Toronto, Ontario -- May 14. 2013 -- Intact Financial Corporation has reported net operating income for the quarter ended March 31, 2013 of $175 million or $1.27 per share ($1.02 per share excluding a non-recurring item) compared to $179 million or $1.34 per share in the corresponding quarter of last year.
Net income remained relatively unchanged at $174 million and adjusted earnings per share, which excludes integration-related costs, was $1.36 versus $1.55 for the same period last year. The combined ratio increased 2.8 percentage points to 95.1 per cent from the exceptional underwriting performance of 92.3 per cent in the first quarter of 2012. Direct premiums written increased 9 per cent to $1.5 billion compared to a year ago, reflecting the addition of Jevco and organic growth.
"Throughout the first months of this year, we experienced better than expected growth as a result of our recent acquisition and its resulting expanded product offering, which was well-received by brokers and customers," said Charles Brindamour, Chief Executive Officer of Intact Financial Corporation.
"Our operating performance was sound during the quarter compared to last year's exceptional results which benefited from much more favourable weather conditions. Both our home and personal auto insurance portfolios fared well despite a significant increase in the number of snow and wind-related claims."
The company expects that industry premium growth is likely to evolve at a similar pace to that of the last 12 months. Furthermore, the continued low interest rate environment could support firmer market conditions.
Net operating income for the quarter was $175 million, down $4 million from the same quarter in 2012 which benefited from a mild winter. The decrease in underwriting income and lower investment income were partially offset by an unusually-low effective tax rate this quarter.
Underwriting income in the quarter decreased by $40 million to $83 million compared to the same period a year ago. The combined ratio of 95.1 per cent was 2.8 percentage points higher than last year's exceptional underwriting performance. The increase was primarily due to the impact of more normal winter weather conditions in home insurance and less favourable prior year claims development in commercial lines.
Personal auto combined ratio improved 1.1 percentage points from a year ago to 94.1 per cent, as a significant increase in the frequency of claims due to more seasonal weather conditions offset higher favourable prior year development.
Commercial auto combined ratio increased 12.1 percentage points to 97.3 per cent from the very strong performance of 85.2 per cent in the first quarter of 2012. The increase was primarily due to a higher number of claims compared to last year's unusually mild weather conditions and unfavourable prior year claims development. Excluding catastrophes and prior year claims development, the current year loss ratio was up by 3.5 percentage points year-over-year.
For more information on Intact Financial Corporation, please visit intactfc.com.
Levis, Quebec -- May 14, 2013 -- Desjardins Insurance has launched a new usage-based insurance (UBI) offering in Ontario and Quebec. This is currently the only usage-based auto insurance offered in Ontario. Aviva previously provided a UBI in Ontario through its Autograph program, but Aviva discontinued the offering on August 1, 2011.
The new offering from Desjardins Insurance is called Ajusto. A statement from Desjardins says Ajusto offers consumers the opportunity to control their car insurance savings and get up to an additional 25 per cent off their premium, on top of existing discounts.
"By introducing Ajusto, Desjardins Insurance is helping to transform the traditional car insurance model, based on factors like age, gender and type of vehicle. We're challenging that model by offering a product that's based on individual driving habits, in line with global trends," explains Sylvie Paquette, president and COO of Desjardins General Insurance Group and senior vice-president and general manager, Desjardins Group, Property and Casualty Insurance.
Ajusto measures three factors to determine a driver's savings: distance travelled annually (up to 10 per cent off), extent and frequency of hard braking and acceleration (up to 10 per cent off), and the time of day the vehicle is driven (up to 5 per cent off). Premiums will never increase as a result of participating in the program.
Customers will have secure access to a personalized online dashboard where they can track their driving habits and insurance savings. The driving data on the online dashboard is updated daily and is subject to strict privacy policies. The discount is calculated monthly.
"We've been committed to offering made-to-measure protection for a long time. Every driver deserves personalized insurance and Ajusto is the ultimate in personalization," says Denis Côté, vice-president of Marketing at Desjardins Insurance. "Participants in our pilot study saved an average of 12 per cent. These discounts are on top of the made-to-measure savings already offered by Desjardins Insurance, so policyholders are getting truly customized savings."
The Ajusto device is about the size of a cellphone and very easy to install. Customers simply follow the instructions included in the package they receive by mail.
Ajusto is a free, voluntary program available to drivers in Quebec and Ontario who own cars manufactured in 1998 or later. Exceptions are limited to a few makes and models, but a Desjardins Insurance says a solution is in the pipeline.
For more information, please visit ajusto.com or watch an overview of Ajusto in the player below.
Toronto, Ontario -- May 2, 2013 -- Mainstream adoption of technology is having a major impact on the way auto insurance customers in Canada interact with their insurance provider, according to the latest J.D. Power & Associates 2013 Canadian Auto Insurance Satisfaction Study.
In 2013, the percentage of customers using non-traditional channels, such as a provider's website, has increased by as much as 7 percentage points from 2012, now accounting for as much as one-third of all customer interactions, depending on the particular region.
Among customers who contact their insurance company, nearly one-half (49%)—including those of agent/broker-based insurers (43%) and direct insurers (57%)—use multiple channels to contact their provider.
"An increasing number of consumers are going to the Web for their first point of contact to gather information," said Jeremy Bowler, senior director of the insurance practice at J.D. Power & Associates. "Auto insurers in Canada are aware of this major shift and need to continue to enhance their digital presence."
Bowler urges auto insurers to enhance their digital capabilities and promote these options, not only so that consumers can research and buy insurance when and where they want, but also so that customers can do the same when self-servicing a policy.
The study, now in its sixth year, measures insurance customer experiences with their primary auto insurer in Canada. Customer satisfaction is measured across five factors (in order of importance): interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in three regions: Ontario/Atlantic; Western (British Columbia; Alberta; Saskatchewan; and Manitoba); and Quebec.
Auto insurance customers in all three regions are more price sensitive in 2013 than they were in 2012, based on the 2013 study results.
"Although overall satisfaction has increased in the Ontario/Atlantic region, the uptick in insurer-initiated premium increases in the Western and Quebec regions has taken a toll on overall satisfaction," said Lubo Li, senior director of the services and emerging industries division at J.D. Power & Associates.
Regional Rankings
Customer satisfaction in the Ontario/Atlantic region has increased by 5 points (on a 1,000-point scale) from 2012, primarily due to flat or stable premiums. Bundling also is up in this region, which means that discounts appear to be bolstering customer satisfaction. Although customers in the Ontario/Atlantic region are the most price sensitive, possibly because there is no crown insurer presence, fewer customers reported premium price increases in 2013.
Grey Power ranks highest for a second consecutive year in the Ontario/Atlantic region with a score of 794, followed by Belairdirect (782) and The Personal (780).
Customer satisfaction has declined by nine points in the Western region from 2012, primarily due to a higher number of insurer-initiated premium increases. Some 27 percent of customers in this region indicated an insurer-initiated increase in 2013, compared with 25 percent in 2012.
Canadian Direct Insurance ranks highest in customer satisfaction in the Western region for a third consecutive year with a score of 800. BCAA (794) ranks second, and is followed by Co-operators (776).
The Quebec region, which achieved the highest customer satisfaction score among all regions in 2012, experiences the largest year-over-year decline in 2013 (-25 points). Satisfaction with price (-45 points) and policy offerings (-27 points) significantly decreases from 2012. Among the three regions, a larger percentage of customers in the Quebec region in 2013 also indicate that their insurer initiated a price increase, compared with 2012 (14% vs. 11%, respectively).
The Personal ranks highest in the Quebec region with a score of 835. Following in the rankings are La Capitale (830) and Promutuel (829).
Toronto, Ontario -- April 30, 2013 -- The Ontario Liberal government has announced it will introduce new legislation as part of a strategy that would reduce auto insurance premiums by an average of 15 per cent.
If passed, the legislation would require a premium reduction of 15 per cent on average, require insurers to offer lower premiums to consumers with safe driving records and provide the Superintendent of Financial Services with the authority to require insurers to file new rates.
The proposed legislation would also expand and modernize the Superintendent's investigation and enforcement authority, focusing on fraud prevention and make the Superintendent's Guidelines, incorporated by reference in the Statutory Accident Benefits Schedule, binding.
A statement from the Ontario government says the strategy will decrease overall premiums in Ontario by $1.5 billion a year, and reduce the average annual premium per insured vehicle by $225.
"Reducing auto insurance claim costs is part of the government’s plan to lower premiums for Ontario drivers. We will crack down on fraud, make roads safer and ensure people enjoy good benefits, security and proper care," according to a statement from Charles Sousa, Ontario's Minister of Finance.
Ontario NDP Leader Andrew Horwath has been calling for a 15 per cent reduction since February. It's one of the central conditions that the Ontario Liberals must address when they release the provincial spending plan on May 2 if they want to secure support from the NDP.
Alex Sun, CEO of Mitchell, presents opening remarks at Mitchell's 2013 Property & Casualty Conference.
By CRM Staff
Rancho Mirage, California -- April 22, 2013 -- Thought leaders from many of North America's top auto and workers’ compensation insurance companies came together recently for Mitchell's annual Property & Casualty Conference at Rancho Las Palmas Resort & Spa in Rancho Mirage, Calif. The conference featured sessions covering critical topics affecting the industry.
The exclusive, invitation only event is geared towards for P&C claims executives who want to connect with some of the most knowledgeable insurance, business, and technology experts presenting on today's critical claims issues.
According to Mitchell, the annual Property & Casualty Conference provides a comprehensive view and an extraordinary opportunity to gain insights, ideas, and perspectives on innovative approaches, technologies, and methodologies used by leaders in business today.
Highlights from the auto claims side included the unveiling of some of Mitchell's newest product innovations, a breakout session focusing on advancements on vehicle technology such as accident avoidance tools and telematics, and another session on claims fast-tracking, explaining how data-driven technology combined with consumer self-reporting tools can speed workflow decisions—leading to claims being settled more quickly and efficiently.
The 2013 Property & Casualty conference included the Mitchell Demo Lounge, showcasing innovation in P&C products and solutions.
Regina, Saskatchewan -- April 15, 2013 -- The Insurance Institute of Saskatchewan has announced it will provide training for auto insurers on the province's new restricted auto licensing requirements.
The Restricted Agent Course is designed to meet the curriculum requirements specified by the General Insurance Council of Saskatchewan. The course material is drawn from the wealth of learning content developed by the Insurance Institute and will be delivered in a variety of ways to meet the diverse needs of students. Self-study and traditional classroom learning options will be available. Frequent and convenient exam sessions will also be available.
Toronto, Ontario -- April 15, 2013 -- Reports released by Insurance Bureau of Canada (IBC) show that Ontario's auto insurers had marginal net returns in 2011 and 2012 after recovering from a severe loss situation prior to 2010 reforms.
The studies were done by two different independent professional firms, KPMG and J.S. Cheng & Partners.
Key Stats show:
2011 return on equity (Private Passenger Auto)
2.6% (JSCP)
0.2% (KPMG)
2012 return on equity (Private Passenger Auto)
4.9% (JSCP)
3.3% (KPMM)
Increase/decrease claims costs 2012 over 2011
+ $300M (JSCP)
- $198M (KPMG)
These returns on equity numbers compar to banks at 16.5%, the retail sector at 12.2%, life and health insurers at 9.3% and the securities industry at 12.6%.
These reports also add that between 2008 and 2010, the Ontario auto insurance industry lost $2 billion.
“These professionally qualified reports correct the highly misleading comments made by those who do not understand the auto insurance system including the Ontario Trial Lawyers Association,” said Ralph Palumbo, Vice-President, Ontario, IBC. “The reality is that the system in Ontario is broken and needs to be fixed. We know that the price of auto insurance in Ontario is too high. Consumers deserve a competitive auto insurance system that delivers affordable premiums for all drivers and fair benefits for injured collision victims. This can only be achieved with a commitment to real reforms that address costs and create a better system for drivers.”
“It’s quite simplistic for the NDP to call for a rate cut without a plan,” added Palumbo. “But do the math – a straight 15% cut to premiums would turn a modest profit in 2012 to another potential $1 billion loss across 90 insurance companies that sell auto insurance in Ontario and sets up the possibility of insurers leaving the market or becoming insolvent.”
