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A A BUSINESS BUSINESS INFORMATION INFORMATION GROUP GROUP PUBLICATION PUBLICATION Publications Publications Mail Mail Sales Sales Agreement Agreement #40069240 #40069240

February 2008

Change isn’t always easy. You know that moving your business online is inevitable to stay competitive. But training, investment and new workflows probably feel quite daunting. We know that, and we’re here to help. We’re making improvements to our broker portal to make your life easier. And by thinking about personal lines differently, we want to empower you to make decisions quickly and say ‘yes’ more often to your customers. Let’s make the change together. Speak to your local Aviva team or visit

CU portal ad final help buttons.indd 1

1/28/2008 5:44:19 PM



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Cover Story 10 Web 2.0



18 Profile: NOBEL LAUREATE It’s not every day you wake up to find yourself the winner of a Nobel Peace Prize, but that’s exactly what happened to ICLR executive director Paul Kovacs, who shared the prize along with the other members of the Intergovernmental Panel on Climate Change. BY VANESSA MARIGA




While Canada’s insurance industry debates legacy PUBLISHED system conversion strategies and broker/carrier data exchange methods, the consumers’ technological world has advanced to the point of using interactive “Web 2.0” technologies, enabling podcasting, blogging, RSS news feeds, YouTube video feeds, etc. Should the insurance industry be following suit?

EVOLUTION — Commercial brokers’ data exchange with carriers is about to reach the next level, featuring both uploading and downloading capabilities. BY KEVIN CAMPBELL


INTERNET CONNECTION — Online quoting is now a reality; the next step is for brokers to start generating contacts through online business. BY MAXIME POULIN

Water damage claims have supplanted fire claims as the most frequently occurring type of homeowner policy loss. At the same time, some in the insurance community are advocating for insuring overland flood perils, which currently aren’t covered in Canada.

STORMY 2008 FORECAST – Insurance carriers must look at ways to prevent water damage claims from raining down around them.




48 ADJUSTERS AND HCAI – Independent adjusters

bridged the gap between brokers and carriers, but has the new technology opened a divide between brokers and consumers?

want HCAI to give them the same kind of single sign-on access that company adjusters have to the new electronic auto claims system.



DO THE RIGHT THING — Keal Technology and Applied Systems have teamed up to combine core technologies, eschewing competitive logic for the greater good of the industry.


52 SOUPED-UP MODEL – IBC has launched its new



UNDERLYING ASSUMPTIONS — Underwriting does not equate to policy administration. So why do people assume tech systems supporting underwriting activity are the same as those that support policy administration?


54 DETAILS, DETAILS – Underwriters can obtain far



38 STANDARDS RULE! – They’re not sexy, but everyone


24 TECHNOLOGY TOOLS – Web portal technology has

wants them: Standards are transforming the way brokers exchange data with their insurance company suppliers. BY STEVE KAUKINEN MEMBER AUDIT BUREAU OF CIRCULATION

SUBSCRIPTION RATES: 2006 CANADA 1 Year $34.95 + $2.45 GST = $37.40 2 Years $48.95 + $3.02 GST = $46.11 3 Years $62.95 + $4.41 GST = $67.36 Single Copies: $7.50 + .53 GST = $8.03 Annual Statistical Issue (included with above subscription) or separately: $37.00 + 2.59 GST = $39.59 ELSEWHERE 1 Year $42.00 2 Years $68.00 3 Years $95.00

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Automobile Statistical Plan (ASP) data collection and processing system, having transformed its IT infrastructure in the process.

greater detail for their risk analyses by using a fire underwriting survey (FUS) in conjunction with geographic information systems (GIS).

4 Editorial 6 Market Watch 61 Moves & Views Canadian Underwriter is published thirteen times yearly (monthly + the Annual Statistical Issue) by Business Information Group, a division of BIG Magazines LP, a leading Canadian information company with interests in daily and community newspapers and business-to-business information services. Business Information Group is located at 12 Concorde Place Suite 800, North York, ON, M3C 4J2. Phone: (416) 442-5600. All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent. We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs. ©Published monthly as a source of news, technical information and comment, and as a link between all segments of the insurance industry including brokers, agents, insurance and reinsurance companies, adjusters, risk managers and consultants. Privacy Notice From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374 Fax: 416-442-2191 E-mail: Mail to: Privacy Officer, 12 Concorde Place., Suite 800, North York, ON, M3C 4J2



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Leap Frog hen the CSIO Portal closed shop in late 2005, independent insurance brokers in Canada were left wondering how they would communicate in the future with multiple insurers through their broker management systems. To a certain degree, their professional lives were — and still are — riding on the answer to this question. The CSIO Portal may have disappeared, but the brokers’ need for a single-entry, multiple-carrier interface (SEMCI)-style solution did not. So if the CSIO’s Web portal project wasn’t going to provide the solution, what was? Who was going to produce this magic solution and how would they do it? At this point, two trends in technology have presented themselves. First, at the same time it abandoned the Portal, CSIO said it would start to focus on establishing standards for data exchange between brokers and carriers. Its announcement had the same impact as telling brokers their professional fate was being placed in the hands of Clark Kent instead of Superman. Certainly the star power of standards paled in significance to a potentially much-cooler, marquee tech solution that might solve the brokers’ communication problems with carriers, thus saving the day. Enter the proprietary tech solutions offered by technology vendors. After the Portal collapsed, it seemed as though the field had opened up completely for one or more companies to come up with the very type of technology for which brokers and insurers were looking — something that would allow brokers to communicate information from their broker management systems (BMS) to multiple insurers, each of which had their own proprietary data management solutions. Just over two years later now, in 2008, it is interesting to see a leap-frogging trend emerging in the broker technology market. Proprietary solutions evolve, standards then become widespread, after which proprietary solutions tinker with and/or fill in any remaining gaps in the standards, and by then the standards are further refined and on it goes… As expected, technology vendors are starting to fill the void left by the portal’s absence; they are now offering proprietary solutions to help independent brokers communicate data and information to their various insurance suppliers. They are doing this through the creation of various “translator”-style technologies. Essentially, a brokerage sends data through its BMS not directly to an insurer, but to a translator program established by a technology vendor. Once there, the translator solution



David Gambrill Editor • February 2008


converts the broker’s data information into something recognizable by each and every one of the insurer’s separate data management systems. The data, in its translated format, is sent to each of the insurers. These types of ‘stop-gap,’ proprietary technology solutions are now out in full force; temporarily at least, they appear to be a solution of choice since the portal’s demise. But if proprietary solutions have a weakness, it resides in the question of who owns and uses them. Brokers want to own the technologies they use to communicate with the carriers. Carriers supported the CSIO Web Portal solution probably in part because they would have owned the technology. And tech vendors want to own the technology that connects to their broker management. [The recent Keal-Applied Systems alliance is an interesting case of two vendors setting aside their proprietary claims over standards and engaging their competitive juices instead on broker management systems. But in a competitive market, one cannot assume such acts of altruism.] This is where the emergence of XML standards comes in. At the same time vendors have been working on translator programs, CSIO has published its updated versions of XML standards for electronic forms in both personal and commercial lines. And one can easily see that as a greater percentage of the industry’s insurers adopt the standards, the need for translator programs will disappear as everyone begins using standard XML files. We can easily see standards leap-frogging over proprietary solutions as the primary means for independent brokers to do business with multiple insurers. And in this area, vendors themselves may be on board. For example, at face value, following industry-established standards is far easier than third parties shelling out piles of cash to produce a computer language program that translates across multiple systems. But even as the use of standards becomes more widespread — which is partly reliant on the brokers recognizing their full value and lobbying insurers to adopt them — one has to wonder whether the temptation in the future to change the standards or “customize” them may limit or trump the beneficial effects of their universal use in the industry. If that’s the case, we could easily see a new interregnum (perhaps a decade or so away) in which third-party vendors emerge once again to fill in gaps that arise in the absence of a universal standard. Stay tuned to see which way the worm will turn next in the world of broker technology.





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Taking on the responsibility of risk is what we do at ACE. With our expert underwriting, superior claims handling, and local market experience, you can focus on the possibilities, not the liabilities, to make progress in your business. For more on ACE Canada, visit P R O P E R T Y & C A S U A LT Y

A C C I D E N T & H E A LT H




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Canadian Market IBC calls for governments to review and update infrastructure nsurance Bureau of Canada (IBC) is calling on Canadian governments to review critical infrastructure to ensure the country is better able to deal with severe weather events in the future. IBC president and CEO Mark Yakabuski has called on all governments to work together to: • reinforce/improve infrastructure; • strengthen building codes and build in climactic design values; • consider sweeping land use revisions; and • improve disaster management. “Since the 1970s, we have witnessed a 20-fold increase in the cost of claims from extreme weather and geological losses,” Yakabuski said as part of the panel at the Climate Adaptation


I • February 2008


IBC asks Newfoundland to remove taxes on insurance premiums nsurance Bureau of Canada (IBC) has reiterated its long-standing call to the government of Newfoundland and Labrador to remove taxes on insurance premiums. “The people of Newfoundland and Labrador have the highest insurance tax burden in the G8,” Don Forgeron, IBC vice-president, Atlantic region, said in a release. “For every dollar of home, car and business insurance they buy, the provincial government charges them 19.6 cents in tax. This adds up to [Cdn]$80 million annually.” These “unnecessary” taxes are an unfair burden on homeowners and drivers, for whom insurance is a vital product, Forgeron said. “Premium taxes are also an impediment to businesses and not-for-profit organizations. Because these taxes are levied as a percentage of insurance premiums, organizations that face higher risk are also hit with more tax. Sectors most severely affected include not-forprofits, the hospitality industry and exporters.” The IBC has stated its objections to the province’s high level of insurance tax in government submissions for many years. ■


Expert Meeting hosted by the City of Toronto in January 2008. “At the same time, we have greater density in our cities, higher rebuilding costs and more expensive contents.” Yakabuski said Canada has now reached “a critical juncture” and “must deal with this problem head on.” He said too many municipalities are struggling with infrastructure that is well on in years and is in desperate need of upgrading. “The unfortunate reality is that infrastructure failure played a major role in every major natural disaster in Canada in recent memory, including the Ice Storm (January 1998), the Saguenay Flood (1996) and the Greater Toronto Area rainstorm (August 2005),” he said. ■

MPI reports 2007 nine-month profit of Cdn$80.4 million anitoba Public Insurance (MPI) has reported a profit of Cdn$80.4 million for the nine months ending Nov. 30, 2007, marking an increase over the Cdn$59.1 million reported during the same period in 2006. MPI later this spring intends to return Cdn$63 million to policyholders in the form of a one-time rebate equalling 10% of the Basic Autopac premiums they paid for the previous insurance year. “Manitobans continue to purchase newer vehicles, which is ultimately reflected in our bottom line” despite rising claims costs, said Don Palmer, vice-president of finance and CFO.


The claims costs for the nine months ended Nov. 30, 2007 increased by Cdn$26 million (to Cdn$572.6 million) over the same period in 2006, Palmer explained. He pointed to the Dauphin-area hailstorm in August, which resulted in roughly 14,000 claims at an estimated value of Cdn$50 million, as well as the fact that physical damage claims incurred increased by Cdn$15.5 million. “Manitoba Public Insurance holds reinsurance coverage, which will limit our costs from this incident to Cdn$10 million,” Palmer said of the hailstorm. Bodily injury claims costs rose by Cdn$5.3 million over the same nine months of 2006 to Cdn$186.8 million. ■

Regulation CCIR looks into incidental selling of insurance he Canadian Council of Insurance Regulators (CCIR) is consulting the insurance industry on the incidental selling of insurance (ISI). “As a result of potential licensing and consumer issues stemming from the sale of insurance incidental to some other core business activity, the [CCIR] created the ISI working group,” the CCIR says in a letter sent to stakeholder organizations dated Dec. 13, 2007. The letter was just recently posted on the regulator’s Web site.


The ISI working group has defined an incidental seller of insurance as being “a person who, in pursuing activities in a field other than insurance, offers, as an accessory, for an insurer, an insurance product which relates solely to goods sold or services offered by the person or secures a client's enrollment in respect of such an insurance product.” The working group is expected to consult the industry and produce a consultation report on the topic sometime “during the winter of 2008.” continued on page 56...

value: n. the full worth of something. Consider the cost of the premium against the coverage and factor in the cost of efforts to make a claim. Chubb Insurance better defines its policies. When you have better defined coverage, you gain better value in insurance.

If you seek value for your clients, Chubb is your recommendation.

Chubb Defines Insurance Chubb Insurance refers to Chubb Insurance Company of Canada. The precise coverage offered is subject to the terms, conditions and exclusions of the policy as issued.



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Cover Story



The Internet’s incarnation as a platform has arrived for many consumer-oriented Web sites ranging from MySpace to YouTube to Second Life. The architecture underlying these collaborative, user-oriented sites and the features they offer are generally called Web 2.0, which refers to a host of technologies such as Ajax, RSS and Software as a Service (SaaS). The big question: does it mean anything to the insurance industry?



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As Canadian insurers continue to look for better ways to work with their own brokers within the limited technological sphere of data management, their policyholders are already turning to Web 2.0 — advanced, interactive Web technology that’s overtaking traditional ways of doing commerce.

By Craig Harris echnology has an unerring knack of making many people feel perpetually two steps behind the pace. Nowhere is this perception more accurate than with Web 2.0 — the “next generation” of Internet technology that emphasizes openness, collaboration and participation from users. Entrenched in many familiar Web sites such as Google, Facebook and Craigslist, Web 2.0 represents a sea change in how the Internet has been transformed from a static, one-way, read-only medium to a dynamic, open and user-based experience. “This ain’t your big sister’s Internet,” notes Dan Tapscott, chief executive of technology and business think tank New Paradigm, and the author of Growing up Digital, in an article for Backbone magazine. “The old Web was about sites, clicks and ‘eyeballs.’ In some ways, it resembled the old broadcast media more than today’s new collaborative Web. As users and computing power multiply and easy-to-use tools proliferate, the Internet is evolving into a global, living networked computer that everyone can program.” Not aware of it? Although popular with high-tech junkies and software programmers, Web 2.0 is not exactly making massive splashes in the insurance industry. There are some examples of insurance companies using bits and pieces of the technology, particularly in the United States, among companies such as Progressive, Nationwide and The Hartford. But it is definitely in the early stages in the Canadian property and casualty industry. Progressive Insurance launched the insurance industry’s first official Web 2.0 site in November 2007, which the company said features “easier navigation, more personalization and customization, easier-to-use video content and more visuals throughout.” Progressive has also signed deals with Ziff Davis Enterprise, an IT media company based in New York, and Lonely Planet Publications to provide increased content. “This is about watching and reacting to trends to keep our site relevant to all users,” says Toby Alfred, general manager of customer acquisition at Progressive. “It moves content from static to interactive. The redesign lets users get more from their visits, share their experiences and have their experience delivered to them in blogs, RSS readers and personal home pages.” In another example of a Web 2.0 insurance approach, Nationwide introduced a viral marketing campaign in October, 2007. It launched the “Have the Talk” Web site encouraging consumers to engage in difficult conversations regarding personal finance and insurance issues. The site features humorous video shorts starring comedian Frank Caliendo, which also have been posted on YouTube. Nationwide has also reached out to bloggers on, a social networking and media Web site. “I think we’re seeing a shift from a transaction-based economy to a dialoguebased economy,” Joe Case, public relations officer at Nationwide told Insurance & Technology magazine. “If you ignore the opportunities that social media and


11 • February 2008



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Cover Story • January 2008


Web 2.0 offer, you ignore an opportunity for real dialogue with the customer base.” John Anthony, director of the property and casualty innovation lab for The Hartford Financial Services Group, told a forum conducted by Insurance & Technology magazine that “insurers are starting to realize the value of social software to enhance open communications. For example, we recently experimented with podcasting to distribute best practices and industry information within our sales organization, and are exploring the use of wikis as platforms to document IT standards and reference architectures.” For all this activity, there are still ruptures and disagreements within the IT world about the exact definition of Web 2.0. Does it represent a distinct set of new technologies, or is it more of a marketing buzzword? Some argue it is, at best, an interpretive model referencing a second generation of Internet-based services that use the Web as a platform, employer-rich user interfaces, involve some level of collaboration and rely heavily on user-contributed data. “You have to be wary of the hype,” says George Semeczko, chief technology officer for Royal & SunAlliance Canada. “People often want to say they are Web 2.0 just to look cutting-edge. You may have flavours of Web 2.0 and you bolt it onto something you have existing. So you have a service that you currently offer on the Internet and you enhance it through Web 2.0.” “There is some fire when it comes to insurance and Web 2.0,” says Donald Light, a senior analyst with research firm Celent, “but there is a lot more smoke.” “Web 2.0 is not a flash in the pan, but it is somewhat of a marketing term,” says David West, research area director, insurance for the consulting firm Tower Group. “Some people will view it based on the nature of the sites that are currently dominating the Web. I think it is more the underlying technology and the architecture that is used that makes the key difference.” The roots of Web 2.0 can be traced back to 2003, when computer guru Tim O’Reilly’s company O’Reilly Media first coined the term. This was followed by the first O’Reilly Media Web 2.0 conference in 2004. According to Wikipedia (itself a Web 2.0 success story), O’Reilly defines it as “the business revolution in the computer industry caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform.” Wikipedia also notes the phrase “Web 2.0” hints at an improved form of the World Wide Web. Technologies such as Weblogs (blogs), social bookmarking, wikis, podcasts, RSS feeds (and other forms of many-to-many publishing), social software, and Web application programming interfaces (APIs) provide enhancements over read-only Web sites. Stephen Fry, who writes a column about technology in the British Guardian newspaper, describes Web 2.0 as “‘an idea in people’s heads rather than a reality. It’s actually an idea that the reciprocity between the user and the provider is what’s emphasized. In other words, genuine interactivity, if you like, simply because people can upload as well as download.’” This emphasis on collaboration and user-generated content

may work well for Web sites like Amazon, which seeks customer reviews of books, or YouTube, which relies exclusively on user postings for its content, but what about insurance companies? Where do the real opportunities exist for insurer-based Web sites? In a report on IT in the insurance industry released in January 2008, Celent asked for the first time about insurer strategies related to Web 2.0. It surveyed insurers on key elements of Web 2.0, including Ajax, wikis, blogging, SaaS, podcasts, RSS, tagging, social networking and mashups. “Overall, insurers are in an assessment and limited deployment mode for Web 2.0 technologies,” Celent concluded. “The most frequent deployments were aimed at better Web site usability (Ajax) and facilitating communication within teams and with external partners (wikis). Large insurers are generally earlier adopters than midsize.” Celent’s Light says the initial opportunities for insurers in Web 2.0 are in improving Web site efficiency through Ajax; not just for external users, but also for employees and third parties that access a company’s intranet. “That is a real problem and a real solution, and we are seeing a fair amount of pickup on it,” Light says. “On the vendor side, they are selling applications to insurance companies with better usability for anyone using a browser. It may just be a claims processing system or policy admin system that in technical terms uses the intranet within the company. However, it is about improving the user interface that many insurance company employees use day in and day out to do their job.” Semeczko calls the use of Ajax “a brilliant way of reconfiguring Web sites” and a little more efficient than the use of traditional technologies. “There are bits and pieces of the technology that are being developed and being pushed further because of Web 2.0. That can be leveraged to extend a Web 1.0 Web site, if you will.” Insurers are also likely to embrace wikis, another element of Web 2.0, in the coming months, according to Light. “We are seeing a certain amount of uptake on the use of wikis,” he says. Wikis allow documents to be written collaboratively, in a simple markup language using a Web browser. “It is basically a way of getting a communication, status and/or project management vehicle in place pretty quickly and easily,” Light says. “The nature of work within insurance companies is that there is a lot of need for ad hoc tools for short-lived teams or single projects.” Internally, insurers will have a greater opportunity to share knowledge and information because of Web 2.0, Semeczko notes. “Web 2.0 is going to be so much quicker than the traditional meet, greet and publish,” he notes. Mashups, referring to applications that combine data from more than one source into a single integrated tool, are another potential benefit of the Web 2.0 environment, according to Semeczko. “Take a simple case,” he says. “Let’s say you want to find preferred body shops; you do a mashup and throw someone to a Google map. I think mashups are just an extension of offering Web services on a Web site.” “You can become a stronger player by building mashups that



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are imaging via barcode and it’s fantastic! We scan all personal lines documents, memos from “ We carriers, and invoices or documents sent from our vendors for tax purposes. Soon we’ll be scanning our commercial lines documents and checks sent back from the bank. Our team members appreciate being able to find documents a lot faster now because they are stored in the right place. Also, we save time using barcoding in conjunction with fax@vantage, Applied’s desktop fax solution, when we transmit a copy of a policy to a lienholder or notary.

” Pierre Plamondon, Partner Assurances Desjardins Plamondon, Baie-Comeau, Québec

Raise the bar. Paperless technology is helping brokerages profit.

Barcoding with TAM Barcoding is an easy-to-use document management tool available only in TAM, the automated broker management system from Applied Systems, Inc. Find out how TAM can help your business increase revenue per employee, reduce overhead expenses and go paperless. Contact Applied Systems Canada at 800-387-2028 or



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Cover Story access data, but also provide some additional functionality to the user,” notes West. “It is in the way you build it, so your mashup is better than the next guy’s. You provide more of what the end user wants.” SaaS, in which, for example, an operator or vendor ‘hosts’ a customer Web site, has some relevance for smaller insurance companies and certain lines of business. “We are also seeing some pickup on SaaS in terms of smaller and mid-sized companies,” notes Light. “They can see business value in terms of lowering their data centre overhead by acquiring SaaS, or because they are at early stages of getting a new policy admin system, but it is only one or two lines in a certain region. Instead of spending millions of dollars or 18 months, they go to an outsourced provider or software provider and use it that way. That is a compelling argument for this scope of project.” The emphasis on SaaS for smaller to mid-sized companies and its role as a temporary solution will likely preclude larger insurers from making widespread use of it, according to Semeczko.“I have to ask myself: ‘Do I want to get some free software off the Internet • February 2008


eracy in the IT environment varies enormously. You have some that are frighteningly canny, and are really up on it, and you have the other group that would rather fax a piece of paper. I have not seen a clamouring demand for it [Web 2.0 capability] as yet, but as the people who use the Internet become more comfortable with the approach, you may see more of it appearing.” Of course there are also potential pitfalls associated with any move towards a Web 2.0 environment. Liability for slander on user-generated Web sites, privacy, confidentiality and data-access issues generally top the list of concerns related to the new collaborative approach to communicating via the Internet. “There are two aspects to insurance companies embracing this stuff — external or internal,” says Semeczko. “You could use many of these features internally, because you are not overly concerned about misuse and you have an acceptable use policy for employees. However, if you were to use an aggregator to provide access to insurance companies for quotes and comments, you have to be careful in how much you are on the hook for potentially slanderous comments about a company or product. That is where traditional companies are going to be a little more cautious in going Insurers might implement bits and down this route, because you are giving pieces of Web 2.0, but some fear the up control to some extent over the conwhole philosophical approach of the tent on the sites.” new platform towards collaboration Insurers might implement bits and and openness may be watered down pieces of Web 2.0, but some fear the by a traditional industry structure. whole philosophical approach of the new platform towards collaboration and openness may be watered down by and start drawing up servers and creating new user IDs?’” he says. a traditional industry structure. “Not really. Instead, I want to leverage what I’ve got and bolt “The insurance industry has been particularly slow to leverage something on to that so, from a management perspective, I don’t collaborative technologies such as blogs, wikis and podcasts in have administration costs going through the roof. I am more the public domain,” notes The Hartford’s Anthony. “While these interested in things like Lotus Notes 8.0, which is targeted to communication tools offer an opportunity to engage our cussocial software, wikis and blogs as part of the Lotus Notes envi- tomers, partners and shareholders in a direct and often more perronment. I can leverage that and use it.” sonalized conversation, they can be perceived as a challenge to One interesting potential application for Web 2.0 is boosting existing corporate communication controls and processes.” transactional capability and functionality for portals. Most insurSemeczko says the biggest challenge with Web 2.0 comes ers now have portal technology for broker transactions, but the down to business value. “I think the biggest challenge is finding host of Web 2.0 technologies might provide more collaborative the benefit for it. Where can you do this that benefits the end cusmodels for accessing data, sharing data and making transactions. tomer, but also has a financial benefit for the company?” he notes. “For brokers, it is up to the carriers and vendors to make their “There has to be a business case. Don’t just do this for the sake of jobs easier,” notes West. “If you are using Web 2.0 applications, trying out some technology.” you are creating interfaces that enable the agent to dump their That business case will likely arrive in the next few years, as data straight off their computers right into your systems. That younger generations come to dominate the workforce and the will draw more business to that carrier and represent a much consumer marketplace, according to West. greater ease of doing business. Those carriers will gain more busi“If you start looking at the changes in Web technology and the ness from brokers.” changes in the population, it’s exciting to think: ‘What’s next?’” For a broker-driven insurance company, portals are “the price West says. “You have ‘millennials’ coming of age, you have ‘Gen Y’ of doing business,” says Light. “But Web 2.0 technology can be in the workforce. These are the people who grew up with comused within the portal, in terms of range of functionality, query puters. The way they interact with companies, the way they buy and transactional capabilities. That is likely where the battle will products is very different from the way Boomers grew up. be in the future.” Insurance companies are challenged by creating products and Semeczko says more can be done with brokers along these services that meet the needs of the younger generation coming lines in the future. “The thing with brokers is, you find their lit- up, but that are also sold in a manner they want.”

CHB 14204 Broker wealth


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wealth: n. valuable possessions or resources. Insurance protects the wealth your clients have accumulated. The more wealth, the greater the need for protection against risk. Clients trust you to recommend the best policy to manage that risk. Chubb Insurance better defines its insurance to reduce risk and protect wealth.

If your client’s wealth is worth protecting, Chubb is your recommendation.

Chubb Defines Insurance Chubb Insurance refers to Chubb Insurance Company of Canada. The precise coverage offered is subject to the terms, conditions and exclusions of the policy as issued.



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Cover Story WEB 2.0 PRIMER A glossary of terms

tion information to real-estate data from Craigslist, thereby creating a new and distinct Web service that was not originally provided by either source.

• Ajax (Asynchronous JavaScript and XML) is a group of interrelated Web development techniques used for creating interactive Web applications. A primary characteristic is the increased responsiveness and interactiveness of Web pages achieved by exchanging small amounts of data with the server “behind the scenes” so that the entire Web page does not have to be reloaded each time the user performs an action.

• A podcast is a collection of digital media files distributed over the Internet using syndication feeds for playback on portable media players and personal computers. The term, like “radio,” can refer either to the content itself or to the method by which it is syndicated; the latter is also termed podcasting.

• A blog is a Web site on which entries are commonly displayed in reverse chronological order. “Blog” can also be used as a verb, meaning to maintain or add content to a blog. Many blogs provide commentary or news on a particular subject; others function as more personal online diaries. A typical blog combines text, images, and links to other blogs, Web pages, and other media related to its topic.

• RSS (“Really Simple Syndication”) is a family of Web feed formats used to publish frequently updated content such as blog entries, news headlines or podcasts. An RSS document — called a “feed,” “Web feed,” or “channel” — contains either a summary of content from an associated Web site or the full text. RSS makes it possible for people to keep up with their favorite Web sites in an automated manner.

• A mashup is a Web application that combines data from more than one source into a single integrated tool. An example is the use of cartographic data from Google Maps to add loca-

When the Problem is Ease of Doing Business the Smart Answer is


• A social network service (or social networking) focuses on the building and verifying of online social



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Cover Story networks for communities of people who share interests and activities, or who are interested in exploring the interests and activities of others, and which necessitates the use of software. Most services are primarily Web-based and provide a collection of various ways for users to interact.

• Social software is normally defined as a range of Web-based software programs. The programs allow users to interact and share data with other users. This computer-mediated communication has become very popular with social sites like MySpace and Facebook, media sites like Flickr and YouTube and commercial sites like Amazon and E-bay.

• A tag (or tagging) is a (relevant) keyword or term associated with or assigned to a piece of information (a picture, a geographic map, a blog entry, a video clip, etc.), thus describing the item and enabling keyword-based classification and search of information.

• Viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clips, interactive Flash games, advergames, images, or even text messages. • A wiki enables documents to be written collaboratively, in a

• Software as a service (SaaS) is a software application delivery model in which a software vendor develops a Web-native software application and hosts and operates (either independently or through a thirdparty) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it.

simple markup language using a Web browser. A single page in a wiki is referred to as a “wiki page,” while the entire collection of pages, which are usually well interconnected by hyperlinks, is “the wiki.” A wiki is essentially a database for creating, browsing, and searching through information. Source: Wikipedia

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A Call for Action on Clima Paul Kovacs, the executive director of the Toronto-based Institute for Catastrophic Loss Reduction, woke up one morning to find out the Intergovernmental Panel on Climate Change (of which he is a member) shared a Nobel Peace Prize alongside Al Gore for producing and promoting climate change research By Vanessa Mariga aul Kovacs is a self-confessed nonmorning person. Of course, there are always exceptions: late last year, for example, he woke up to an email from the secretariat of the Intergovernmental Panel on Climate Change (IPCC) telling him that the panel’s work had earned the 2007 Nobel Peace Prize. He smiles and admits the news put a little extra pep in his step — even though the prize was to be shared with ex-U.S. vice president Al Gore, who appears in the popular movie about climate change, An Inconvenient Truth. Kovacs credits his work with the Toronto-based Institute for Catastrophic Loss Reduction (ICLR) as the launching pad that spurred his 11-year involvement with the IPCC. Prior to his career as a climate change researcher, Kovacs worked as a civil servant at Queen’s Park in Ontario. He was working for the Ministry of Finance in 1992 when Hurricane Andrew pummelled the southern coast of Florida. The event served as a trigger to begin a dialogue between government and insurers here in Canada, Kovacs said. The dialogue explored the question: If an event of such magnitude were to hit Canada, would the insurance industry and Canadians at large be prepared to handle the consequences? At that time, representatives from the insurance industry, government and the science community met “to look at all of the different kinds of natural perils that can occur in Canada — things like earthquakes or a severe weather event,” Kovacs says. “We brought in a number of scientists to discuss the different risks and we determined how ready the insurance industry was to do its job. We came out of there with the sense — and I proposed this back to the industry — that we should have this


P • February 2008


long-term dialogue between researchers and the insurance industry.” Hence, the ICLR was formed. “From that early work, that’s how I was invited to represent Canada on the IPCC,” Kovacs says. THE COLLECTIVE GOOD The IPCC consists of government representatives and researchers from 180 countries. Conceived more than 20 years ago, the panel is essentially a creature of the governments involved. The collective has written four reports, each taking between five and six years to complete, exploring climate-related issues as determined by the government representatives. Government representatives formulate the questions. They might ask, for example: Are there more severe events happening? Are we prepared for these events? Are we learning from things that happened in the past? Researchers are divided into teams. Each team attempts to answer different elements of the questions government representatives pose. “It’s an incredibly rigorous process,” Kovacs says. Each team of scientists reads through and summarizes all of the existing research and literature on the topic that they’ve been assigned. Their summaries, reviewed by another team of researchers, serve as a reflection of what the science is saying. “So in essence other scientists are looking over our shoulders to check to see if we got it right,” Kovacs says. Once the review group gives its feedback, the working group is charged with explaining how it will modify the findings or “stick with what we said.” Once that step is complete, politicians representing the governments appearing on the panel review the working group’s

findings and offer editorial comments. That aspect of the process, Kovacs says, “was very helpful, and sometimes challenging because politicians look at the questions differently than the scientists. But to communicate what we were finding, I thought that the editorial comments they were offering were often very helpful.” Once the next round of feedback is taken into consideration, a smaller group



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mate Change

of scientists write a summary document that serves as a high-profile report of the project.“And it’s edited one sentence at a time by the governments,” Kovacs adds. “So when the panel says there is a scientific consensus that the climate has changed, that’s incredibly powerful.” Kovacs participated in the panel’s third and fourth reports (released in 2001 and 2007, respectively). To have a few thousand of his words appear in a report that was drafted over a period of five or six years doesn’t sound very demanding, he chuckles. “But it had to fit into the context of what everyone else was saying, and

SHELTER FROM THE STORMS For some, climate change is a frightening reality, but Kovacs is invigorated by the research opportunities it affords. His primary focus, he says, is to develop better ways for people to protect themselves from the severe weather and events associated with the phenomenon. The ICLR’s research focus encompasses four major Canadian perils: earthquakes, floods, windstorms and wildfire. On the global stage, Kovacs has offered to continue working with the IPCC. So far, his work with the organization has caught the attention of another global research organization: the International Council for Science (ICS). Based in Paris, the ICS last November decided a global integrated hazard analysis of all natural hazards is a priority and chose the ICLR to head up the project. Kovacs says the project will explore two trends. The first trend is encouraging, he says. Even though the frequency of severe weather events is increasing, and the global population is expanding, death rates as a result of natural catastrophes are declining. Kovacs says this is a positive sign, but insists there is room for improvement. “Where we are losing ground is the property damage,” he says. “On that front, we’re still seeing losses double every five to seven years. It’s a very disturbing logarithmic trend.” Although the formalities of the project are still being ironed out, Kovacs says he hopes one day to see the project reach the same scale as the IPCC. “On my boldest of days, I would love to see this in the same way that the dialogue on climate change takes place,” he says. “Let’s organize researchers from all around the world to the greatest extent we can to engage in this dialogue under this overarching framework that we put together, and try to document and communicate what we’re learning about loss control and loss prevention from all of the different hazards around the world.” The mandate of the IPCC is clearly defined by governments. But the new program’s research on hazards will be steered by the science community.“What do the scientists think need to be dealt with?” Kovacs says, outlining some of the questions the hazard analysis might yet tackle. “Can we facilitate and document that process to help scientists better understand some of the questions that other scientists are raising? Can we direct more of the scientific work to things like loss prevention and loss control?” Although the project will have a “modest” start — as it stands, Lloyd’s of London announced in late November a Cdn$100,000 sponsorship of the program, Kovacs is in active discussions with the Government of Canada to help secure funding — Kovacs remains confident, that like the IPCC and the ICLR, its research findings will have a great impact.

19 • February 2008

Photo by Simon Cheung

it had to go through this rigorous process. So, it was very challenging, but very rewarding.” Having the Nobel Peace Prize bestowed on the IPCC’s work, Kovacs says, recognized “the ongoing effort to understand what’s happening to the climate and communicate it so that decisionmakers in government could make better decisions.” Because of the IPCC’s collective work over the past two decades, there’s no longer a debate in the science community that the earth’s weather is in fact changing, and that the change is accelerating, Kovacs says. “And now, let’s move on. There are a lot of other questions to deal with — like, what do we do about it?”



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By David Gambrill here is a line in the poem, The Rime of the Ancient Mariner — “Water, water every where, nor any drop to drink” — that speaks to the increasing water damage claims Canadian insurers have been experiencing lately, leaving insurance companies parched for more premium dollars to pay the claims. Statistics for 2007 are not yet available to support the anecdotal evidence (and won’t be until around March 2008), but there appears to be a growing consensus within the Canadian insurance industry that water damage claims are now more frequent than the previous Number 1 bane of the country’s insurers — fire damage claims. “From Chubb’s standpoint, I can tell you that water damage has become the most frequent peril that we’re paying claims on when it comes to a homeowner situation, whereas historically fire and theft would have made up a greater percentage of our claims,” observes Chubb Insurance Company of Canada’s vice president of personal insurance, Paul Morrissette. The Co-operators president and CEO Kathy Bardswick predicts the same will hold true when the 2007 financial results are tabulated. “I think that 2007 will prove to be a very troubling year as well for water-related losses for the industry,” she says. “I will be absolutely surprised — shocked, in fact — if it doesn’t prove to be one of our most troubling years in the past 10 related to water losses.” The situation may well blow the lid off a simmering, behind-the-scenes dialogue, in which some insurers are calling on the industry as a whole to re-think its occasionally confusing approach to covering water damage. On the one hand, for example, insurers cover homeowners’ water damage if the damage arises as a result of sewer backup. But no Canadian carrier offers protection in a homeowners’ policy for overland flooding.


T • February 2008


public statement, with the overall insured losses totaling Cdn$50 million. ICLR researcher Dan Sandink further points to the 2004 floods in Peterborough, which caused Cdn$87 million of insured flood damage based on more than 5,000 claims. A state of emergency was declared when the city was hit with more than 220 mm of rain over just a twoday period. “You cannot say the Peterborough rain event was climate change,” Kovacs says. “But you can say that climate change means we are going to have more rain events like Peterborough.”

Water,Wa Everyw

FLOOD OF CLAIMS Where is all of this water damage coming from? Global climate change is an obvious culprit. Paul Kovacs, the executive director of the Institute for Catastrophic Loss Reduction (ICLR), is a member of the Intergovernmental Panel on Climate Change (IPCC), which recently shared a Nobel Prize for its scientific work in the area of climate change research. “There’s climate change, increasing rainfall events,” he says. “There’s lots of evidence, not only in the models, to say it will increase in the future, but there’s lots of empirical evidence to show it’s already increasing now.” He cites a study, conducted eight years ago, showing that there has been a 20% increase in the number of rainfall events measuring more than 50 mm (over two inches), which is considered a heavy rainfall event, between 1900 and 1990. A quick scan of Environment Canada’s ‘Top 10 Weather Stories’ for 2007 bears out his observation. The stories include major flooding events in British Columbia, Manitoba, Saskatchewan and Alberta. As recently as January 2008, a major windstorm and rain event in Ontario caused a great deal of flooding in the “cottage country” around Huntsville, Ontario. Water damage claims from that storm accounted for a “majority” of the insurance claims, Insurance Bureau of Canada (IBC) noted in a

Canada’s insurers are experiencing a thanks to a variety of factors. At the sam of re-thinking the absence of coverage Urban development is also a factor in flooding. What happens to the water when it falls? It searches for permeable areas, Sandink observes. He notes that non-permeable, concrete areas — a consequence of urban development — have replaced permeable surfaces such as wetlands, meadows, river valleys, grass, trees, etc. As a result, when the rains fall, the water flows over non-permeable surfaces, often arriving in policyholders’ basements, causing flood damage. In some situations, higher water-damage costs might be attributable to the more valuable and expensive items that are increasingly finding their way into people’s basements. “Some of the renovation trends in our major cities, where homes are gutted with high frequency and then rebuilt or renovated on a large scale, [mean] basements are no longer the ugly, cement areas where people store old, outdated goods,” said Morrissette. “In many cases, you have elaborate home theatres in there. You have



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ater where g a flood of water damage claims, same time, they might be on the verge age in Canada for overland flood.

OVERLAND FLOOD COVERAGE Insurance industry partnership with governments is at the heart of a discussion surrounding one of the insurance industry’s Achilles Heels — the ambiguity surrounding water damage cover. “We have a fairly confused approach to water in the policy, as it stands,” Bardswick says. “We have the separate sewer backup endorsements. We speak specifically to sewer backup in the event called ‘sewer backup,’ but we have, and I’ve seen it, a number of situations in which it’s a grey area. Is it a sewer backup? Is it a flood? Do we cover it or don’t we?” Adjusters have a number of means to determine whether flooding is a result of sewer backup, which is covered, or overland flooding, which is not. Morrissette notes adjusters look for things like impurities or discoloration in the water, water stains appearing from outside the house, and whether other houses in the area have experienced the same type of water damage. Coverage for water damage arising from sewer backup is often a standard feature in a homeowners’ policy. Historically written as a separate rider attached to a homeowner's policy, coverage for sewer backup is now increasingly being subsumed under the general homeowners’ policy, Glenn McGillivray, the managing director of ICLR notes.

21 • February 2008

people decorating them with the same level of detail as they do other levels of their home. And the basement is a frequent area for damage to occur.” But basement contents and demographics make up only part of the flooding story. Although urban development has proceeded at a remarkable pace, Canada’s municipal infrastructures in Canada have not kept up. From 1800 to as late as 1970, cities traditionally used the same pipe structures to handle both sewer and storm water flow, Sandink notes. After the 1970s, cities started to build storm sewers separate from the sewer pipes. They also started to look into other ways to manage the water flow, including: • incorporating overland flow routes in the design of their storm water infrastructure; • building streets with higher curbs; • introducing storm water retention ponds in areas that were depressed; and

• ceased or decreased development in naturally permeable areas, so water could flow into these areas and be absorbed into the ground before it hit the sewer system. After 1990, Sandink says, municipalities got even more aggressive, incorporating best water management practices areas into their development plans. Ontario’s ‘technology triangle,’ for example, Kitchener-Waterloo-Guelph, has its Grand River Conservation Authority that deals strictly with water issues related to the Grand River. Despite all of the above initiatives, storm water rains still manage to overwhelm aging, cracked storm water pipes, overwhelming the system. The cost to upkeep the 30-year old water infrastructure is costly, Kovacs notes. He says ICLR’s discussions with representatives of the City of Toronto have suggested it might cost Cdn$1 billion alone just to refurbish Toronto’s aging system — to say nothing of how much it will cost other cities to do the same. A recent Federation of Canadian Municipalities report, estimating how much it would cost nationally to repair decaying infrastructure such as roads, storm water systems, etc., comes up with a figure of Cdn$123 billion. As expensive as that sounds, repairs to the infrastructure are top-of-mind for Canadian insurers. IBC in January called on Canadian governments at all levels to make infrastructure repair a top priority. “Since the 1970s, we have witnessed a 20-fold increase in the cost of claims from extreme weather and geological losses,” IBC president and CEO Mark Yakabuski said as part of a panel at the Climate Adaptation Expert Meeting hosted by the City of Toronto. “The unfortunate reality is that infrastructure failure played a major role in every major natural disaster in Canada in recent memory, including the Ice Storm (January 1998), the Saguenay Flood (1996) and the Greater Toronto Area rainstorm (August 2005).”


pg20,21,22Insight_v1_DG_VM • February 2008



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Alas, many policyholders believe water damage due to overland flooding is also covered, even though no such coverage exists in Canada. Kovacs and Sandink both refer to an ICLR study in which 70% out of 2,100 survey respondents indicated they believed they were covered for overland flood damage when in fact they weren’t. “Certainly you see the impact on consumer perceptions of the insurance industry in that regard,” Sandink says. “Because when consumers are affected by a flood, they assume they’re covered. But when they go to their insurance company when they’ve had overland flood damages, [the insurers] say: ‘No, you are not covered.’ And [the consumer] will say, ‘Well, I didn’t know that before. What am I paying my premiums for?’ “In the study I did in Peterborough, the open-ended responses talked to that point. People were just angry about it.” Canadian policyholders can’t totally be blamed for believing this, since insurance companies in Europe, United States and other countries, unlike their Canadian counterparts, do cover overland flooding. In fact, Guy Carpenter & Company LLC noted extensive flooding in June 2007 caused severe damage in north-eastern, central, and southwestern England. "Over 130,000 insurance claims were submitted, with insured losses estimated at over £3 billion ([US]$6.2 billion)," the report noted. So why don’t Canadian insurers cover flood? Insurance companies typically do not offer overland flooding coverage because of what is called “anti-selection,” McGillivray notes. Simply stated, while every Canadian home is at risk of fire, theft or wind damage, not every Canadian home is at risk of overland flood damage. Those most at risk of such damage are those who own or build property in a flood plain. As a result, not everyone will buy flood insurance, which means the risk can only be priced over a smaller base of policyholders. That makes the premiums more expensive; overland flood coverage therefore becomes unaffordable for the policyholder and unprofitable for the insurer. There are questions as to why the antiselection argument has carried the day in Canada, when overland flood coverage is available elsewhere. At a brokers’ conference in Ontario a few years ago, one bro-

Page 22

ker, who was not talking about flood coverage, said “I can insure a dynamite factory that I know is going to blow up on Saturday and make money.” The key, he added, is to price the product properly according to the risk of damage. And therein lies the dilemma for Canadian insurers: what can be done to reduce the risk of water damage, so that overland flood coverage might be affordable and profitable for private insurers? SOLUTIONS Obviously, in order to mitigate water damage, policyholders can do some things themselves, Sandink notes. They can install backwater valves, which prevent sewer backup from flowing back through the pipes into the house. They can install waterproof basement windows, window wells can be added to prevent water from flowing into windows. Landscaping should be graded so that water is directed away from the house’s foundation. Sump pumps can be added to work in concert with the backwater valves, and downspouts can be detached so water doesn’t flow down to the foundation of the house. Making these things happen will depend on insurers making the effort to educate their policyholders. Bardswick and Morrissette advocate using a combination of education approaches. Chubb, for example, Morrissette says, goes “to great extent to educate every one of our homeowners, customers, first and foremost, on how to shut off the water in their home, so that if a problem does start, they can at least mitigate further damage in the event of a pipe burst or some sort of freeze that might occur somewhere in the house.” He adds Chubb has an appraisal service that visits with customers onsite and demonstrates where the water shutoff valve is, labels it, and explains other ways available to monitor moisture — including available devices that can shut off water automatically when a certain amount of moisture is detected. Bardswick notes this kind of face-toface time can add up, when spread across millions of Canadian policyholders. Another way to educate is through premium rates. Some companies, for example, offer rate decreases for policyholders that agree to install backwater valves. Such valves, when they are installed, “float” inside the water pipes; when the water reaches a certain level, the

valve closes, preventing the water from flowing back up the pipe. Kovacs says the cost to install the valves themselves is relatively inexpensive — about $60 for the valve, and about two hours of labour costs to pay the plumber to install it. Of course, the broadest and most lasting initiative would be the upgrading of municipal infrastructures. This, as IBC notes, requires a long-term partnership with all levels of Canadian government. Some hope such a partnership would create the opportunity to discuss mitigation efforts that might lead to overland flood coverage. In a recent Swiss Re report, the reinsurer notes “there is no reason why comprehensive insurance cover against floods should not be marketable — provided that the partnership between policyholders, insurance companies and the government works.” European insurance brokers themselves have recently called on their governments to increase mitigation efforts, including: • an independent government agency dedicated exclusively to mitigating flood risk; • government commitment to improve flood defences and fix drainage systems; • improve flood map development; and • consulting with the insurance industry before approving development in flood plain areas. Such items would also likely be preconditions for any Canadian private insurer to consider underwriting flood risk in Canada. And some of them seem to be a long way on the horizon. “We do not have adequate flood-mapping in Canada,” McGillivray observes, by way of example. “The flood map program died a couple of decades ago after government cuts, and so there’s very, very few places in Canada that have adequate flood maps — like in Quebec, for example.” Regardless, says Bardswick, the discussion about covering overland flood risk needs to begin now. “I think that that discussion needs to happen,” she says, citing the need for the industry to partner with governments. “I think we need to be more proactive as an industry in trying to identify what are the possible solutions, what are the best practices that are out there worldwide. What are other jurisdictions doing, and is it applicable to us? How do we go about implementing it as an industry?”

And the other fires that never burned because of it. On a quiet April morning, a fire swept through Ball Packaging Europe’s facility in Hassloch, Germany. Within days, FM Global was on the scene, finding ways to help minimize the company’s loss of production and working closely with Ball management to better equip its other European plants. But that’s not where this story ends. The experience has helped FM Global work with other corporations on better ways to protect against fire, too. So it’s more than the true story of one factory that didn’t survive a fire. It’s the story of many businesses that are better protected today because of it.

To read more true stories about how FM Global’s unique approach keeps small problems from becoming major headaches for businesses all over the world, visit

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© 2007 FM Global. All rights reserved.



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he Human T Th Element • February 2008


Web portals have simplified brokers’ lives when it comes to communicating data to carriers. But have they minimized the chances of making errors during the data-entry phase? More importantly, have they over-commoditized the product, separating the client from the broker’s advice? By Brenda Rose, Vice President, Firstbrook, Cassie & Anderson Limited

echnology is undeniably transforming the world around us, and the environment in which we work, faster than ever. Just witness the ferocious adoption rate of the latest MP3 players and virtual reality games. To keep pace


with high-tech advances, businesses must continuously make the right choices. This is especially true of public-facing organizations like insurance brokerages, as customer expectations increase steadily in tandem with the emergence of new technology standards. Simply adding more computerized wizardry, however, can be counter-productive — especially if it serves merely to commoditize products and isolate the customer. The key is to use new tools to out-distance the competition without

compromising existing services that customer’s value. With the ongoing soft market compressing bottom lines, and the war for distribution heating up, brokers seeking to differentiate themselves must choose especially wisely among available technology options. When delivering advice and analysis to clients, the broker’s priority is always the customer relationship. Thus, the ultimate test for any new technology is whether it provides real benefit to the customer.

STATE OF THE ART One tool now widely available to brokers is the insurer ‘portal,’ or Web screen, through which brokers key information directly into insurer systems to obtain quotations, create or change coverage. This is not a new concept; in fact, insurers’ sites today are more attractive and userfriendly than ever. Also, some portals now provide access to commercial package business as well as personal lines. The insurer sites do have a certain allure – a

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broker can control the work process and ensure a rapid turnaround, avoiding the frustration and expense of backlogs and endless unproductive follow-ups. Nevertheless, brokers must carefully weigh pros and cons before agreeing to employ these sites, because the longerterm implications may disadvantage both broker and client. For traditional business, the broker’s ownership of client information is generally clearly defined within the brokercompany contract. Once brokers enter data directly into insurer systems, however, that priority is not always as clear. Business relationships do ebb and flow, and contracts are sometimes cancelled. In

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E&O QUESTIONS Within a brokerage operation, the BMS is central. It’s a complete, integrated storehouse, encompassing many functions and incorporating information from any number of different insurers into a single, consistent format. In a claim or an errors and omissions situation, both client and broker will depend on the data preserved there. Complete documentation within the system of every communication and transaction is therefore a necessity dictated by prudent business practice. However, many insurer Web screens don’t interface with broker systems (or not for all types of transactions). In order to use insurer Web sites, information already

The key is to use new tools to out-distance the competition without compromising existing services that customers value. • February 2008


this event, what assurance does the broker have of ongoing access to data or notes stored within an insurer’s system? What protection does the client have that an insurer will not use the data stored in its systems for unrelated marketing purposes? To protect both the broker and the client, it is important to amend the broker-company contract to define clearly the rules around new processes before undertaking any of them. In addition, typical broker-company contracts do not refer to liability arising from clerical work performed by brokers on the insurer’s behalf. In the absence of the insurer assuming specific responsibility, a brokerage will carry a greater proportion of the professional liability exposure, simply by virtue of doing a greater share of the work. If a broker CSR entering data via an insurer’s Web site erroneously omits some key coverage, the brokerage may very well be held responsible for a subsequent claim. The insurer can deny liability, forcing the broker to call on his errors and omissions coverage. Certainly, the brokerage cannot assume simple goodwill or ex-gratia payments will provide a safety net. Without written insurer acknowledgement of responsibility for work performed outside the Broker Management System (BMS), brokers must weigh the benefits of the Web technology against the added exposure to their own professional liability.

recorded in the BMS must be reproduced manually — an expensive duplication of time and effort. Each different insurer portal carries with it idiosyncrasies for brokerage staff to learn, creating inherent inefficiencies when multiple markets are used. Further, employing insurer Web technology requires an immediate brokerage decision on workflow: will CSRs enter their own transactions on the insurer site, or will specific personnel be designated for the task? Either option carries risks. If brokerage staff members enter transactions on the insurance site on their own, that entails training multiple individuals and — if staff infrequently use the system — may lead to more errors. Alternatively, delegating to specific individuals requires relaying information to yet another person before it reaches the insurer page; again, this increases delays, expense and possible errors. There are cumulative costs, direct and indirect, associated with using insurer Web sites. For example, a Cdn$3-million portfolio with one insurer might represent 2,000 or more policies and, over the course of a year, well over 1,000 transactions. Informal surveys suggest a typical endorsement may take 15 to 20 minutes to input manually, consuming five or six hours each week. Multiply that number for each carrier for whom the brokerage

undertakes to process transactions. Further, because the data entry does require underwriting judgments, the responsibility can be assigned only to more experienced — and higher-paid — personnel. Even harder to evaluate, however, is the cost of the time redirected from other, more productive work. Despite the convenience of producing some documents sooner, the value to the client is more than neutralized if the use of Web screens shrinks the remaining time otherwise available for customer service and interaction. Fortunately, trends in insurance technology development are towards improved integration of insurer and broker systems. It is logical to win efficiencies by having brokers assuming some insurer tasks, but it follows that brokers and insurers should cooperate to simplify that process, using the most current technology. Insurers do realize that independent brokers must coordinate with multiple markets as efficiently as possible. Further, insurers recognize the most organized, proficient brokerages will deploy the most efficient tools. It makes sense, therefore, for insurers to maximize their own automation investments by using the same integration technology. Despite its past history, the concept of SEMCI (single-entry, multi-company interface) is still relevant and pressing. The vision of ‘round-trip,’ real-time transactions — starting and ending with the broker’s own system, and including a single ‘login’ required for access to many insurers — would still be the most efficient means of communication between multiple parties, without duplicated effort or loss of accuracy. A number of recent initiatives in the United States and Canada have targeted the elimination of double entry. Nevertheless, more development is needed; this will require ongoing stakeholder cooperation, information-sharing and adoption of CSIO standards before the broker’s ideal becomes the norm. Of particular importance is building an integrated process for policy amendments, as this transaction presently has the least amount of automated data transfer. On average, policy changes are revenue-neutral, but they are nevertheless a crucial customer service. In order to serve the client well, insurers and brokers need to manage this expense well, a shared goal that could be



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accomplished by means of improved integration. BEYOND DATA EXCHANGE Beyond data exchange with insurers, brokers have many other ways of leveraging technology to build value for clients. Certainly online quoting services hosted

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tasks that divert staff from customized one-on-one activities such as discussing needs and risk management, or providing a detailed analysis of coverage options. Time-creating technology strategies, all focusing on raising the level of customer service, might include: • telephony software to expedite client

In attempting to match the convenience of Internet shopping, brokers run the risk of over-commoditization, separating the client from the broker’s advice. by direct writers and banks have gained much attention, and their response speed sets a new benchmark that must be equaled. It is not enough, though, simply to duplicate the competition’s devices. On the contrary, brokers need to differentiate themselves, highlighting the unique, custom features of their offerings. In attempting to match the convenience of Internet shopping, brokers do run the risk of overcommoditization, separating the client from the broker’s advice. Automation better serves customers when used to eliminate sources of frustration or redundant

identification, locate associated records and spare customers annoying repetition; • document imaging, in conjunction with dual monitors, enabling staff to easily access information instantly; • multi-company quoting engines integrated with broker systems, eliminating re-keying; • automated invoicing to avoid unnecessary data entry; • claims download to the BMS, to hasten and facilitate client advocacy; • automation of internal workflows such as document processing, saving unneces-

sary steps; • maximizing use of features within the existing BMS, including marketing tools; and • creation of secure client access to their own account information, including options for contacting broker staff at any point. It is crucial, too, that all staff members are trained and fully comfortable with whatever tools are implemented. Of course, brokers are not making operational choices in a vacuum. Given evolving technological capabilities, other factors — regulatory changes, new exposures and original products — are also generated and drive competition. One certainty is that the status quo is no longer an option. It is critical that brokers measure the pulse of new trends, cultivate their organization’s agility and incorporate change as part of their culture. Collectively, brokers can influence how technology develops and is implemented in our industry. To do so, brokers must be informed and get involved. The price of future success will be a diligent ongoing investment of time, talent and funding to ensure the best service and value for customers.

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Truly Altruistic Keal Technology and Applied Systems forge a deal designed to help the industry as a whole, giving brokers the power to communicate data to multiple carriers By David Gambrill magine those two guys in the MacIntosh v. PC computer commercials agreeing for the common good to integrate their different operating systems and compete instead on product, price and service. The event would indeed be momentous, and is somewhat analogous to a big moment in broker technology that occurred at the Insurance Brokers Association of Ontario (IBAO)’s AGM last October. At that time, two wellknown competitors in the field of broker management systems, Keal Technology and Applied Systems, announced they would be integrating some of their featured technologies and competing with each other on the basis of product and not on data entry standards. The partnership, now in place, sees Keal's flagship broker management system (BMS), known as ‘sigXP,’ integrate with Applied Systems’ real-time solution known as WARP.

I • February 2008


In a separate agreement between the two companies, Keal’s commercial management system (CMS), ComXP, will integrate with Applied Systems’ broker management system, The Agency Manager (TAM). ComXP allows commercial brokers to do a proposal to a client, issue policies and manage production with the important accounting and other functionalities contained in the broker management system. TAM is insurance agency software designed to provide brokers efficient, relevant workflows that enable CSRs to quickly and efficiently dispatch agency business. One interesting feature of the deal is the residual question of what possessed Applied Systems to hand over one of its core business features, the WARP technology, to its competitor, Keal. The answer appears to be one of those rare moments that happen in a competitive market environment — altruism. Both Applied and Keal point out that their partnership is

intended to help out the insurance industry as a whole. Put very simply, WARP is a technology interface that allows brokers to communicate (seamlessly and in real-time) the data collected in their BMSes to multiple insurance companies. Its technology solution essentially falls in the category of a single-entry, multiple-carrier interface (otherwise known as ‘SEMCI’). “WARP is essentially a secured Web service that sits between a broker and multiple carriers,” Doug Johnston, Applied Systems’ vice president of partner relations and product innovations, says. “It’s a translation program, authenticator, communicator.” When a broker wants to perform a transaction with one or more carriers, an encrypted transaction is communicated out to WARP. WARP authenticates the broker as a trading partner with the end carriers to which the message is going. WARP then takes the message from the




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broker’s BMS and reformats it into each carrier’s agreed-upon version of CSIO for that line of business, province, time period, etc. It finally communicates the brokers’ data to each end carrier in the way the carrier’s technology is designed to receive the information. WARP is updated with the latest CSIO standards developed for insurance data communication, relieving both brokers and insurance companies of the burden and necessity of constantly keeping up with CSIO standard updates (although it is recommended that they do so). In the process, Johnston notes: “The carrier does not have to figure out, ‘How am I going to deal with 400 different bro- • February 2008


kers on different pieces of software for security or connection or something like that?’ Or, ‘Am I going to have to worry about updating to a different version of CSIO when I don’t know if my brokers are ready for it?’” The creator of the WARP technology, Applied Systems, is based in the United States. Johnston said he made it no secret during his meetings in Canada that he would be willing to share the WARP technology with other BMS vendors willing to use it. He said he got the call from Pat Durepos, president of Keal Technology. The two companies then discussed how to hammer out an agreement that would benefit both sides — and most importantly their combined 2,000 or so broker clients. For Durepos, the question was whether the partnership between the two competitors would benefit the broker industry as a whole. Durepos himself started in the insurance business as a broker in the early 1970s. “I’m the CEO of Keal, and I operate it with the idea that I’m a broker and, as a broker, does this make sense?” he says of his professional background and its influ-

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ence in forming the partnership with Applied. “Is this something that brings value to the brokers? I think that that helps us.” Keal is the exclusive distributor in Canada of a data-integrating product called Nexysis, which Durepos describes as “as close to being the same type of product to WARP as you can be.” Durepos notes Nexysis and WARP have a lot of the same functionalities, although he notes that WARP is “more robust,” handles more transactions, has been in the marketplace longer and is distributed in both the United States and Canada. Nexysis, on the other hand, is unique to Canada, entertains transactions in the personal lines

says. “So what Keal gets out of it is not having to program all of that data communications, the security, the CSIO XML communications. Basically they can take this module with a programming hook and embed it into the Keal management system and instantly get the same communication that’s available to Applied customers. The advantage [for Keal] is, Pat doesn’t have to spend millions of dollars trying to figure out how to do this.” And the advantage for Applied? “Well, the advantage to carriers in Canada is that instead of 1,000 brokers having access to this technology, now 1,800 have access to this,” Johnston says. “From a carrier’s perspective, it makes life a little easier now that there’s almost twice as many brokers that can be transmitting CSIO XML.” Durepos agrees with Johnston “From a carrier’s perspective, it makes life that if Keal and Applied are to a little easier now that there’s almost twice compete, they should compete on as many brokers that can be transmitting BMS systems and not on technolCSIO XML.” ogy that will help the entire indus- Doug Johnston, Applied Systems try in its gradual conversion to CSIO XML standards. Over the long run, the consistent use of XML standards may do away with the need for translator programs. But until that time, Keal and business, and is unique in the way it han- Applied believe their agreement will be dles basic functionalities such as upload- better for the industry as a whole. ing new business and endorsements, and “It’s kind of working with your comlooking after renewals. petitor,” Durepos says. “But the way we The Canadian marketplace has insur- look at that is that WARP may be owned ance companies like AXA using Nexysis, by Applied, but it is a unique and good while others, such as ING Canada, Royal product that is also a beneficial tool for & SunAlliance Canada and Aviva, are our clients. On that basis, I often compare using WARP. Keal could have opted to it to ABS brakes that we all use [in our develop new data communications tech- cars]. The ABS brake was an invention by nology to compete with WARP’s offerings. one of the large automakers. But when I But Durepos said he didn’t want to “rein- ask people who developed the ABS brake vent the wheel.” Partnering with Applied system, nobody can tell me. Chrysler uses opened up the WARP market to brokers it, Ford uses it, GM uses it and Toyota uses using Keal BMS systems, while at the same it. And guess what? ABS brakes have got time giving Applied access to Keal’s clients better, they’re cheaper, so they’re part of using Nexysis. every automobile. Business-wise, the deal doesn’t really “It’s really not important who owns give WARP technology’s creators anything the ABS brake technology. What’s imporother than additional brokers. Johnston tant is that the consumers have a good, notes some in Applied’s sales force were efficient technology at a reasonable price. scratching their heads wondering why When I go back to insurance, I say this Applied just gave away one of the core fea- is very simple. We’re going to partner tures of its products. “The software com- with WARP — we’re really partnering ponent that we plug into the agency man- with Applied — and we’re going to use ager in Canada that allows WARP com- that technology instead of reinventing munication with carriers can now be the wheel and using our clients’ dollars plugged into the Keal product,” Johnston to build the same type of technology.”

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Two Sides of Same Coin Underwriting does not simply equate to policy administration, and so it’s not safe to assume that systems supporting underwriting activity are the same as those that support policy administration

n the quest for competitive advantage, growth and cost control, insurance carriers at the top of the perBy Glen Piller, formance spectrum consistently have President and CEO, one thing in common: they recognize Iter8 Incorporated the importance of superior underwriting as a source of market differentiation. However, many insurance carriers are under the simplistic impression that underwriting equates to policy administration. As a result, they may assume the systems that support underwriting activity are the same as those that support policy administration. This is a false assumption. In fact, effective underwriting demands distinct, modern technology to drive efficiencies and flexibility, enabling proactive response to the changing marketplace. Such technology would be free of the constraints associated with being embedded within a policy administration system. The most significant improvements to underwriting effectiveness come from two sources: technologies external to policy administration systems, and the management of underwriting and product rules.

I • February 2008


POLICY ADMINISTRATION SYSTEMS Why don’t policy administration systems support underwriting? Policy administration systems were built to an internal focus, with user interfaces designed for insurance experts and people proficient with in-house practices, terminology and processes. These systems are stable, dependable and long-lasting, built to maintain current products and customer information,

and to provide such data to underwriting service representatives quickly. However, while these functions are essential, the systems designed to deliver them have their limitations and weaknesses. They are unyielding and difficult to modify, often using outdated, poorlysupported programming languages. Code changes are complex and lengthy, demanding the business process expertise of large multi-disciplinary teams. Testing regimes are arduous, time-consuming and difficult to track and monitor. Business users are unable to make changes to such a system, user interfaces cannot be readily altered, and non-experts cannot use the system at all. Haphazard growth can result in silos forming, with resultant poor data-sharing and incompatible coding. Reporting and performance metrics become extremely limited. In contrast to the nature of these systems, however, underwriting is a vibrant and volatile activity, with market conditions, rates, rules, product configurations, customer needs and mix all changing rapidly and frequently. Underwriting factors change daily, not quarterly. Superior underwriting demands uniqueness and differentiation, not sameness and predictability. Underwriting applies judgment based on data from multiple sources — integrated and shared — not data buried in monolithic rigidity. SUPERIOR UNDERWRITING: WHAT IT DEMANDS To be a top performer demands: Cost effectiveness Underwriting activity is a controllable, manageable cost, best achieved through submissions management, underwriting collaboration and a focus on underwriting — not the administration of information and data entry and a battle with incomple teness and inaccuracy. Readily available rules, procedures, rates and pricing Managed workflow prioritizes submissions, evaluations and decisions executed quickly and cost-effectively. Instant data retrieval means moving faster than the competition.



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Ease of use Policyholders and brokers need a userfriendly, accurate system at the point of sale — in a broker’s office. The system must catch errors when editing fields or submitting completed work. Automated underwriting is a major advantage, and is now available for the majority of personal lines, with varying types of commercial products close behind. Ease in new product rollout and current product improvements As business changes rapidly, there is an increasing demand for speed and accuracy in the movement of new products from conception to rollout, and in changes to existing products. Smooth collaboration and information sharing Complex underwriting requires multiple underwriter involvement, approvals and reviews. This demands centralized and accessible information with automated notifications, routing and auditing. Submission pipeline management Proactive management of sources of business, success in quoting, speed to process and respond to market needs. NEW SYSTEMS: THE REQUIREMENTS To enable carriers to best achieve superior underwriting, new systems are required. They include the following: Personal Lines • February 2008


Producer-facing sales and service applications A system to apply underwriting and workflow rules to the point of sale (a broker’s office) will deliver a sales and service advantage, and now is critical to support personal lines underwriting. Such a system makes use of connectivity tools and the automation of underwriting. Connectivity tools Commonly used between independent brokers and insurance carriers, these tools are required to connect people and technology automatically in real-time to: • improve accuracy, and eliminate transcription errors and omissions, and • speed up application and policy processing — which is particularly important

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in a competitive market — as information is smoothly transported to and accessed from third parties. Process Automation Tools The automation of processes — such as rating, the application of rules, pricing, and risk assessment for standardized personal lines or small commercial packages — reduces training demands and minimizes the risk of exposure to errors and omissions. Such automation is highly valuable at broker point-of-sale, early enforcement of eligibility, product, segment, rating, underwriting and data-correction rules. • Often labelled “automated, exceptionbased underwriting,” the application process is partially automated so that only exceptions, triggered by the rules, are examined by a person. • Policies can be quoted, bound and issued — or modified and edited — automatically. This applies particularly to personal lines and small business commercial. Commercial Lines

Case management tools Software applications are required to enable multiple underwriter access, shared data, case and workflow management and the use of alerts. • Complex commercial and specialty lines cannot be handled without collaboration, since multiple experts are needed and policies must be reviewed, edited and frequently modified. This is especially true in areas of assessment of risk exposure, multiple rating and pricing and geographic diversity. • The need to reduce processing times necessitates access by multiple underwriters, and with channel partners. Collaborative management tools These enable multiple members of the underwriting team, third parties and internal specialists to marry the rules, workflow and decisions associated with a complex underwriting prospect. These tools: • focus on the steps to underwrite new commercial business, so workflow is smoothed and efficient; • enable effective management of authority and approvals by type of business, monetary value, and risk; and • collect and store checks, verifications and external data in a centralized position, accessed by all.

Content Management Tools Applications that can edit, capture and store all forms of information to an underwriting function. • Policy systems store data, but underwriting requires content to be attached to an account. This could include relevant digital content or other elements of the documentation process. • Brokers can attach photographs of risks. Text file attachments in XML (such as credit reports) can be re-formatted for viewing and rules can be applied against the content. Personal and Commercial Lines

Underwriting Workstation A central workstation with software to support underwriting functions and maintain underwriting functionality and data. This system enables: • access by the underwriting team to consider all elements of the underwriting function; • the smooth, effective and accurate rollout of new product, rates, or risk categories without multiple system changes. Information is readily reviewed, tracked and managed; • the monitoring, measurement and numerical charting of the submission process. This allows line managers to understand which products or segments attract the best business and which ones could be developed further. It helps in the evaluation of bottlenecks in the underwriting process, identifies which brokers attract the best business, and can be used in assessing how risk management could be improved; and • the numerically-based routing and load-balancing of work for underwriters in larger firms. CONCLUSION Underwriting and policy administration are two distinct functions, requiring distinct systems and technology. Superior underwriting is a prime differentiator, and can position you ahead of your competitors. Look for technologies that best address your needs and which underwriting processes are in place to meet them. Systems suited to maximizing underwriting effectiveness are in place and can prove far more cost effective than policy administration system changes.



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No Respect They might be boring, they might not be sexy, but XML standards for data communication might just transform the way brokers do business with insurance carriers nsurance is necessary, it’s how we make a living, but admittedly staid. Technology, to most of us, isn’t exciting stuff. Standards, especially insurance technology standards, are just downright boring. In short, the CSIO (Centre for Study of Insurance Operations) — the organization By Steve Kaukinen, responsible for property and casualty President, standards in Canada — is like Centre for the Study Rodney Dangerfield: it gets of Insurance no respect. Operations (CSIO) The CSIO formed in 1981 to improve the competitive advantage of the independent broker distribution channel. To this day, the mandate has never changed. The forefathers of the CSIO wisely chose standardization as their Number 1 priority. This is still CSIO’s Number 1 priority as we fast forward to 2008; only now, the focus is technology (XML) standards rather than forms (paper) standards. For the independent broker channel, a key issue related to the biggest competitive advantage of its competition: direct writers boast an ease of doing business based on the fact that they have only one company underwriter with whom to communicate. In contrast, independent brokers face both increased costs and slower customer service due to the inherent inefficiencies of communicating with multiple insurers, each of which has its own underwriting rules,

I • February 2008


forms and systems. Of course, the independent broker distribution channel has advantages of its own: for example, independent brokers offer choice, the broadest possible product selection, strong customer advocacy and nonpartisan advice. To help overcome the cost and potential service disadvantages of the independent broker distribution channel, the CSIO has been developing standards for property and casualty insurance for more than 26 years. These standards were originally paper form standards — application forms and claims forms. But as technology developed, so, too, did standards for EDI (electronic data interchange), enabling brokers to transfer data from their BMS (broker management systems) directly to insurer’s underwriting systems. To this day, CSIO continues to manage the standards for both forms and EDI; as a result, the work of CSIO has a substantial impact on the workflow of the independent broker. Unfortunately most of this goes unnoticed by those that it helps the most: the independent broker. Today’s technology has advanced even further with SOA (service oriented architecture), the benefits of which include speed-tomarket, lower costs and greater flexibility, giving insurers much greater ability to exchange data between their new and old (legacy) systems and broker’s management systems.



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agreed upon; they should not stray from the agreed-upon format. If change is required, processes are in place that allow for necessary change to happen. If competitive advantage for the independent property and casualty broker channel is to be defined as simpler workflows — including one data-entry point, real-time information exchange and complete data integrity — the key to this is broad acceptance of CSIO XML standards amongst insurers and broker management system vendors. The true “drivers” of this change must be the independent brokers themselves. They can help by

demanding, in unison, that their insurance companies and vendors continue to develop XML solutions. One can take heart that there is a light at the end of the tunnel. We are beginning to see some promising XML projects emerge in the commercial lines arena between some very prominent insurers and one vendor whose systems are based on CSIO XML. It will be interesting to get feedback from brokers who benefit from these solutions. Hopefully, when the successes come, XML standards will become a little less boring and CSIO will be a little less like Rodney Dangerfield.

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39 • February 2008

Underpinning both SOA and Web services is XML (Extensible Markup Language). Today a significant proportion of CSIO’s standards activity is devoted to XML, including the development of XML standards and assisting vendors and insurers with the implementation of those standards. The real promise of XML standards for the property and casualty industry includes the following vision. Independent brokers enter their information in their broker management systems; the information then seamlessly, accurately and in “real-time” transfers to the selected insurer or insurers information systems. That information would then be passed back with the necessary changes — a new business quote, a renewal, a policy change — in the same seamless, accurate and real-time way. Unfortunately the adoption of XML standards is going very slowly. There are many reasons for this: • insurers have limited time and resources. Due to past EDI implementations that were costly, and the efficiency of which ranked only “so-so,” they have been slow to adopt XML standards; • broker management system vendors face the same resource dilemmas. As well, demand for XML is very low; and • XML is a long-term solution. Standards by their very nature require broad adoption to work at peak efficiency. The list goes on. Meanwhile brokers continue to face the same workflow challenges they have always faced. There have been many attempts at solutions, but none have survived. The implementation of standards is not a quick fix: it is a long-term solution. Now with the promise of XML and very sound XML property and casualty standards, any future systems development in the Canadian property and casualty industry should adhere to the standard. But vendors and insurers have to resist the temptations of the past. They must find ways to fit within the standard, rather than customizing it to fit them. CSIO is grateful to those who participate in developing the standards and always encourages greater participation. CSIO does not build the standard: its members build the standard. CSIO merely facilitates the process. Those developing with XML standards must recognize the standards represent what the membership has

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Reaching Maturity Commercial brokers’ data communications with carriers are poised to reach the next level: a two-way data exchange — that is, both uploading and downloading capability — between commercial brokers and carriers

By Kevin Campbell, President, Policy Works Inc. • February 2008

40 rokers have been lobbying their insurance companies for commercial data exchange for some time. A 2006 technology survey by the U.S. standards group ACORD found nearly half of its agent and broker respondents said learning and using various company proprietary systems was their greatest challenge in supporting automation. In addition, 47% responded “duplicate data entry” when asked to identify the major automation “time-waster” in doing business. No similar survey exists in Canada, but plenty of anecdotal information suggests brokers here are equally frustrated with proprietary Web portals, data reentry and input errors.


All of that is set to change. Today, tangible signs exist that commercial data exchange is reaching a new level of maturity. Insurance companies are responding to brokers’ requests and working with them to deliver easier, more efficient solutions for commercial insurance. Brokers’ ability to upload commercial data into an insurance company Webbased solution is a reality right now for several insurers; the opportunity for companies to automate download of information to brokers is imminent in the months ahead. This year will see several insurers adopt upload — and eventually download — data exchange solutions for their commercial brokers. UPLOAD/DOWNLOAD Four insurers have begun the process of integration with a clear-eyed sense of what it takes to achieve upload from commercial management systems (CMS) to their Web-

based application and, eventually, download back to broker systems. ING Canada, Gore Mutual Insurance Company, Aviva Canada, and Royal & SunAlliance Canada have entered into agreements with Policy Works to exchange commercial lines data and develop an efficient integration solution. Policy Works customers are already uploading their submissions to ING’s SaversCL quoting facility. The integration is developed using the CSIO commercial lines XML standards. All four insurers are also members of the Policy Works Certified Data-Exchange Partner Program, which helps validate the process of information transfer. We asked these companies why they chose to pursue commercial data exchange, what the opportunities and challenges were and how they expected the future of commercial lines data exchange to evolve.



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All insurers agreed the central goal of data exchange is to make it easier for brokers to do business with them. “We recognized that many brokers use technology to manage their commercial lines business,” says Peter Weightman, senior vice president of commercial lines at ING Canada. “The logical step was to facilitate a data exchange between our technology and a broker’s technology. We want to make it easier for brokers to do business with ING.” Kevin McNeil, president and CEO of Gore Mutual, agreed. “Simply put, our broker partners told us this was important

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to them and we listen very carefully to their feedback,” he said. “While our GoBroker technology is among the best in the industry, seamless data exchange with broker management systems continues to be our goal.” The benefits of commercial data exchange are varied, but insurers honed in on a few areas. “This is a great opportunity for Aviva and our broker partners to provide superior service to the end customer,” notes Linda Regner Dykeman, senior vice president of commercial lines at Aviva Canada. “With the enhanced efficiencies of commercial quote and bind in

Get the job. Done. TM • February 2008


the hands of our brokers through our simple business solution, Fastrax, we are able to focus our underwriting resources on adding even more value to our broker partners, and ultimately the end customer, through our technical underwriting and risk management expertise.” By reducing the amount of time brokers and their CSRs spend processing policies, Royal & SunAlliance is able to spend more time with its customers, get a better understanding of its customers’ businesses and deliver a more personal service that customers value,” says Shawn DeSantis, senior vice president of commercial and personal insurance at Royal & Sun Alliance. “There are also cost savings for quoting and binding small commercial business.” Companies are not blind to the difficulties associated with data exchange. “Based on experience in implementing different technologies, we know to expect the unexpected,” observes Weightman. “An area that has required more time and has proven more complex than anticipated is the mapping of coverages for the download. However, we know that putting the appropriate time and resources on this part of the project will pay off with a better solution in the end.” This functionality will allow brokers to download automatically the ING quote back into Policy Works, completing the round-trip data exchange of commercial quotes. ING expects to have its download operational in spring 2008. INDUSTRY STANDARDS The role of industry-based standards is a theme that all companies stress is crucial to efficient data exchange. “Working with the CSIO commercial lines XML standards is critical for companies looking to develop integration capabilities," says Terri Johnson, vice president of commercial insurance solutions at Gore Mutual. "What does this mean for our broker partners? This has simplified the implementation process so Gore Mutual can deliver solutions faster.” Without these standards, Weightman adds, “the development and maintenance of the technology becomes extremely cumbersome, time-consuming and expensive.” Industry standards allow vendors and insurers to build an interface that can be reused, which results in lower build costs



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for involved parties, notes DeSantis. And the interfaces can evolve in unison. “There are a couple of distinct differences between personal and commercial lines standards,” DeSantis says. “Commercial lines standards were done with the benefit of the knowledge and experience of the prior personal lines standards. And commercial products are more complex so there is a recognition that the standards will need to evolve.” Aviva’s Regner Dykeman says the XML standards for commercial lines contain a certain amount of ambiguity. “The same data element can be captured in a variety of ways in different parts of the XML stream,” says Dykeman. “We need to have open communication through CSIO, between vendors, insurers and brokers to ensure that we define the standard as tightly as possible so that we can deliver superior service to our brokers.”

looking for broker management systems integration. Gore Mutual is prepared to play a significant role in the delivery of that solution.” The opportunities with data exchange are many, including general inquiry, billing and endorsements, says Weightman. “We see commercial data exchange continuing to evolve and grow over the next few years,” he says. “We expect our business strategies — namely, expanding the current ING capabilities — will reflect this fact.” Regner Dykeman says that with the success of Fastrax's quote and bind func-

tionality, there is no reason the functionality cannot be expanded to include renewal and endorsement activity for commercial lines business in the future. “Our brokers are telling us that this is what they want and we're listening,” she says. DeSantis anticipates the breadth and depth of commercial lines data exchange will continue to expand as the popularity of data exchange grows and reflects the changing Canadian insurance marketplace. “This could mean more complexity of product options, or added transactions,” he says.

43 • February 2008

VENDORS SUPPORTING STANDARDS The vendors’ role should be one of supporting standards and openness instead of offering yet more proprietary solutions, DeSantis says. “We believe it’s critical for software vendors and insurers to work closely together to bring efficiencies to brokers. “It’s important that the software vendor is able to build its offering using an industry standard, like the CSIO XML standards, instead of proprietary interfaces. The vendor should also be an active member of the industry standards committee.” In addition, software vendors “have an excellent understanding of brokers’ processes and workflows,” says Johnson. “By working with vendors and their members, Gore Mutual has the opportunity to apply this knowledge to our systems, modifying our processes to line up with the processes that our brokers have adopted. This helps us deliver more meaningful solutions.” Given that the upload of standardsbased data from brokers to insurance company Web-based applications is already a reality, what does the future hold for commercial lines efficiency and exchange? “Our brokers want it all and so do we!” says McNeil.“Our plan is to allow all types of commercial transactions from commercial management systems. Brokers have told us loud and clear that they are

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Internet Connection Now that online quoting is a reality, the next phase in the development of broker technology is to give brokers the ability to generate new contacts through online business

By Maxime Poulin, Sales representative, Trainer, Compu-Quote Inc.

iane Robinson never thought she’d be looking to Web surfers to sell insurance, nor would she call herself a fan of the Internet. She is an old-school insurance executive, so talk of Web surfing, online social marketing and online shopping is outside her comfort zone. “We’re still pretty conservative in the insurance industry,” says Robinson, a vice-president with AGR Insurance Brokers Inc. “It’s a trust factor. I’m still cautious.” But Robinson also knows she has to jump on board with new technology or else her company would never be able to compete. “As an ambitious and proactive brokerage, we are always looking for ways to increase our sales and our level of customer service. The Internet is not going away, so we knew we had to have tools to get out there and market ourselves." Such tools might include the provision of comparative rating and underwriting software for insurance brokers. Twenty-five years ago, the challenge was to overcome the limitations inherent in the early development of brokerage technology. Today, it’s broadening brokers’ perspectives when it comes to prospecting for clients. “Brokers were used to picking up the phone or thumbing through a manual to get rates,” says James Nickelo, CompuQuote senior vice-president of sales and

D • February 2008


business development. “We came along with a better way to do things. Instant rate comparison was a hot commodity.” GENERATING LEADS : BEYOND ONLINE QUOTATION Now online quoting is available and technology has turned towards the task of generating leads for brokers. Products are being made available now to help brokers generate business leads. “We knew we needed a tool to establish a channel to develop leads as we watched the growth of business on the Internet,” Nickelo says. “Consumers are going online

to search insurance and they don’t want to make a phone call. So we wanted to give a tool to brokers that would allow consumers to get quotes from their homes or offices.” Technology is available to increase business leads for brokers, but even with advances in technology, brokers must still make calls and develop relationships with prospects. “Fear not, the technology does not replace that personal touch,” Robinson says. “But it does help to streamline our work, since we can now transfer our leads directly into our rating software. We are



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kerage staff from the time-consuming task of gathering information and processing the quote. Brokers can focus on servicing, which leads to greater returns on the marketing dollar. Adding an Internet component to the brokerage business gives brokers another avenue to reach consumers, in addition to the traditional methods of print and radio advertising. “There is a growing interest from insurance companies and associations to use such technology to send leads to brokers, but brokers still need to have these tools on their own Web sites,” says Nickelo. “The more channels the better, because it`s all about using this technology to get leads, which in turn means more clients.” By offering online quoting, brokers gain prospective clients who consider themselves too busy to walk into a broker office or who feel more comfortable doing their own research. At the 10th Annual Insurance and Investments Convention in Montreal last fall, influential members of the industry had an open discussion about the storm threatening insurance brokers. Speakers noted brokers need new ways to market themselves and develop sales. Louis Regimbal, associate partner at IBM Global Services, says the situation in Canada is similar to that of the United Kingdom a few years ago. English brokers had to change their business model and strategy in order to maintain their market shares. One of the solutions was the Internet. Brokers had to be more sensitive to client’s needs and the Internet was a part of the solution to address issues of flexibility and accessibility. The Internet will influence 90% of all new insurance sales, and 30% of these sales will be completed online by 2011, according to research and consulting firm Celent, in 2007. ONLINE QUOTING Online quoting can also be a cost-efficient lead generation mechanism for brokers. Some available technology includes a feature that automatically downloads the consumer’s information into the brokerage’s ratings software. This allows the broker to make contact with the person and keep the client on the brokerage’s promotions list. W. Tim G. Richardson is an e-commerce, marketing and international busi-

ness professor and author of Marketing in the Information Age and Current Issues in E-business. He says one of the advantages of having an online quotation tool on a broker Web site is the decrease in costs. Consider, for example, the costs of radio, television, print and Yellow Pages advertising, as well as the expense of employing other methods used to attract new clients — in addition to the staff costs incurred to transform a prospect into a client. With an online quotation tool, a brokerage’s Web site can generate genuine prospects, complete with detailed personal information. In short order, a brokerage will be able to recover the cost of its online lead generation tool and start to see how it can help to attract more customers.

Top 10 Reasons to Use Online Lead-Generation Technology

• Online insurance sales are expected to double by 2011. Brokers need to be visible and attractive, as quoting and policy transactions are becoming Web-based. • Online shoppers want an immediate quote. Provide convenient onestop shopping by offering comparative quotes from your Web site 24/7. • Report capability lets you measure results, track hits and determine marketing campaigns. • Brokers can decide who might obtain an online quote using predefined filters. • Online, cost-effective quoting tools give brokers a provincial or even nationwide presence to generate leads outside your geographic area. • Online quoting tools give brokers a similar quoting capability as direct writers — only better, because brokers can show prices for more than one carrier. • Instantly ramp up the lead-generation potential of your Web site. • Customization allows you to keep your branding for a consistent look and feel. • The technology is available on a secure server. There are no updates to process. • Quote information is passed directly into rating engine to avoid double entries.

45 • February 2008

now able to target a specific market.” Progressive insurance brokers like Robinson realize the importance of using technology as part of a business plan. Price is often a key factor in choosing insurance — particularly auto insurance — so comparative quoting is a key element for such plans. Such quoting, delivered any time day or night via the Internet, provides a simple and user-friendly means for consumers to obtain instant online comparative quotes, translating into more business. As consumers enter the information themselves, online quoting relieves bro-

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Protecting our Communities Insurers need to work with governments to ensure policyholders are protected from increasing water damage

Apology/Correction • February 2008


Canadian Underwriter would like to apologize to The Co-operators president and CEO Kathy Bardswick, who submitted a piece to the magazine for publication in December 2007. Due to editorial oversight, the piece was omitted from our cover feature, which presented the 2008 market outlook from primary insurers. We are pleased to present Bardswick’s viewpoint here in its entirety. Correction: In our December 2007 cover feature, we incorrectly identified Charles Brindamour as the incoming president and CEO of ING Insurance Company of Canada. In fact, he is the president and CEO of ING Canada and not ING Insurance Company of Canada, as indicated. ING Insurance Company of Canada is a subsidiary of ING Canada and Derek Iles assumes the presidency of this subsidiary. Canadian Underwriter apologizes for this error.

s weather patterns change and storm damage rises, I am becoming increasingly concerned about insurance companies’ ability to adequately protect our communities. Water-related damage is increasingly one of the most frequent types of home insurance loss in Canada. And, according to our research, it is the least understood by policyholders. All too often clients learn what is — and is not — covered in their policy after they have suffered a water-related loss. As we understand all too well, surprises of this sort create animosity and distrust toward the industry as a whole. If water damage continues to increase both in frequency and severity, as is the current trend, our industry may be in for a flood of resentment. There is a crucial need for continued research, as well as infrastructure and planning improvements, to boost our capacity to mitigate the risks of 21st century weather. Storms are a time for insurance companies to prove their worth. Too often we cannot do so, either because we increasingly don’t write certain risks in a


particular area or because of policy excluBy Katherine Bardswick, sions. It’s not President and CEO, uncommon to The Co-operators see a third of General Insurance all claims Company denied following major water-related events. Perhaps it’s time we consider a different approach. Whether it’s an industry pool, a partnership with government or some other alternative, we should explore ways to better protect homeowners. The volatility and softness of the market is also of concern as we head into 2008. The impact of downward pressure on commercial rates and underwriting results will be felt, and require action at a time when significant court challenges to the auto legislation regime are underway. Add to that fair value accounting and skittish investment markets and it becomes apparent pricing discipline should be the order of the day.



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Seeking Single Sign-on Independent adjusters are wondering if there is a way for them to sign on to Ontario’s new Health Claims for Auto Insurance (HCAI) system without requiring multiple sign-ons

By Laura Kupcis

s insurers prepare to switch over to Ontario’s new Health Claims for Auto Insurance (HCAI) electronic claims processing system this month, independent adjusters have expressed concerns about technical aspects of the system — particularly with the absence of single sign-on access for independent adjusters. The main role for adjusters will be to adjudicate forms in HCAI. And although there have been plenty of opportunities for adjusters to learn how to use the system — setting up organizations, setting up users and establishing manager roles in the system — independent adjusters are saying there may have been a lack of communication with them during the initial establishment of the program, which may have resulted in some potential difficulties for adjusters using the system. “From our perspective, (I) just wish there was consultation with our industry, because we are such a huge part of the insurance industry,” Tammy Norn, the regional director of Ontario casualty at

A • February 2008


CGI, said. “The [Canadian Independent Adjusters’ Association] really should have had a seat at the table. A lot of the issues we are dealing with now could have been prevented.” As of Feb. 1, 2008, health care

providers and insurers in Ontario will be required to process medical/rehabilitation auto insurance claims electronically through HCAI. In addition to having a number of existing legislative and regula-

tory obligations to claimants, insurers are required under HCAI regulations developed by FSCO to participate in HCAI. “As such, insurers were consulted extensively in the design of the HCAI system,” said Michael Smith, general manager of HCAI Processing, the central agency that oversees the HCAI process. “We believe that this consultation process produced very positive outcomes.” Some insurers process claims in-house, others outsource to independent adjusters and still others use a combination of the two. HCAI was created with all claims-handling methods in mind and offers insurers the flexibility to accommodate these different arrangements. Since HCAI’s development, the Insurance Bureau of Canada (IBC) has worked closely with independent adjusters to ensure they are trained and ready to use the system, Smith says. Users will be required to log into the HCAI system and input the data for an accident benefit file electronically instead of manually on paper. In HCAI, forms assigned to a particular insurance company’s adjuster will be viewed online and printed off. Adjusters working for an insurance company will do their normal due diligence; when they make a decision

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regarding any aspect of a particular claim file, they will input that decision into HCAI. The system will then notify the health care provider about the insurance adjuster’s decision. Other processes in the auto insurance claims system — following up with a claimant and so forth — continue as usual. However, it’s not quite so simple for independent adjusters. Although individual health care providers and insurance company adjusters need only a single sign-on to log into the HCAI system, independent adjusters will need to use a different sign-on for each and every insurer with which they do business. In short, an adjuster will have a unique username and

Norn said. “Obviously, any technical changes [to HCAI would not be] done on the fly, and it’s not something [HCAI is] looking at right away. But ideally, that’s how it would work from an independent adjuster’s perspective.” Smith noted, however, that with regards to signing into the system, privacy is paramount. “Insurers are obliged to protect the privacy of claimant information,” he said. “With HCAI, every effort has been made to ensure privacy. Having insurer-specific sign-ons for independent adjusters gives insurers an even greater degree of security and control in this respect. In the unlikely event of sign-on breach, a multi-insurer

provides proper notice under Sec. 68, HCAI would be obligated to provide the forms to the independent adjuster, not the insurer, or else the forms would not be deemed received. We are unsure how HCAI will be able to deal with this situation.” In another situation, a form might end up in an “unmatched bucket” if HCAI cannot match a form with the corresponding adjuster, which means it’s not in the hands of the appropriate adjuster, but still deemed received by the system, Norn notes. “So the problem there is [that the process] is in conflict with the current legislation,” Norn said. “It’s deemed received

“We have to go in and check under every (insurance company). So, log out, and log back in under the other insurance company, and log back out. We could potentially go in four and five times in a morning and four and five times in an afternoon just to be able to see all the insurance companies we are doing work for.” - Franca Reale, Cunningham Lindsey Canada • February 2008


password for every insurer with which they are working. This means an independent adjuster will log in and out of multiple user profiles on any given day in order to ensure that all files are being handled and processed. And due to strict timelines, it won’t be a matter of simply logging in once per insurer: it will mean multiple times per day, per insurer. “We have to go in and check under every (insurance company),” said Franca Reale, the Ontario automobile manager of Cunningham Lindsey Canada. “So, log out, and log back in under the other insurance company, and log back out. We could potentially go in four and five times in a morning and four and five times in an afternoon just to be able to see all the insurance companies we are doing work for.” Some wonder whether the HCAI system could be set up in such a way that independent adjusters could sign in with a unique username and password and then, once in the system, an adjuster could simply select the insurer for which they are authorized to do work and access the files that way. “The system is not set up that way,”

sign-on would have potentially exposed a number of insurers instead of just one.” Independent adjusters have also expressed concerns over conflicts in policy. At the moment, regulations dictate that adjusters have a certain number of days — usually 10 business days — to respond to a treatment. Assessments, however, such as those found in OCF22s, are to be completed within three business days. In that time, an adjuster must determine whether or not an assessment is reasonable or necessary. After reading and reviewing FSCO’s April 2007 bulletin, there does not appear to be any change in Sec. 68(8) of the regulations, Reale noted. “When an independent adjuster receives a file from an insurer, we must notify all parties in writing that we are handling the file on behalf of the insurer,” she said. “By way of our Sec. 68 letter, all documents are to be re-directed to the particular independent adjuster, or the documents are not deemed received. The bulletin indicates HCAI can receive OCF forms in paper form. It is our understanding that if an independent adjuster

once it hits that unmatched bucket, but in all reality the adjuster might not get it for a day or two after that by the time they figure out whose [file] it is. By that time, the adjuster’s now got one day [to complete the file].” But, Smith noted, the insurer is accountable if a SABS timeline is missed. “The insurer has the flexibility to set up their organization in HCAI in a way that ensures forms are received by adjusters (independent or otherwise) in a timely manner,” he said. “It is possible, for example, for insurers to set up outside adjusters to receive forms directly, but that decision is up to the individual insurer.” Despite these particular concerns on the part of independent adjusters, they are quick to point out the system is a very useful tool, not only to manage workflow, but to also keep track of what is being paid out on claims. “It is a very user-friendly system, so adjusters will definitely adapt to the system very easily,” Norn noted. “Take the technical issues away, it’s a fantastic system … and I think the insurance industry as a whole will benefit from it — from the statistical data that can be gathered.”

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Enhancing Auto Statistics IBC’s introduction of new tech for the collection of auto insurance data will have a number of other, ancillary benefits By Susan Frakes, Chief Information Officer, Insurance Bureau of Canada nsurance Bureau of Canada (IBC) on Jan. 7 of this year launched its new Automobile Statistical Plan (ASP) data collection and processing system. In doing so, IBC also completed a major IT infrastructure upgrade that will significantly improve the organization’s ability to meet the data needs of the industry and of industry regulators across the country. IBC uses the ASP to collect statistical data related to the auto insurance experience of licensed insurers. Collected data is reported to the General Insurance Statistical Agency (GISA), a statistical agency appointed by regulatory authorities to collect the experience of licensed insurers. The IT renewal project met a very ambitious timeline to deliver the ASP, and the infrastructure upgrade now has IBC well positioned to meet the data needs of the industry for years to come. A new IT platform using industry-standard Microsoft technology for data collection, analysis and exhibit production will eventually deliver a number of key benefits, including the following: • the turnaround time for the production and delivery of statistical exhibits will be cut dramatically; • data analysis to support industry issues will be available live; and • subsequent changes to the ASP to support new data-reporting requirements will be completed sooner and at a reduced cost to the industry. This technological makeover will drastically improve IBC’s overall ability to collect and use industry data. Of course, there are also some secondary benefits of a wholesale technological upgrade. For instance, enhancements to IBC’s IT

I • February 2008




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environment will most certainly have a positive effect on other IBC products and services. PRE-ASP This renewal project was precipitated in 2005 by a backlog of ASP changes that would have been very time-consuming and costly to make in IBC’s existing IT environment. IBC management knew clearing the backlog would be a challenge, but saw the task as an opportunity to modernize IBC’s systems. Prior to its IT renewal, IBC had been using a variety of proprietary, unsupported technologies. These technologies required specialized skills and expertise for support and maintenance; this presented an unacceptable business risk. The plan with IT renewal was to implement a whole new IT platform that conformed to industry standards and provided the flexibility needed to keep up with rapidly changing demands for data, both from regulators and from within IBC. Project implementation faced a few roadblocks. In April 2006, when GISA became the statistical agency for insurance regulators, this created an additional challenge for IBC. The role of statistical agency had previously been filled by IBC. When GISA was created, IBC’s relationship as a subcontractor to the new agency brought an additional level of oversight to the project. Delays related to the creation of GISA put the IT renewal project two months behind schedule and jeopardized the January 2008 launch date.

system is the first major deliverable of the IT renewal project. Subsequent phases involving the development and deployment of the new ASP exhibit production and analytical environment are already underway. The IT renewal project is a model of how to balance IBC’s contractual requirements and regulatory obligations with the various other data needs of the industry. The new ASP was a challenge for the indus-

try. However, as with most challenges, it also presented a tremendous opportunity.


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53 • February 2008

DELIVERING THE GOODS The fact that Phase 1 of the project was delivered on time and under budget is a testament to the hard work and dedication of the staff at IBC and GISA, but insurers also played a big role. The January launch followed a successful three-month, all-industry test phase. During this test phase, 97% of insurers tested their own system modifications that were required to accommodate the mandated ASP changes. The test phase was an essential part of the project, and insurers demonstrated their characteristic diligence in helping to ensure that the January launch date was met. For its part, IBC handled more than 2,000 insurer inquiries during testing; no major problems were reported during this time. The launch of the new data collection

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Property Casualty Underwriters Club (PCUC) Luncheon, January 2008, Toronto

Making a Big 'FUS' With GIS Using a fire underwriting survey (FUS) in conjunction with geographic information systems (GIS) gives underwriters far greater detail for their risk analyses By Vanessa Mariga

idden exposures and risk trends in both personal and commercial property lines can be uncovered with the use of the Fire Underwriters Survey (FUS) and geographic information systems (GIS), said Alan Pang, director of property and casualty insurance business services for CGI Risk Management Services. Pang spoke at the Property Casualty Underwriters Club (PCUC) January luncheon in Toronto about the elevated level of property detail that FUS and GIS can offer underwriters when determining the risks and prices associated with particular policies.

H • February 2008


SIZING-UP FIRE PROTECTION FUS is a program to grade the quality of public fire protection in Canadian communities. Funded by insurers, CGI and its predecessors have been conducting field surveys since the early 1900s to advise of deficiencies and make recommendations to improve fire protection.

“Over the years, the FUS recommendations have resulted in hundreds of millions of dollars of improvements in municipal fire protection infrastructure,” Pang said. “A win-win for both local homeowners and businesses and the insurance industry.” Within the survey, two grading systems have been developed, Pang continued. The Public Fire Protection Classification system for commercial property has 10 grades, reflecting the ability of a community to control and extinguish major fires in commercial, industrial and institutional buildings. Grade 1 signifies the best fire protection, and Grade 10 is the worst. The Dwelling Protection Grade classification system has five grades, reflecting the ability of the community to extinguish fires in small dwellings such as homes. Again, Grade 1 is the safest. Pang listed a number of factors the grading system takes into consideration:

the quality of the fire department makes up 40% of the grade, including, among other things, a consideration of the number and location of stations, and staff and training and equipment quality; water supply accounts for 30% of the grade and considers factors such as pumping and storage capacity, as well as the reliability of the water supply; fire safety control is 20% of the grade, looking at things such as building, fire and electrical code enforcement and inspection staff; and fire service communications is the basis for 10% of the grade, taking into account the number of emergency lines relative to population, adequacy of portable radios for communication at fire sites. “So far in Ontario, only Hamilton has managed to attain a Grade 1 on the commercial classification of FUS,” Pang said. “Three-hundred and eighty communities have Grade 9, and 318 have Grade 10.” Between 1989 and 2007, Cdn$4.5



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billion (adjusted for inflation) of commercial fire claims covering building, contents and business interruption were paid out in Ontario. Residential fire claims between 1990 and 2007 in Ontario were roughly Cdn$4.2 billion, Pang noted. On average, commercial premiums, as quoted by four major insurers for policies in areas with towns with Grades 7-10, are 272% higher than for policies in protected towns with Grades 1-3. In the area of “dwelling protection grades,” 53 municipalities have scored Grade 1 in Ontario. A further 1,277 municipalities are rated Grade 5. The average premium, as rated by four major insurers for a policy in an unprotected area (i.e. an area with a Grade 3 or higher), is 210% more than in a protected area with Grade 1, Pang said.

sewer system which has been known to generate more sewer back-up claims.” Pang emphasized postal codes are designed to help deliver mail and not assist insurers in managing their exposures to the level of detail required. He said his team is currently working with local governments across Canada to gather as much GIS digital information as possible on fire defenses, flood plains and critical infrastructure. “This level of information combined with CGI's claims data bases in GIS would be the ideal street address underwriting tool for insurers”, he said.


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DIGGING EVEN DEEPER When FUS is used in conjunction with GIS, the level of detail on a property increases a great deal, allowing the underwriter to precisely locate the risk, analyze its exposures and develop a more accurate price. Clicking to a slide showing a map of Hamilton, Pang said Hamilton is the only Ontario municipality to have an area within its city limits that scores Grade 1 in the FUS commercial grading. But, he continued, “Hamilton also has adjacent areas ranging from Grade 4 to Grades 7-9”. Pang pointed out that the geographical areas associated with these grades does not conform to three or six digit-postal codes. That is where GIS can help locate a risk down to a longitude and latitude level. He clicked to a GIS-enhanced map of City of Edmonton, showing the perimeters of the different postal codes within the city, as well as the number of houses within each postal code. In addition, Pang overlaid the reported sewer backup and water damage claims incurred in each postal code following the July 2004 rainstorm. He pointed to two postal code areas, located on opposite banks of the North Saskatchewan River. The first postal code had 7,602 homes and incurred a Cdn$51.1-million sewer back-up and water damage loss. The second had 3,611 homes and incurred only Cdn$4.46 million in property

damages. Although summarizing industry claims by three and six-digit postal codes helps identify the general vulnerability of risks to sewer back-up and water damage claims, GIS allows the underwriter to locate a commercial or habitational risk with precision by longitude/latitude and then assess flood and sewer back-up exposures by looking at the risk’s digital elevation in proximity to flood plains and combined sewer systems. This is important, he said, “because a difference of a few meters in elevation can determine whether a risk gets flooded or is linked to a combined



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continued from page 6 ...

The CCIR says the consultation document will deal with the following issues related to the sale of insurance by incidental sellers: • exclusions, restrictions and limitations in insurance policies being

sold by incidental sellers; • potential conflicts of interest; • role and responsibilities of the incidental sellers; and • availability of statistical information. ■

CCIR wants to start dialogue on risk-based regulation he Canadian Council of Insurance Regulators (CCIR) is looking to foster dialogue between regulators and stakeholders on the basic approaches to risk-based market conduct regulation (RbMCR) in Canada. RbMCR means directing regulatory efforts to the most significant issues that either have the greatest potential for consumer harm or that could weaken public confidence if left unchecked, the CCIR says in its paper, “An Approach to Risk-based Market Conduct Regulation.”


T • February 2008


In a risk-based approach, regulators prioritize issues based on their potential impact to achievement of desired regulatory outcomes. The CCIR is working toward a mutually agreed-upon framework so that, where regulators choose to do so, a riskbased approach can be adopted efficiently, according to the paper. “The development of a mutually agreed-upon framework should minimize the potential for differences in regulatory approach between jurisdictions and increase the opportunities for

regulatory collaboration.” As well, within any jurisdiction, provincial or federal, the adoption of riskbased methods for assessing market conduct is not an all-or-nothing proposition, the CCIR adds. “There will be circumstances where risk-based approaches work best and situations where more traditional methods are a better fit. It will be up to individual regulators to decide what methods work best in a given situation.” access the white paper and comment on it, visit: ■

Claims 1998 Ice Storm would cost twice as much in 2008

Ontario storm generates Cdn$50 million in claims

oday, a recurrence of the 1998 Ice Storm in eastern Ontario and Quebec would result in total insured losses of between US$1 billion and US$3 billion — potentially twice the US$1.3-billion cost incurred in 1998, according to a retrospective report by Risk Management Solutions (RMS). RMS released the report on the 10th anniversary of the storm that devastated portions of Ontario, Quebec and parts of northeastern United States. Potential damages from a 2008 recurrence of the storm fall into three categories, a RMS statement says: • direct physical damage to automobile and property; • additional living expenses; and • refrigerator and freezer contents that may be lost as a result of prolonged power outages. Although major improvements have been made to the Hydro-Quebec electrical power grid, an ice storm of this magnitude would still cause significant and lengthy power outages, the release adds. “This storm demonstrates that direct physical damage from a catastrophic event may comprise only a minor percentage of the total insured losses,” said Robert Muir-Wood, chief research officer of RMS. “Infrastructure disruptions such as power outages lead to costly business interruption losses for commercial and industrial properties, as well as additional living expenses for homeowners forced to evacuate their properties.” ■

storm that hit Ontario at the beginning of January is estimated to have resulted in roughly Cdn$50 million in insured damage, according to the Insurance Bureau of Canada (IBC). The majority of the damage was due to sewer backup, in addition to a lot of personal property claims, IBC reported. Also, there was a small number of auto and commercial property claims. “There have been a surprising number of claims in cottage country,” primarily due to trees falling onto cottages, IBC adds. A windstorm tore through parts of southern and central Ontario at the beginning of the month, with winds ranging between 76 km-h and 133 km-h. The winds tore down tree branches and left more than 140,000 without power, according to Following on the heels of the windstorm, major flooding in Huntsville, Ontario, forced residents to leave their homes. ■





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Human Rights Code amendment could lead to more punitive damages


Multinationals face elevated political and economic risk levels in 2008 ultinational organizations face elevated political and economic risks in 25 of the 50 largest global economies, according to an analysis released by Aon Trade Credit Global. Such risks include business interruption caused by war, terror attacks and political interference, Aon reports. Political and economic risk is highest in the oil-rich nations of Iran, Nigeria and Venezuela, where businesses face civil unrest, war, terrorism and non-payment by governments for services rendered, Aon notes in a release announcing the results of its 2008 Political and Economic Risk Map. Terror attacks, crippling regulatory changes or strikes and civil unrest are very real risks in nations whose economies are among the fastest-growing, while they represent a relatively lower risk in the world's wealthiest nations, the release notes. Companies doing business in Russia face an increased degree of state control in the natural resources sector, while the global risk management community is increasingly concerned about supply chain risk in Asia, Aon notes. ■


Reinsurers Reinsurers’ market discipline starting to “dwindle”: Benfield


20 08

100 years of providing

peace of mind The year 2008 marks a significant milestone for the Saskatchewan Mutual Insurance Company, 100 years since its formation in 1908 by a group of Saskatoon area pioneer farmers. Supported by approximately 55 employees and a network of over 250 brokers throughout Saskatchewan, Alberta, and Manitoba, SMI currently serves more than 50,000 policyholders. The company has assets of $60 million and annual premium revenue of $35 million. SMI has an A.M. Best Company Financial Strength Rating of A-(Excellent)pd. As we celebrate this significant milestone, we wish to express our sincere appreciation to our brokers and other stakeholders for their continuing support as partners in our growth. 279 3rd Avenue N SASKATOON, SK

57 • February 2008

nother year of comparatively mild losses for the reinsurance market in 2007 means “any remaining postloss caution from previous years is rapidly dwindling,” according to the report Changing the Game, published by Benfield, an independent reinsurance and risk intermediary. The report finds property catastrophe rates at the January 2008 renewals are continuing to decline. “Risk-adjusted falls of more than 10% were reported in many territories,” Benfield notes in a press release announcing its report. In spite of the rate reductions, “the trend for higher retentions has continued, suggesting reinsurance pricing is still relatively robust,” Benfield says. “Pressure from rating agencies, regulators and investors to manage capital more efficiently continues to exert some discipline.” Benfield CEO Grahame Chilton described 2007 as “another ‘cat-lite’ year.” However, he added, “we saw increased demand for high level catastrophe reinsurance cover.” Catastrophe models are suggesting the continuation of a longer-term escalation in size and frequency of catastrophe losses, Chilton said. He said growing risk concentrations and climate change are driving the trend.


ill 107, An Act to Amend the Human Rights Code, could increase damage awards, including punitive damages, Martin Smith, associate lawyer with McCague Peacock Borlack McInnis & Lloyd LLP, told Ontario Risk and Insurance Management Society (ORIMS) members at a luncheon seminar in January. Bill 107 sets out to create an efficient way to deal with equality complaints, Smith said. But it will also create new challenges for the insurance defence bar and company risk managers. Such challenges might include: • increased damage awards, including punitive damages; • more complaints under the human rights regime, as well as in the civil court; • increased limitation periods; and • increased deference to Tribunal decisions. In the area of monetary damages, Martin noted, Bill 107 will introduce the following changes: • provide for unspecified compensation for losses arising out of the infringement of a protected right; • remove the Cdn$10,000 limit on damages for mental anguish; • provide for orders of restitution (other than through monetary compensation); • permit the Tribunal to order a respondent to do anything that the Tribunal believes the respondent ought to do to promote compliance with the act; and • permit the civil courts to order monetary compensation. In addition, Martin notes, a punitive fine of up to Cdn$25,000 has been implemented to deal with those who violate the act. ■

Risk Management

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I N S U R A N C E C O M PA N I E S AMERICAN INTERNATIONAL COMPANIES "The Strength to Be There". AVIVA CANADA INC. Home Auto and Business Assurance. FM GLOBAL The leader in property loss prevention. GRAIN INSURANCE AND GUARANTEE COMPANY Commercial Lines Underwriters THE GUARANTEE COMPANY OF NORTH AMERICA “Specialized insurance products...professional service”

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PILOT INSURANCE COMPANY Over 80 years of Protection Through Local Brokers.

KEAL TECHNOLOGIES Complete technology solutions for insurance brokers.


THE INSURANCE INSTITUTE OF CANADA The professional educational arm of the industry. REGISTERED INSURANCE BROKERS OF ONTARIO (RIBO) Self-regulatory body for general insurance brokers in Ontario. RISK & INSURANCE MANAGEMENT SOCIETY INC. Dedicated to advancing the practice of effective risk management. RISK MANAGEMENT CONSULTANTS OF ONTARIO (RMCO) Self-regulatory body for independent, fee-for-service risk management and property/casualty consultants operating in Ontario. BUILDERS RISK INSURANCE WINTONIAK & MOTARD INSURANCE Build your own Builder's Risk Insurance Quotation/Cover online - as easy as 1..2..3. CLAIMS ADJUSTING FIRMS CGI ADJUSTERS INC. The one-stop risk shop for all your insurance needs. CRAWFORD ADJUSTERS CANADA One Globe, One Company CUNNINGHAM LINDSEY International independent claims services. KERNAGHAN ADJUSTERS Adjusting Solutions — Depend On Us!



SOVEREIGN GENERAL INSURANCE COMPANY Since 1953 SPORTS-CAN INSURANCE CONSULTANTS LTD. Specialist in Annual and Term insurances for Recreational Sports, Fitness, Leisure & Tourism activities WAWANESA INSURANCE Earning your trust since 1896. I N S U R A N C E L AW THE ARC GROUP CANADA INC. Your Partner in Insurance Law & Risk Management INSURANCE SOFTWARE APPLICATIONS KEAL TECHNOLOGIES Complete technology solutions for insurance brokers. TRITECH FINANCIAL SYSTEMS INC. Provider of an enterprise solution to P&C insurance companies and their agents & brokers in Canada & USA PREMIUM FINANCING AIG CREDIT CORP. OF CANADA The leader in Financing Commercial Insurance Premiums by offering innovative products & services allowing our Broker Network to experience an instant payment alternative.

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PROedge Seminar: Forensic Engineering in Practice Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 28 Mississauga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 19 PROedge Seminar: Errors & Omissions/Professionals’ Liability Mississauga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 5 PROedge Seminar: Lease Agreements: Satisfying Insurance Requirements Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 27 Annual CIP Symposium Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 29

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Upcoming Events: for a complete list please see: and click ‘My Events Calendar’ in the nav. bar on the homepage.

Keal Technology and ING Insurance Company of Canada announced a “com-

The Insurance Corporation of British Columbia (ICBC) has sold more than 80,000 licence plates supporting the 2010 Olympic Winter Games, marking a solid step towards its goal of 100,000 plates in the program’s first year. As part of the “Show Your Support to Win” promotion, a new car was awarded to a driver upon purchasing one of the plates, an ICBC release says. Net proceeds from the plate program, which began in April 2007, go towards supporting the Canadian Olympic team and the successful staging of the 2010 Olympic Winter Games. They are part of the ICBC’s sponsorship as an official Olympic supporter in the motor vehicle insurance category. ■

vide a scholarship to a University or College student involved in an insurance course. ■

and I have worked very closely over the years and she has proved a valuable member of the executive team with Kingsway for more than 10 at Kingsway,” Shaun Jackson, years; during that time, she has held Kingsway’s president and CEO, said increasingly progressive executive in a release. “She has built a strong roles. In addition, she has been sig- and credible financial team within nificantly involved in all financial the organization and her experience reporting and capital will ensure a seamless raising initiatives over transition of the this time, according to financial managea release. As vice presment of the company. ident and CFO, she Her appointment is will assume responsiwell-deserved and bility for financial reflects her strong reporting, capital technical abilities, management, taxation dedication, and strategy and investor financial and operarelations for the cortional knowledge of Shelly Gobin porate group. “Shelly Kingsway.” ■ Kingsway Financial Services Inc. has appointed Shelly Gobin as vice president and CFO. Gobin has been

We are pleased to advise the insurance industry that Mary Margaret Fox joined our firm effective January 2, 2008 based in our Toronto office. Call: 416-607-4278 Email:

Mary Margaret is one of Canada’s pre-eminent insurance law practitioners with a special interest in Directors’ and Officers’ liability and Professional Indemnity. Mary Margaret is ranked by the Canadian Legal Lexpert® Directory as a leading practitioner for Commercial Insurance Litigation, Directors’ and Officers’ Liability and Professional Liability; by Best Lawyers in Canada for Directors’ and Officers’ Liability and Insurance Law and is listed for the area of Directors’ and Officers’ Liability in both The International Who's Who of Insurance and Reinsurance Lawyers and the Lexpert® American Lawyer Guide to the Leading 500 Lawyers in Canada. Nicholl Paskell-Mede LLP is a specialist litigation law firm providing advisory and dispute resolution services in the fields of insurance law, professional indemnity and the defence of civil actions with offices in Montreal and Toronto.

w w w . n p m . c a

390 Bay St., Suite 612, Toronto Ontario M5H 2Y2 Telephone: 416-366-4555

61 • February 2008

A ‘Go To’ Lawyer Joins A ‘Go To’ Law Firm


mercial integration relationship,” in which Keal’s commercial management system (CMS), comXP, will exchange data with the ING Insurance broker application SaversCL. Using CSIO XML standards, data can be exchanged between broker and insurer using CMS applications like Keal’s comXP, a Keal release says. The integration will allow the brokers who use comXP the ability to upload customer property information directly from comXP to ING’s Web portal to request a quote, it adds. “This integration represents significant workflow enhancement for brokers.” ■

The Portuguese Insurance Professionals Association (PIPA) held its annual Christmas lunch at First Choice Restaurant, where Portuguese cuisine and good red wine were served. PIPA members opened the event to allow other guests to partake and enjoy the camaraderie. Guests were asked to support PIPA's goal of raising funds for a scholarship. PIPA's main goal is to pro-

CUW Feb-08-Ins SvcsFeb8_08


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3:25 PM


the latest Canadian Underwriter online poll, we

asked if direct writers pose a threat to independent brokerages. An overwhelming 76.29% of respondents said yes, while 23.1% of respondents did not see direct writers as a threat. ■

CU Online Poll

76.29 % Yes 23.1% No

Wawanesa Mutual Insurance Company. In her new leader-

ship role at IBC, Bonnie will report directly to Mark Yakabuski, president and CEO, and will sit on IBC's operations committee. She will lead the organization's efforts to reform the Ontario auto insurance system and to develop a consensus position on key reform issues within the industry. ■

Arch Insurance Group, a member of Arch Capital Group Ltd., has formed a new energy division — Arch Worldwide Energy — that

harnesses all of the group's property and casualty energy-related capabilities into one dedicated unit. The new division combines Arch's expertise in the areas of onshore energy, offshore energy, construction allrisk, erection allrisk and energy Thomas G. Kaiser casualty. Arch said in a press release the move is intended “to heighten [Arch's] response to evolving energy needs worldwide.” Arch Worldwide Energy will be led by Thomas G. Kaiser, the executive vice president at Arch Insurance Group. “Arch Insurance Group has always offered expertise in energy, but this strategic group, completely dedicated to the issues of the energy market, will drive high-quality risk solutions on a worldwide basis,” said Ralph E. Jones, the chairman and CEO of Arch Insurance Group. “This new division maximizes the energy-specific intellectual capital, products and services of Arch exclusively for the energy sector,” said Kaiser. “We have studied our clients' evolving risk needs and believe that our new unit positions us to develop the most effective solutions for their risk management arsenal.” The Arch Worldwide Energy client base includes clients from the oil, gas, petrochemical, chemical, power generation, pulp and paper and mining and steel industries. Clients can access these services in Canada, the United States, and London. ■

Rowan Saunders, President & CEO of Royal & SunAlliance, is pleased to announce the appointment of Ken Keenan as President of Canadian Northern Shield Insurance Company (CNS). Mr. Keenan brings more than 22 years experience working in intermediated insurance. He joined R&SA Ireland in 2000 as the Director of Personal Lines where he was responsible for the underwriting, pricing and operations of the property and auto portfolio. In 2005, Mr. Keenan was appointed Director of Sales & Marketing and as a member of the Irish Executive team. Mr. Keenan is an Associate of the Insurance Institute of Ireland and holds a Certified Diploma in Accounting and Finance (ACCA). Canadian Northern Shield Insurance Company (CNS) is the market leading insurer of personal property, commercial and private automobiles in British Columbia, with annual written premiums of approximately $164 million in 2006. CNS is headquartered in Vancouver, and has full service underwriting and claims offices in Victoria, Nanaimo and Kelowna, with a claims service office in Kamloops and is represented by more than 200 brokers across the province. CNS is a member of the Royal & SunAlliance Canada Group of companies.

63 • February 2008

captives. The consumer segment includes personal insurance for high been appointed to lead the company's net worth individuals and families commercial and consumer segments along with affinity groups, a Willis for both Canada and statement says. Ealy has the United States. Ealy been with the company will continue in his for about six years. Prior current role until a to his work as chief successor is named. operaing officer, he The commercial segled its Chicago and ment includes not only Milwaukee offices and small and mediumhelped create and lead sized enterprises, but its Client Advocate also managing general professional developagent and affinity proment program in North grams, public entity America. He will reloThomas V. Ealy risk pools and group cate to Chicago. ■

Thomas V. Ealy, Willis North America's chief operating officer, has

Ken Keenan


Lysyk has been appointed to the position of vice president, Ontario at the Insurance Bureau of Canada. Lysyk is a chartered accountant and has a certified internal auditor designation. She served most recently as the vice president and CFO for The Bonnie

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The Ontario Risk & Insurance Management Society's (ORIMS) annual Christmas luncheon in


December attracted hundreds of festive industry partygoers to the Sheraton Centre Toronto, home of the Toronto 2008 RIMS Canada Conference (September 21-24, 2008). In the spirit of giving, the ORIMS executive donated the proceeds of the annual charity raffle to World Vision Canada. World Vision is a Christian relief, development and advocacy organization dedicated to working with children, families and communities to overcome poverty and injustice. ORIMS president Erin Magilton-Morneau presented World Vision with a cheque for Cdn$10,000. â– • February 2008


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Dale Chow has been appointed as vice president, Vancouver branch manager for Chubb Insurance Company of Canada. Chow and his team are responsible for all field operations serving British Columbia. Chow has re-joined Chubb from the Bermuda offices of Allied World Assurance Company, where he was vice president of professional lines and team leader. Joining the firm in 2002, Chow was a key contributor to the growth of the pro-

fessional lines department from inception to gross written premiums (GWP) of over Cdn$200 million, the company noted in a release. “Dale's track record speaks for itself. We were sorry to see him go back in 2002, but we're thrilled to have him back”, Chubb president and CEO Ellen Moore said in a press release. “We pride ourselves on the strength of our local relationships and Dale will help us continue that tradition.” ■


Swiss Re's voluntary initiative to become greenhouse neutral, “COyou2 reduce and gain,” completed its first year; more than 400 staff members around the world • February 2008


David Wong, FCIP Manager, Central Regional Branch Ecclesiastical Insurance Office plc is a specialist insurer that seeks to advise and protect those who enrich the lives of others. Through the independent broker network, we offer customized insurance solutions to faith and related not-forprofit organizations, retirement communities, education facilities, unique properties, registered charities, and select commercial enterprises. We are dedicated to serving the needs of our customers and their communities. Stuart Rowley, Underwriting and Operations Manager for Canada, is pleased to announce the appointment of David Wong to the role of Manager, Central Regional Branch. Most recently, David held the position of Regional Commercial Manager for Ontario at a major Canadian Insurer. Dave brings extensive experience and a solid track record in commercial underwriting, business development and management. Ecclesiastical Insurance was established in the UK in 1887. The Canadian branch opened in 1972. Owned by a charitable trust, group profits are returned to our owner for distribution to charitable initiatives.

participated. The program offers Swiss Re staff financial incentives to reduce greenhouse gas emissions. The subsidized investments vary between regions, but 130 staff — 116 of them in the United States — received support to purchase a hybrid car. In Switzerland, 170 employees received contributions towards public transport passes. A further 80 staff around the world were granted subsidies with energy- and electricity-related investments, including the installation of solar panels and heat pumps, a Swiss Re release says. By 2011, the goal is to motivate 10% of Swiss Re staff to participate; its first year garnered the participation of 5%. ■ Zurich Financial Services Group has

launched a new climate office. The mandate of the office is to help the company determine climate-related risks across its businesses. Reporting directly to Zurich's global chief underwriting officer, the climate office will be fully embedded in Zurich's underwriting infrastructure. It will focus on the development of products and services addressing the evolving risks associated

with climate change, as well as the establishment of a long-range carbon management strategy, a Zurich release says. The company also established a climate change advisory council, consisting of internal functional leaders and external advisors reporting to Zurich's group management on strategic and operational issues associated with climate change, the release adds. ■

Royal & SunAlliance (R&SA) has partnered with the Executive Development Centre at Queen's School of Business to launch a new broker education program. The program, Making Partner, has been designed with Queen's to provide cus-

tomized senior management leadership and business skills to R&SA brokers who aspire to “make partner” one day in their brokerages, R&SA noted in a release. “We believe in the long-term growth of the broker channel, which is why we've made such a significant investment in a high-calibre program,” Shawn DeSantis, senior vice president of commercial and personal insurance at R&SA, said in the release.“In this increasingly competitive market, it is more and more important to have broad business skills to operate a successful business, and we are excited to partner with such an internationally respected business school to deliver those skills to our brokers.” ■ Clive R. Tobin on April 1, 2008 will retire from his post as chief executive of XL Capital Ltd.'s insurance operations. David B. Duclos will succeed him. Tobin will continue with XL as vice chairman of XL Insurance (Bermuda) Ltd., where he will concentrate on assisting with strategic opportunities in emerging markets, an XL release says. Duclos is currently the chief operating officer of the company's insurance operations.

Clive R. Tobin left David B Dudos

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Canadian Underwriter February 2008  
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Canada’s Insurance and Risk Magazine. Since 1934 Canadian Underwriter, Canada’s leading insurance journal, has provided insurance profession...