Insurance News - Wednesday, September 4, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, September 4, 2013:

• It seems all these new electronic proof of insurance laws are confusing police. What to do if the driver doesn't let an officer take their smartphone back to the squad car?
• Sprint launches technology that blocks a driver’s cell phone from sending and receiving text messages and surfing the Web.
• A New Jersey auto insurance group has released results of a study that offers some interesting new insights into the distracted driving behaviors of young New Jersey drivers.
• GM also claims that almost-driverless cars will be out by 2020.
• Europe wants to jump on the Big Brother tactics by limiting a car's top speed to the posted speed limit--no matter the driver's input.
• Another worry regarding self-driving cars - hackers find ways to hijack car computers and take control.

Insurance News - Sunday, September 1, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, September 1, 2013:

• Google’s $258 million investment in the car-hailing app company Uber made headlines last week.  Google’s interest in Uber is likely connected to their ongoing investments in driverless or autonomous cars, and it shows that the potential of this technology is much greater than is commonly realized.
• Transport Canada says deaths from distracted driving up 17% over last 5 years. News like that makes you look forward to seeing self-driving cars on the road. 
• Can smartphones prevent crashes? That's what the future may hold as Honda demonstrated a car equipped with dedicated short-range communications technology that can detect a pedestrian with a smartphone that has the same tech installed.
• U.S. Appeals Court sides with insurer in New York case where policyholder claimed optional benefit was misleading.  Policyholder thought he was getting in excess of the standard $50,000 in coverage instead of expanded coverage for other vehicles and passengers.
• Missouri is considering an uninsured motorist bill that would take away the right from uninsured drivers to sue an at-fault driver for non economic damages.
• ICBC is looking for a 4.9% rate increase for it basic auto insurance coverage but says much of the increase will be offset by rate reductions to optional coverage.

What Stands Out About Esure Insurance?

Gone are the days when taking an insurance cover was a matter of choice rather than a requirement. Reality seems to set in as scores of individuals are fast realizing that it’s better to be safe than to be sorry. The effects of an occurrence of an eventuality can have catastrophic effects on the financial well being of a person. Chances are that your business might be crippled to its knees as a result of a fire outbreak, or your precious car might be no more as a result of a devastating accident. What do you do in such circumstances? Do you start wishing that it never happened and that you wish you had taken insurance?

Taking an insurance cover as any insurance firm will advise you is a very important undertaking. However, it’s instructive that you settle for a firm that has a good presence and one which has proven its mettle in provision of quality insurance products. The name Esure insurance as you will agree with me has become a household name in the insurance sector. Its popularity stems from the fact that the firm has put in place proper mechanisms aimed at ensuring all the needs of customers are met. What is it about Esure that has made it so successful?

For starters, it’s important to note that Esure insurance recognizes the fact that insurance is of essence in our day to day life. The firm is cognizant of the fact that an ignorant populace means low business and inadvertently failure. In this regard, Esure insurance has rolled out an effective marketing plan aimed at sensitizing people from all walks of life on the importance of taking an insurance cover. The rallying call for the firm has been the need for people to be safe rather than to be sorry. Chances of being okay tomorrow and in a bad shape the following day are very real. 

With this in mind, Esure insurance has adopted a number of means. For starters, the firm has come up with a comprehensive website where existing clients and potential customers can have a look at their products and how they stand to benefit in the event of an occurrence of a loss. Clients can visit the website and understand how compensation is processed as well as compare quotes on the various insurance products offered by the firm. Esure insurance is cognizant of the fact that the number one reason why many people shy away from taking insurance is because of the belief that some firms take ages to issue compensation. 

This is something that is of concern and therefore the firm has put in place measures aimed at ensuring that the process of compensation is hastened and that clients are returned to the financial position they enjoyed before the occurrence of a loss with immediate effect. Something else that makes Esure stand out is its effective customer support. The firm has an effective and reliable online customer support aimed at ensuring that customer queries are answered to their satisfaction. Their philosophy of steadfast research has seen Esure insurance providing or coming up with insurance products aimed at meeting all the expectations of customers. Why not try this firm and enjoy all the benefits of insurance?

Dispute Resolution System Review Is Seeking Submissions From Stakeholders

On August 23, 2013 Ontario Minister of Finance Charles Sousa announced that he had appointed the Honourable J. Douglas Cunningham, former Associate Chief Justice of the Ontario Superior Court of Justice, to conduct the review of Ontario’s dispute resolution system.  

Mr. Cunningham is seeking stakeholder perspectives on the Ontario auto insurance dispute resolution system and the Ministry of Finance has posted on their website an invitation to stakeholder so make submissions.

Written submissions can be sent to the Ministry of Finance on or before September 20, 2013.

Mr. Cunningham is expected to deliver an interim report to the Minister of Finance in October 2013, and a final report in February 2014.  

Insurance News - Thursday, August 29, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, August 29, 2013:

• The courts are turning their attention to the dangers of texting and driving. A New Jersey appeals court ruled that a person could have a legal duty to avoid texting with someone who is driving.
•  Only five remaining U.S. states have no prohibition whatsoever on texting while driving.
• Auto insurers shouldn't just focus on claims fraud.  The latest trend in the U.S. is underwriting fraud by applicants who conceal or misrepresent information.
• Insurers love to insurer safe drivers.  So what is the safest city in America to drive in? Fort Collins, Colorado according to Allstate claims data. 
• Get ready to hand over control over the steering wheel because Nissan is planning to introduce their first self-driving cars by 2020.
• FSCO officially eliminated their mediation backlog as of August 19th but now they will have to focus on a build up of arbitration applications.

FSCO Lowers ROE Benchmark to 11%

When approving filed auto insurance rates from individual insurance companies FSCO has allowed a reasonable rate of return. In his 2011 Annual Report, the Auditor General of Ontario discussed the changed economic environment since 1996 when the return on equity (ROE) benchmark was last updated and recommended that it be reviewed. The Ontario Government endorsed the recommendation in the 2012 Ontario Budget.

 FSCO selected two consultants (Dr. Fred Lazar and Dr. Eli Prisman of York University) to conduct the ROE review for automobile insurance. The ROE review included consultation with stakeholders and is now complete and is posted on the FSCO website.

FSCO uses an after-tax , return on equity ( “ ROE ”) benchmark in the rate review process for rate filings by auto insurance companies in the province. The benchmark was initially established at 12.5% in 1988. In 1996 the ROE benchmark was reduced to 12%. The ROE benchmark is one of many variables used in the rate review process .

Three other provinces (Nova Scotia , New Brunswick and Newfoundland and Labrador) use an ROE benchmark ranging from 10% to 12%.

In carrying out their review of FSCO’s ROE benchmark the consultants examined various approaches and settled on the Capital Asset Pricing Model (CAPM) , which is a widely accepted methodology for estimating a company’s cost of equity capital

The consultants concluded that the current cost of capital for insurers is below FSCO’s current 12% after-tax ROE benchmark. They noted , however, that the current risk-free rate is abnormally low as the Bank of Canada deals with the aftermath of the 2008-9 economic and financial crisis and likely underestimates what the risk-free rate might be under more normal economic conditions.

Consequently, the consultants concluded that it would be inappropriate to apply the CAPM simplistically, noting that if it had been applied continuously from 1995 with appropriate risk-free rates and market risk premiums, the resulting ROE would have moved sharply from year to year, in some cases changing by more than 150 basis points. To address the volatility in the application of the CAPM model, the consultants proposed moving to a 5 or 10-year rolling average for the ROE benchmark, utilizing the CAPM results calculated in the report 

If a 10-year rolling average were used to determine the ROE benchmark, for 2013 the benchmark would be between 11.20% and 11.28%. If a 5-year rolling average were used , the benchmark for 2013 would be between 10.40% and 10.56%.

 As a result, FSCO has determined that it will now be using an 11% ROE as a benchmark for Automobile Insurance rate filings, effective immediately.

Insurance News - Monday, August 26, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, August 26, 2013:

• Another U.S state (Illinois) allows drivers to use phones as proof of auto insurance coverage but still no initiative in Canada.
• Illinois also now has higher minimum coverage for third party liability. The new amounts are $25,000 for injury or death of one person (up from $20,000) and $50,000 for injury or death of two or more people. Still one of the lowest in terms of TPL coverage. 
• According to a LexisNexis Insurance Telematics study 36% of consumers would switch auto insurers to receive usage-based insurance discount. 
• Do people with luxury cars drive differently? Apparently they do.
• Posting on Facebook about driving drunk got a teen arrested when he bragged about hitting another car.