance are characteristically unique, de-
Curtain call for entries. Submit your nominations for the Annual CIP Society National Leadership Awards.
Nominations will be accepted until June 1. For more information about the leadership awards and the nomination process, please visit the CIP Society website.
www.insuranceinstitute.ca/cipsociety April 2017 Canadian Underwriter
23
pending on the circumstances surrounding the incident. In some instances, the community or an organization, such as the Red Cross, can control immediate needs. Other events, however, must rely on insurance-covered assistance. Overall, the risk of financial loss can be more effectively contained when proper, responsive actions are taken immediately to aid those individuals most affected. In the immediate real-time and lon-
ger-term aftermath, crisis management services can lessen the lingering severity of the incident to accelerate operational recovery. Access to professional resources is often critical to empower university leadership and designated personnel to leverage crisis expertise skills for timely response to an occurrence under the glare of an unfolding scenario. Costs may be incurred to leverage the professional expertise of third-party re-
A NEW DAY. Farm Mutual Reinsurance Plan is proud to introduce you to our new brand: Farm Mutual Re. Our new look more accurately reflects who we are today. It’s a symbol of our commitment to the strength and sustainability of the Canadian and international mutual insurance community. For over 50 years, we have been proud to provide genuine value through our unique products and services and to be a Canadian leader in agricultural-based reinsurance solutions. It’s the dawn of a new day and whatever the future holds, Farm Mutual Re will be there to deliver on our promises.
| www.farmmutualre.com | T: 519-740-6415 | 24 Canadian Underwriter April 2017
FMRe2728_ANewDay_CanUnderW_AD_4.5x7.25.indd 1
2017-03-10 10:05 AM
sources, such as security services, counselling and consultant fees. Post-event support may require medical services and psychological intervention.
SOCIAL OUTREACH Social media has proved to be a powerful tool for notification and actionable restraint. Website postings, alerts, systematic telephone outreach and text messages are indispensable tools. Yet, recent events indicate other social platforms shared throughout individually followed communities can speed and infiltrate individuals’ sphere of facts, such as lockdowns, scene of the incident, law enforcement presence and recommended action. Higher education institutions must have an established plan to reach the entire campus community immediately at any time throughout the year, not just during the academic calendars. University risk management is advised to take precautionary steps to update and implement “testing” of the emergency plan on a regular, periodic schedule. In many cases, universities run campus-wide drills to inform their constituents of the protocols, notification systems and courses of action during new student orientation or at the start of a new school year. Yet, the complexion of student enrollment, faculty and university personnel changes from semester to semester throughout the academic year. During summer months, many college and university campus facilities offer interim classes, provide topical educational seminars or host sports programs for high school athletics. These diverse communities likely to be on campus during a disruptive event should be duly informed to avoid fear and confusion. The overarching benefits of insurance coverage assistance offer leadership of higher educational institutions an additional level of peace of mind when faced with an unexpected, often tragic event, on their campuses. Insurance reimbursement of disruptive event expenditures encourages preparedness, timely response and a path to operational recovery.
Measuring Extremes An updated North American climate index shows an increase in the occurrence of extreme weather events in Canada. A number of Canadian regions are among those with the highest index values, indicating the largest deviations in extreme weather events and sea levels from historical values. How can this information help inform the risk management strategies of Canadian insurers and others?
Caterina Lindman
Chair, Climate Index Working Group
The latest batch of data from the Actuaries Climate Index (ACI) — developed collaboratively by the Canadian Institute of Actuaries, the Society of Actuaries, the Casualty Actuarial Society and the American Academy of Actuaries, with climate expertise and research provided by Solterra Solutions — was released in March. Tracking quarterly changes in climate extremes and sea level, the index shows that a number of Canadian regions are among the areas with the highest index values. Higher values signify the largest deviations in extreme weather events and sea levels from historical values. Using data from neutral, scientific sources, the frequency of extreme events measured by the index is relative to the average frequencies during the 1961 to 1990 reference period. Are the findings cause for concern about climate change? How should insurers and others deal with the changes?
WHAT DO THE RESULTS SHOW?
Doug Collins Chair, Climate Change Committee
The latest index values for Canada point to an increase in the frequency of extreme weather occurrences and changes in sea levels to a sustained index value well above any five-year period during the reference period (see graph opposite).
!
The analysis of data for Canada shows the current five-year moving average value for the index is 0.67. The index value averaged zero during the reference period (by definition), first reached a five-year average value of 0.5 in 2006, and has stayed consistently above that level since 2010. As noted, these values indicate an increase in the frequency of extreme weather occurrences and changes in sea levels. Looking at the United States and Canada combined, three of the past four seasons have witnessed an index value in excess of 1.50, compared to the 30-year reference period. The spring and summer 2016 data reflect a continued pattern of increased frequencies of high temperatures and precipitation, and of lowerApril 2017 Canadian Underwriter
25
Peace of mind coverage, DAY AND NIGHT.
At A.M. Fredericks Underwriting Management Ltd., we believe that experience makes all the difference. That is why you can count on us to provide peace of mind coverage for all your clients’ needs. As one of Canada’s leading federally licensed Managing General Underwriters, our national expertise in niche and non-standard commercial liability, professional liability and property risks is second to none.
Visit us at www.amfredericks.com to learn more!
temperature extremes compared to the reference period. The index divides the continental United States and Canada into 12 regions. Specifically, Canada is divided into five regions. • Central Arctic (Northwest Territories and Nunavut); • Northeast Atlantic (New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island); • Northeast Forest (Ontario and Quebec); • Northern Plains (Alberta, Manitoba and Saskatchewan); and • Northwest Pacific (British Columbia and Yukon Territory). The current highest five-year average values by region are in the Northwest Pacific, Northeast Atlantic and Southern Plains (Kansas, Montana, North Dakota, Nebraska, Oklahoma, South Dakota, Texas and Wyoming). Where possible, the index components measure extremes, rather than averages, because extremes have the largest impact on people and property. Averages tell a story, but with climate data, important trends are better revealed by looking at what is happening at the extremes. The ACI has six components, namely the following: 1. warm temperatures (above the 90th percentile); 2. cold temperatures (below the 10th percentile); 3. heavy precipitation (maximum fiveday precipitation in each month); 4. drought (measured by consecutive dry days);
5. high wind (above the 90th percentile); and 6. sea level. These components were selected because they are representative of the key impacts of climate on people and the economy. Looking at the data for Canada by component, heavy precipitation has seen the largest changes in recent years, followed by the increase in warm temperatures and a corresponding decrease in cold temperatures. The latter component is subtracted from the other five when calculating the composite index. By subtracting this component in the index calculation, the index is increased by the reduction in cold extremes, consistent with increased melting of permafrost and increased propagation of diseases, pests and insects that were previously less likely to survive in lower temperatures, the index explains.
HOW CAN THE INFORMATION BE USED? Canadian insurance companies can use data by region and component to focus on areas where claim activity is most important. Concerned about heavy rain in Ontario and Quebec? Data for the northeast forest region will show that periods of heavy precipitation have been more significant in recent years, causing that component to be the leading index value for the latest five years at 1.26. Underlying that index change is a 12% increase in five-day, monthly maximum precipitation in the latest five
years compared to the reference period. Seasonal data underlying graphs could be modelled against claims data to help assess the risk and, in turn, companies can incorporate their insights into specific pricing, underwriting, product development or claims strategies.
POTENTIAL EFFECTS IF THE PATTERNS CONTINUE Climate change will have varying effects by class of business; property, casualty, life and health insurers will identify different risks and opportunities. Reinsurers will be interested to know how their reinsureds are monitoring this aspect of their business. Specifics about the frequency of extreme events should also be useful to non-insurers in their financial planning and risk management efforts. Coverage decisions, such as where and whether or not to provide property or flood insurance, can be informed by historical climate statistics. Actuaries are increasingly using predictive models to measure correlations and trends for use in pricing, underwriting, claims management, marketing and enterprise risk management. The risk management implications of climate change will only continue to grow if current trends continue. Companies that incorporate climate data into their strategic planning will have a competitive edge. They will also be better able to provide climate disclosures and supply convincing information to regulators, shareholders and lenders to demonstrate that they are effectively managing risks.
!
April 2017 Canadian Underwriter
27
Patchwork Cover
Brokers should advise commercial clients that commercial property and liability insurance generally exclude losses arising from terrorism. Although special stand-alone coverage is available, the bigger challenge going forward may be the client mindset toward terrorism insurance cover and an apparent lack of concern over potential related risks.
BY GREG MECKBACH
28 Canadian Underwriter April 2017
COVER STORY
Patchwork Cover
T
T
he world is witnessing real change with respect to the terrorism threat: differences in how attacks are being delivered; differences in targets; and differences in apparent objectives. A protective response is needed to answer all of those changes. That said, has related cover moved in step with the evolution of terrorist acts? If existing coverage is not accessible or affordable, is not clearly understood by commercial clients or is not being viewed as worthy of concern, that makes the job of brokers all the more important. Insurance brokers must be thoroughly versed on which policies apply (or which do not) and which acts are covered (or which are not) to ensure that clients, too, have enough of a solid understanding of the potential risk to determine what protections make most sense for their organizations.
April 2017 Canadian Underwriter 29
COVER STORY
Patchwork Cover CHANGING TIMES
More recently, there has been “a move Standard commercial liability policies away from many terrorism events which do not cover claims arising from terrorism. are basically taking down huge buildCouple that with limited stand-alone cover ings, to attacks against softer targets and for cyber terrorism and brokers must these sortsCOVER of lone-wolf STORY scenarios,” says STORY ensure that they inform clients where Tarique COVER Nageer, leaderCover of Marsh Inc.’s Patchwork Cover and advitheir gaps are and what stand-alone propertyPatchwork terrorism placement are available in the sory practice in New York City. “a move (and)policies domestic terrorism,” he market. points “a which move (and) domestic terrorism,” he and points Understanding the cover The problem for risk managers and nts out. “That’s really onethe ofgaps the biggest COVER STORY ts which “That’s really one of the biggest could prove critically important in light brokers is that lone-wolf attacks, alge build- out. issues. If you’ve got a lone wolf, that Patchwork Cover ergets buildissues. If you’ve got a lone wolf, that of the altering face of terrorism. For though covered by sabotage, “are actuand could just be somebody who is a disgets and could just be somebody who is a disexample, in its that 2016decides TerrorismtoandgoPolitical ally not covered under the definition of ios,” says gruntled employee omestic he points that decides to go os,” says terrorism,” gruntled RiskDepot Map, Aon plc notes that be- terrorism” in insurance policies, reports rsh Inc.’s downViolence to employee Home and buy fertilizer at’s Inc.’s really one oftothe biggest sh Home Depot fertilizer tween and 2015, attacks” and advi- down and make a 2010 bomb toand go buy and“bomb blow up you’ve a lone wolf, that to go and blow up nd advi- gotand make a bomb accounted forplace 58%ofofwork,” terrorist his ex-employer’s Hirstattacks st be somebody who is a dis-place of work,” Hirst his ex-employer’s in Western countries, but that image goes onto say. employee goes that decides to go onto hadissay. flipped by 2015, when 52% “That home-grown terrorism, whichof terHome Depot and buy fertilizer “That is home-grown terrorism, which rorist attacks in Western countries is not covered generally under a (terror- were e a bomb to go covered and blow up isism) not generally athe (terrorshootings and 34% bombings. definition, so just youunder needwere sabomployer’s place of work,” Hirst ism) definition, so you need the saboIn 2014, he twoexplains. Canadian military memtage extension,” o say. tageThere extension,” he explains. bersmay diedalso —be one aftertobeing shot in a need rethink s home-grownThere terrorism, may which alsolink be between a need toterrorism rethink Ottawa and another after being deliberthe traditional vered generally under a (terrorthe link ately struck by abetween vehicle interrorism Quebec. andtraditional property damage and business in-South finition, so you need the saboand property damage business inof the(BI) border, 50and people this past terruption losses, given thedied greater nsion,” he explains. terruption (BI) given the greater Juneof atpublic a losses, Florida nightclub targeting places meant toafter pro-Omar The problem for risk may also betargeting a need to rethink of public places meant to proMir Seddique Mateen took hostages. duce more casualties. tional link duce between terrorism managers and brokers casualties. “Shootings have become more Anmore increase in “terrorist-inspired” acts comperty damage An andincrease businessin inacts Aon’s is that lone-wolf attacks, than“terrorist-inspired” notes — asmon opposed tobombings,” “terrorist-directed” n (BI) losses, given the greater — as opposed to “terrorist-directed” Terrorism and Politicaldisrupt ViolenceoperaRisk Map. acts — “can significantly although covered of public places meant to proacts — “can significantly disrupt operaIndustries most targeted by terrorists tions for some companies,” Marsh Inc. by sabotage, “are re casualties.tions for some companies,” Marsh Inc. in 2015 in 2016 order,Terrorism transport, suggests in thewere, firm’s Riskretail, risk rease in “terrorist-inspired” actually not covered suggests in the acts firm’s 2016infrastructure Terrorism Risk and extractives, critical risk Insurance Report. okers pposed to “terrorist-directed” Insurance Report. financialairlines, sector, the report adds. under the definition of Forthe example, hotel chains kers can significantly disrupt operatacks, For example, airlines, hotel chains “Brokers should be looking to offer and travel websites “experienced drops terrorism” in insurance some companies,” Marsh Inc. acks, and travel websites drops cover toprices” their“experienced clients forthe terrorism ed in their stock following March and in the firm’s 2016 Terrorism Risk following the March policies, advises Gary ed in2016 theirsabotage,” stock prices” recommends Gary Hirst, presibombing at the Brussels Airport, re eport. Hirst of CHES Special 2016 bombing at out. the Brusselsofficer Airport, dent and chief executive of CHES the report points re xample, hotel chains red airlines, theHowever, report points Special Risk Inc., a Canadian managing as out. terrorism shifts away Risk Inc. “There is a red l websites drops on of “experienced However, as terrorism shifts away general agent and Lloyd’s coverholder. from large explosions towards lone-wolfmisunderstanding of ock of prices” following the March towards lone-wolfon from explosions “The principal terrorist type large attacks, there is “a clear trendthreat for to rance mbing at the Brussels Airport,is “a clear trend for what terrorism risk is type attacks, Canada remains that mostly posed propby violent rance terrorism riskthere to evolve from Gary t points out.terrorism risk to evolve from mostly propextremists whoto could inspired actually defined as.” erty damage related events be similar to to Gary er, as terrorism shiftsrelated away to events similar to ecial erty damage carry out an attack in Canada,” Public the (November 13, 2015) Paris attack,” e explosionsthe towards lone-wolfecial (November 13, 2015) attack,” Safety Canada notesParis in its 2016 is a KPMG advises in Political Risk and Crisis Public Hirst. His view is that “there is a misuncks, there is “a clear trend in forPolitical Risk and Crisis is a KPMG advises derstanding of what terrorism risk is acReport on the Terrorist Threat to Canada. Management Insurance: Opportunities for Growth, ng riskof to evolve from mostly prop-Opportunities for Growth, Management 9-11 — inflation-adjusted in- tually defined as” in an insurance policy. releasedAfter inInsurance: 2016. g of age to eventsinsimilar to sk related is released 2016. “Sabotage does cover acts of lone-wolf sured losses from KPMG which explains, were approxiIn the Paris attacks, sk is ember 13, 2015) Paris attack,” as.” In the ParisUS$42.9 attacks, KPMG explains, (and) domestic terrorism,” he points mately billionwhilst — “terrorism “asset damage was limited the dvises in Political Risk and Crisis as.” “asset damage was limited whilst the either out. “That’s really one of the biggest risk insurance quickly became estimated cost of business interruption nt Insurance: Opportunities for Growth, estimated cost of business interruption unavailable or very, very expensive according to various economists might and issues. If you’ve got a lone wolf, that in 2016. according to various economists might in the United States, Gregory could just be somebody who is a disreach”unaffordable,” US$12 billion. Paris attacks, KPMG explains, reach” US$12 billion. Meeks, a member of the coverage U.S. House of gruntled employee that decides to go gers and Marsh reports that some amage was limited whilst thethat some coverage gers Marsh reportsavailable Representatives, commented during a down to Home Depot and buy fertilizer acks,and al- enhancements relate to active dcks, costalof business interruption enhancements relate to conseactive and make a bomb to go and blow up debate inavailable 2014. are actushooter situations and resulting gretoactuvarious economists mightand resulting consenition of shooter quences,situations extra expense for evacuating S$12 billion. nition of quences, extra expense for 30 because Canadian Underwriter Aprilevacuating 2017 s, reports people of a threat, contingent reports that some coverage , reports because a threat, contingent is a mis- people interruption ofofoperations, cancelled ments available relate to active sism a misof operations, cancelled risk interruption reservations and loss of attraction. situations resulting consesm risk and reservations loss policy of attraction. nsurance An active and shooter acts “as a lia-
T
his ex-employer’s place of work,” Hirst goes onto say. “That is home-grown terrorism, which is not covered generally under a (terrorism) definition, so you need the sabotage extension,” he explains. There may also be a need to rethink the traditional link between terrorism and property damage and business interruption (BI) losses, given the greater targeting of public places meant to produce more casualties. An increase in “terrorist-inspired” acts — as opposed to “terrorist-directed” acts — “can significantly disrupt operations for some companies,” Marsh Inc. suggests in the firm’s 2016 Terrorism Risk Insurance Report. For example, airlines, hotel chains and travel websites “experienced drops in their stock prices” following the March 2016 bombing at the Brussels Airport, the report points out. However, as terrorism shifts away from large explosions towards lone-wolftype attacks, there is “a clear trend for terrorism risk to evolve from mostly property damage related to events similar to the (November 13, 2015) Paris attack,” KPMG advises in Political Risk and Crisis Management Insurance: Opportunities for Growth, released in 2016. In the Paris attacks, KPMG explains, “asset damage was limited whilst the estimated cost of business interruption according to various economists might reach” US$12 billion. Marsh reports that some coverage enhancements available relate to active shooter situations and resulting consequences, extra expense for evacuating people because of a threat, contingent interruption of operations, cancelled reservations and loss of attraction. An active shooter policy acts “as a liability policy designed to go hand-in-hand with (or as an alternative to) a (general liability) policy,” explains Joseph Gilliland, a terrorism underwriter for Beazley plc, which manages syndicates in the Lloyd’s market.
O E T O R R R R E T R R O I E R R R
Terrorist Terrorist
Terrorist
LIMITED ATTENTION But the terrorism issue still does not
OUR MARKET APPROACH IS DIFFERENT
from other managing general agents and insurance organizations
200+ PRODUCT LINES & IN HOUSE CAPACITY EXCLUSIVE TO CHES SPECIAL RISK INC. Through our extensive market experience we help our supporting retail brokers to identify their clients unique risk exposure through a genuine collaboration with our underwriters, and then engaging with our insurance carriers. Together we will help our brokers identify the many ways they can resolve their clients’ financial risk, leading to inspired solutions.
STOP SEARCHING – START FINDING INSURANCE SOLUTIONS.
MAKE YOUR MOVE ChesSpecialRisk.ca
OTTAWA OFFICE | T 613.745.6100 E quotemehappyOttawa@chesspecialrisk.ca TORONTO OFFICE | T 416.452.7850 E quotemehappyToronto@chesspecialrisk.ca
COVER STORY
Patchwork Cover
up STORY having to pay for physiseem to be high on the list of many may end COVER Patchwork Cover cal STORY property damage and business incommercial clients. Noting that he hasCOVER terruption expenses not covered in been in the brokerage business for 36Patchwork Cover move (and) domestic years, Rodney Hancock, chief execu- standard commercial policies resulting terrorism,” he points which tive officer of points McFarlan Rowlands, says from terrorist acts, war, malicious damout. “That’s really he one of the biggest and) domestic terrorism,” buildhis never been issues. you’ve got ahas lone wolf, thatasked for age, strikes, riots and civil commotions,” ut. “That’s reallyIfthat one of firm the biggest COVER STORY ssues. and If you’ve commercial terrorism coverage and has Mohabir says. could just be somebody who is a disgot a lone wolf, that Patchwork Cover That being the case, Hancock recom” says never sold it. gruntled employee that decides to go ould just be somebody who is a disCOVER STORY mends that commercial brokers protect Inc.’s That lack of concern surprises the fordown to Home Depot and buy fertilizer runtled employee that decides to go Patchwork Cover orism,” he points advimer president of the Insurance Brokers and make a bomb to go and blow up own to Home Depot and buy fertilizer ne of thehisbiggest Association ofterrorism,” Ontario, inhe light of what ex-employer’s of up work,” Hirst nd to domestic go andplace blow n “amake movea bomb (and) points a lone wolf, that happened last year Strathroy, Ontario, goes out. onto say. of work,” is ex-employer’s place Hirst ents which “That’s really oneinof the biggest ody who is“That a dis-iswhere the firm has an office. home-grown terrorism, which oes onto say. uge build- issues. If you’ve got a lone wolf, that hat decides to covered go past August, Aaron Driver is not generally under awho (terror“That and is home-grown terrorism, which argets could This just be somebody is a was dis-shot and buyism) fertilizer by police while inside a taxi, believed definition, so you need the sabonot covered under a (terrorrios,” says generally that decides to go go and tage blowgruntled up be employee headed for London, Ontario. It he explains. m) so toyou need the saboarshdefinition, Inc.’s extension,” down to Home Depot and buy fertilizer ce of work,” Hirstwas reported at the time that Driver There may also be a need to rethink ge extension,” he explains. and advi- and make a bomb to go and blow up had made a martyrdom video in which the traditional link between terrorism a need to rethink y.There may also his be ex-employer’s place of work,” Hirst he n terrorism, which suggested that he was planning and property damage and business in- to detohe traditional goes link onto between say. terrorism ly under aterruption (terror-nate home-made bomb somewhere (BI) losses, given the greater nd property damage and business in“That isa home-grown terrorism, which in ou need the saboan urban centre. of public places meant to prorruptiontargeting (BI)islosses, given the greater not covered generally under a (terrorplains. “We have had quite a lot of more casualties. rgeting ofduce public places meant to you pro-need ism) definition, so thenear-misses saboa need to rethink in the last four years,” suggests An increase in “terrorist-inspired” actsAlan Bell, Commercial terrorism uce more casualties. tage extension,” he explains. etween terrorism president of Toronto-based Global Risk — as opposed to “terrorist-directed” An increase in “terrorist-inspired” There may also beacts a need to rethink insurance is “often and business inInternational Inc.disrupt acts — significantly opera— as opposed to“can “terrorist-directed” the traditional link between terrorism , given the greater “Thedisrupt average Canadian company tions for property some companies,” Marsh Inc. in- and overlooked” by business cts — “can significantly operaand damage and business aces meant to pro-the average Canadian in the doesn’t suggests in the firm’s 2016 Terrorism Risk sk clients, suggests Burns ons for some companies,” Marsh Inc. terruption (BI) losses, given thestreet greater think about that,” Bell maintains. “I get Insurance Report. uggests in the firm’s 2016 Terrorism Risk targeting of public places meant to proers and Wilcox Canada’s orist-inspired” acts people saying to me all chains the time, ‘This example, airlines, hotel surance Report.Forduce more casualties. cks, terrorist-directed” Lalita Mohabir. is increase Canada. Nothing happens and travel websites drops For example, airlines, hotel chains really An in“experienced “terrorist-inspired” acts in ntly disrupt operaCanada,’ andfollowing I say, ‘Well, has happened their stock prices” theitMarch “While terrorism nd travel in websites “experienced drops — as opposed to “terrorist-directed” anies,” Marsh Inc. in Canada, but you have forgotten about 2016 bombing at the Brussels Airport, their stock prices” following the March disrupt operaacts — “can significantly insurance coverage is 2016 Terrorism Riskit,’” hesome relays. the report points out.companies,” 016 bombing at the Brussels Airport, tions for Marsh Inc. d not mandatory to do terrorism insurance However, asin the terrorism shiftsTerrorism away herisk report points out.Commercial suggests firm’s 2016 Risk is hotel chains nrnes, of “often overlooked” by business clients, from large explosions towards lone-wolfHowever, asInsurance terrorism business, the mindset Report.shifts away okers experienced drops agrees Lalita Mohabir, the national prodattacks, there is “a clear trend for nce om large type explosions towards lone-wolfFor example, airlines, hotel chains towards its importance ollowing the March ttacks, uct and personal accident and speterrorism risk toclear evolve from mostly prop-drops pe attacks, there is “aleader trend for and travel websites “experienced ry e Brusselserty Airport,cial related should change.” risksmostly manager forsimilar Burns Wilcox to events to rrorism risk todamage evolve propred in theirfrom stock prices” following theand March ial Canada, a coverholder in the Lloyd’s market. the (November 13, 2015) Paris attack,” ty damage related events similar 2016tobombing at the to Brussels Airport, are rism shifts away “Standard commercial policies KPMG advises inParis Political Risk and Crisis generally themselves from errors and omissions hea(November 13, 2015) attack,” the report points out. towards lone-wolfered exclude all acts of terrorism,” Mohabir (E&O) claims by informing clients Management Insurance: Opportunities for Growth, PMG advises inHowever, Political Risk Crisis shifts away of as and terrorism “a clear trend for says. “While terrorism insurance cover- what is not covered and asking them released in 2016. ion ofInsurance: anagement for Growth, fromOpportunities large explosions towards lone-wolfis mostly from propage is not mandatory to do business, In the Paris attacks, KPMG explains, leased in 2016. type attacks, there is “a clear trend for the what risks are of most concern. urance o events similar to .” “Most policies are called ‘all-risk,’ and mindset towards its importance should “assetterrorism damage was limited whilst thepropIn the Paris attacks, KPMG explains, risk to evolve from mostly Gary 015) Parisestimated attack,”change,” then they list all the exclusions,” Hancock she recommends. cost of business interruption asset damage was limited whilst the erty damage related to events similar to tical Risk according and Crisis pecial says. “You should tell them, ‘These are the Terrorism risk is difficult to model to various economists might timated cost the of business interruption (November 13, 2015) Paris attack,” portunities for Growth, things you don’t have, and if you need because it “differs substantially” from sereach” US$12 billion. ccording e is a to various KPMG economists advises in might Political Risk and Crisis sach” and US$12 them, tell me, I can probably get them, vere weather events and, in part, because Marsh reports that some coverage billion. Management Insurance: Opportunities for Growth, ng of enhancements , KPMG explains, s, albut you have to tell me,’” he points out. losses from attacks are not accidental, available relate to active Marsh reports that in some coverage released 2016. imited whilst thesituations isk is actu“I think if you tell people what’s states the report, Terrorism Risk Insurance Act: shooter and resulting consenhancements available to activeKPMG explains, In the relate Paris attacks, iness interruption on of not covered and ask them what their The Commercial Consumer’s Perspective, from quences, extra expense for evacuating as.”situations hooter and resulting conse“asset damage was limited whilst the economists might ports extra the Risk and Insurance Management concerned about, that should protect people because of evacuating aofthreat, contingent uences, expense for estimated cost business interruption mis- because you from an [E&O] perspective, beSociety Inc. interruption of operations, cancelled eople of a threat, contingent according to various economists might t risk some reservations coverage m cause you can certainly document that Without terrorism coverage, “businesses and loss of attraction. nterruption ofreach” operations, cancelled US$12 billion. le relate toAn active rance active shooter policy acts “as a liaservations of attraction. agers and and loss Marsh reports that some coverage d resulting conse32 Canadian April in 2017 bility policy designed to go hand hand An active shooter policy actsUnderwriter “as a liattacks, alenhancements available relate to active se for evacuating -wolf with (or as an alternative to) a (general lity policy tosituations go hand inand handresulting conse“are actu- designed shooter threat, contingent ith (or as to) a expense (general for evacuating finition ofan alternative quences, extra rations, cancelled es, reports people because of a threat, contingent
T
T
E
TE E R T
R
conversation,” says Hancock. What can brokers do to help ensure that risks are properly assessed? On its terrorism cover application form, for example, Totten Insurance Group asks an applicant, among other things, if it has a perimeter fence, if it has access control and whether or not its premises are within 500 metres of certain types of property. These include military premises, tourist attractions, sporting venues, religious institutions and international hotels.
R
RO O RI R R
COVERED OR NOT?
Commercial all-risks property damage and BI policies “tend to exclude terrorism and most of the political violence perils globally,” says Christof Bentele, head of global crisis management at Allianz Global Corporate and Specialty SE. “They do, however, cover strike/riots/ civil commotion and/or malicious damage losses,” Bentele reports. Economical Insurance does not provide coverage for property damage or third-party liability arising from acts of terrorism, a company spokesperson notes, but adds that the insurer’s commercial insurance does cover “fire or any gas explosions that may result from acts of terrorism.” Hancock explains that when insurers write property policies, “they basically say there is no coverage for terrorism, but if the damage caused by terrorism is the result directly of a fire or explosion, they will cover that part of it.” Insurers “will cover the damage to the building or the contents,” he notes. But that still leaves a coverage gap with third-party liability. “For a retail client, if someone goes in there and starts firing off weapons in a mall and injures shoppers, theoretically, you could be sued for that,” Nageer points out. This is because entities such as hotels and retailers “could be liable for ‘lax security’ if a situation like that does occur,” he explains. “Products are becoming more available for terrorism liability, active assailant and active shooter types of losses,” Nageer adds.
RE O R I O S R R R
Terrorist Terrorist
Terrorist
Terrorist
3rd Annual Insurance InsuranceAnalytics AnalyticsCanada CanadaSummit Summit Insurance Analytics Canada Summit Insurance Analytics Canada Summit June 28-29, 2017 | Toronto Marriott Downtown Eaton Center | Toronto, Canada
June 28-29, 2017 | Toronto Marriott Downtown Eaton Center | Toronto, Canada June 28-29, 3rd Annual June 28-29, 2017 2017 || Toronto Toronto Marriott Marriott Downtown Downtown Eaton Eaton Center Center || Toronto, Toronto, Canada Canada Annual 3rd3rd Annual 3rd Annual
Insurance Analytics Canada Summit Insurance Analytics Canada Summit Insurance Analytics Canada Summit Insurance Analytics Canada Summit Insurance Canada Summit June 28-29, 2017 | Analytics Toronto Marriott Downtown Eaton Center | Toronto, Canada 3rd Annual
Integrate IntegrateAnalytics, Analytics,Prove ProveValue Value Integrate Analytics, Prove Value Canadian Underwriter has secured aaAnalytics, $200 discount off registration, quote 4819CU200 when Integrate Analytics, Prove Value Integrate Analytics, Prove Value Canadian Underwriter secured a $200 discount off registration, quote 4819CU200 when Integrate Prove Value Canadian Underwriter has secured discount off registration, quote 4819CU200 when Integrate Analytics, Prove Value Canadian Underwriter hashas secured a $200 $200 discount off registration, quote 4819CU200 when Integrate Analytics, Prove Value June 28-29, 2017 | Toronto Marriott Downtown Eaton Center | Toronto, Canada June 28-29, 2017 | Toronto Marriott Downtown Eaton Center Toronto, Canada June 28-29, 2017 | Toronto Marriott Downtown || Toronto, June 28-29, 2017 | Toronto Marriott Downtown EatonEaton CenterCenter | Toronto, CanadaCanada
you register online at: http://events.insurancenexus.com/canada/register.php you register online http://events.insurancenexus.com/canada/register.php you register online at: http://events.insurancenexus.com/canada/register.php you register online at:at: http://events.insurancenexus.com/canada/register.php Canadian Underwriter has secured discount quote 4819CU200 when Canadian Underwriter has secured aa$200 discount off registration, quote 4819CU200 when Canadian Underwriter has secured a$200 $200 discount offregistration, registration, quote 4819CU200 Join 350+ Insurance Executives, Canadian Underwriter hashas secured a $200 discount off registration, quote 4819CU200 when when Join thethe Biggest Insurance Analytics Summit Canadian Underwriter secured a $200 discount off registration, quote 4819CU200 when Join 350+ Insurance Executives, Join 350+ Insurance Executives, Join Biggest Insurance Analytics Summit Join the Insurance Analytics Summit you register online youBiggest register online at:at: http://events.insurancenexus.com/canada/register.php Join 350+ Insurance Executives, you register online at:http://events.insurancenexus.com/canada/register.php http://events.insurancenexus.com/canada/register.php Join the Biggest Insurance Analytics Summit Attendees in 2016 Included: in Canada forfor Exclusive Insight on How To:To: online at: http://events.insurancenexus.com/canada/register.php Attendees in 2016 Included: youregister register online at: http://events.insurancenexus.com/canada/register.php Attendees in 2016 Included: inyou Canada Exclusive Insight How in Canada for Exclusive Insight on on How To: Attendees in 2016 Included: in Canada for Exclusive Insight on How To:
1. Smash Your Organizational Goals With Join the Biggest Insurance Analytics Summit Join the Biggest Insurance Analytics Summit 1. Smash Your Organizational Goals With 1. Smash Your Organizational Goals With Join the Biggest Insurance Analytics Summit 1.Join Smash Your Organizational Goals With the Biggest Insurance Analytics Summit Game-Changing Analytics: Match analytics Canada for Exclusive on How To: Joininthe Biggest InsuranceInsight Analytics Summit
in Canada forAnalytics: Exclusive Insight on How Game-Changing Analytics: analytics Match analytics inGame-Changing Canada forExclusive Exclusive Insight on How To:To: in Canada for Insight onMatch How To: Game-Changing Analytics: Match analytics programs with organizational goals to prove in Canada for Exclusive Insight on How To: programs with organizational goals toWith prove programs with organizational goals to 1.1.and Smash Your Organizational Goals programs with organizational goals to prove prove Smash Your Organizational Goals With value win executive support, deliver insights 1. Smash Your Organizational Goals With 1.value Smash Your Organizational Goals With value and win executive support, deliver insights and win executive support, deliver insights Game-Changing Analytics: Match analytics value and win executive support, deliver insights 1. Smash Yourimpact Organizational Goals With Game-Changing Analytics: Match analytics that drastically business outcomes and Game-Changing Analytics: Match analytics Game-Changing Analytics: Match analytics that drastically impact business outcomes and that drastically impact business outcomes and programs with organizational goals toto prove programs with organizational goals prove that drastically impact business outcomes and Game-Changing Analytics: Match analytics become a data-driven organization programs with organizational goals to prove programs with organizational goals to prove become a data-driven organization become aa data-driven organization value and win executive support, deliver insights value and win executive support, insights become data-driven organization programs with organizational goals todeliver prove value and win executive support, deliver insights value and win executive support, deliver insights 2. Exploit Internal and External Data For that drastically impact business outcomes and that drastically impact business outcomes and 2. Exploit Internal and External Data For value and winimpact executive support, deliver insights 2. Internal and External Data For that business outcomes and 2. Exploit Exploit Internal and External Data For thatdrastically drastically impact business outcomes and become a data-driven organization More Valuable Insights: Get an edge on your become a data-driven organization that drastically impact business outcomes and More Insights: an edge your More Valuable Insights: Get an on your become aValuable organization More Valuable Insights: GetGet an edge edge on on your become adata-driven data-driven organization competition with business-critical intelligence: 2. Exploit Internal and External Data For become a data-driven organization competition with business-critical intelligence: 2. Exploit Internal and External Data For competition with business-critical intelligence: competition with business-critical intelligence: 2. Exploit Internal and External Data For combining disparate data from across 2. Exploit Internal and External Data For More Valuable Insights: Get an edge onon your More Valuable Insights: Get anyour edge your combining disparate data from across your combining disparate data from across your 2. Exploit Internal and External Data For combining disparate data from across your More Valuable Insights: Get an edge on your organization, big data and new data such as IoT, competition with business-critical intelligence: More Valuable Insights: Get an edge on your competition with business-critical intelligence: organization, big data and new data such as organization, big data and new data such as IoT, More Valuable Insights: Get an edge competition with business-critical intelligence: organization, big data anddata new data suchon asyour IoT,IoT, weather, social media and more combining disparate from across your competition with business-critical intelligence: combining disparate data from across your weather, social media and more weather, social media and more combining disparate data from across yoursuch as IoT, competition with business-critical intelligence: weather, social media and more organization, big data and new data combining disparate data from across organization, big data and new datayour such as IoT, 3. Build an Unshakable Technology organization, big data and new data such as IoT, combining disparate data from across your 3. Build an Unshakable Technology 3. Build an Unshakable Technology weather, social media and more weather, social media and more organization, big data and new data such as IoT, 3. Foundation: Build an social Unshakable Create aand flTechnology exible, scalable andand weather, media more organization, big data and new data such as IoT, Foundation: Create aexible, flexible, scalable Foundation: Create aa flfland exible, scalable and weather, social media more 3. Build an Unshakable Technology Foundation: Create scalable and 3. technology Build an Unshakable Technology framework thatthat enables bestbest weather, social media and more 3.secure Build an Unshakable Technology secure technology framework enables secure technology framework that enables best Foundation: Create a fl exible, scalable and secure technology framework that enables best Foundation: Create aand flexible, scalable and practice analytics both now in the future, 3. Build an Unshakable Technology Foundation: Create a fl exible, scalable and practice analytics both now and in the future, practice analytics both now and in the future, 3. Build an Unshakable Technology secure technology framework that enables best practice analytics both now and in the future, secure technology framework that enables including datadata visualization, storage, management Foundation: Create a flexible, scalable and best secure technology framework that enables best including visualization, storage, management including data visualization, storage, management practice now and inmanagement the future, Foundation: Createboth aboth flexible, scalable and practice analytics now and in the future, including dataanalytics visualization, storage, and governance secure technology framework that best practice analytics both now and instorage, the enables future, and governance and governance including data visualization, management secure technology framework that enables best including data visualization, storage, management and governance practice analytics both now and in the future, including data visualization, storage, management and governance 4. Become an Insurer of the Future practice analytics both now and inwith thewith future, and governance 4. Become an Insurer of the Future 4. an Insurer of the Future with and governance including data visualization, storage, management 4. Become Become an Insurer of the Future with Organizational Transformation: Leverage including data visualization, storage, management 4.4.Become anan Insurer ofof the Future with Organizational Transformation: Leverage Organizational Transformation: Leverage Become Insurer the Future with and governance Organizational Transformation: Leverage 4.analytics Become an Insurer of the Future with champions and evangelists, build a a and governance Organizational Transformation: Leverage Organizational Transformation: Leverage analytics champions and evangelists, build analytics champions and evangelists, build aa analytics champions and evangelists, build Organizational Transformation: Leverage team that combines business intelligence with 4. Become ancombines Insurer of the Future with analytics champions and evangelists, build aa analytics champions and evangelists, build team that business intelligence with 4. Become an Insurer of the Future with team that combines business intelligence with analytics champions and evangelists, build a team that combines business intelligence with Organizational Transformation: Leverage analytics aptitude and eradicate operational siloes team that combines business intelligence with team that combines business intelligence with analytics aptitude and eradicate operational siloes Organizational Transformation: Leverage analytics and eradicate operational team thataptitude combines business intelligence with siloes analytics aptitude and eradicate operational siloes analytics aptitude and eradicate operational siloes analytics champions and evangelists, build a to motivate rapid adoption and organization-wide analytics aptitude and eradicate operational to motivate rapid adoption organization-wide analytics champions and evangelists, build a siloes to motivate rapid adoption and organization-wide aptitude and eradicate operational siloes toanalytics motivate rapid adoption andand organization-wide toto motivate rapid adoption and organization-wide team that combines business intelligence with support for analytics motivate rapid adoption and organization-wide support for analytics that combines business intelligence with support for analytics toteam motivate rapid adoption and organization-wide support foraptitude analytics support forfor analytics analytics and eradicate operational siloes siloes support analytics analytics aptitude and eradicate operational 5. Focused Departmental Discussions to to support for analytics 5. Focused Departmental Discussions 5. Focused Departmental Discussions to to motivate rapid adoption and organization-wide Focused Departmental Discussions 5. Give Focused Departmental Discussions to toto Focused Departmental Discussions to5.5. motivate rapid adoption and organization-wide You More Detail: With tracks exploring 5.Give Focused Departmental Discussions toexploring Give You More Detail: With tracks You More Detail: With tracks exploring support for analytics Give You More Detail: With tracks exploring Give You More Detail: With tracks exploring Give You More Detail: With tracks exploring support for analytics analytics each business department, hone in in Give Youin More Detail: With tracks exploring analytics in in each business department, hone analytics in each business department, hone in analytics each business department, hone analytics in each business department, hone analytics in each business department, hone in inin 5. Focused Departmental Discussions to on strategies tailored for underwriting, pricing, analytics in each business department, hone in 5. Focused Departmental Discussions to on strategies tailored for underwriting, pricing, on strategies tailored for underwriting, pricing, on strategies tailored for underwriting, pricing, on strategies tailored for underwriting, pricing, on strategies tailored forunderwriting, underwriting, pricing, Give You More Detail: With tracksexperience, exploring marketing, claims, fraud or customer on strategies tailored for pricing, Give You More Detail: With tracks exploring marketing, claims, fraud or customer experience, marketing, claims, fraud or customer experience, marketing, claims, fraud or customer experience, marketing, claims, fraud or customer experience, marketing, claims, fraud customer experience, analytics in each business department, hone in in marketing, claims, fraud ororcustomer experience, so you walk away with more immediately analytics in each business department, hone so you walk away with more immediately so you walk away with more immediately so you walk away with more immediately so you walk away with more immediately so you walk away withmore more immediatelypricing, strategies tailored for underwriting, underwriting, soon you walkknowledge away with immediately applicable on strategies tailored for pricing, applicable knowledge applicable knowledge applicable knowledge applicable knowledge applicable knowledge applicable knowledge marketing, claims, fraud or customer experience, marketing, claims, fraud or customer experience,
C
Join Join350+ 350+Insurance InsuranceExecutives, Executives, Join 350+ Insurance Executives, JoinJoin 350+ Insurance Executives, 350+ Insurance Executives, Attendees in 2016 Included: Attendeesin in 2016 2016 Included: Attendees Included: Attendees in 2016 Included: Attendees in 2016 Included:
so you walk away with more immediately soCanadian you walk away with more immediately Canadian Underwriter has secured a $200 discount off registration, quote 4819CU200 when Canadian Underwriter has secured aa a$200 discount off registration, quote 4819CU200 when Underwriter has secured $200 discount registration, quote 4819CU200 when Canadian Underwriter has secured $200 discount off registration, quote 4819CU200 when Canadian Underwriter has secured $200 discount registration, quote 4819CU200 applicable knowledge Canadian Underwriter has secured a a$200 discount off off registration, quote 4819CU200 when when Canadian Underwriter has secured a $200 discount off registration, quote 4819CU200 when applicable knowledge you register online at: http://events.insurancenexus.com/canada/register.php you register online at: http://events.insurancenexus.com/canada/register.php you register online at: http://events.insurancenexus.com/canada/register.php you register online at: http://events.insurancenexus.com/canada/register.php you register online at: http://events.insurancenexus.com/canada/register.php you register online at: you register online at:http://events.insurancenexus.com/canada/register.php http://events.insurancenexus.com/canada/register.php Canadian has secured secured aa $200 $200 discount discount off off registration, registration, quote quote4819CU200 4819CU200when when Canadian Underwriter Underwriter has
C
COVER STORY
Patchwork Cover
COVER STORY
Patchwork Cover COVER STORY Patchwork Cover
) domestic terrorism,” he points That said, with aCOVER standard commercial uninsurable,” Nageer argues. STORY move really (and) one domestic terrorism,” he points “That’s of the biggest liability policy, “someone being injured While government and commercial Patchwork which out.got “That’s really one the biggestCover s. If you’ve a lone thatof on yourwolf, premise as a result of terrorism buildings are “relatively easy to insure” If you’ve gota disa lone wolf, that dbuildjust be issues. somebody who is or sabotage attack would not be cov- for terrorism risk, it may be considerrism,” hecould points ts andemployee just be somebody tled that decides to gowho is a disered,” Hirst explains. ably more difficult to place terrorism ne ofHome the gruntled biggest ,” to says employee that decides to go n Depot and buy fertilizer COVER STORY“The liability part of a standard polinsurance for some occupancies. amake lone wolf, that Inc.’s aPatchwork down to to go Home and bomb andDepot blowexcludes up buy fertilizer icyCover basically that cover comody who is a disdx-employer’s advi- and place make of a bomb go and blow up work,”toHirst RY decides to gopletely,” Hancock comments. hat his ex-employer’s place work,” Hirst onto say. kand Cover fertilizer While “there of are extensions available goes ontoterrorism, say. hat isbuy home-grown which that, in the event that a bomb goes off and blow upSTORY COVER “That is home-grown terrorism, which COVER STORY tgo covered generally aproperty (terroronunder your and it injures a visitor, cedefinition, of work,” Hirst Cover isPatchwork not covered generally under a (terror- Patchwork Cover so you need the saboa third party or a neighbouring properism) so you need the saboextension,” he definition, explains. ty, then with the liability extension, that n terrorism, which tage extension,” he explains. here may also be awould need topoints rethink domestic terrorism,” hebe covered,” Hirst explains. Still, y under a (terrorThere may also be a need to rethink traditional link between terrorism hat’s really one of the biggest “I don’t think a great deal of brokers are u need the sabothe traditional linkthat between terrorism property damage and wolf, business inIf you’ve got a lone aware that you can actually buy a thirdplains.(BI)and property damage and business inuption losses, given the greater ust be somebody who is a disparty terrorism cover,” he says. a need to rethink terruption (BI) losses, given the greater eting of public places meant to prodetween employee that decides to go policies, the definition In stand-alone terrorism targeting of public places meant to promore casualties. oand Home Depot and buy fertilizer of terrorism is “clearly stated in the polbusiness induce more casualties. nkeincrease in “terrorist-inspired” acts covers a broad range a bomb to go and blow up icy wording and given the greater An increase in “terrorist-inspired” as opposed to “terrorist-directed” employer’s place of Hirstincluding acts acts ofwork,” coverage, committed ces meant to pro— as opposed to “terrorist-directed” — operato “can say. significantly for disrupt political, religious and ideological —terrorism, “can significantly operas isfor someacts companies,” Marsh Inc.disrupt home-grown which purposes, as well as acts of sabotage,” orist-inspired” acts tions for some companies,” Marsh Inc. ests in generally the firm’s 2016 overed under aTerrorism (terrorreports ArthurRisk J. Gallagher & Co. errorist-directed” suggests in the firm’s 2016 Terrorism Risk ance Report. sk finition, so you need the saboAdvantages of stand-alone terrorism tlyexample, disruptInsurance operaReport.hotel chains rension,” airlines, he explains. ers policies, the company information, anies,” Marsh “Underwriters need ForInc. example, airlines, hotel chains travel websites “experienced drops coverage ecks, may also be a need to rethink suggests, include for political 2016 Terrorism Risk and travel websites “experienced drops eir stock prices” following the March to have an idea as to ditional link between terrorism violence such as war, civil war, strikes, doperty in at their stock prices” following the March 6 bombing the Brussels Airport, damage and business inwhat exactly they are riots, civil commotion, malicious damhotel chains 2016 bombing at the Brussels Airport, eport points out. enes, on (BI) losses, given greater age,the insurrection, rebellion, revolution, xperienced drops covering and what reportmeant points owever, astheplaces terrorism shifts away gllowing of public toout. procoup d’états and mutiny. ed the March However, as terrorism shifts away exactly their exposures more large explosions towards “As I lone-wolfunderstand at this point, you can Brussels Airport, ncrease ofcasualties. from large explosions towards lone-wolfattacks, there is “a clear trend for in “terrorist-inspired” acts coverage for terrorism, are,” Tarique Nageer add the property type attacks, there isprop“a clear trend for rism risk to evolve fromyou mostly nce opposed to “terrorist-directed” but can’t add the liability,” Hancock of Marsh Inc. says of rism shifts away terrorism risk to evolve from propdamage related tocomments events similar to mostly “can significantly disrupt operaary of terrorism insurance. “You owards lone-wolfcontingent business erty to events similar to 13,damage 2015) related Paris attack,” rNovember some companies,” Inc. to buy a stand-alone. That said, ial “a clear trend forhaveMarsh the (November 13, 2015) Paris attack,” G advises in Political Risk and Crisis interruption coverage sfrom in the firm’s 2016 Terrorism Risk available,” he says. they are readily propsgement a mostly KPMG advises in Insurance: Opportunities for Political Growth, Risk and Crisis Report. for terrorism. These events similar to Insurance: Opportunities for Growth, Management sed in 2016. of example, airlines, hotel chains EXPENSIVE PROPOSITION 015) Paris attack,” kinds of contingent inKPMG 2016.explains, thewebsites Parisreleased attacks, “experienced drops Other terrorism-related risks are either not kvel is tical Risk and Crisis Infollowing the Paristheattacks, KPMG explains, loss scenarios may et damage was limited whilst stock prices” March insured or are the very expensive. So-called ortunities for“asset Growth, .” damage was limited whilst the mated cost of business interruption ombing at the Brussels Airport, be covered within a “blanket” contingent business interruption estimated cost of business interruption rding to various economists might ort points out. (CBI) from a terrorism event, “where a certain radius or a , KPMG explains, according to various economists might h” US$12 billion. client ever, aswhilst terrorism shifts doesaway not declare who their conmited the certain city, “but a reach” US$12 billion. arshexplosions reports that some coveragesuppliers are,” is one rge towards lone-wolftingent business ness interruption rsacks, and Marsh reports that some coverage ncements relate to uninsurable active blanket policy for that thereavailable is “a clear trend for example of risk, Nageer says. economists might ks, alenhancements available relate to active terrisk situations and consem to evolve fromresulting mostly prop— it’s uninsurable.” “The underwriters need to have an actu-related situations and resulting consences, extrashooter expense foras evacuating mage to events similar to idea to what exactly they are covering tionsome coverage of 13, quences, extra expense for evacuating ple because of a threat, contingent vember 2015) Paris attack,” and what exactly their exposures are,” “What is difficult or a bit more exle relate to active eports people because of a threat, contingent ruption of operations, cancelled advises in Political Risk and Crisis he says of CBI coverage for terrorism. pensive is religious buildings, as an exdavations resulting consemisinterruption ofGrowth, operations, cancelled and loss of attraction. ent Insurance: Opportunities for “So they could cover these kinds of ample, because, unfortunately, a lot of seactive for evacuating m reservations and loss ofliaattraction. shooter policy acts “as a dnhreat, inrisk 2016. contingent loss scenarios, but within a religious buildings are vandalized and contingent urance An active acts “as a liaye policy to goshooter hand inpolicy hand Paris designed attacks, KPMG explains, certain radius or a certain city,” he says. they do tend to see a lot of malicious acts ations, cancelled bility policy designed to go hand in hand (or as an alternative (general damage was limited whilst the policy “Butto) a ablanket for that — it’s against them,” Hirst reports. “What we of attraction. e-wolf with (or asinterruption an alternative to) a (general ed cost of business olicy acts “as a liang tohand various economists might 34 Canadian Underwriter April 2017 o go in hand US$12 billion. ive to) a (general h reports that some coverage ements available relate to active
are finding is incredibly difficult are clinics that offer things like abortion.” Other hard-to-place terrorism policies are for organizations testing substances on animals, he notes. “We found if there are cigarette factories that test cigarettes on animals or there are make-up manufacturers that are putting eye shadow in animals’ eyes, they tend to attract a lone-wolf-type attack. Where you do have the radical side of the associations for animal rights, they will actually go in and attack the laboratories that are carrying out that type of testing,” he says. As of December 2016, Hancock reports that there was “no cyber coverage at all on anything that I could find” for terrorism risk. “If you just get hacked and you don’t know who it is, you can certainly buy coverage for that,” he explains, but adds that if the hackers then went public and turned out to be terrorists, there would be no coverage. “Stand-alone terrorism policies generally do not cover cyber attacks,” says Mohabir. There is some coverage — albeit limited — for chemical, biological, radiological and nuclear (CBRN) attacks. “Most commercial property insurance policies have a standard CBRN exclusion,” Nageer explains. “The same thing holds for the stand-alone terrorism policies. However, there are standalone terrorism policies available, which could cover you for CBRN events.” Although available, CBRN coverage “is very expensive,” Hancock says, and his understanding is that not much of that specific coverage is sold. Events triggering such an exclusion may surprise some. “Hospitals and clinics do have very large X-Ray machines that typically have radioactive isotopes in them, which are required to power the actual X-ray mechanism,” Hirst explains. “Typically, a number of sabotage and terrorism policies have a radioactive exclusion on it,” he says. Hirst points out that such an incident could cause pollution in the surrounding area, resulting in damage to third parties and shutting down the healthcare facility. “It is possible to cover physical
I T TE ER R O O R R R R S E T R R O R I S T R R O R I S T E T R OR O I R SI T E R R R E T R T R E O RR RI OS R T I Terrorist Terrorist Terrorist rorist Terrorist Terrorist Terrorist Terrorist
April 201
1566
April 2017 Canadian Underwriter
The right ingredients work beautifully together.
Looking to spice up your Insurance product offering? We’re serving up an extensive array of CAA Insurance with a side of tailored marketing campaigns to get you noticed for all the right reasons. Competitive prices on a trusted brand, plus your deep Broker expertise … that’s bound to shake things up.
We’re looking to partner with best-in-breed Brokers. Talk to us to find out more. Call Kathy Corbacio at 1-905-771-3297 | broker.caainsurance.com Join the conversation @CAAforbrokers
Auto and Property Insurance are underwritten by CAA Insurance Company. ® CAA trademarks owned by, and use is authorized by, the Canadian Automobile Association. (1566-01/17)
1566_CAASCO_INS_Broker_CU-APR_Salt-Pepper.indd 1
2017-03-21 10:41 AM
COVER STORY
Patchwork Cover
Here at home, although stand-alone terrorism policies can be purchased, “not many people have them because, fortunately, the number of terrorist attacks (in Canada) is very small,” suggests McFarlan Rowlands’ Rodney Hancock.
bodily injury to visitors on your premise, either through a third-party extension or by buying a personal accident extension,” he says.
BROKER ADVICE This is one reason that brokers need to ask clients about their businesses, says Nageer. If a terrorism event occurs at a site with radioactive material, “you could technically have a dirty bomb scenario, but not caused directly by a dirty bomb, but caused by a regular terrorism bomb going off,” he explains. “There is some language which could be added to policies which could cover you for contamination or decontamination that results from CBRN material which you may have stored on your premises,” he says. “You really have to watch the exclusionary language because a blanket exclusion for CBRN without any carve-back for chemicals or materials stored on premises, which are impacted by a terrorism event, could cause you to be left with a hole in your insurance in the event that it’s not fully clarified with 36 Canadian Underwriter April 2017
the insurance underwriter,” Nageer says. The same gap could exist on sites where chemicals are stored, he explains. “The thing to do is get to know your clients well,” Nageer recommends. “Get to know their business well and know what their risk is, so you have to ask the right questions,” he adds. Brokers need to make sure clients have proper coverage for sudden and accidental pollution caused by terrorism or sabotage, Hirst advises. “If it’s a regular property placement, obviously, that does exclude sabotage and terrorism, so the peril of accidental seepage and pollution as a result of a terrorism attack isn’t covered,” he notes. “You could have some sort of petroleum storage facility which is attacked and it creates contamination of surrounding property. You need to look at the coverage to make sure that you do have sudden and accidental seepage and pollution extensions,” Hirst says. Nageer points out that policies covering CBRN exist both as stand-alone products and as sub-limits on policies that cover terrorism. “If you want a huge amount
of CBRN limits, for example, in a major metropolitan city, that likely would be very costly for you and, potentially, uninsurable,” he says. Other coverage gaps arise if there is a denial of access to company property as a result of a terrorist incident or threat, says Hirst. “It is possible to buy insurance for the perils of terrorism and sabotage that cover what we would call a loss of attraction, i.e., the police, for everyone’s safety, have closed down a shopping mall,” he relays. Brokers should tell clients that terrorism insurance “is inexpensive, dependent on the limit of liability,” Mohabir advises. They should also inform clients that coverage for terrorism also includes protection against sabotage and BI. For clients with operations outside of Canada, brokers need to discuss political violence coverage, not just terrorism coverage, Nageer contends. Civil wars, rebellions, insurrections and coups are more common in emerging markets than in developed nations, he goes on to say.
Connect with your customers wherever they are. These days, being “there” for your customers has taken on a whole new meaning. Today’s consumer wants access to information anytime, anywhere. Applied software enables your brokerage to deliver an improved customer experience by easily connecting you with prospects and enabling you to provide existing customers with access to insurance information when and where they are. And perhaps more importantly, where they’re going next. At Applied, we’re connecting the business of insurance. See how at appliedsystems.ca/customerexperience
appliedsystems.com
Markel. Expect more from your insurance carrier
Commercial general liability Cyber risks insurance Directors and officers liability Environmental impairment liability Life sciences Professional liability Property and inland marine Security and protection industry Umbrella and excess liability
Helping brokers with effective insurance solutions since 1966 Calgary Montreal Toronto Vancouver www.markelinternational.ca
2nd Annual Insurance-Canada.ca Broker Forum Toronto
Brokered Advance Technology was the main item on the menu at the 2nd Annual Insurance-Canada.ca Broker Forum. As quickly as things are changing for brokers and their partners — driven, in large part, by customer wants and demands — is the breadth of options available for brokers to sample. Jason Contant
Online Editor
Angela Stelmakowich Editor
Attendees gathered in Toronto in early March to find out what is — and what should be — on the minds of brokers. Technology was central to discussions at the broker forum, the theme of which was Disruption: New Realities, New Opportunities.
CHATBOT SET TO LEARN Learning is a life-long process not only for humans, but for online chatbots, Amanda Ketelaars, operations manager for Mitchell & Whale Insurance Brokers, suggested in sharing her brokerage’s recent experience during the Insurance-Canada.ca Broker Forum. Powered by rules and a form of artificial intelligence called natural language processing, which seeks to understand the intent of a question, the brokerage’s English-language chatbot can, among other things, provide an insurance quote, take a claim, set up a call and take a change request, Ketelaars reported. “Each conversation is giving the chatbot some chance to learn,” she pointed out during the session, Chatting it up with Customers. Unlike humans, though, the chatbot can manage several conversations at once and provide quick responses, she told forum attendees. That said, not every conversation is spot-on. Using the example of a client who referred to
right-hand drive vehicles by asking, “Do you insure RHD vehicles?” The bot realized the person was asking for an auto quote, but did not understand it was a specialty vehicle. However, “the bot is going to learn that. Next time, the bot will respond with, ‘We will get you a specialty quote.’” Of course, the bot is not alone. At her brokerage, during normal business hours, there is “someone watching who can jump in if it’s going south.” In the first month of using the bot, Ketelaars reported, the brokerage saw more than 51,000 messages through the chatbot, with each chat consisting of an estimated 20 to 30 messages. Broken down, 70% of those messages during the 30-day period were for quotes, 20% were for frequently asked questions and 10% were for policy changes, she said. In all, 65% of the calls were during business hours and 35% were after business hours.
VALUE IN RECOGNITION If an insurer can offer brokers more products, assistance and its brand is recognized by clients, “there is some value there,” Jeff Roy, chief executive officer of Excalibur Insurance Group, noted during the broker forum. Roy was discussing the contentious decision
April 2017 Canadian Underwriter
39
in January in which the Insurance Brokers Association of Ontario (IBAO) announced that it was formally suspending its sponsorship partnership with Aviva Canada “for the foreseeable future.” IBAO argued that it had received “overwhelming support” to take action following the latest direct-to-consumer offering leveraging the Aviva Canada brand: the insurer’s partnership with Maple Leaf Sports and Entertainment for “team-branded” home and auto insurance directly to fans of Toronto’s Raptors and Maple Leafs sports teams. “Aviva continues to leverage the Aviva brand for broker-distributed products and direct-to-consumer products, with an inconsistency around product availability and pricing, a strategy the IBAO believes promotes confusion for consumers,” IBAO chief executive officer Colin Simpson said at the time. But Roy suggested during the panel discussion, Distribution in the InsurTech Age,
“For any broker out there, when you’re looking at technology, the best place to start is to look at the key issues you want to address as an organization and making sure that if you solve those issues, they actually help you on your bottom line.” that with the Aviva Canada direct name, there is a “bigger play” if the insurer does offer more products and the brand is recognized. If “you’re going to help me and that brand is recognized by my clients, there is some value there,” he suggested. “It is a murky thing, but as long as they give
us a competitive price as a broker [and] give us the same tools, too, I think they can do it,” Roy told attendees. “I struggle with it just like everybody else,” he said. But “to put the company that has helped you more in the penalty box, I really struggle with,” he added. “If the customer has a choice, they are probably going to take the quickest, fastest, most convenient model to purchase,” suggested Ryan Spinner, head of innovation at Aviva Canada, and another member of the panel. “I think that is the challenge for everyone: to be in the right place, right time, with the right product and proposition. Whoever can provide that in the most simplistic form will win,” Spinner said.
SIGN OF THE TIMES “For many organizations, like yourselves included, keeping a process digital represents an opportunity to actually ease the regulatory and the compliance bur-
OUT OF THE BOX
INSURANCE DESIGNED FOR BROKERS COMMERCIAL . RESIDENTIAL . TRANSPORT* . MARINE
*auto liability cover available in Quebec only.
At APRIL Canada, we understand that not all risks are created equal. Our team specializes in designing “out of the box” solutions for “out of the box” risks, working in partnership with insurance brokers for the benefit of your clients. CALGARY . VANCOUVER . TORONTO . MONTREAL 1-855-745-1010 www.april.ca
40 Canadian Underwriter April 2017
Insurance made easy
den and tighten up compliance,” said Andrea Masterton, director of corporate marketing for eSignLive by VASCO, during the broker forum. “When you keep a process electronic, you have unprecedented visibility and control over that process,” Masterton said during the session, e-Signature FAQ for Brokers. “You can build workflow rules to make sure that common mistakes like missing signatures, missing pages, missing documents completely goes away,” she maintained. “So from an E&O (errors and omissions) perspective, risk goes down,” she added. Electronic signatures “are being used by companies big and small all across the country and across a variety of industries,” Masterton said. As such, e-signatures should be viewed as table stakes, she suggested. Pointing out that electronic signatures have been recognized by provincial and federal laws since the early 2000s, though, still too many brokers are “stuck on paper,” Masterton argued.
new functionality in the future,” May told forum attendees. The brokerage is also considering looking at a chatbot down the road, May reported. “We think that this is going to reduce the phone calls and some unnecessary touch points that we’re engaging with our clients on and let our brokers focus on the upselling, cross-selling and advice-based stuff that they should be spending their time on,” he added.
CUSTOMERS WANT ADVICE, REAL-TIME RESPONSE
APPS CAN HELP BROKERAGES BE TOP OF MIND Having a broker’s brand right on the customer’s phone, as would be the case with an app, is a very attractive proposition, Darryl May, principal with KTX Insurance Brokers, suggested during the broker forum. “I think just having our logo on someone’s phone is a powerful thing and that’s expensive real estate,” May said in relaying what the brokerage is doing with its current app. “Getting that there makes sure that people, when they think about their insurance, it’s right there; they see it every day, right in front of them,” he pointed out during the session, Customer Engagement & Digital Self-Service. Beyond being top of mind, though, is the need to adapt in line with the wants of customers. “Every client that is registering currently, we are sending them a survey to find out what they like about it (app), what they would like to see from the app and using that feedback to drive
Gardner explained to those attending the session, Adjusting for Disruption. Although these “lookers” are not licensed adjusters, they get the process rolling, he pointed out. With a house fire, for example, “why does it have to be an adjuster doing all the front-line work?” Gardner asked. “The reality is so much of this is automated now. All I need is somebody to take the picture, so it’s either the policyholder or a looker,” Gardner said. “We see this as a revolutionary way to go into the marketplace with a variable workforce,” he added.
“For any broker out there, when you’re looking at technology, the best place to start is to look at the key issues you want to address as an organization and making sure that if you solve those issues, they actually help you on your bottom line,” May advised.
TECHNOLOGY ON THE FRONT LINES Current technology allows for starting the claims process with taking a picture of damage and having the claims process unfold from there, attendees of the broker forum heard. Gary Gardner, senior vice president of global client development for Crawford & Company, discussed the impact of the company’s majority acquisition of WeGoLook this past January. The mobile technology company features an on-demand workforce of 30,000 “lookers,” agents dispatched to perform real-time field inspections, verifications, custom tasks and vehicle inspections,
Brokers could provide added value to their customers by suggesting offers that help save money on home and auto insurance, Bill Morris, senior partner with Navicom Inc., noted at the forum. “Who doesn’t want to save money? Who knows more about potential ways to save money on cars and homes than your industry?” Morris asked during the session, the Future of Customer Engagement. Brokers could tell customers about things such as offering a 15% discount on snow tires or electronic access to all insurance policies, he suggested. With regard to the latter example, his company’s research shows that interest is more prominent with younger generations (those under 25 and 25- to 39year-olds), “because that’s what they’re expecting,” Morris said, suggesting that it “could be a game-changer.” What customers want to talk about “historically, are not areas where brokers would have focused on,” he argued. “It may have nothing to do with buying something; it may have something to do with knowledge or wisdom,” he added. Another valuable customer engagement asset is the ability to get answers to any question in real time. “That’s the world we live in now. We know that technology is coming; it’s here. We know that disruption is under way. Why not be the leaders?” Morris asked. “The opportunity is for you to grab that disruption,” he suggested. April 2017 Canadian Underwriter
41
www.suminsurance.ca
SUM Insurance Can. Underwriter 4_17.indd 1
3/21/17 1:42 PM
Aerial Manoeuvres
Jeffrey McCann
Vice President, Digital Strategy, Shaw Sabey & Associates
Brokers will play a critical role as trusted risk management advisors in the rapidly expanding drone industry. Brokers need to inform their customers that as soon as the rotors are turning, a standard general liability policy no longer responds, and either an aviation policy or an endorsement is required. There is no question that drones are taking off. Right now, most commercial drones are used for taking photographs and video, but that is going to change quickly.
A May 2016 report issued by PricewaterhouseCoopers notes that the emerging global market for commercial drone services will replace human labour valued at more than US$127 billion, only US$8.8 billion of which will be in entertainment and media. The areas that will see a larger disruption from unmanned aerial vehicles (UAVs) “in the near future� are infrastructure (US$45.2 billion), agriculture (US$32.4 billion) transport (US$13 billion) and security (US$10 billion). Another report from Gartner, Inc., released earlier this year, has predicted that the global drone market revenue will rise 34% to as much as US$6 billion in 2017, and more than US$11.2 billion by 2020. As technology adapts and ever more uses are found for these highly adaptable flying machines in a growing market, regulators and their insurance and legal counterparts are struggling to keep pace.
April 2017 Canadian Underwriter
43
Even when companies are not using drones directly, they may inherit the exposures. For example, many golf courses, ski resorts and destination hotels host weddings and events where the booking requests to contract a drone photographer. The venue’s insurance policy would exclude aviation liability, leaving them exposed. REGULATORY ENVIRONMENT In Canada, drones are regulated by Transport Canada. There are two ways to legally fly a drone commercially. The first is to adhere to all of Transport Canada’s exemption requirements, requirements that come in two categories: one for UAVs that weigh one kilogram or less, and one for drones that weigh up to and including 25 kilograms. Some examples of exemption requirements include flying safely, only operating at least eight hours after consuming any alcohol, being at least 18 years of age, completing ground school or related training, and notifying Transport Canada before each flight. These ground schools are not yet regulated themselves, although a sample curriculum has been provided by Transport Canada as a guideline. A second option is to obtain a Special Flight Operations Certificate (SFOC) from Transport Canada. The contents of the SFOC application are intended to show that the user understands how airspace works and that he or she is a competent pilot. The application must also include where and when the flights will occur. Most importantly for brokers, whether a pilot is flying commercially under the exemptions or with an SFOC, he or she must be able to present proof of carrying a minimum of $100,000 worth of liability insurance for flying the drone. Although this is the minimum requirement, $1 million or more of coverage is often appropriate. In December of 2016, Transport Canada released updated exemptions that include the following: • a new emphasis on pilot education and training, including examinations and ground school; 44 Canadian Underwriter April 2017
drone popularity over the past five years, and more are on the way. Federal transport minister Marc Garneau announced just in March that Transport Canada will be overhauling all rules around recreational drones this summer. The new rules will mean recreational drone operators may not fly higher than 90 metres; at night; within 75 metres of buildings, vehicles or people; or within nine kilometres of the centre of any airport, heliport, aerodrome or water aerodrome where aircraft take off and land. One thing that is not likely to change, though, is the insurance requirement.
UAV RISKS AND SOLUTIONS • difference in drone weight classes; • requirement that the pilot must have on hand documentation of the exemption, proof of liability insurance, name and address of the UAV operator, a copy of the UAV system operating limitations and evidence that the required training has been completed; and • requirement that the pilot must not be farther than one-quarter nautical mile from the UAV. One example of a change that may impact insurance is that the exception requirement for UAV weight changed from “0 to 2.5 kilograms” to “0 to 1 kilogram.” The insurance policy generally refers to flying in compliance with Transport Canada. As such, if the pilot is no longer exempt because of this regulation change, there are implications for how that policy responds. When the rules change, so does the policy. Changes like these have been occurring more frequently with the increase in
Because drones are technically categorized as aircraft, it makes them tricky to insure. Most commercial insurance policies, and almost certainly all homeowners policies, have aviation risks specifically excluded. What are the liabilities for a new company offering drone services? What about an established real estate or road building firm adding drones to create efficiencies? Or a golf course with dozens of wedding clients all asking about drone photography? These are the kinds of questions that brokers are now fielding.
UAV FLYING LIABILITIES As soon as the rotors are turning, a standard general liability policy no longer responds, and either an aviation policy or an endorsement is required. The risks are third-party bodily injury and property damage from the drone crashing. Some managing general agents (MGAs) are offering UAV liability policies backed by an extension of aviation capacity, while a few domestic markets have also introduced their own versions. The UAV liability policy is sold standalone, which can be
easier for a broker to place, and MGAs generally do not require contracts to deal with on a one-off basis, removing barriers for smaller brokerages to access the product. The more common solution emerging in the Canadian market is a simple general liability (GL) policy with an endorsement carving back the aviation exclusion. This can be complicated if a client, such as a road builder, has an existing GL and the carrier is not prepared to take on the UAV liability exposure. For home-based photographers, though, this is a simple way to address both UAV flying operations and the day-to-day exposures of operating a small business.
PHYSICAL DAMAGE Most often when people hear drone insurance, they think about physical damage coverage. Many of the MGAs offer physical damage as an option, but unless the value of the drone is more than
CanadianUnderwriter-half_0417.indd 1
$5,000, physical damage coverage does not make financial sense for the client. To illustrate, consider a drone that retails at around $1,300. To insure for $1,000 premium and $1,000 deductible is not practical. The insured value does include payload, so if that same drone was equipped with an expensive camera or mapping equipment, physical damage policy should be recommended. UAV programs are mostly in their infancy and underwriters are careful to manage their ratios as they grow in volume, so physical damage is sparse.
PERIPHERAL EXPOSURES Even when companies are not using drones directly, they may inherit the exposures. For example, many golf courses, ski resorts and destination hotels host weddings and events where the booking requests to contract a drone photographer. The venue’s insurance policy
would exclude aviation liability, leaving them exposed. It is critical for the venue to obtain certificates with proof of UAV liability coverage, a copy of the SFOC and appropriate training certification; become additional insured on the pilot’s policy; and set clear rules and guidelines for flying at its property. It is also important to note that without the SFOC or proof of exemption, the insurance policy likely is not valid. Firms in other industries — such as agriculture, construction, building maintenance, forestry and mining — seeking to subcontract drone pilots should implement the same risk management procedures to ensure the appropriate coverage is in place. This highlights the critical role brokers will play as trusted risk management advisors to this rapidly expanding industry, even if they are not required to put a UAV liability policy in effect.
2017-03-27 2:23 PM
April 2017 Canadian Underwriter
45
Your Insurance News Source .ca
Sign-Up at http://bit.ly/cudaily to receive Canadian Underwriter’s free DAILY e-Newsletter each morning – containing all of the latest industry news, press releases, blogs, events, careers and more.
C4 2017 CatIQ’s Canadian Catastrophe Conference Toronto
Angela Stelmakowich Editor
Greg Meckbach
Associate Editor
Herding
Catastrophes, both natural and man-made, continue to capture the attention of everyone involved in Canada’s property and casualty industry. By gathering the most up-to-date and relevant information, the thought is that stakeholders will better be able to herd straggler facts into a more manageable and usable form.
Those gathered for Catastrophe Indices and Quantification Inc.’s Canadian Catastrophe Conference (C4 2017) in downtown Toronto learned about all manner of topics, including natural catastrophe losses, the Fort McMurray wildfire, terrorism insurance, Cat modelling, geomagnetic storms and wildfire risk management.
RETHINKING TERRORISM INSURANCE Terrorism insurance programs need a reset to ensure that clients are appropriately covered given the continuing shift from attacks on property
Cats to attacks on people designed to produce mass casualties, said Scott Bolton, the United Kingdombased director of business development and network relations for Aon Risk Solutions. “We can’t just keep having conversations around property damage and business interruption,” Bolton told those attending Terrorism Risk: International & Canadian Perspectives. “We’ve got to start looking at impact on life, impact on liability, impact on all these other things that mass-casualty attacks bring,” he said during the panel discussion. The innovation in the terrorism insurance space will come from looking at the gap “between PDBI (property damage, business interruption) — the core of your terrorism insurance program — and the actual impacts that are resulting,” explained Bolton. “We could have zero property damage from a mass casualty attack, but the impacts are going to be broader when you start seeing the deaths and injuries to people,” he said. “From an insurance perspective, you start hitting on the life lines of business — medical, benefits
April 2017 Canadian Underwriter
47
about PDBI,” he told session attendees. To reassure clients that their terrorism programs will respond in mass-casualty, low-property damage events, it is a good idea to look “at these other lines of business,” Bolton advised.
potentially, potential liability,” Bolton pointed out. Citing the 2016 attacks in Nice and Brussels as examples, he noted that there was little property damage. Terrorism events are shifting “certainly in the last 24 months, to the mass-casualty space, the impacts from a mass-casualty attack,” he said. Liability issues do not “really come into play if we’re talking
PINNING DOWN WILDFIRE LOSSES When determining accumulation of risk, wildfire presents an “additional
Congratulations! Chubb would like to congratulate Gregory Belton, Executive Chairman of HUB Ontario operations for being awarded the Order of Canada, the highest order granted to a citizen in our country. This award recognizes significant dedication to the community and service to the nation. Congratulations to Greg and the family! We look forward to our continued partnership between Chubb Insurance and HUB.
Chubb. Insured.
SM
chubb.com/ca
48 Canadian Underwriter April 2017
complexity” for insurers and reinsurers, Manuel Chirouze, managing director of natural hazards and geoscience for the Americas at Guy Carpenter & Company LLC, said during C4 2017. Noting that wildfire is a really complex peril, “most of the losses will be coming from the wildland-urban interface and that’s an area that is both rapidly evolving and where the built environment is rapidly changing,” Chirouze pointed out during the panel discussion, Wildfire Risk Management. “We have no model for Canada, which is strange,” said Andreas Siebert, head of geospatial solutions at Munich Re. “Wildfire on a global scale has always been a poor cousin in the modelling community due to the amount of affected values,” Siebert suggested. “In the end, doing an accumulation of that purely based on a sum of the assets that is within an area that is exposed is not enough,” Chirouze said. Though Canada saw big wildfires in Kelowna and Slave Lake over the last decade and a half, panel moderator Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction, argued that “the Canadian insurance industry never really concerned (itself) with wildfire.” Canada probably has “billions, if not trillions, of assets in the wildland-urban interface and deep in the woods,” McGillivray pointed out. HAIL DENTS NAT-CAT PICTURE 2016 was a year of records: the largest catastrophe-related insured losses in Canada’s history, the biggest loss for a single Cat and the most hail events in the month of July, Carolyn Rennie, managing director of Catastrophe Indices and Quantification Inc. (CatIQ), reported during C4 2017. Across the country, incurred losses for the Canadian insurance industry as a result of 2016’s 13 Cat events and at least eight notable events totalled roughly $5.2 billion, Rennie said. The notable events — causing less than $25 million in losses — “are estimated at about $17.5 million each,” she told attendees.
The Fort McMurray wildfire was the largest Cat loss, accounting for approximately $3.7 billion in insured losses, but hail made its own dent in a number of provinces. “Nine of the 13 Cat events involved the peril hail,” Rennie said. Among other places, hail pelted Alberta, Saskatchewan, Manitoba, Ontario and Quebec, she pointed out. The impact of hail is demonstrated by overall losses by line of business. In 2016, 58% of losses were due to personal, 32% to commercial and 10% to auto, Rennie reported. However, removing Fort McMurray from the mix reveals a different story. “Auto is now 33% of the losses, primarily due to the hail damage this year,” she relayed. Even excluding the Fort McMurray loss, Alberta “still went over half a billion,” she added.
sphere, Luis Marti, director of reliability studies, standards and compliance for Hydro One, explained. “If I have a current moving very slowly up in the ionosphere, I am going to have voltage induced into the wires,” Marti noted. “It is a big deal because we design our power network to work at 60 Hertz; we design the transformers to work at 60 Hertz, alternating current,” he said. A
geomagnetic disturbance could induce electrical current at a much lower frequency, he pointed out. North American Reliability Corporation released a report from a task force in February 2012, Marti said. “What they concluded was that the most likely thing that would happen in a major event would be the voltage would be so depressed that you would
BLACKOUTS IN PERSPECTIVE The insurance industry needs “a better understanding” of the probable impact of a coronal mass ejection or other extreme space event rather than rely on pessimistic estimations, Balz Grollimund, Swiss Re’s head of underwriting for Canada and the English Caribbean, suggested during a session at C4 2017. “We are worried about a big coronal mass ejection, or CME, from the sun hurling charged particles towards the earth, affecting the geomagnetic field and then inducing some potential problems in the infrastructure,” Grollimund relayed during the panel discussion, Geomagnetic Storms:The Next Black Swan. “We need a better understanding of the probability, effects and really model through the full chain from the CME to the impact on the grid, on society — the financial impact,” he argued. “The big thing that we are worried about when we talk about solar storms is the blackout scenario,” Grollimund said. “How much money do I really need to put aside for a 1 in 500 year solar storm event?” he asked. “At the moment, I really don’t know.” A geomagnetic disturbance can “increase the number of particles” in the iono-
Canada’s leading provider of pre and post-loss appraisal and consultation services. SPECS provides the insurance industry with expert, impartial, and comprehensive structural consultation. Our customers benefit from precise valuation of damages, accurate reserves, a reduction in claim cycle times and enhanced claimant satisfaction. Trust SPECS to assist with any residential, commercial, industrial or CAT claim.
SERVICES • PROPERTY LOSS SCOPE AND ESTIMATING • BID ANALYSIS AND MANAGEMENT • PROJECT MANAGEMENT AND CONSULTING DIVISIONS • TECHNICAL SERVICES • CONTENTS APPRAISAL • STORM AND CATASTROPHE BENEFITS • REDUCED CLAIM AND PROJECT TIMELINES • EFFECTIVE EXPENSE AND COST CONTROL • PRECISE VALUATION OF DAMAGES
2017 © All rights reserved. Specialized Property Evaluation Control Services Limited
specs.ca 888-737-7327
April 2017 Canadian Underwriter
49
New modelling shows seismic risk in the Vancouver Basin is greater than previously believed. “What jumps out is there is a stark difference between the City of Vancouver, which shows losses are going down, and the Vancouver Basin, which shows losses are going up.” end up having to turn off the system, so to speak, or there would be a voltage collapse,” he reported. If a geomagnetic disturbance causes damage to transformers, “the main liability to insurance comes from the fact that manufacturers cannot produce,” Grollimund said.
WIND FED MASSIVE BLAZE Weather and cross-over conditions before and during the Horse River Fire in Alberta last May made it clear that dousing the blaze was unlikely, Darby Allen, former regional fire chief for the Regional Municipality of Wood Buffalo, suggested during C4 2017. “Certainly in a fire of this magnitude ended up being, we weren’t going to put that out,” Darby said during his keynote address at the conference. Noting that spring “was very, very dry, low-humidity conditions, extremely hot,” there was also cross-over conditions, “when the relative humidity is lower, generally much lower, than the actual temperature,” he said. “We had cross-over conditions four days out of the first seven,” he said of the so-called Fort McMurray wildfire. “It just means that when that thing gets going, nothing, naturally, is going to stop it,” Darby said. “There is no humidity, the wind will come, it (wildfire) will get oxygenated and it will start ripping around there at an incredible rate.” A few days into the fire, there were maps showing some spotting of fire on the other side of the river. At a distance of approximately 1,200 feet or about 365 50 Canadian Underwriter April 2017
metres, “the largest jump before that that I was aware of was about 240 metres, so we were pretty confident it wouldn’t do that,” Darby relayed. But it did end up jumping the river and that was combined with a change in wind direction. The wind had been going west to east and then changed drastically. “That wasn’t in the prediction,” he said. Asked if there are things homeowners could have done to make their properties more resistant, Darby said that he is not so sure. Adopting certain materials for siding and shingle types, for example, “in general circumstances, your home will outlast something that has got cedar siding and regular shingles,” he said. However, that likely would not have been the case in this fire, Darby added. “Having said that, if you live in a community such as Fort McMurray and you’re plunked in the middle of the boreal forest and you’re thinking about building a property, I think it’s wise to think about that investment (preventive measures),” he emphasized.
HIGHER QUAKE RISK IN BASIN THAN PREVIOUSLY THOUGHT New modelling seems to indicate seismic risk in the so-called Vancouver Basin is greater than previously thought, Justin Moresco, manager of model product management for Risk Management Solutions, said during a panel discussion at C4 2017. The Vancouver Basin — the region south of Vancouver straddling the Fraser
River Delta, which sits on deep layers of soft soils and includes the City of Richmond — has less exposure than Vancouver, Moresco noted during the session, CAT Models: Model & Hazard Uncertainty. That said, “the seismic risk there is greater both in a relative sense that is averaging a loss per unit of exposure and also in an absolute sense that is its contribution to the average annual loss of all British Columbia,” he explained. What jumps out is there is a stark difference between the City of Vancouver, which shows losses are going down, and the Vancouver Basin, which shows losses are going up, Moresco reported, citing findings of his company’s upcoming 2017 model for Canadian quake. “The 2017 model is estimating that average annual loss in the City of Vancouver is now going down by more than 10%. The total insured value as a percentage of British Columbia is about 13% and its average annual loss as a percentage of British Columbia is about 15%,” he reported. However, “in the Vancouver Basin, our 2017 model is saying that losses are going up by more than 10%. The total insured value as a percentage of B.C. is about 9% and average annual losses as a percentage of B.C. is about 18%,” he told session attendees. Why higher risk in the basin matters, Moresco pointed out, is that Richmond and other cities within the area “have been growing rapidly in the last 10 years and so if this trend continues, it means that the seismic risk is only going to intensify.”
CANCER CHANGES EVERYTHING SO CAN YOU. in partnership with
Join WICC Ontario at Relay For Life WHAT IT’S ABOUT:
WHAT YOU DO:
What: Canadian Cancer Society’s Relay For Life – the largest WICC fundraising event in Ontario.
Build your team: Friends, family, colleagues, clients. Teams are often 10 people, but more or less is great too.
Why: To celebrate cancer survivors, commemorate those we’ve lost, and raise money for life-saving research.
Register: visit www.relayforlife.ca
Where: Downsview Park, Toronto When: Friday June 16, 2017 6:00pm – midnight. Who: You – be a captain and sign up your team right away. It’s easy – we’ll show you how.
Choose your WICC Relay For Life event, either Downsview Park or any other Relay event around the province. Pick WICC! Select WICC under “Team Company” to make sure your funds count for the industry campaign.
Questions? Go to www.wicc.ca Design compliments of
MOVES & VIEWS
UPCOMING EVENTS: FOR A COMPLETE LIST VISIT
www.canadianunderwriter.ca
AND CLICK ‘MY EVENTS CALENDAR’ ON THE HOME PAGE
1
Kathy Boychuk [1a] is now president and chief executive officer of Peace Hills Insurance, the company’s Board of Directors reports. Boychuk replaces Diane Brickner [1b], who began working at Peace Hills Insurance when the company was formed in 1982 and became president in 1990. Brickner was initially succeeded, in January 2015, by Gene Paulsen, who had been vice president of underwriting and marketing. Paulsen retired last October and Brickner became interim chief executive officer. As former chief financial officer, Boychuk is replaced by Ajay Tellis, who held the same post at CAA Insurance Company.
2
Toronto-based Kingsway Financial has announced that executive vice president John Fitzgerald [2] will become president and chief operating officer of the company. Fitzgerald was hired as executive vice president of Kingsway Financial and appointed to the company’s Board of Directors last year. His past positions include a managing member of Argo Management Group LLC and chief executive officer of Hunter MFG LLP.
3
American International Group Inc. has reported that Peter Hancock [3],
52 Canadian Underwriter April 2017
1a
1b
2
7
8a
8b
chief executive officer of the company, is resigning. Hancock will remain as chief executive officer until a successor has been named. He was appointed to the position in September 2014 after joining the insurer in 2010.
grow offerings for commercial group insurance, while Steel and Ferraro Insurance offers expertise in farm insurance.
4
Ontario-based Vision Insurance Brokers Ltd. and Steele and Ferraro Insurance Brokers Limited have joined BrokerLink, a subsidiary of Intact Financial Corporation. Terms of the transactions, finalized on March 1, were not disclosed, but staff of the two brokerages will also be joining BrokerLink. BrokerLink envisions Vision Insurance Brokers helping to
5
Tia Levan [5] has been promoted to the position of executive vice president at AssessMed Inc. Levan “will continue to partner with our marketing team to develop and implement brand positioning strategies that lead to growth, as well as maintain responsibility for accreditation programs, day-to-day finance, corporate social responsibility programs and human resources for AssessMed,” reports the company, which provides medicolegal evaluations and file reviews to auto insurers and other clients.
6
Blue Schindler [6] is now senior vice president of SCM International Programs Group LP (IPG), which provides third-party administration (TPA) and claims management services. In her new role, Schindler “will continue to oversee IPG’s operations and take on the additional duties of supporting future integration activities in the United States’ TPA space as SCM builds its presence outside of Canada,” the company notes.
7
Accident Support Services International Ltd. (ASSI) has named Rick Yates [7] as its new vice president, Canadian Insurance
MOVES&&VIEWS VIEWS MOVES
of Calgary; Gordon Adams; Robert Cartwright, Jr.; Al Gorski; Leslie Lamb; John Phelps; Michael Phillipus; Frederick Savage; and Lori Seidenberg.
3 3
9 positions have included general 9adjuster, branch manager, vice president of operations and Lloyd’sYates Division Programs. willleader. assume responsibility for sales, marketing and business Macdonald development withChisholm ASSI’s Traskinsurance Insurance (MCT) Canadian carrier announced in early program. The former presiJanuary thatOntario it will join propdent of the chapter erty and casualty brokerage of the Canadian Insurance BrokerLink. The terms of the Claims Managers Association transaction were develop not dis- and has also helped closed, a statement launch notes the first Auto Glass from BrokerLink. claims call centreBrokerLink in Canada, companies, subsidiaries of is a former vice president Intact Financial Corp., of claims for TD Insurance, include offices and has84 owned andserving operated clients in Atlantic Canada, CARSTAR Collision franchise Alberta andASSI Ontario. Dating locations. operates 32 back morereporting than 60 centres years, in collision MCT hasand more than in 110 inOntario Alberta, partnersurance in 18 ship withprofessionals 52 police services. offices. Michael Brien, who has led TIPI MCTInsurance over the last 12 years, joins BrokerLink as Partners has joined head ofwith its Atlantic operations. IMI Brokerage
6
8
5 5
10
7
Carolyn Snow [7] will lead RIMS as president for to thecreate 2014an term, Company which took effect January Indigenous-owned agency. 1. Snow, who has and beenIMI on the TIPI Insurance RIMS Board Directors Brokerage willofhave more for seven25 years, is currently dithan employees working rector of risk management for from Ontario to British Humana Inc. She previously Columbia, the two firms served and as RIMS’s treasurer, report, all employees secretary director of will remainand with the new external affairs. company. “Both The TIPIRIMS and board 2014 also includes IMI willforcontinue to operate vice president under their ownRichard brands for Roberts, Jr.; treasurer Julie the foreseeable future,” they Pemberton; corporate secrenote. “This is the path for tary Nowell director First NationsSeaman, to take control of global risk management for over their own futures,” PotashJoan Corporation of states Barmby-Halcro Saskatchewan Inc.; Gloria [8a], IMI Brokerage’s founder Brosius; Steve“Our Pottle, director and president. customers of risk management services are Indigenous people, their at York University; Jennifer governments and businesses,” Santiago; Janet Stein, direcadds Nathan Ballantyne [8b], tor of risk management chief executive officer ofand insurance at thePartners. University TIPI Insurance
10
8
As of January 8, Toronto insurance broker Jones DesLauriers Insurance Management Inc. 6 (JDIMI) had acquired Whitley Insurance and Financial Services. Whitley Insurance has offices in Belleville, Ontario and the nearby communities of Trenton, Deseronto and Stirling. “The acquisition is expected to build a solid presence for JDIMI in Eastern Ontario and position the firm to better service their clients, 11 with strengthened commercial and personal insurance offerings in theSterling region and Andrea [9] a new financial services divihas been appointed sion,” vice notespresident a statement of from JDIMI. and President and CEO claims risk management Shawn will lead the at EagleDeSantis Underwriting Group teams from both companies. Inc. Sterling “brings over Loris Clarke [8] has been 20 years of experience in named successor to Paul maritime, transportation Whitley, president ofreports Whitley and insurance law,” Insurance, who will remain the independent managing during The a transition period. agent. former partner
9
with Montreal law firm Robinson Sheppard Shapiro Ken Rayner [9] has has experience in subrogajoined Anderson tion, contract and risk McTague & Associates management, which “will be as its director aLtd. tremendous assetoftobusiboth ness development, Central brokers and clients.” Region. “Ken brings a wealth of experience to our comCommercial pany, having held various specialty insurer senior management Ironshorepositions Inc. withwelcomed insurers and other MGAs,” has Andrea
9
10
says Chuck McTague, president of Anderson McTague & Associates, a familyowned MGA based in its New Tsoulogiannis [10] to Brunswick. Inas January, AnToronto team assistant derson McTague & Associates vice president and announced specialist. it was expanding, production The adding an office in Toronto appointment is part of an to service theofbrokers of Ontario expansion Ironshore’s and Manitoba. Rayner’s mergers and acquisitions appointment group, formedconfirms in 2016.the company’s “commitment to the Ontario/Manitoba marketRobyn Young place, and [11], to theofbuilding Calgary-of a local support team to assist based Lundgren & brokers with their surplus Young Insurance Ltd., is now lines difficult to place on theand Board of Directors business,” McTague adds. of the Centre for Study of
11
Insurance Operations. Young is co-owner of Lundgren The Guarantee & Young Insurance Ltd. Company and a past president ofof America the InsuranceNorth Brokers has announced that Tara Association of Alberta. Wishart [10] became vice president ofBoston-based claims for the insurer’s Toronto branch DrivSafe has on December 2, 2013. Having launched its 21 years of experience in The mobile app, for Apple and Guarantee’s claims Android devices, in Canada. department, Wishart be DrivSafe reports that will its app, responsible for the operations which is free for personal of the Branch Claims. use forToronto all drivers, evaluates She firstbehaviour joined The Guarandriving based on tee in 1995 as an adjuster distance travelled, speed, and has heldgeographic roles of increastime of day, ing seniority with the comfootprint, distractions while pany, including, most driving and other factors. recently, claimsthe manager The app learns user’s for specialty lines. Wishart driving habits for seven is a member both the Surety days and of then compares the Association driving of Canada and individual’s behaviour theothers Canadian Association to and provides a of Women in Construction. personalized report card.
10
12
Follow @CdnUnderwriter on http://twitter.com/CdnUnderwriter
April 2017 Canadian Underwriter February 2014 Canadian Underwriter
53 57
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
Cocktails started and a 123-proof Aberlour A’bunadh Batch 58 whisky finished the Scotch Nosing dinner of the Honourable Order of the Blue Goose, International, Ontario Pond at the Ritz-Carlton Toronto on March 23. Singlemalt master Edward Patrick also guided the 150-plus guests through the tasting of a Tullibardine 500 Sherry Finish, a Glenmorangie Quinta Ruban, and a Glenlivet Nadurra finished in Oloroso Sherry casks. The annual fundraiser took in close to $5,000 for Cam’s Kids, a charity in support of children and youth who suffer from extreme anxiety.
54 Canadian Underwriter April 2017
Page 55 Blue Goose
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
continued on page 57... April 2017 Canadian Underwriter
55
Recent Insurance Press Releases featured on insPRESS.ca Vericlaim Canada celebrates new office in British Columbia
The Guarantee announces launch of H2O+ water protection
March 24, 2017 — by Sedgwick
March 10, 2017 — by The Guarantee
Did you know that APRIL Canada insures commercial marine risks?
Organizational changes at SPECS
March 22, 2017 — by APRIL Canada
Blue Goose Ontario’s Annual Scotch Nosing – Thursday, March 23, 2017
FirstOnSite Restoration strengthens leadership team in Alberta, Saskatchewan and Manitoba March 20, 2017 — by FirstOnSite Restoration Limited
Data Breach – we are all at risk!! March 20, 2017 — by APRIL Canada
CSIO appoints Tracy Krunic of Intact Insurance to Board of Directors March 20, 2017 — by CSIO (Centre for Study of Insurance Operations)
Lethbridge Collision Reporting Centre relocates March 16, 2017 — by Accident Support Services
Lisa Bodemann joins Sedgwick leadership in Canada March 16, 2017 — by Sedgwick
Crawford & Company (Canada) Inc. assisting with claims following severe windstorm damage in Newfoundland March 15, 2017 — by Crawford & Company (Canada) Inc.
CSIO 2017 members’ meeting & reception to feature keynote by Facebook Canada’s head of financial services March 15, 2017 — by CSIO (Centre for Study of Insurance Operations)
Blue Schindler named senior vice president of IPG March 14, 2017 — by SCM Insurance Services
New CEO and CFO for Peace Hills Insurance March 13, 2017 — by Peace Hills Insurance
Lynn Hemingway appointed vice president, operations Accident Support Services International Ltd. March 10, 2017 — by Accident Support Services International Ltd.
March 10, 2017 — by SPECS Limited
March 9, 2017 — by DKI Canada
CSIO appoints Robyn Young of Lundgren & Young Insurance to Board of Directors March 9, 2017 — by CSIO (Centre for Study of Insurance Operations)
STRONE requalifies as a Best Managed Gold Standard Company in Canada March 9, 2017 — by STRONE-Itech
DKI Canada grows with the addition of CDN Restoration in Etobicoke, ON. March 8, 2017 — by DKI Canada
Steve McDonald of St. Albert wins 2017 Toyota Tacoma in Select Sweepstakes March 8, 2017 — by Economical Insurance
Grant Rerie’s 20th Anniversary with Kernaghan Adjusters March 8, 2017 — by Kernaghan Adjusters
Josie MacKinnon joins Sedgwick leadership in Canada March 7, 2017 — by Sedgwick
Stefanie McKay appointed chief underwriting officer at ENCON March 6, 2017 — by ENCON Group Inc.
Rick Yates joins Accident Support Services International Ltd. as vice president of Canadian insurance programs March 6, 2017 — by Accident Support Services International Ltd.
GUARANTEE GOLD is awarded a podium finish at the Insurance Canada Technology Awards
Eagle Underwriting Group Inc. is pleased to announce the addition of Andrea J. Sterling
March 3, 2017 — by GUARANTEE GOLD
March 10, 2017 — by Eagle Underwriting
March 2, 2017 — by Economical Insurance
Economical commits $110,500 to the fight against cancer
La Garantie annonce le lancement de la protection H2O+
Economical and Petline hold National Cupcake Day fundraisers for local animal shelters
March 10, 2017 — by La Garantie
March 1, 2017 — by Economical Insurance
To Read the Full Story for Each Press Release, visit insPRESS.ca
GALLERY ...continued from page 55
See all photos from this event at www.canadianunderwriter.ca/gallery
What opens a closed door? An appeal takes a refined skill set. Identifying the right issues. Persuasive factums. And a team of consummate advocates devoted to knowing the law and convincing the court. In the right hands, closed doors can be opened with fresh thinking. Lerners Appeals Group. The end is the point.
London Peter Kryworuk, Andrew Murray, Carolyn Brandow, Yola Ventresca Toronto Earl A. Cherniak Q.C., William Pepall, Kirk Boggs, Mark Freiman, Angus McKinnon, Bryan Smith, Brian Radnoff, Cynthia Kuehl, Jason Squire, Stuart Zacharias Sign up for our Netletter at lerners.ca/appealsnetletter.
Lerners LLP | Lerners.ca
April 2017 Canadian Underwriter
57
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
It might have come a day early, but that did not put a damper on the 8th annual St. Patrick’s Day Charity Social hosted by SCM Insurance Services on March 16 at Toronto pub Grace O’Malley’s. Local Irish folk duo Lennan Delaney and Jim Maxwell played an appropriate soundtrack for the evening’s festivities, which raised $6,000 for the Juvenile Diabetes Foundation and PeaceBuilders.
58 Canadian Underwriter April 2017
Putting the pieces together.
Events and Seminars Calendar CIP Society Events and Seminars give you the opportunity to learn, to network, to catch up on industry developments and to advance your professional and career development. CIP Society Seminars
CIP Society Events
Vancouver—Win-Win Negotiation Workshop ........................................... April 27 Red Deer—Introduction to Condo Insurance .................................................May 2 Red Deer—Condominium Insurance Claims ..................................................May 2 Toronto—Maximizing Your Underwriting Potential......................................May 9 Edmonton—Client and Insurer Disaster Protection .......................................May 9 Edmonton—Advanced Business Interruption..............................................May 10 Victoria—From Contract to Building (Commercial).....................................May 10 Medicine Hat—Introduction to Condo Insurance ........................................May 30 Medicine Hat—Condominium Insurance Claims .........................................May 30
Victoria—Peers & Beers............................................................................... April 27 Hamilton—Fireside Chat ................................................................................May 3 Toronto—Celebrate, Refresh & Relax .............................................................May 9 Ottawa—Wine & Cheese & Learn................................................................ May 11 Toronto—At the Forefront: Adapting to Changing Customers.................... May 17 Calgary—Battle of the Insurance Bands ........................................................June 1 Toronto—Fellows’ Golf Tournament ..............................................................June 5 Moncton—Charity Softball Tournament .....................................................June 16 Edmonton—Annual Golf Fun Day .................................................................July 17
Looking for insight and research on the latest trends in the p&c industry? Visit our free online library of Trends Papers at www.insuranceinstitute.ca/cipsociety/information-services. Looking for information to advance your career? Visit: www.insuranceinstitute.ca/mycareer.
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
Princess Margaret Cancer Centre scientist Dr. Vuc Stambolic was among the presenters at the Women in Insurance Cancer Crusade’s National Sponsor Luncheon, which educates WICC supporters on the organization’s work. Stambolic, whose research has received Canadian Cancer Society funding, gave an overview of his groundbreaking research into genedriven cancer treatment. The event was held March 6 at the downtown Toronto offices of Chubb.
Sunny skies and warm temperatures smiled on skiers at Alpine Ski Club in Collingwood, Ont., where McCague Borlack LLP and Canadian Litigation Counsel held their annual Winterfest Ski Day for clients and friends on February 23.
60 Canadian Underwriter April 2017
v4Quarter Century AD March 2014
2/25/14
4:12 PM
Page
Announcing Announcing thethe Announcing theMay 20th, 2015Annou WEDnesday, Announcing the
QUARTER CENTURY CLUB QUARTER CENTURY CLUB Albany ClubQUARTER QUARTER The CENTURY CLUB QUARTER CENTURY CLUB CE 56th Annual Reception 56th Annual Reception 91 King Street East 58 Annual Reception th
56th Annual Reception
Toronto, ON, M5C 1G3
5
Wednesday, May 24th, 2017 Reception – 12:00 p.m. th th WEDnesday, May 20 , 2015 WEDnesday, May 20 , 2015 The Albany Club Cost -King $75.00 WEDnesday, May 20th, 2015 91 Street East Albany Club TheThe Albany Club Toronto, ON, M5CClub 1G3 91 King Street East The Albany 91 King Street East 56th Annual Toronto, ON, 91 King Street East Toronto, ON, M5C 1G3 1G3 Reception –M5C 12:00 p.m. Reception Committee: ON, M5C 1G3 CostToronto, - -$75.00 John Cherrie 416-737-7525 Reception – 12:00 Reception – 12:00 p.m.p.m. Stewart Ponton - 905-740-1100 th -Reception – 12:00 p.m. $75.00 Cost -58$75.00 FordCost Blow -Annual 416-457-7072 Reception Committee: Cost - $75.00
Featuring…
‘The Roasting of Featuring… Featuring… Paul Handcock Featuring… Featuring…
56th Annual John Cherrie - 416-737-7525 56th Annual Send Contact Info and Cheque Reception Committee: John Sharoun -Annual 416-957-5001 56th Reception Committee: John Cherrie John Cherrie 416-737-7525 Payable to- -416-737-7525 (or VISA, provide exp. date): Ford- Blow 416-457-7072 Reception Committee: Stewart Ponton - 905-740-1100 Stewart Ponton John - 905-740-1100 Cherrie - 416-737-7525 Stewart Ponton Ford- Blow - 416-457-7072 Ford Blow 416-457-7072 Stewart Ponton - 905-740-1100 Send Contact Info and Cheque Quarter Century Club Ford Blow - 416-457-7072 Send Contact and Cheque Payable to (orInfo VISA, provide exp. date): Granite Claims Solutions Send Contact Info and Cheque to (or VISA, provide date): John 5915Payable Airport Road, Suite 200 Send Contact Info and exp. Cheque Payable to Sharoun (or VISA, provide exp. date): ‘The Roasting of Stewart Ponton Quarter Century Club Mississauga, ON, L4V 1T1 Stewart Ponton Payable to (or VISA, provide exp. date): Quarter Century Quarter Century Club Club c/o905-740-1100 Crawford & Company (Canada) Ltd. Stewart Ponton Phone: Granite Claims Solutions Paul Handcock Granite Claims Solutions Quarter Club 123Airport Front St, Century Suite 300 Fax: 905-671-2088 5915 Road, Suite 200 5915 Airport Road, SuiteClaims 200 Solutions ‘The Roasting of Granite Toronto M5J 2M2 Mississauga, ON, L4V 1T1 Email: stewart.ponton@graniteclaims.com Mississauga, ON, L4VAirport 1T1 Road, 5915 Suite 200Paul Handcock Phone: 905-740-1100 Email:Mississauga, John.Sharoun@crawco.ca Phone: 905-740-1100 Thank you for the sup ON, L4V 1T1 Fax: 905-671-2088 Phone: 416-957-5001 Fax: 905-671-2088 Phone: 905-740-1100
Featuring… Featuring…
Roasting ‘The Roasting ‘The‘The Roasting of ofof Tim Guernsey’ ‘The Roasting of Handcock PaulPaul Handcock Thank you for the support Email: of these generous event sponsors: Email: stewart.ponton@graniteclaims.com stewart.ponton@graniteclaims.com Fax: 905-671-2088 Paul Handcock
Thank you for the support
Email: stewart.ponton@graniteclaims.com
Thank you for the support of these generous event sponsors: Thank Thankyou youfor forthe thesupport supportof ofthese thesegenerous generousevent eventsponsors: sponsors: Thank you for the support of these generous event sponsors:
Once again this year, the Quarter Century
Institute Scholarship Once againInsurance this year, the Quarter Ce Insurance Institute Scholar Design and Space Compli
Once
Once this again thisthe year, the Quarter Century Club to plans to continue to amake a donation Once again year, Quarter Century Club plans continue to make donation to the to the again thisInsurance year, theagain Quarter Century Club plans to continue to make a donation to the Insurance Institute Scholarship Fund, in memory of our claims colleagues Scholarship Fund, inCentury memory of our claims colleagues OnceInstitute year, Quarter Club to continue to make atodonation to the Design and Space C Once again thisthis year, The the Quarter Century Club plans toplans continue to make donations Insurance Institute Scholarship Fund, inof:memory of our of claims colleagues Insurance Institute Scholarship Fund, inScholarship memory our claims colleagues DesignCharities and Space& Compliments Children’s the Insurance Institute Fund. Design Designand andSpace SpaceCompliments Complimentsof: of:
Design and Space Design and Space Compliments of: Compliments of:
Page 62 Vancouver Brokers & Waterloo Curlers
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
Global economic growth is back, insurtech investment is rising fast, and Canadian insurers underappreciate earthquake risk: those were some of the key messages delivered at Swiss Re’s annual Canadian Insurance Outlook in Toronto on April 4. Presenters included Swiss Re Reinsurance CEO Moses Ojeisekhoba, Swiss Re Canada President and CEO Veronica Scotti, and David McGown, the Insurance Bureau of Canada’s SVP of Strategic Initiatives. More than 125 senior industry members attended the breakfast, held in the historic Grand Banking Hall of Toronto’s One King West.
62 Canadian Underwriter April 2017
COMPREHENSIVE COVERAGE IS OUR MIDDLE NAME. Only Burns & Wilcox has the depth and breadth of experience to deliver the right solutions right away.
burnsandwilcox.ca
Commercial | Professional | Personal | Cross Border | Binding | Risk Management Services
40938 BURNS Canada Middle Name Ads Overview Resize.indd 1
6/24/16 3:36 PM
WATER DEFENCE COVERAGE An extra layer of protection for new and existing insurance policies. Wawanesa’s Water Defence Coverage combines our Sewer Backup Coverage and new Overland Water Coverage into one comprehensive package, providing our policyholders with full peace of mind.
DON’T BE DEFENCELESS. Contact your Wawanesa Business Development representative today to learn more. wawanesa.com/water