THE RIDESHARING REVOLUTION The proliferation of companies like Uber is real, and needs to be dealt with by insurers, regulators, and brokers.
8–11%
of the transportation market in Canada is represented by the ridesharing economy
30
Canadian municipalities allow Uber drivers
160,000
people drive for Uber in the US and Canada
one million
rides are given by Uber drivers in North America every day Sources: Transportation Research Board, Uber
“This presents a very significant E&O exposure from coast to coast that is new for us” Philomena Comerford, Baird MacGregor Insurance Brokers LP But without official action, the fight to regulate Uber – and provide drivers with appropriate coverage – is at a standstill. According to property/casualty insurer Allstate, which has already introduced an insurance solution for Uber drivers in the United States, it’s primarily this lack of regulation that has prevented what could be a growing market from flourishing. “This is a grey area in terms of regulations, [and] insurance is a highly regulated industry in Canada,” Allstate said. “At this time, insurers are unable to bring an Uber product to market without additional regulatory clarity from various level of government.” That makes the action from Aviva Canada particularly welcome to brokers. They’ve
applauded the carrier and begun calling for the rest of the industry to join the crusade to regulate Uber – though preferably with even harsher consequences. “The penalties for lying on a statutory auto application have been beefed up, and while we haven’t seen authorities throw the book at anybody to this extent quite yet, the fines can be up to $250,000 for the first offense and $500,000 with the possibility of jail time for the second,” said Philomena Comerford, president and CEO of Baird MacGregor Insurance Brokers LP in Toronto. The reason for her vigilance – and that of other brokers across the country – is apprehension about the effect unregulated
ridesharing services could have on the insurance sector and on brokers in particular. “The exposure being thrust upon personal lines carriers is significant and growing,” Comerford said. “From a broker standpoint, this presents a very significant E&O exposure from coast to coast that is new for us.” Yet this attitude of apprehension is a relatively new one in the country. In years past, the public discourse was largely critical of insurance companies for not keeping up with “the Ubers of the world.” Now, many Canadians understand the industry is trying to keep their clients from harm, Cooper says. “It’s as if someone walked into a party and said, ‘Hi, I drive around without insurance all the time,’” he said. “Most people now know the repercussions of that, and understand that you could be financially ruined for the rest of your life.” Brokers are now left hoping this will be enough to get the ball rolling with other insurers and, eventually, the nation’s insurance regulators.
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4/12/2015 5:55:04 AM