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THE PROBLEM WITH PROPERTY
Adjusters will be on the front lines of looming changes to homeowner’s insurance
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• first notice FN Crawford CEO says industry needs better CAT preparation Insurance professionals need to be prepared in case natural catastrophes affect their own homes, and they also need to collaborate with competitors in order to develop an industrywide solution for overland flooding, the head of a claims management firm’s Canadian subsidiary suggested at an industry meeting May 14. “How equipped are we (personally) to be prepared for power outages?” Pat Van Bakel, president and chief executive officer of Crawford & Company (Canada) Inc. asked an audience of industry professionals. “Do we have food and water to help us through? Batteries, flashlights, lanterns? What about a portable generator? Are we reasonably well prepared to be outside of our homes for an extended period of time?” Van Bakel made his remarks during a presentation, titled “Failing to Plan is Planning to Fail,” at the Insurance Institute of Ontario’s “At the Forefront” event in Toronto. “Given the industry that we work in, we should be prepared” for disasters such as power outages and floods, Van Bakel said. Van Bakel was appointed to his current position last year at Atlanta-based Crawford, whose services in Canada include property & casualty claims management. During his presentation Wednesday, Van Bakel said when insurance executives make plans, they should also conduct a
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“pre-mortem,” which is essentially an exercise in assuming the plan has failed and figuring out what went wrong. “I think you will be amazed at the outcome,” he said. “Take off the rose-coloured glasses, take off the blinders and before you even implement your plan, develop strategies to mitigate against those failure points, and your chances of success just went up exponentially.” Van Bakel suggested that last year, some firms were not as prepared as they could have been for the flooding June in southern Alberta and the July 8 rainstorm in Toronto. “I recall sitting in executive boardrooms around this time last year and being told not to worry about cat events, that internal plans and resources were in place and there was no need to develop cat plans with external stakeholders,” he recounted. “Fast forward about six weeks. Two of the most populated areas of Canada would never flood within two weeks of each other, would they?” Van Bakel described what could happen to claims departments if they are not prepared for a major earthquake. “Access to the region is impossible,” he said. “All cellular, hydro, water, gas and city services are out and will be for some time. Your boss is on vacation and off the grid. The person you have designated as your catastrophe manager is also on vacation. You are not able to make contact with any of the local staff in the affected region. How sound is your plan?” l
Zurich research shows cyber claims pose “systemic risk” Cyber-risk management professionals must look beyond their internal information technology safeguards to interconnected risks that could build up and create a global shock on a similar scale to the 2008 financial crisis, cautions recently published research from Zurich Insurance Group. The reliance on information technology has created a complex web of interconnected risks, notes a statement from the Swiss insurance group. Findings – detailed in the Zurich Cyber Risk Report, created in collaboration with the international think tank Atlantic Council and issued earlier this week – shows organizations must improve their response to cyber risks to avoid a potential global shock. “While our society’s reliance on the Internet grows exponentially, our control of it only grows linearly, limited by outdated government procedures and ineffective governance,” notes the report. “Yet modern cyber risk management does not give much thought to ‘distant digital perfection,’ the aggregations of cyber risk, which lie sometimes far outside an organiza- t i o n ’ s own server and firewalls.” The report identifies seven interconnected risks, namely internal IT enterprise, counterparties and partners, outsourced and contract, supply chain, disruptive technologies, upstream infrastructure, and external shocks. l
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• first notice FN Lloyd’s releases global warming report Lloyd’s of London recently released a report that suggests global warming could either increase or decrease thunderstorm risk in the United States, but a rise in sea levels on the east coast could increase losses from storms similar to Hurricane Sandy. Catastrophe Modelling & Climate Change, which was produced by the exposure management and reinsurance team at Lloyd’s, was released May 8. In it, the authors review the latest research in climate change and the history of catastrophe modelling. Another section includes case studies provided by catastrophe modelling vendors. “For many extreme perils the natural variability to date is larger than the underlying climate change tendency,” Lloyd’s notes. “Future projections show that in the coming decades the underlying tendency is expected to emerge more clearly.” The contributing authors are Ralf Toumi, an atmospheric physics professor at Imperial College London and Lauren Restell of Lloyd’s Exposure Management. They warn that the levels of carbon dioxide, methane and nitrous oxide levels in the atmosphere “are higher than at any time” during the last 800,000 years. “The Summary for Policymakers of the IPCC’s Fifth Assessment Report (2013) reports an unequivocal warming of the climate system,” Lloyd’s noted. “Changes are observed in atmospheric and oceanic temperatures, the extent of ice and snow coverage, and the concentration of greenhouse gases in the atmosphere.”
But this is not necessarily contributing to an increase in thunderstorms in the United States, according to a case study, provided by Verisk Analystics Inc.’s Boston-based AIR Worldwide unit, in the Lloyd’s report. The AIR Worldwide authors — senior research scientist Ioana Dima and Shane Latchman, AIR’s manager of research and consulting and client services — note there are “two competing mechanisms” by which global warming can change thunderstorm risk in the United States. One effect of global warming that could reduce the probability of severe thunderstorms is a “weaker lower level global temperature gradient between equator and poles which in turn causes a weakening of the vertical wind shear.” However, Dima and Latchman note, an “increase in vertical instability and low-level moisture would result in an increased probability of severe thunderstorms in the future, since both these factors are important for the formation and development of thunderstorms.” Their paper was on both U.S. severe thunderstorms and tropical cyclones in a region of the Pacific encompassing a wide area, including Papua New Guinea, Fiji and Samoa. Global warming “has a direct impact on the intensity and life cycle” of tropical cyclones “by providing more energy to the storms and allowing for a possible increase in severity and frequency,” they wrote. l
RSA study sees increased observations of distracted driving Canadians report seeing many distracting driver behaviours, but few admit to being the ones fixing their hair while behind the wheel, according to a new survey from RSA. In the survey of 1,436 Canadian drivers conducted online by Leger Marketing, 63% said they have witnessed other drivers putting on makeup, and 57% reported seeing others fix their hair, while only 3% admitted to applying makeup and 7% to fixing their hair. The survey also reports that 66% of Canadians have witnessed people driving with pets on their lap but less than 4% admit to doing it themselves. It also found: • 24% of Canadians report seeing other drivers make out, while 3% admit to it themselves • 60% of Canadians have watched other drivers scream/swear at other drivers, pedestrians, cyclist, while only 23% admit to that behaviour • 40% of Canadians report seeing other drivers screaming at passengers; 8% admit to doing that themselves • 61% of Canadians have seen other drivers distracted with the radio or GPS, while nearly half admit to that themselves. l
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• first notice FN P&C Industry posts decline in underwriting profit: Swiss Re Record catastrophe losses caused the Canadian property and casualty insurance industry to see a decline in underwriting profit for 2013 to $284 million, compared with $1.9 billion in 2012, according to a quarterly briefing from Swiss Re’s Economic Research and Consulting division. Net income (after tax) fell by nearly 30%, and return on equity deteriorated to 7.7%, a decline of 3.5 points, the firm says in its May 9 briefing. Elevated catastrophe losses increased the industry’s combined ratio by nearly 5 points year over year to 99.8%, it says. “Alberta floods caused the biggest loss on sigma records in Canada, with an estimated $5 billion in economic losses and an estimated $2 billion in insured losses,” the briefing says. “Combined with damage from thunderstorms and flash floods in Toronto in July and an Ontario ice storm in De-
cember, 2013 insured losses from natural catastrophes reached a new record for the country.” Direct premiums written grew 3.7% year over year in 2013, compared with 3.1% growth in 2012.That was driven largely by the 5.7& growth for property lines, Swiss Re noted. Auto premiums were slower growing at 2.2%, compared with 2.9% in the prior year and 5.1% in 2011, and approved rates in Ontario auto declined by almost 4% in the last quarter of the year. “Combined with the declines in prior quarters, Ontario auto rates declined by almost 5% in 2013,” Swiss Re’s briefing notes, adding that further decreases are likely, as the industry works to meet the provincial government’s target for rate reductions. l
ICE STORMS CATASTROPHES FLASH FLOODS
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A bi-monthly magazine (6x per year), Claims Canada is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. Business Information Group is located at: 80 Valleybrook Drive, Toronto, ON, M3B 2S9. Claims Canada magazine is the Official Publication of the Canadian Independent Adjusters’ Association [CIAA] and through its editorial content and circulation brings together the ‘entire property & casualty insurance claims market nationally’ with information and insight into the profession, business and people of insurance claims and loss adjusting. All key claims process stakeholders are reached as part of our readership community – including: both CIAA member and non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management
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Message from the President La Plume du Président MARIE GALLAGHER “Mastering Disaster” was the theme of this year’s CIAA/CICMA Atlantic Joint Conference held in Nova Scotia the early part of June, which I was fortunate to attend, along with over 100 registrants from Nova Scotia, New Brunswick, PEI and Newfoundland. The organizing committee consisting of both CIAA and CICMA members did a fantastic job putting together an education program that was informative and relevant. With June marking the first anniversary of the Calgary storm, now hailed as the largest natural disaster in Canadian history with 1.7 billion dollars in insurable losses, and July marking the first anniversary of the Toronto storm, Ontario’s largest natural disaster with 850 million dollars in insurable losses, the timing couldn’t have been better. Topics focused on what we can learn from these events, ranging from Maintaining Evidence; Insurers’ Rights/Avoiding Estoppel; Avoiding Bad Faith Claims and a review of Municipal Liability. I particularly enjoyed the presentation by Jim Abraham, Meteorologist, on “Climate Change and Weather – “Is Weird Weather the New Norm?” (in a nutshell, the answer is yes!). Many of you may recognize Jim as a former meteorologist with Environment Canada, now retired, and part-time meteorologist on CBC Radio. With the use of graphs, statistics and in layman’s terms, Jim explained why we have become more vulnerable to these types of storms and why they have become so costly to us as an industry. According to Jim, there is no doubt the frequency and severity of the storms we have been seeing in recent past are here to stay, primarily due to changing weather patterns resulting from an increase of heat and moisture in the atmosphere as a result of growth in CO2 emissions. “CO2 lasts for 100 years – once you put it in the atmosphere it stays there” Jim advised. Factors such as our population growing exponentially, people living longer and people “accumulating more stuff ” than previous generations (think of our lavishly finished and furnished basements today in contrast to the ones most of us grew up with) – all these contribute to the resulting costs we are seeing from these severe weather events. On top of it all, it is not only increased costs we are faced with as a result of severe weather events – it is manpower. With insurers, independent adjusting firms and restoration firms staffed according to the anticipated needs of their respective clients, as we have all experienced, when a severe weather event hits, those adjusters and contractors are each suddenly faced with an influx of hundreds of incoming claims in a very short time period. When a severe weather event occurs, the urgency of “getting boots on the ground” is of utmost importance. The goal of CIAA’s on-going initiative regarding temporary licensing harmonization for “insurance claims events” is to assist with just that. In times like these, prioritizing and triaging becomes paramount. And as evidenced by the presentation put on by the Canadian Red Cross on Catastrophe Assistance at the Atlantic Joint Conference, possibly no one does this better than the Red Cross. When the largest 10 Claims Canada
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« Maîtriser les catastrophes » était le thème du congrès conjoint de l’Atlantique de l’ACEI/ACDSA cette année, qui a eu lieu en Nouvelle-Écosse au début de juin et auquel j’ai eu la chance d’assister avec plus de 100 participants de la Nouvelle-Écosse, du Nouveau-Brunswick, de l’Île-du-PrinceÉdouard et de Terre-Neuve-et-Labrador. Le comité organisationnel composé de membres de l’ACEI et de l’ACDSA a fait un travail fantastique pour mettre sur pied un programme éducatif qui a été instructif et pertinent. Le mois de juin marquant le premier anniversaire de la tempête de Calgary, maintenant considérée comme la plus grande catastrophe naturelle de l’histoire du Canada avec 1,7 milliard de dollars en pertes assurables, et le mois de juillet marquant le premier anniversaire de la tempête de Toronto, la plus grande catastrophe naturelle de l’Ontario avec 850 millions de dollars en pertes assurable, le moment n’aurait pas pu être plus opportun. Les sujets étaient axés sur ce que nous pouvions apprendre de ces événements, comme le maintien de la preuve, les droits des assureurs (évitement de l’estoppel), l’évitement des sinistres de mauvaise foi et l’examen de la responsabilité municipale. J’ai trouvé particulièrement intéressante la présentation de Jim Abraham, météorologiste, « Changement climatique et météo : est-ce que les intempéries bizarres sont la nouvelle norme? » (en un mot, la réponse est oui!). Beaucoup d’entre vous reconnaîtront sans doute Jim comme ancien météorologiste à Environnement Canada, maintenant à la retraite, et météorologiste à temps partiel à CBC/Radio-Canada. Grâce à des graphiques, des statistiques et des termes simples, Jim a expliqué la raison pour laquelle nous sommes davantage exposés à ces types de tempêtes et la raison pour laquelle elles sont devenues si coûteuses pour notre industrie. Selon Jim, il n’y a aucun doute que la fréquence et la gravité des tempêtes que nous avons pu observer récemment perdureront, principalement en raison de conditions météorologiques changeantes résultant d’une augmentation de la chaleur, de l’humidité et des émissions de CO₂. « Le CO₂ dure 100 ans : dès que vous en rejetez dans l’atmosphère, il y reste », indique Jim. Des facteurs comme la croissance exponentielle de la population, l’espérance de vie prolongée et la tendance à accumuler de plus en plus d’articles par rapport aux générations précédentes (songez à nos sous-sols somptueusement meublés d’aujourd’hui par rapport à ceux où la plupart d’entre nous ont grandi) contribuent aux coûts générés par les phénomènes météorologiques violents que nous observons. En plus d’engendrer des coûts plus importants, les phénomènes météorologiques violents exigent également une main-d’œuvre accrue. Les assureurs, les cabinets d’experts en sinistres indépendants et les entreprises de restauration étant dotés en personnel selon les besoins prévus de leurs clients respectifs, lorsqu’un phénomène météorologique violent survient, ces entreprises sont soudainement aux prises avec des centaines de demandes de règlements reçues en un laps de temps très court, comme nous l’avons tous observé. Quand un phénomène météorologique violent se produit, il est essentiel d’arriver sur place le plus rapidement possible. L’objectif de l’initiative en cours de l’ACEI concernant l’harmonisation temporaire des permis pour les « événements de sinistres d’assurance » est d’aider dans ces situations. Dans ces situations, la priorisation et le triage sont d’une importance primordiale. Et comme en témoigne la présentation préparée par la CroixRouge canadienne sur l’assistance en cas de catastrophe lors du congrès www.claimscanada.ca
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flooding disaster in Canada’s history hit southern Alberta last June, over 1000 Canadian Red Cross volunteers were deployed from across Canada to assist. As a result of revenue raised from various activities at the Joint Conference, including a silent auction that took place during the Lobster Dinner (yes lobster!), the Committee Members were especially proud and excited to present the Canadian Red Cross with a donation of $10,000 on behalf of its members. So impressed was I with the presentation given by the Canadian Red Cross, and having learned so much by it, I have asked them to put together an article for an upcoming issue of Claims Canada similar to the presentation they gave. In the meantime, they were extremely appreciative of the donation and guaranteed the funds would go a long way to help those in need in Atlantic Canada. I also had the pleasure of attending Ontario Region’s AGM held in Niagara-on-the-Lake in June. As always, either of these events would not be possible without the support of our many sponsors. Thank you! With the cold of winter and spring behind us and the warmth of summer now upon us, I am sure many are taking the time to enjoy traditional summer activities of golfing, trips to the cottage, boating and family get-togethers. Enjoy it while you can because you just never know what’s around the corner! For me, I am very much looking forward to our upcoming CIAA National Convention and AGM being held at the Chateau Frontenac in Quebec City August 21 – 24. We have a fantastic program arranged and the location just couldn’t be better! I hope to see many of you there, both returning and new delegates alike, and once again, appreciate all the assistance of the sponsors who will be supporting us this year. I wish you all a safe and much deserved enjoyable summer. n
conjoint de l’Atlantique, il est probable que personne ne fait mieux que la Croix-Rouge. Lorsque la plus importante inondation de l’histoire du Canada a frappé le sud de l’Alberta en juin dernier, plus de 1 000 bénévoles de la Croix-Rouge canadienne ont été déployés partout au Canada. En raison des recettes générées par les différentes activités qui se sont tenues lors du congrès conjoint, incluant une vente aux enchères par écrit qui a eu lieu pendant le dîner au homard (oui, du homard!), les membres du comité étaient particulièrement fiers et heureux de présenter à la CroixRouge canadienne un don de 10 000 dollars au nom de ses membres. J’ai été tellement impressionné et j’en ai tant appris lors de la présentation de la Croix-Rouge canadienne, que j’ai demandé à celle-ci de rédiger un article pour un prochain numéro de Claims Canada qui est similaire à la présentation qu’elle vient de donner. Entretemps, elle a été extrêmement reconnaissante du don et a garanti que les fonds aideront considérablement les gens qui sont dans le besoin au Canada atlantique. J’ai également eu le plaisir d’assister à l’assemblée générale annuelle de la région de l’Ontario à Niagara-on-the-Lake, en juin. Comme toujours, aucun de ces événements n’aurait été possible sans le soutien de nos nombreux commanditaires. Merci! Alors que le froid de l’hiver et du printemps est derrière nous et que la chaleur de l’été est arrivée, je suis sûr que beaucoup d’entre vous en profiteront pour s’adonner à des activités estivales traditionnelles comme le golf, les excursions au chalet, la navigation de plaisance et les rencontres familiales. Profitez-en pendant que vous le pouvez parce que vous ne savez jamais ce qui vous attend au tournant! En ce qui me concerne, j’ai vraiment hâte d’assister à notre prochain congrès national et à l’assemblée générale annuelle de l’ACEI qui se tiendra au Château Frontenac, à Québec, du 21 au 24 août. Nous avons préparé un programme fantastique et il n’y a pas de meilleur emplacement! J’espère voir beaucoup d’entre vous, tant les nouveaux que les anciens délégués, et encore une fois, je suis reconnaissant pour l’aide de tous les commanditaires qui nous soutiendront cette année. Je vous souhaite à tous un agréable été bien mérité. n
NATIONAL EXECUTIVE 2013-2014 2011-2011 PRESIDENT Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 • Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com 1ST VICE-PRESIDENT David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400 – 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6559 • Fax: (604) 659-6570 E-mail : david.porter@graniteclaims.com 2ND VICE-PRESIDENT Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 • Fax: (905) 896-3485 E-mail: apoon@cl-na.com SECRETARY Dara Banga, FCIP, CFEI DSB Claims Solutions Inc. 204 Main Street North, Brampton, ON L6V 1P1 Phone: (416) 400-8933 • Fax: (905) 915-4685 E-mail: dara.banga@dsbclaims.com
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TREASURER Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com PAST-PRESIDENT John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca
DIRECTOR James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 • Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 • Fax: (905) 896-3485 E-mail: apoon@cl-na.com DIRECTOR John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 • Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com DIRECTOR Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 • Fax: (416) 492-5657 E-mail: cwalker@maltmans.com
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• cover story
THE PROBLEM WITH
PROPERTY
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In the wake of record catastrophic claims, insurers in key regions of Canada are changing their approach to personal and, to a lesser extent, commercial property insurance. Coverage terms are constricting, sub-limits are being introduced, deductibles are increasing and rates are rising, especially for water damage losses. It will take time before claims are filed on these revised policies and customers discover the true extent of coverage amendments. It’s a testy situation that could put independent adjusters on the spot.
BY CRAIG HARRIS
I
n the p&c insurance industry, there is a always a lag period before policy changes are made at the front end by insurers and claims are made at the back end by customers. Given that most consumers don’t read their policies in detail, the changes can present an abrupt shock to those who assumed they had coverage for, say, their water logged home entertainment system in the basement. Guess who has to explain the thorny implications of sub-limits or higher deductibles? The claims handler. In many cases, that means the independent adjuster. That time delay is precisely what is occurring in property insurance today, as underwriters struggle to determine and limit their exposures, particularly for water damage and sewer back up losses. Adjusters say that several insurance companies have already sent out notices of policy changes on renewal of personal property policies. To control their exposures in general, insurers can increase premiums, place restrictions on underwriting, change deductibles, introduce limits (or sub-limits in
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specific areas), modify policy wordings and implement exclusions or endorsements. “We have seen announcements from insurers that changes are coming,” notes Fred Plant, president of Plant Hope Adjusters Ltd. “There will be a bit of a lag as changes come into effect gradually on renewals and on specific dates for new business. The changes are coming; so too is an event where those changes will come to fruition and be magnified. We expect it wont be pleasant.” “We are getting bulletins from insurers we work for; they have notified us of the changes they are making and how they are dealing with the issue,” says David Riddell, president of Calgary-based Canadian Claims Services. “They want to make sure everyone is aware of the changes on the new renewals, mainly for sewer back-up and hail damage.” There are several types of specific policy amendments that adjusters are seeing on the front lines of claims handling, according to sources. “On water damage specifically, we are receiving notifications from a number of insurers regarding some
tightening of wordings and reduced sub-limits, and we are hearing indirectly from brokers and insureds about increased deductibles and premium increases,” says Jim Eso, senior vice president, property & casualty, Crawford and Company (Canada) Inc. “Sub-limits, will likely have the biggest impact. If someone’s deductible goes up from $1,000 to $2,500, it won’t necessarily influence their decision to buy coverage or perhaps to change insurance companies. However, an imposition of a $15,000 sublimit on basement water claims is a significant issue for someone who has a home theater in their basement.” The reaction from consumers on policy changes, whether higher deductibles, premiums or sub-limits, is predictably negative. “Usually, it comes up when we get a new claim, we are looking through the declaration pages of the policy coverages; that is where we see any limitations or higher deductibles,” notes Lee Powell, director of property, major loss services, Cunningham Lindsey. “The statement you are hearing from insurers is that a lot of the smaller losses are getting June/July 2014
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absorbed into higher sub-limits and deductibles. The question that comes back from consumers is: ‘then, why do I have insurance in the first place, especially for water damage claims?’” Many say that the consumer backlash against property insurance changes is in its early stages, but will likely gather momentum in the months and years ahead. “It is really too new; there haven’t been any claims impacted by the changes yet, but it will come,” Riddell observes. “You hear informal feedback from people about new limits or capping sewer back up, higher deductibles. Anytime there is change or people get less perceived value for their insurance policy, they are not happy. Homeowners insurance is not an option for most people, as they have mortgages. This is seen as just another way for insurance companies to make more money.” Riddell and Eso note that policy changes in Alberta involve both water damage and hail. On the latter front, homeowners insurance for older roofs may be subject to depreciation instead of replacement cost coverage. There’s little doubt that the frequency and severity of large severe weather loss events is on the rise. The insurance industry has been pointing to telling statistics of property insurance claims growth over the past decade. From 1983 to 2008 – 25 years – yearly natural catastrophe losses in Canada averaged around $400 million. Over the next four years, they hovered around $1 billion each year. Then came 2013 – the year of the Alberta and GTA floods and the costliest year in Canada’s catastrophic insurance loss history. Severe weather cat losses hit $3.2 billion. “It seems to me that we are having more severe weather events,” Powell says. “Every year or other year, there is a major loss event, not just a one-in-ten or 1-in-50 scenario. That is where on the independent adjuster side we are more 14 Claims Canada
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Industry data show that despite increases in premiums and claims over time, the Canada-wide return on equity in property lines appears to be on a downward trend. aligned with insurance companies. We are working more closely together as a team to handle these major events.” What about the numbers by property lines specifically? Industry data show that despite increases in premiums and claims over time, the Canada-wide return on equity in property lines appears to be on a downward trend. The Canada 9-year average ROE for personal property from 2004-2012 was 7%, which is 4.7% below the overall p&c industry 9-year average of 11.7%. The data for commercial property is better, with a 9-year ROE average of 13.6%; however, the downward trend is also seen here, with 2011 being the least profitable year with an ROE of only 4.8% Powell notes that “on the
commercial side, we have not seen as much in terms of limiting coverage; we have, however, seen higher deductibles for flood and sewer backup.” Some regions, such as Alberta and the Maritime provinces have fared particularly poorly in personal property insurance results. Over the period 2004-2012, Alberta only had one year of positive ROE (2006), with 2011 showing the worst result at a staggering -51.8% ROE. The average ROE over that period in personal property was -17%. The Maritime provinces also posted a substantial negative ROE in personal property in 2009 (-17.1%), with the 9-year average at a mere 4.6% While there are many sources of property insurance claims, water www.claimscanada.ca
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damage is singled out as the major factor behind the increase in losses and the pressure on insurer financial results. Insurance companies in Canada, such as Aviva, have shown that just over half of all property claims involved water damage. For Aviva Canada the figure for waterrelated losses in 2013 was $190 million. (Other insurers have reported similar ratios of water damage claims to overall property losses). In February 2014, the Canadian Institute of Actuaries released a report called “Water Damage Risk and Canadian Property Insurance Pricing.” The study, prepared by KPMG, included a survey of insurance companies on trends in water-related losses. It found that “the majority of respondents answered water claims were roughly 40% or more of total claims. For some insurers, water damage claims range from 60% to 70% for Ontario and western regions. Condominium water claims comprise a much larger percentage of total claims relative to homeowners and commercial multi-peril policies; many of the respondents indicated claims from 60% to 90%. Not only are water damage claims a large proportion of total claims, at least 90% of exposures are subject to water damage, depending on perils covered in the standard policy and what optional coverages are offered.” The CIA study found that losses due to water are becoming a challenge in accurate pricing and reserving. “The increasing trends seen in the number of water damage claims (i.e., frequency of claims) as well as in the costs of claims (i.e., severity of claims) are alarming to many in the P&C industry. Trends in frequency are often attributed to… climate change, aging and inadequate infrastructure, and lifestyle changes. The reasons for increasing severities include but are not limited to the costs in addressing mould remediation as well as the costs required to address any concerns about the presence of asbestos in old drywall.” 16 Claims Canada
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“Not only are water damage claims a large proportion of total claims, at least 90% of exposures are subject to water damage, depending on perils covered in the standard policy and what optional coverages are offered.” The report also noted that insurance companies have some work to do to get a more accurate risk assessment of the threat of future water damage. “Currently, most P&C insurers have not captured all of the data (about either the properties or the local environments) required for detailed actuarial analyses of the risk of water damage. To move to a goodpractice state with respect to data will require considerable investment of personnel, IT, and human resources,” the CIA study noted. In the face of this uncertainty, insurers are increasing premiums – a trend borne out in a J.D. Power Canadian Home Insurance Study. The report, released in June, discovered
that 45% of customers indicated they received a premium increase in 2014. It also noted a 10-point increase in the price index on a national level. Year over year, the number of weather-related insurance claims in Canada has increased by 32%, according to J.D. Power. The study is based on responses from 7,092 home insurance customers, collected March through April 2014. Increased rates, higher deductibles and new sub-limits for water-damage coverage are only part of the insurer response to heightened property insurance exposures. Modified wordings are also being considered or implemented, particularly for sewer back-up coverage. Insurance Bureau www.claimscanada.ca
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of Canada recently released a new limited sewer backup endorsement advisory wording designed to clarify what is and what is not covered in a flood-type situation. While not binding, these advisory wordings are often used as the basis for insurance companies to develop their own policy terms and conditions. Independent adjusters note that many insurance companies already had clear policy language and contract wordings in place that distinguished between overland flood and sewer back-up. However, in situations such as the Alberta floods and, to a lesser degree, the GTA water losses, insurers often changed their coverage interpretation to include certain claims. “There were wordings that existed in relation to the (Alberta) floods last year that specifically excluded sewer back-up if it happened preceding or at the same time of an overland flood,” Riddell says. “Some of the insurers relied upon that wording at first to deny claims and then ultimately reversed their positions due to public pressure.” Whether modified policy wordings will clarify matters during a major loss event is an unanswered question for claims handlers. Sources say that independent adjusters will have to be aware and proactive on any property insurance changes and how they affect the end consumer. “I think the important question is whether policyholders have firstly read (in the case of direct written policies) and secondly truly understood (in the case of brokered policies) the implication to their own potential situation in the event of a loss,” Eso observes. “The tendency may be that in the face of increasing premiums, policyholders are accepting reductions in coverage in order to minimize premium increases. They (may not have) full understanding of the impact various scenarios such as a major water loss or total roof loss in a hail storm could mean to them if coverage is not full replacement coverage to full policy limit. The lack of complete www.claimscanada.ca
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awareness becomes reality only when a loss occurs, which can make the claim settlement more challenging.” “Adjusters will have to be vigilant in ensuring they have the current wording in-hand before making any comment or commitment on coverage,” Plant notes. “Actually, that is the way it should be all the time; however, practice does not always follow protocol. Those adjusters who are
not careful may end up digging into their pockets.” In the short to medium term, more and more insurers will likely continue to control the frequency of water damage claims through measures like higher deductibles and sublimits. “Insurance has always been – ‘what is our risk?’” Riddell says. “When (insurers) are trying to place
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“I think the important question is whether policyholders have firstly read (in the case of direct written policies) and secondly truly understood (in the case of brokered policies) the implication to their own potential situation in the event of a loss,” Eso observes. a value on what their potential exposure is versus the premium collected, they are always going to be looking at ways to mitigate their exposure, whether that is capping certain levels of coverage or raising deductibles. This absolutely reduces claims. If consumers have the financial wherewithal to do it, many will just absorb the smaller claims, even for sewer back-up. They don’t want to be rated, they don’t want an increase going through next year.” Eso notes that insurance brokers will typically have the best “line of sight” into how many customers decline to submit claims due to these policy changes. He adds that Crawford and Company’s after-hours Claims Alert Call centre has witnessed some signs of this activity. 18 Claims Canada
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“What we do see… is a higher number of claims that are either withdrawn or simply cashed out due to a combination of higher deductible and lower sub-limit coverage,” Eso says. “In some of those situations, proceeding with full repair through a specialist contractor is simply not financially feasible for an insured whose policy is subject to sublimit, depreciation or a high deductible. Any one of those may be the tipping point that strains an insured’s financial resources beyond their ability to proceed with full repair.” Plant says that brokers will also have a strong role to play in consumer education. “The most common recurring claim is water-related so there will be more people who will have had a claim adjudicated based on one
wording and then find their second (or third) claim more restricted,” he notes. “Brokers will play an important part in lessening coverage-shock by fully explaining coverage changes on renewals or restrictions on new business.” How much the actual “savings” or “efficiency gains” accrue to insurance companies from their policy revisions is an open issue subject to many variables, including the role of contractors in the repair work process. Some sources argue that exposures like mould could become a major problem if sub-limits reduce the amount of coverage and repair work done on a water-damaged property. After the gains in mould remediation in recent years, it may be “two steps forward, one step back” if the changwww.claimscanada.ca
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es in property policies become fully embraced by the p&c industry. “What will insurers do now in those cases where they do not control the remediation of the damage due to water because of a limitation of coverage?” Plant asks. “A $50,0000 repair is only covered to a limit of $20,000. Will insurers be content to simply write the limit cheque and walk away? They will likely want or should want some sort of release so that an improper clean-up is not their responsibility. That is a deviation from the current trend of the insurer dispatching a contractor to do the job and if something happens later the contractor has to come good for it.” Plant adds that “contractors are likely to feel the pinch on this even more than field adjusters. Insurers will not be so keen to simply send their contractor over to do the job, although some insurers may leave the henhouse keys where they are. Those insurers may not see much change in
payouts. Perhaps there will now be a need to have a proper and independent (of the contractor) assessment of the cause and the application of coverage in the circumstances.“ Eso observes that insurance companies have spent years developing comprehensive property policies on an all risk, replacement cost and high limit basis for most personal property insurance policies. They have also created preferred construction networks to handle the vast majority of claims through a direct repair process. He calls this the existing “Canadian claims model.” “Changes that increase claim costs to the homeowner to the extent that larger numbers of files do not go through a managed repair process is a significant issue I think to the Canadian claims model,” he observes. In the end, the problem with property is two-fold: will the policy changes truly achieve the right effect for the insurance industry of limit-
ing exposures? And how well will the changes be communicated to clients to avoid the “sticker shock” of diluted coverage? “I think the issue that the property insurers will wrestle with for awhile is the impact of the tightening of coverages and payouts available as they try to find the right balance,” Eso concludes “The challenge will be finding a balance that maintains customer satisfaction and underwriting confidence, while controlling or limiting repair cost and allowing for competitive premium pricing. Time will tell whether current policy changes have struck that balance or gone too far.”
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• spotlight S
The
Aviator Saskatchewan’s Paul Greening has had a rich, varied career in the adjusting profession, but his true passion remains aviation claims. BY CRAIG HARRIS
“Find a job you love, and you will never work a day in your life,” according to Confucius. For Paul Greening, an adjuster and aircraft enthusiast, he has been able to combine both interests into a lifelong career in aviation claims. It started with obtaining a pilot’s license in 1968. Not that the work is easy or without its challenges. “I run my office out of Palliser Park, Sask. on Lake Diefenbaker because I learned a long time ago you don’t have to be in any specific place to do aviation claims,” Greening explains. “Accidents don’t happen in your own back yard; you have to travel to the site.” In fact, he keeps two backpacks stocked and ready (one for summer, one for winter) for the emergency phone call to handle a claim. “When an aircraft loss happens, they don’t count on you being there tomorrow,” he says. “It is today, or as quickly as possible after the incident occurs. That is the way the aviation world works. It doesn’t matter what you are doing at the time; if a loss happens, you are gone.” The dedication and commitment required to be a specialist aviation 20 Claims Canada
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loss adjuster reflects the nature of the profession, says Greening. Like many Prairie residents, he is a plain talking, hardy, do-it-yourselfer who has spent years honing his skills. “The challenging part of this job is you are not in the position of getting guidance from underwriters,” he observes. “You make your own decisions because often you are not in communication with anyone. You go in there, see what has to be done and get it done.” Paul Greening has been “getting it done” for over 35 years and under the banner of Greening Aviation Claims since 2002. He has specialized in aviation claims for Aviation Underwriters and the Canadian Aerial Applicators (hull and drift liability) in all three Prairie provinces. But his career also arcs back several decades and includes a diverse set of experiences and unique opportunities
in claims handling. While Greening first became an independent loss adjuster in 1966 (he started out in claims with Saskatchewan Government Insurance in May, 1959), it wasn’t until 1975 that he got the nod from Hank Eisler, a well-known aviation adjuster in Saskatoon, to start taking on aircraft-related losses. He became a partner in the firm H.J. Eisler Co. Ltd. (operating as Stinson Eisler Adjustment Bureau). Greening recalls that building up the expertise in this specialized field took some time. “I tutored under Hank for several years,” he notes. “In the aviation world in those days, Lloyd’s of London was the primary insurer. They let me do some of the claims, but Hank had to sign the reports that went to London. After five years, Lloyd’s finally gave the green light for me to sign off on my own reports.” www.claimscanada.ca
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the business was sold to (then) Underwriters Adjustment Bureau, with Paul specializing in aviation and professional liability claims. Since that time, he has handled hundreds of aviation claims. Greening notes aircraft losses are challenging on many levels due to complexity, tragedy (loss of human life) and recovery issues. “You have to explain the claims procedure to the insured,” he says. “In many cases, it may be their first loss. You have to sort of hold their hands, discuss it with them and say,’ here is how I think we can get this resolved for you.’ Keep the insured involved in the claims procedure with straight talk and honesty.
One of the “challenges of this job is being able to explain unique loss situations to underwriters.
“
His adjusting experience also extends to other interesting areas, such as professional liability and environmental claims, particularly related to the uranium industry. Greening handled a lot of the claims during the Saskatchewan uranium mining surge of the 1970s. “That was a very interesting opportunity,” he recalls. “When mines develop from exploration to production, losses occur left and right. There was a real variety of environmental issues, which included claims like release of contaminated water and uranium spills to internal hydrogen fire.” Mining and aviation were closely related activities during the heyday of the uranium boom in Saskatchewan. “The earlier years of the aviation industry involved smaller aircraft and exploration in the north when mining started to develop,” explains Greening, who has handled claims from the Arctic to the southern deserts of the U.S. “Aviation became a key factor in the exploration, surveys and development of mines. Later on, that evolved into transportation of personnel and larger passenger aircraft. The transportation world changed from cargo and survey to passengers and supplies.” Professional liability became Greening’s focus in 1983, when he was appointed as the investigating adjuster on behalf of the Law Society of Saskatchewan. For 18 years, he was directly involved in the development of claims procedures for the Law Society, a role that extended to the Law Society of the (then) Northwest Territories. “I spent many years handling E&O losses for the law society here,” Greening says. “They finally went selfinsured; I was directly involved with their program, in terms of setting up loss prevention measures. Actually I worked myself out of a job,” he laughs. In 1987, Greening and two partners purchased H.J. Eisler Co. Ltd., allowing him to specialize in aviation and professional liability claims. In 1995, a branch office of Eisler Adjusters was established in Regina and, in 2002, Greening Aviation Claims was incorporated with Paul becoming the sole owner. The general insurance side of
Some notable recent losses include the mid-air collision near St. Brieux, northeast of Saskatoon, in May 2012 that resulted in five fatalities. Another involved the crash of a survey aircraft due to engine failure on a street in Saskatoon in April 2011 that left one fatality. “You have to take time and understand what they are going through. Some of the cases we deal with are quite tragic. So you have to reach out to the people who suffered the loss, before you even think about doing the claim,” Greening says. Fortunately, only a relatively small minority of aviation claims entail loss of life. For Greening, maintaining the expertise to handle these often complex claims is part of the role of a niche lines adjuster. “There are two aspects to the continuing education required,” he says. “The first is the insurance policy and underwriter’s requirements. Aviation
underwriters will send you a copy of the policy, so that you can digest everything pertaining to that specific loss. The (policies) are very unique; you receive custom policies drafted by aviation brokers and agents and then you really have to start digging.” A second, equally important, facet of this specialty is knowledge of the “product” itself – the aircraft and its parts and characteristics. “You need a good understanding of aircraft structure, piston and turbine engines, fabric-covered aircraft to high-end aircraft,” Greening notes. “You don’t have to be an engineer, but you have to know the basics and when you need more specialized knowledge, consultation with aircraft engineers.” There are plentiful rules and regulations involved in aviation, including arrangements to deal with various authorities such as the Transportation Safety Board and Transport Canada. Aircraft and pilot documentation, flight records, weather, flight and aircraft limitations are other factors that must be carefully documented. “One of the challenges of this job is being able to explain unique loss situations to underwriters,” Greening says. “Keeping underwriters well informed is key.” While aviation claims handling is clearly a specialized line of business, Greening argues that it is a field ripe with opportunity for adjusters with the right mindset –and commitment. “I think there is very much a market for independent adjusters specializing in niche lines,” he says. “The key is, number one, finding someone who is interested in that particular line of business and, number two, ensuring they are dedicated to it.” He adds that “it won’t happen immediately; it takes a few years to build the expertise. Look at me, it took five years before the underwriters at Lloyd’s let me sign off on my own reports.” For Greening, in the end the investment in knowledge he has put into aviation claims has paid off in a rewarding career full of challenge, opportunity and interest. The work is worth the effort. It’s a passion – and a labour of love. June/July 2014
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On Site
How a site control clerk can benefit the construction and insurance claims process. BY COLIN MCCLEARY
How many insurance claims people are familiar with the term “Clerk of the Works?” For those who aren’t, it’s a British term and denotes a role that is primarily intended to represent the interests of the client in a construction project. The job of a British Clerk of the Works is to ensure that the quality of both materials and workmanship are in accordance with the design information, specifications and engineering drawings. This type of clerk is the most highly qualified non-commissioned tradesperson in the Royal Engineers. We don’t really use ‘Clerks of the Works’ in Canada in this capacity, but we do have site control clerks. The site clerk role is narrower than the scope of role of the British Clerk of the Works, but many of the tasks are similar. Pure site clerking is a role often overlooked as a valuable component of loss adjusting and claims cost containment efforts. 22 Claims Canada
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The use of a site clerk on a loss site provides a real time record of the activities of contractors or the policyholder following a loss event for which insurance is claimed. It is particularly useful where emergency work is being performed on a time and material basis and where no other cost controls exist. It can also be useful for lump sum restorations. The logs and photographs kept by the clerk allow the adjuster or claim handler to look at the conditions of the loss site by the hour. Typically, the clerk records the ongoing results of tear-outs by recording evidence of the original observed conditions and what is revealed during removals. The logs record all personnel on the site at any given time, the nature and quantity of equipment deployed, contents and materials removed or delivered, weather conditions or other site conditions which may delay, impede or halt work altogether. Without this information, there is no means to validate if the charges or losses www.claimscanada.ca
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claimed are justifiable. When the claimant, policyholder, or other service provider is aware there are no on-site monitoring, errors or cost exaggerations can easily materialize. But there are other equally important benefits to deploying a site clerk. Here are a few; • Clerking a loss site monitors the progress of the work on an hourly basis – allowing the adjuster to determine if more project acceleration is necessary; • Monitoring identifies delays, such as weather events, power outages, water shortages, delivery issues or any other factor that might impact the ability of the contractors to complete work on a timely basis; • With real time monitoring issues such as site conflicts are identified – as sometimes occurs with crosstrades bumping into one another which might reveal a lack of project management – all important information for an adjuster;
companies and their adjusters. Clearly they do not want conflicts with their customers. In our experience on remediation jobs of significance, where dozens of workers are deployed, it is often difficult to verify if the time and material tracking maintained by the service provider issued after the event is accurate. When a site clerk is present, contractors are interested in comparing data sets to verify the accuracy of their own information before invoicing, and this helps loss adjusters to make final recommendations for loss payments much easier and far more The use of a site clerk reliable. on a loss site provides a Even the mere presence of a clerk on real time record of the the site can serve to curtail over-claiming, because no one can really be sure activities of contractors what the clerk has observed or what or the policyholder information was captured. It’s like putting a police car on the side of the following a loss event highway – it doesn’t need a policeman for which insurance is in it to slow down traffic.
claimed.
• Real time monitoring records head-counts of general contractors, sub-contractors and consultants who are on the site at any given time. This can benefit these contractors where it’s own personnel have not kept clean activity records and enables the adjuster to cross reference time and materials charged against time & materials recorded;
Colin McCleary is a Senior Site Clerk with EllisDon Consulting and Project Management (www.ellisdon.com).
• Equipment and machinery deployed is identified and confirmed to be in use or not in use. Sometime contractors do not realize non-utilized equipment is not chargeable to the job – and at least such information allows the adjuster to address such charges; • A real time presence of a site clerk records removals, such as debris (how many loads, size of disposal vehicles, dumpster or bins), contents and salvageable items; • Construction materials delivered to the site, but not used are also recorded to ensure an accurate material count at the end of the emergency work; • Site conditions are recorded and in the event further damage is discovered or claimed, how such damage might have resulted and if its loss related; • The site clerk’s records provide daily evidence and can serve to mediate invoicing conflicts, or conflicts with a policyholder regarding conditions that have generated time element losses associated with outages and whether such time is justifiable support for such business and extra expense loss claims; Many contractors and consultants serving the insurance industry have a symbiotic relationship with the www.claimscanada.ca
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June/July 2014
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The Evolution of Claims Technology
From manual processes to the virtual world, the claims environment has experienced dramatic changes. BY JOE COLBY
Claims technology has fundamentally changed our work environment. Twenty years ago, I waited for Canada Post or a courier service to deliver claim documents and first claim reports. We were paper intensive with numerous manual processes and claim cheques. We then evolved to using a combination of basic computer systems to capture transactions and a fax machine for claim documents. Now, we use email, web portals, text messaging and sophisticated claims systems with electronic claim files. Vanishing physical claims files, fax machines and administrative staff coupled with increases in productivity and cycle times (some companies purporting a 20% improvement in claim shelf life) are all tangible derivatives of evolving technology. Back in the day, claims were written down by clerical staff following a telephone report from a policyholder or broker and given to a claims supervisor who would distribute claims based on the concept of matching skill to complexity of work and/or distribution of workload. Claims organizations have evolved their processes and implemented sophisticated systems that use business rules logic. These allow claims to be directed automatically to the appropriate claims unit or file handler for quick vendor assignment. The result? A claims process that moves forward with increased speed and efficiency. As technology has evolved and with additional pressure on expense mitigation and customer service excellence, organizations have recognized the importance of having a rounded and instinctive claims management system. Technology has allowed companies to provide the customer with various self-service claims solutions. Smartphone apps that allow a customer to report a claim, call a tow truck, or secure contact information for preferred vendors to assist on the spot at the time of a claim 24/7. Web portals permit customers access to limited informa24 Claims Canada
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tion contained within their claim file, such as repair status updates or whether liability has been determined and a deductible waived. Some of these systems have the ability to push these updates as they occur to the policyholder. Rental agencies and repair facilities are integrated into the process and technology with the ability to transmit updates real time to an insurer’s claims system. Vendors now document activities in a claim that used to be completed by claims staff. This reduces the frequency of inquiry calls into claims departments and the amount of times claims personnel touch a claim file. Many companies have changed the way they assess auto and property physical damage claims. How many of us remember a field appraiser or adjuster who wrote up a paper appraisal or property building damage estimate? Now, we have estimating software that is used by both the vendor and appraiser or adjuster with that information built in and with the ability to provide insurers with robust management information. In some cases an appraisal desktop system is in place with built-in logic and business rules that allow vendors to transmit their estimates and photos electronically to the insurer to secure quick system automated approval for the lion’s share of claims that fit within a predefined profile or monetary threshold. This results in a no touch approach to claims handling as there is no physical intervention on the part of the adjuster or appraiser in the process. Gone are the days where the appraiser calls car dealerships to secure market value figures for a vehicle that has been totaled in an accident. Market value assessment software and the internet (e.g. Auto Trader) provide this information almost immediately. Adjusters can now access claims information remotely and in real time. We continue to see how portable devices advance in capability. New apps are released constantly that make smartphones easier to use and more relevant for adjusters. Adjusters have the ability to secure and transmit audio, photo and video claim material along with file notes and other documents electronically from www.claimscanada.ca
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the loss site to a central claims system. Most consumers with a click of a button without having to fill out forms or live in the same mobile world and have access to the same pick up the phone to complete the request. devices and technology. Insurance fraud has become a significant problem for The Internet has also impacted the way claims are han- the Canadian property and casualty insurance industry. dled for both the adjuster and insured. The scale of so- As such, technology has become increasingly helpful in phisticated tools and information available on-line seems fraud detection and prevention. Advancements in techalmost unlimited. Adjusters have access to a broad range nology have taken us from using basic red flag paper of internet based resources to assist in quantifying claims checklists when I handled claims to automated fraud anasuch as sites that validate pricing on property contents or lytics and scoring systems that identify claims with fraud online news articles to assist in understanding the nature indicators through the implementation of rules engines of a loss which improves on productivity. applied at first notice of loss. Policyholders have access to many of the same internet Another area of technology that has started to emerge resources so adjusters now deal with more recently is the use of telematics a much more educated and tech-savdevices with usage-based insurance vy client than was the case 20 years (UBI) programs. Vehicle telematics ago. Today’s claims professional must devices are inserted into a vehicle’s be prepared to respond accordingly diagnostic port and used to collect and ensure that he or she is prepared and store vehicle data such as speed, when working with an insured on a breaking, time of day the vehicle is claim. driven etc. for the purpose of ratThe evolution of social networking and pricing a risk. The potential ing websites provides adjusters with impact on claims investigations can a method to complete activities’ be significant given the independent checks when validating or investigatdata available to assist with accident Some of today’s claim ing a claim. Social media sites such as reconstruction. Facebook and Twitter can often assist Technology is also being used to systems allow the today’s adjuster with gathering inforattract and retain staff. Today’s adfront line adjuster to mation about a claimant including a justers who are comfortable with photo or posts about certain activitechnology have come to expect proorder police and fire ties the claimant is engaging in that gressive employers to keep up with occurrence reports, conflict with the reported injuries or advances in systems and software to credit reports, disability. enhance efficiency. Canadian courts continue to conSo with all the changes in techVIN history reports sider the use and admissibility of nology, are claims handled more efand various this information in personal injury ficiently? Can adjusters handle more other relevant search claims. An important concern for claims than they did 20 years ago? claims organizations s the developdocuments directly from Have we realized reduced levels of ment of guidelines for the use of this claims indemnity and expense leaktheir electronic claim type of information to ensure mateage? There have been multiple studies rial is being used and secured approby insurers and consulting firms to file with a click of a priately and in compliance with reguobjectively validate that advances in button without having lations. technology have improved the qualto fill out forms or Technology has had a significant ity, consistency and productivity of impact on vendor management over claim handling. pick up the phone to the last ten years. Many organizaWhile it is difficult to predict complete the request. tions use bill audit software. Inwhere technology is headed and how stead of adjusters reviewing invoices it will impact tomorrow’s adjusters, from lawyers and independent adjusters as part of their one thing is certain – adjusters who lack advanced skills daily responsibilities, companies are using bill review in technology or who fail to embrace the technological software to automate the process. These systems allow changes ahead will have difficulty sustaining a lengthy claims management to measure the performance of a career in the adjusting profession. particular firm and to benchmark multiple firms against Joe Colby is a Vice President of Claims with Swiss Re in each other. Some of today’s claim systems allow the front line ad- Toronto. Joe has extensive experience in all aspects of claims juster to order police and fire occurrence reports, credit management including indemnity and expense mitigation, reports, VIN history reports and various other relevant individual and corporate-wide claim strategy development search documents directly from their electronic claim file and litigation management. www.claimscanada.ca
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The
Complexity
of an Abuse Claim
In a Newfoundland sexual abuse case, new evidence allows an insurer to void a policy due to misrepresentation. BY MICHAEL TEITELBAUM
In a split decision, the Newfoundland and Labrador Court of Appeal (NLCA) held that an insurer’s earlier consent order to defend a school abuse claim was not binding in light of the discovery of new evidence. Accordingly, the insurer was entitled to assert the policy was void due to knowledge of prior circumstances amounting to misrepresentation when entering into the policies. (Guardian Insurance Company of Canada v. Roman Catholic Episcopal Corporation of St. John’s, 2013 NLCA 62. A) Specifically, the NLCA held that there was no judicial discretion to apply the doctrine of res judicata when new evidence has been subsequently discovered that entirely changes an aspect of the original case. Res judicata, literally meaning a “matter judged,” is the principle that a case cannot be relitigated once it has been judged on its merits.
Background In 1989, Archbishop Penny and the Roman Catholic Episcopal Corporation of St. John’s (RCEC) were sued by a minor claiming damages 28 Claims Canada
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for sexual abuse alleged to have been committed by Father James Hickey, a Roman Catholic priest from 1982 to 1988 (the “1989 Proceedings”). The Statement of Claim in the 1989 Proceedings alleged that Archbishop Penny knew or ought to have known of Fr. Hickey’s activities. Archbishop Penny and RCEC brought a third party claim against Guardian Insurance Company of Canada claiming defence and indemnification under liability policies held with Guardian. While admitting the existence of the policies, Guardian denied the obligation to indemnify and defend on the grounds that Archbishop Penny or RCEC either knew or ought to have known of the actions of Fr. Hickey. Guardian relied on their failure to communicate this knowledge to it as grounds for relieving Guardian of its obligations. Having conducted extensive investigation enquiries, including an Examination for Discovery of Archbishop Penny, Guardian’s counsel came to the conclusion that there was no “credible, probative or admissible evidence that would allow” Guardian to maintain a denial of coverage.
Accordingly, Guardian entered into a Consent Order in 1992 agreeing to indemnify Archbishop Penny and RCEC with respect to any liability arising out of the 1989 Proceedings only (the “1992 Consent Order”). Subsequent to entering into the 1992 Consent Order, further proceedings were brought against RCEC and Archbishop Penny by various parties claiming that they were abused by Fr. Hickey. As with the 1989 Proceedings, RCEC and Archbishop Penny issued third party claims against Guardian seeking that it indemnify and defend them. After the making of the 1992 Consent Order, new evidence came to light relating to the nature and extent of knowledge that Archbishop Penny, other officials in the Church and RCEC had about the alleged sexual activity of Fr. Hickey. Despite becoming aware of this information, Guardian continued to represent Penny and RCEC in the 1989 Proceedings and in the subsequently resolved cases up to and including their resolution.
Present Proceedings In 2009, another plaintiff sued RCEC alleging sexual abuse by Fr. Hickey and that Archbishop Penny and RCEC knew or ought to have www.claimscanada.ca
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known of Fr. Hickey’s activities. RCEC third partied Guardian claiming that it had a duty to defend RCEC with respect to the claim. Guardian responded to this third party claim asserting that the actions alleged were not covered by the policy because Fr. Hickey’s improper sexual activities were known to RCEC. Guardian pleaded the doctrine of utmost good faith on the part of insureds in their dealings with insurers. Guardian claimed that the policy was void as a result of material non-disclosure of the knowledge RCEC had regarding Fr. Hickey at the time of entering into the initial policy or at the time of the subsequent renewals. RCEC filed a reply to Guardian’s defence and specifically raised the issue of res judicata as a result of the 1992 Consent Order. RCEC also alleged that subsequent to the making of the 1992 Consent Order, Guardian had assumed RCEC’s defence and indemnified it in the subsequently resolved cases. At first instance, the Newfoundland and Labrador Supreme Court found Guardian could not deny coverage because, despite the presence of new evidence, the doctrine of res judicata applied to Guardian’s continued defence and indemnification.
Issues on Appeal Numerous issues were addressed on appeal. For this article, we will focus on two: 1) Did the trial judge err in applying the “special circumstances” exception to the doctrine of res judicata? 2) If the trial judge did err in holding that the doctrine of res judicata applied, would allowing Guardian to re-litigate amount to an abuse of process?
Issue 1 In agreeing with the trial judge, the majority found that some of the information discovered after the making of the 1992 Consent Order, regarding RCEC’s and Archbishop Penny’s knowledge, did amount to new evidence. The evidence was such that if it had been www.claimscanada.ca
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considered, it could have changed the outcome of the original decision. However, the majority found that the trial judge was wrong in holding that he had discretion to deny re-litigation. The majority held that while there is a general discretion not to apply res judicata after considering general notions of fairness, this discretion does not empower a court to apply res judicata where new evidence is discov-
ered. The majority held that this is so because the new evidence exception in itself is designed to achieve fairness. The majority went on to hold that even if there is a residual discretion to apply res judicata in the face of the new evidence, the trial judge nevertheless erred in how he applied and exercised this discretion. In coming to this conclusion, the majority appeared to be swayed by the fact that in the sub-
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Claims Canada 29
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sequently resolved cases, Guardian did not enter into any consent order as it had done in the 1989 Proceedings. Thus, Guardian’s involvement in those cases did not in itself engage the doctrine of res judicata.
The majority further noted that in any event, the focus of an abuse of process claim is not on the fairness issues between the parties but rather on the integrity of the judicial system as a whole.
Issue 2 In holding that the doctrine of res judicata should not be applied, the majority went on to consider whether Guardian’s ability to rely on the new evidence should nevertheless be precluded by the application of the doctrine of abuse of process. In determining that abuse of process did not arise, the majority held that it was satisfied that the refusal to allow the use of new evidence in the current proceeding would undermine, rather than enhance, the judicial system. The court found that Guardian had every right to make a concession and enter into the 1992 consent order either because at that time, it had no evidence of RCEC’s prior knowledge of Fr. Hickey’s ac-
Conclusion In respect of the procedural issue, it appears clear that there is no discretion to continue to apply res judicata where one of the exceptions to the doctrine arises. While the court does leave open the possibility that in the right circumstances, there may still be a residual discretion to apply the doctrine, it is unclear to what extent, if any, such a residual discretion would operate. In relation to the insurance issue, the majority decision has potentially significant consequences. It indicates that in cases of misrepresentation, an insurer can adopt a changed position if new evidence develops. And this is so whether or not a consent order is involved. Often, when an insurer reserves its rights, it will assert that it is entitled to change its position if new facts emerge. This decision appears to support that approach. The interesting twist here is that there was some knowledge after the initial consent order, yet the insurer still defended and indemnified, and is now being allowed to contest the misrepresentation issue. We will not be surprised if leave to appeal is sought from the Supreme Court of Canada.
In respect of the procedural issue, it appears clear that there is no discretion to continue to apply res judicata where one of the exceptions to the doctrine arises. tivities. The majority held that the doctrine of abuse of process could not be invoked.
Introducing insBlogs
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insBlo Michael S. Teitelbaum is a partner with Hughes Amys LLP. Hughes Amys LLP is a member of The ARC Group of Canada, a network of independent insurance law firms across Canada.
Insurance Blogs hosted by Canadian Underwriter
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insBlogs.com brings together commentary Insurance Blogs hosted Canadian Underwriter and insight from a by variety of individuals from throughout the property and casualty insurance industry.
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30 Claims Canada
June/July 2014
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CIAA REGIONAL PRESIDENTS 2013 – 2014 NEWFOUNDLAND & LABRADOR Marcel Pitcher, CIP, CRM Crawford & Company (Canada) Inc. 96 Clyde Avenue, Suite 310 Mount Pearl, NL AlN 4S2 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Marcel.Pitcher@crawco.ca NOVA SCOTIA E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Claude Nadeau Cunningham Lindsey Canada Claims Services Ltd. 1250 Guy Street, #1000 Montreal, QC H3H 2T4 Phone: (514) 939-1570 Fax: (514) 938-5445 E-mail: cnadeau@cl-na.com ONTARIO Dorothy Lowry, FCIP Crawford & Company (Canada) Inc. 15 - 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Dorothy.Lowry@crawco.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Cheryl Hanson Crawford & Company (Canada) Inc. 210 – 227 Primrose Drive Saskatoon, SK S7K 5E4 Phone: (306) 931-1999 Fax: (306) 931-2212 E-mail: Cheryl.Hanson@crawco.ca WESTERN TBA PACIFIC Blair McGregor, CIP Granite Claims Solutions 400 - 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6558 Fax: (604) 659-6570 E-mail: blair.mcgregor@graniteclaims.com
www.claimscanada.ca
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National Standing Committees 2013-2014 ADVISORY David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400 – 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6559 Fax: (604) 659-6570 E-mail: david.porter@graniteclaims.com Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 - 1575 West Georgia Street Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400 – 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6559 Fax: (604) 659-6570 E-mail: david.porter@graniteclaims.com John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Ave. West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca
Laurie Walker, CIP Granite Claims Solutions 5915 Airport Road, Suite 300 Mississauga, ON L4V 1T1 Phone: (905) 740-1784 Fax: (905) 671-1889 E-mail:laurie.walker@graniteclaims.com Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 - 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com
John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com
FINANCE Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com
Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com
Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com
Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com
John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca
Jo-Ann Eccleston, CIP Aviva Canada Inc. 2206 Eglinton Ave. East Toronto, ON M1L 4S8 Phone: (416) 689-3328 Fax: 1-866-805-8585 E-mail: jo-ann_eccleston@avivacanada.com
CONSTITUTION & RULES John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com
Bob Grouchy, BA, FCIP, CRM Allianz Global 1600 – 130 Adelaide Street West Toronto, ON M5H 3P5 Phone: (416) 915-4247 Fax: (416) 849-4555 E-mail: bob.grouchy@agr.allianz.ca Paul Hicks, FCIP, CRM TD Insurance 2161 Yonge Street, 4th Floor Toronto, ON M4S 3A6 Phone: (416) 486-2507 Fax: (416) 545-6022 E-mail: Paul.Hicks@tdinsurance.com Justin MacGregor Past President Insurance Brokers Association of Canada Phone : (416) 859-4567 Mark Stewardson, FCIP Royal & Sun Alliance 2225 Erin Mills Parkway, Suite 1000 Mississauga, ON L5K 2S9 Phone: (905) 403-2333 Fax: (905) 403-2326 E-mail: Mark.Stewardson@rsagroup.ca Mark Weir Intact Financial Corporation 700 University Avenue, 13th Floor Toronto, ON M5G 0A1 Phone: (416) 341-1464 Fax: (416) 217-0562 E-mail: mark.weir@intact.net Beth Bull ACE INA Insurance 1400 – 25 York Street Toronto, ON M5J 2V5 Phone: (416) 594-3067 Fax: (416) 368-0641 E-mail: beth.bull@acegroup.com
CONVENTION Matt Allan, CIP, CRM Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: matt.allan@graniteclaims.com DESIGNATION Paul W. Greening, CLA, FCIAA Greening Aviation Claims Inc. 26C Palliser Park, Box 190 Riverhurst, SK S0H 3P0 Phone: (306) 353-2000 Fax: (306) 353-2200 E-mail: pgreening@sasktel.net E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com Robert V. Pearson, CLA, FCIAA Hansen Labelle Adjusters Ltd. 1328 17th Avenue N.W. Calgary, AB T2M 0R1 Phone: (403) 284-2211 Fax: (403) 284-2299 E-mail: bob@hansenlabelle.ca EDITORIAL Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Dr. Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca
Alex Walker, CIP Royal & Sun Alliance 2225 Erin Mills Parkway, Suite 1000 Mississauga, ON L5K 2S9 Phone: (905) 412-1397 Fax: (905) 403-2328 E-mail: Alex.Walker@rsagroup.ca
John M. Sharoun, FCIP, FCIAA, CRM Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca
CAREER RECRUITMENT PLANNING Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: Richard@azclaims.ca
EDUCATION Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA AMG Claims Inc. 535 North River Road, Unit 3 Charlottetown, PE C1E 1J6 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca
COMMUNICATIONS Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: Richard@azclaims.ca
EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462- 1222 Fax: (902) 462-3688 E-mail: richardvanhorne@actioninvestigations.ca
June/July 2014
John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd. Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Georgiana Chen, CIP ProFormance Group Inc. 1101 Kingston Rd., Suite 280 Pickering, ON L1V 1B5 Phone: (877) 539-3111 Fax: (905) 554-3776 E-mail: gchen@proadjusting.ca NOMINATING John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com PRIVACY James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca PROFESSIONAL PRACTICES John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca
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Smartphone – Smart User? How are mobile devices used in negligence tort claims? BY MAX HUFTON AND JESSIE CAMERON
Handheld wireless technology has increasingly become the focus of allegations of negligence and contributory negligence in tort claims. The technology’s unparalleled ability to distract both tortfeasors and the recipients of their folly presents a unique set of circumstances for the consideration of the court in assessing liability and its relative apportionment in a broad range of contexts. If the dream of the first city planner was to craft an environment where citizens could enjoy simultaneously both splendid isolation and close proximity to millions of others, arguably, the Smartphone has made that dream a reality. Our streets and roads are now littered with people of all ages and all walks of life focused on a palm sized screen in preference to, or avoidance of, the life sized world behind it. Leaving aside the unfortunate consequences of that change on our social environment the trend, now all too often, has unfortunate personal consequences arising from accidents caused as a result of distraction.
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Canadians are among the fastest growing Smartphone users. Anywhere from 56 to 62% of Canadians are Smartphone users, according to a recent Google study. Eight out of ten Smartphone users admit to not leaving home without their mobile device. While texting is increasingly recognized as significantly more distracting than speaking on the telephone, smartphones bring additional distractions into the mix including: email; Internet; GPS and mapping technology; games; music and video. Just how dangerous is it to be focusing on your phone instead of the world around you? A recent Dutch study that focused on media player and cell phone use by pedestrians and cyclists found that in relation to road safety, the following types of distractions were associated with Smartphone use: • Visual distractions; • Auditory distractions; • Physical (bio-mechanical) distractions; • Cognitive distractions; and • Impacts on state of mind/mood due to music or conversation. The effect that using a mobile device has on your spatial awareness is particularly concerning, given the sheer number of decisions that must be made while travelling in traffic or negotiating busy city streets, staircases, parking lots, supermarkets or shopping malls. A study by Byington and Schwebel published in 2013, found that nearly half of 92 students sampled, aged 17-25, reported using mobile Internet on their Smartphone 8 to 16 times per day. One in five students reports using mobile
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The increase in the incidence of injuries and deaths related to Smartphone usage is already being felt by the insurance industry. The 2013 New Jersey decision of Kubert v Best et al has hinted at the potential to hold liable persons texting a driver where it could be shown they knew it was likely the driver would respond while driving. • waiting longer before crossing the street; In assessing and defending claims where distraction • overlooking safe moments to cross the street; may have played a role, it is essential to gather the relevant • looking right and left less frequently; and information quickly. Given the prevalence of less than • looking away from the road more often. smart Smartphone usage noted in the statistical studies, What are the consequences of all this distraction? and on any casual observation of your average 21st CenStatistics show increasing numbers tury high street, information regardof driving and pedestrian-related acing Smartphone ownership and uscidents and deaths linked to mobile age should be obtained in the case of device usage. A South Korean study every injury claim. Information that noted behaviours such as changing should be obtained and preserved the song currently playing, answering includes the cell phone number, celmessages, and browsing the internet lular carrier, and records including were responsible for over 59% of actext messages, email and social media cidents involving distracted pedestriposts made in close proximity to the ans between the hours of 10am and accident time. All potential parties 6pm, while 39% of accidents involvinvolved should be determined and ing distracted drivers occurred from interviewed regarding mobile device 6pm to 12pm. The Seoul study showed usage at the relevant time. In the case the most distracted drivers were aged of a defendant receiving texts, the 20. In the U.S., the National Highways knowledge of the sender as to what Traffic Safety Administration has rethe recipient was doing at the time ported that pedestrian deaths and inmay become key. juries rose sharply between 2009 and There are now apps available that 2011; analysts list texting while walkpermit a Smartphone user to “see ing as a major contributor to these inthrough” their phone using the built creases. The Consumer Product Safety in camera, on a somewhat restricted The effect that using a Commission reported that approxibasis, while texting, emailing etc. mobile device has on mately 1,152 people were treated in Whether such applications will reduce your spatial awareness is the number of accidents or just lull the U.S. hospital emergency rooms for injuries suffered walking into telegraph user into a false sense of security while particularly concerning, poles while using a cellphone or other facilitating the impugned behaviour given the sheer number remains to be seen. A party to litigaelectronic device. of decisions that must Tragically, on April 24, 2014, a lady tion, in the meantime, might want to in High Point, N.C. was killed after be made while travelling know whether the opposing party had her car veered into oncoming trafsuch an app on their Smartphone and in traffic or negotiating fic. According to police, they were why they thought it smarter to look at busy city streets, called to the scene a minute after the their handheld instead of where they lady had posted on her Facebook page : were actually going. staircases, parking lots, “The song Happy makes me so Hapsupermarkets or py.” Recent incidences of distracted Max Hufton and Jessie Cameron shopping malls. walking that made the press include are barristers with the law firm Race the case of Bonnie Miller who walked & Company LLP, primarily involved mid email off the end of a pier into in the defence of casualty claims. They Lake Michigan (in March); a man who fell off a Phila- are both members of Canadian Defence Lawyers. CDL is the delphia train platform onto the railway tracks; and again only national organization representing the interests of civil tragically, the fatal fall of a 19 year old in Melbourne, defence lawyers. It offers broad opportunities to unite the deAustralia over a short railing in a parking lot while tex- fence bar over common issues, as well as providing accredited ting a friend. continuing legal education. Internet on their Smartphone often, very often or always while crossing the street. Not surprisingly, a simulator study showed that students distracted by use of the Internet on their mobile devices practiced more unsafe crossing behaviours than participants who were not. These unsafe behaviours included:
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Canadian Independent Adjusters’ Association
30th Annual General Meeting and Conference August 21 – 24, 2014 A Quebec City landmark, this historic hotel will set the tone for CIAA’s 30th annual conference with exceptional accommodation overlooking the magnificent St. Lawrence River. With easy walking access to all of the wonderful sites and experiences that Old Québec has to offer Fairmont Le Château Frontenac guarantees a memorable and inspiring stay in one of the most beautiful cities in the world.
Visit www.ciaa-adjusters.ca for exciting program details!
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The Body’s “Black Box”
Wearable technology can record vast amounts of data on a plaintiff’s lifestyle and activity – but must this data be disclosed? BY MATTHEW PEARN
Wearable technology is something that has moved from the realm of science fiction to science fact. For more than a decade, we have been using smart phones and other portable computers in our day-to-day lives. Now, the same technology is becoming wearable on arm-bands and in glasses, often used to keep track of our health and fitness goals. Lawyers working in both privacy law and personal injury are beginning to anticipate the power and importance of this technology as it relates to future insurance claims. Activity trackers are one important example of this technology. These are high-tech pedometers typically worn on the wrist of the wearer’s non-dominant arm. The devices measure the movement of the wearer’s body. Using wireless technology, the trackers synchronize with mobile phones and personal computers to give the user a running tally of calories burned and steps taken throughout the day. These trackers are now made by a half-dozen major manufacturers. In a big recent announcement, Apple un36 Claims Canada
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veiled an update to the operating system that powers iPhones and iPads – including an application that will monitor users’ heart rates, sleep, weight and blood pressure. Nike’s FuelBand has been on the market since 2012. Meanwhile, competitors like FitBit and Jawbone have designed ‘apps’ for smart phones and tablets to store and conveniently display the data gathered by these trackers. The question for lawyers and claims handlers is: what significance might these “wearable” technologies play in the context of personal injury claims? There is a huge digital footprint generated by these devices. Weight loss, weight gain, heart rate, blood pressure, diet, exercise and mood can be diarized by users to help keep track of their health. Certain companies have even launched social networking sites to allow their customers to share fitness goals and their progress with friends and strangers alike. Without question, wearable technologies will become both cheap and commonplace in the next decade. Even now, these technologies are becoming relevant in the arena of motor vehicle accident claims. According to the Amer-
cian Bar Association, in October 2013 a driver in California wearing ‘Google Glass’ was the world’s first person to be issued a ticket for ‘distracted driving’ while using this device. For those unfamiliar, these high-tech glasses are a wearable computer that projects information onto the driver’s plane of view. The driver was allegedly browsing the Internet while driving. As wearable technology advances, these devices may truly become the ‘black box’ for the human body, providing incredible insight into the health, lifestyle and behaviour of the wearer. They may be prescribed by physicians as a tool for assisting in healthcare. But what, if any, privacy rights should the wearers of these high-tech devices maintain over this electronic information once the wearer files a personal injury claim? Even at this early stage, the battle lines between relevance and privacy have been drawn. In Laushway v. Messervey (2014 NSCA 7), Nova Scotia’s Court of Appeal has shed light on how to weigh privacy against other important factors when deciding whether the Plaintiff ’s electronic information must be disclosed. www.claimscanada.ca
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In Laushway, the plaintiff alleged that his personal injuries prevented him from completing sedentary tasks, including extended use of his computer. Prior to his injuries, the plaintiff had run an Internet based business from out of his home. The plaintiff claimed that his post-accident income was significantly reduced because he could no longer sit at his computer for extended periods of time. The defendants filed a Motion requesting production of ‘metadata’ captured on the plaintiff ’s hard drive, which metadata would reveal when and for how long the plaintiff was sitting at and using his computer. This was likely the best evidence available to challenge the plaintiff ’s claim that he could not continue his prior work, as his business was run out of his private home and shielded from public view. The defendants were successful in their Motion to retrieve this metadata. The plaintiff appealed, claiming this was a fishing expedition that unreasonably invaded his privacy. The Court of Appeal determined that metadata was ‘electronic information’ that could be disclosed by the Plaintiff under Nova Scotia’s Rules of Court, and accepted that this metadata would be accurate, reliable and relevant to the plaintiff ’s alleged claim that he could work a sedentary job. The Court then considered how to balance the Plaintiff ’s duty to disclose this relevant
information about his lifestyle and employability against the plaintiff ’s privacy interest in how he used his own computer within his private home. For the plaintiff to overcome his duty to hand over this metadata, the Court held that he must first establish his reasonable expectation of privacy in this electronic information. Unlike photographs or private messages that
As wearable technology advances, these devices may truly become the ‘black box’ for the human body, providing incredible insight into the health, lifestyle and behaviour of the wearer. might be collected through a Facebook account or some other social media website, the Court did not see considerable private interest in this metadata that would simply show when the plaintiff was sitting at a computer. The order from the Court was tailored so that only the data showing the plaintiff ’s use of his computer could be collected, denying the defendants fulsome access to computer files and Internet sites visited by the plaintiff.
In the context of activity trackers and other wearable technology, the court’s analysis in Laushway opens up the possibility of requesting similar ‘electronic information’ to demonstrate the plaintiff ’s mobility and overall health. Assuming that data generated by an activity tracker is deemed accurate and reliable, and assuming the plaintiff ’s claim raises issues about his physical activity and wellness, the plaintiff may be ordered to share this electronic information with the defendant. However, the court made plain that a plaintiff, simply by filing a claim, does not grant a defendant free license to rifle through all private aspects of his life which may be recorded electronically. Further, the availability of alternate means to challenge the Plaintiff ’s claim, like surveillance for example, may make the Court reluctant to order disclosure. Claims handlers and insurance defense counsel should closely watch these early decisions on the disclosure of electronic information in personal injury claims, and keep track of what plaintiffs may be wearing on their wrists. The time to raise these arguments is upon us. Matthew Pearn is an associate lawyer with Foster & Company, based in Fredericton, New Brunswick, who practices in the areas of insurance defence and personal injury.
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EF
• education forum
A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA
In Line to
Succeed: Aligning your Resources to Support Strategy
I
n the last issue of Claims Canada, Education Forum looked at how to analyze a firm’s internal environment: the qualities an adjusting business can build on for success. In this issue, we consider how a firm aligns and builds on these qualities.
Lining up the pieces In the last article, we looked at how firms develop bundles of tangible and intangible resources, including (among others) organizational resources such as planning and reporting systems; technological resources such as claims management systems; human resources; and innovation resources. Firms can integrate these resources to develop capabilities and competencies rooted in the skills and knowledge of their staff. How do firms integrate their resources? One way to think of this is to see any organization – from a small, locally-focused independent adjusting firm to a large national one – as a system made up of multiple components that need to work together to transform inputs into outputs. The “inputs” include aspects of the firm’s internal and external environment – its tangible and intangible resources, the 38 Claims Canada
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political and technological environments it operates in, and so on. The “outputs” are determined by the firm’s strategy and include the services, revenues and other effects generated by the firm. The system that transforms the inputs into outputs includes the firm’s people, structures, processes and operations. When all these components are aligned, each reinforces and leverages the others, supporting the execution of strategy. This tight integration of components can form a source of advantage that competitors find hard to imitate. On the other hand, when the components are not fully aligned, strategy can be difficult to execute. For example, if an adjusting firm’s strategy involves distinguishing itself through personalized claims service, yet compensation for telephone adjusters is based primarily on the volume of calls they handle per hour, staff will be motivated to emphasize speed over service – the compensation structure will be out of alignment and will undermine rather than support the strategy. But what should the strategy be in the first place?
Making strategic choices Choosing a business strategy can be described in terms of making three choices: • Which customers (or clients) to serve. To help with this choice, market segmentation can be used to cluster similar clients into identifiable groups, such as by type of insurance business or geographical location. In the adjusting field, a specialist equine adjusting firm would be an example of business segmentation – serving the market segment of specialist insurers who in turn serve horse owners, breeders and trainers. A small local adjusting firm would be an example of geographical segmentation – focusing on a specific local market. • Which needs to meet. A firm must identify the needs of customers in the target group. Customer needs can be divided into two broad categories: low cost with acceptable features, or special features (“differentiation”) at an acceptable cost. • How to meet those needs. Firms must continuously improve their products or services in order to www.claimscanada.ca
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meet their target customers’ needs over time. For example, an adjusting firm can implement new field technology to better capture and manage information gathered in investigating claims.
Meeting clients’ needs Establishing strong relationships with customers or clients makes it easier to identify and meet their needs. Harvard Business School professor Michael E. Porter further breaks down the ways to meet customer needs this way: • Cost leadership – meeting customers’ needs for low cost with acceptable features. To do this, an adjusting firm would need to sell standardized claims services to typical insurers and focus intently on keeping the costs of all activities as low as possible. • Differentiation – meeting customers’ needs for special features at an acceptable cost. To pursue differentiation, a firm needs to offer services that clients perceive as uniquely valuable and worth paying extra for. Developing core competencies in investigating cyber-risk claims could be an example.
If an adjusting firm’s strategy involves distinguishing itself through personalized claims service, yet compensation for telephone adjusters is based primarily on the volume of calls they handle per hour, staff will be motivated to emphasize speed over service – the compensation structure will be out of alignment and will undermine rather than support the strategy.
• Focused cost leadership – similar to cost leadership, but instead of selling to all of the industry’s typical customers, the firm focuses on a particular segment of the market (such as insurers of trucking fleets) and seeks to serve that segment
more cost-effectively than its competitors. • Focused differentiation – similar to differentiation but focusing on a narrower segment of the market (such as specialist insurers of art) when identifying which features are valuable. • Integrated cost leadership and differentiation – pursuing low cost and differentiation at the same time. To do this successfully, firms need to be competent in a larger number of primary and support activities than for any of the other strategies. Each type of strategy can offer a competitive advantage in the face of industry forces, and each can involve risks and challenges. The choice of strategy depends on an adjusting firm’s strengths and on the opportunities and threats it faces. This article is based on material used in the Insurance Institute’s FCIP program, the pinnacle of learning in Canada’s p&c industry. Focusing on strategic leadership and advanced management principles, the program blends academic business theory with practical insurance application.
Culture Clash Of all the components that need to be aligned with strategy, organizational culture can be particularly challenging. Formal systems and processes can be documented, assessed and measured. Informal systems and processes – elements of organizational culture – tend to be unwritten, hidden and difficult to articulate. Organizational culture can be described as the assumptions, values, and expectations shared by the organization’s members. When effectively aligned with strategy and other components, culture can motivate employees and make it easier to execute a strategy. When misaligned – when unstated assumptions about priorities and processes are at odds with the officially stated ones – culture can feed resistance to change and get in the way of strategy. For example, if a company’s strategy calls for sharing information across the organization but the culture is based on managers using their own judgement independently, that culture may make the strategy difficult to execute.
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• on the scene OTS Aviva Canada announced May 27 that Sharon Ludlow will join the insurer as president of Aviva Insurance Company of Canada, effective June 17, moving on from her role as president and CEO of Swiss Re Canada. In the newly-created role, Ludlow will be responsible for Aviva Canada’s broker distribution operations, as well as the company’s customer, marketing and digital strategy, according to a press release from Aviva. She will report directly to Aviva Canada’s president and CEO, Greg Somerville. l Greig Boyle, National Vice President of Operations for Granite Claims Solutions, is pleased to announce that Jodi Payne has been appointed as the new Branch Manager, Calgary branch. Jodi has more than 15 years of progressive claims and leadership experience in the insurance industry working with both National Insurers and Independent Adjusting firms. She has extensive expertise in the areas of automobile, personal and commercial liability, and municipal liability claims. Dale Smith, the current Branch Manager, will be moving into the role of Manager, Technical Claims Services for Southern Alberta. l FirstService Corporation announced June 2 that its subsidiary, FirstService Brands, has acquired Paul Davis Systems Canada. The latter provides mitigation, restoration, reconstruction and emergency services from Vancouver Island to PEI. Ken and Steve Robinson will continue to lead the day-today operations of the Canadian business as CEO and COO, respectively. The acquisition adds 63 franchises to Paul Davis Restoration’s North American business services platform, bringing the total number of franchises to 370. l Crawford & Company announced in late April it is expanding Broadspire Services Inc., its third-party business administration unit. The Atlanta-based firm is “creating new and stronger strategic TPA hubs in Canada, Singapore, Hong Kong and Australia,” Crawford stated in a press release. Broadspire specializes in servicing the claims needs of multinational corporations and their captives, brokers and insurers. l AssessMed announced May 29 a strong commitment towards the development of a national service delivery platform with the opening of fully staffed and fully functional assessment centres, in Montreal, Quebec City, St. John’s NL, Vancouver BC and Edmonton AB. AssessMed’s head office is strategically located next to Pearson Airport in Toronto, Ontario. The company has aggressively expanded operations across Canada due to industry demand for truly unbiased, credible and defensible IME reports delivered on a timely basis and at fair market value. l 40 Claims Canada
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Giffin Koerth Forensic Engineering announced the addition of Andrew Peters to its business management team as the firm’s first-ever Vice President of Finance. In his new role, Andrew will provide expert financial stewardship as he works with CEO Chris Giffin and the Giffin Koerth business management group to guide the firm through its continuous growth and evolution. l CARF International has awarded Alliance of Clinical Evaluators Inc. (ACE) three-year accreditations for its Independent Evaluation Services (Adult) and Independent Evaluation Services (Children and Adolescents). These are the first accreditations that the international accrediting body, CARF, has awarded to the Hamilton-based healthcare management company. “ACE strives to provide the best customer service possible to our clients and is very proud to receive this recognition from CARF,” said Jackie Sampson-Stewart, ACE’s president and founder in a release May 28. l
Mark Samis
Michel Laberge
As part of its expansion plans, Rochon Engineering / Rochon Environmental has appointed two senior professionals to its team. Doug Tremblay, Managing Partner, announced that the firm has appointed Mark E. Samis as a Senior Environmental Consultant and J.M. Michel (Mike) Laberge as Director of Business Development. l Cunningham Lindsey Canada Claims Services Ltd. (“Cunningham Lindsey”) recently announced the opening of the new Grande Prairie, Alberta office effective July 1, 2014. “This is an exciting time for us as our western region is rapidly expanding to better meet the needs of our customers,” said Troy Nevens, Vice President, Western Region. Currently in Alberta, Cunningham Lindsey has offices in Calgary, Edmonton, Lethbridge and St. Paul. “With the addition of a new office in Grande Prairie we are able to expand our services to cover all areas of Alberta and better respond to claims in the northern parts of the province,” added Troy. l SPECS Limited recently announced the introduction of a new online file submission tool available through www. specs.ca. In other company news, SPECS announced the opening of new office location in York Region, Ontario under the leadership of Frank Galati. In addition, Don Watt was promoted to the position of Branch Manager for the Toronto Branch of SPECS Limited. l www.claimscanada.ca
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Canadians are generally underestimating certain risks related to their personal insurance, and many would rather take doing boring or unpleasant tasks over thinking about their coverage, notes a new survey from TD Insurance. In its commissioned online survey of 1,000 Canadians 18 and older, 62% said they would rather shovel snow, spend a Saturday doing laundry, go to the dentist, or wait in an airport security line rather than think or talk about insurance coverage. Many Canadians are also underestimating risks, TD suggests. In its survey, 81% underestimated the likelihood of a home break-in, which TD says is roughly one in 200, based on Statistics Canada data. l The Institute for Catastrophic Loss Reduction (ICLR) is aiming to “influence” the construction of new homes in Canada and plans to demonstrate loss mitigation methods on two homes this year in Western Canada. In May 2013, ICLR showed the public a home in Quebec City, as part of its Showcase Homes program. The Quebec City home was retrofitted in order to make it more resilient to earthquake risk and winter storms. In June, ICLR will announce two Showcase Homes — one in Calgary and the other in Kelowna, B.C., ICLR executive director Paul Kovacs said during ICLR’s annual general meetin. He noted the showcase home in Calgary will be designed to prevent water damage, while the one in Kelowna — to be showcased this fall — will be designed to prevent wildfire damage. l
The Office of the Superintendent of Insurance in Alberta will make its decision on the approval of usage based auto insurance in that province by the end of this year, but is stressing that privacy must be top of mind for insurers who want to launch programs. The office has received several applications for UBI programs and is in talks with insurers and other telematics stakeholders, Laurie Balfour, acting deputy superintendent of insurance in Alberta said in a presentation during the Insurance Telematics Canada conference May 28. The regulator is deciding which rating factors - such as speed, acceleration, braking, turning, time of day, location (GPS), distance driven and mileage - will be approved and which will be prohibited for UBI. l One in five Canadian auto insurance customers taking part in the J.D. Power 2014 Canadian Auto Insurance Satisfaction Study have shopped for a new insurer in the past 12 months, but just 9% have made the switch. The study 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 also ranked in Ontario, Alberta and Quebec. Each insurance company conquests less than an average of 1% of customers shopping for a new insurance policy, notes a statement from J.D. Power, which released the study results in early May. l
Canadian Insurance Claims Education Benevolent Foundation OBJECTIVE • To assist with funding needed to further education of Canadian students entered in an insurance claims related discipline.
• Applications must be received at the CIAA National Office by July 31st annually. • Awards will be announced at the CIAA Annual General Meeting in August.
VALUE • A minimum of one $1000.00 award annually.
DONORS • Canadian Independent Adjusters’ Association • Canadian Federation of Insurance Claims Associations
SUBMISSION • Applications are available at the Canadian Independent Adjusters’ Association National Office: CIAA Centennial Centre, 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Tel: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca
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• on the scene OTS FirstOnSite Restoration has launched a mobile application that provides a direct connection between the restoration provider and its customers 24 hours a day, seven days a week. The mobile app, which is available for Android, iPhone and Blackberry, is part of FirstOnSite’s ongoing commitment to engage in technological solutions to facilitate emergency preparedness and business continuity. The launch of the application coincides with Emergency Preparedness Week, marked from May 4 to 10 across Canada. l Damage to homes, businesses and public infrastructure from spring flooding in New Brunswick is estimated by the provincial government to have exceeded $14 million. NB Public Safety Minister Bruce Northrup said in mid-May that more than 715 properties have reported flood damage since mid-April. He noted the majority of the properties are in the Sussex area. l A majority of Canadians are optimistic about usagebased auto insurance if it could lower their rates, but awareness of telematics programs remains quite low, according to a new survey from Kanetix.“Consistent with all the other surveys so far, 18% of Canadians are familiar with UBI and specifically only 2% of that portion is very familiar with UBI,” Andrew Lo, chief marketing officer and chief strategy officer with Kanetix said. Awareness was highest in Ontario at 22%, and Quebec stood at 16%, although in Alberta, only 6% showed any familiarity with UBI. l More than a third of Canadian small business owners don’t have contingency plans for work stoppages from severe weather or other interruptions, according to a new poll from CIBC. Based on a web survey of 500 small businesses (under 500 employees) conducted by Leger Marketing in February, 35% lack contingency plans, CIBC said. In Atlantic Canada, 43% lacked business interruption plans, followed by Quebec at 41%. In Ontario, 31% didn’t have a plan, and in Manitoba and Saskatchewan, 32% reported not having one. Alberta and British Columbia had 35% and 36% of small businesses respectively lacking a plan. Following major flooding last summer in Alberta and ice storms in Ontario last winter, some small businesses are re-evaluating their business interruption plans because of natural disasters and severe weather, CIBC noted. l Only one in three companies surveyed by Ponemon Institute LLC have a cyber insurance policy to manage the risk of data breaches, but the average cost per compromised record was US$145, with some respondents reporting more than 100,000 compromised records. Traverse Citybased Ponemon Institute announced Monday its ninth annual Cost of Data Breach Study, sponsored by IBM Corp. Thirty-two per cent of respondents “have a cyber insurance policy to manage the risk of attacks and threats” and of those, 54% “are satisfied with the coverage,” Ponemon Institute stated in the report. l 42 Claims Canada
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CIAA New Members — March 2014 INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc. Shawn McLeod Mandy Nauss Mamduhul Siddiqui Ivan Mortley Sarah LeBlanc Barbara Leguee Paula Johnson
Saint John, NB Dartmouth, NS Mississauga, ON Waterloo, ON Yarmouth, NS Winnipeg, MB Mississauga, ON
Level 2 Level 3 Level 1 Level 1 Level 2 Level 3 Level 1
Cunningham Lindsay Canada Claims Services Ltd. Leslie Britton Rachelle Bassett Maria Serquina Gabriel Gonzalez Michael Gauthier Shannon Hong Harold Bowles Stanley Doucet Sharon Rand Robert Miller Yvon Mourant Dani Atterton Ashley Bourda Tammy Giannone Kim Glockling Dusan Komljenovic Angela Kralt Melissa Kralt Victoria MacLean John Mahler Allison McCollum Tracy Oliveira Gennaro Palermo Michelle Phillips Franca Reale Maureen Fraser Samantha Low Nicole Myronyk Kumar Sivakumaran Toby Collins Derrick Filoon Yves Aubin Garry Hogan Diane Strang Celeste Vickers David Villagran David Boone Kelsey Sweet Leslie Guerette Joan McKinlay Kennedy Diane Lefebvre Deborah Casey
Nanaimo, BC Calgary, AB Calgary, AB Edmonton, AB Saskatoon, SK St. John’s, NL Dartmouth, NS Dartmouth, NS Dartmouth, NS Kentville, NS Caraquet, NB Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Hamilton, ON Mississauga, ON Mississauga, ON Mississauga, ON Mississauga, ON Richmond Hill, ON Sudbury, ON Timmins, ON Kelowna, BC Calgary, AB Calgary, AB Winnipeg, MB St. John’s, NL Calgary, AB Barrie, ON Brampton, ON Cornwall, ON London, ON
Thomson Insurance Adjusters Inc. Fred Temple Orangeville, ON
Level 3 Level 3 Level 3 Level 1 Level 2 Level 1 Level 3 Level 3 Level 1 Level 3 Level 3 Level 2 Level 1 Level 2 Level 2 Level 1 Level 1 Level 2 Level 1 Level 1 Level 1 Level 3 Level 1 Level 2 Level 3 Level 3 Level 2 Level 1 Level 1 Level 3 Level 3 Level 3 Level 3 Level 3 Level 1 Level 3 Level 3 Level 2 Level 3 Level 3 Level 3 Level 3 Level 3
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APPOINTMENT
The 14th annual Ontario Pond Blue Goose Scotch Nosing took place on April 3 at the Ritz-Carlton Hotel Toronto in its beautiful Carlton Ballroom. More than 200 Ganders and guests attended raising funds in support of Camp Oochigeas – A Camp for Children With Cancer. l
Stuart Ghan Claude Blouin and Jamie Dunn, Partners at Blouin, Dunn LLP, are extremely pleased to announce that Stuart Ghan has recently joined the firm as an associate lawyer. Stuart is a graduate of Osgoode Hall Law School and was called to the Ontario Bar in 1993. Since his call to the Bar, Stuart’s practice has involved insurance litigation including motor vehicle claims, occupiers’ liability claims and product liability claims. Additionally, Stuart has participated in the defence of high profile Ontario Class Action claims. Stuart has enjoyed success at the trial level and on appeals before the Divisional Court and acting for both Appellants and Respondents at the Ontario Court of Appeal. In addition to trials and appeals, Stuart’s practice includes resolution of matters through settlement conferences, mediations and arbitrations in order to achieve cost effective results for his clients. Stuart is a member in good standing with the Law Society of Upper Canada. Outside of the office, Stuart spends his winters on the ski hill and summers racing triathlons, including Ironman events. Stuart’s contact information is: sghan@blouindunn.com (416) 365-7888 ext. 168 Blouin Dunn is one of Ontario’s leading insurance defence firms whose members have been providing quality legal support to the insurance community for over 30 years. We offer services in Ontario to property and casualty insurers throughout North America, at all levels of experience, at appropriate and competitive rates.
www.blouindunn.com www.claimscanada.ca
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• on the scene OTS Crawford & Company (Canada) offered their invited guests at the 2014 RIMS Conference and Exhibition in Denver, Colorado with a sampling of local fine cuisine on April 26 at 1515 Restaurant. Located in beautiful downtown Denver, 1515 provided guests the perfect atmosphere to mingle, enjoy some great wine and cocktails before sitting down to a private dining experience. l
Crawford & Company, Broadspire and RSG hosted the “Think BIG” reception at the 2014 RIMS Conference in Denver. Attendees were treated to amazing views of Denver atop the Grand Hyatt’s 38th floor Capital Peak Ballroom. Guests also had the opportunity to mingle and enjoy great food, classic cocktails and live music. l
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www.claimscanada.ca
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The Risk Management Counsel of Canada (RMC), a national network of law firms that works with the insurance industry, recently held a “Culinary Trip Around the World” event at Airship 37 on May 1 in the historic Distillery District in Toronto. The event greeted and ushered guests via a red carpet into the “VIP departure lounge” where attendees were then taken on the ultimate culinary voyage to Bangkok, Tokyo, Delhi and Mexico. Also worth noting, the Risk Management Counsel of Canada is a proud supporter the Women in Insurance Cancer Crusade (WICC) and has signed-on to become a National Sponsor. l
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• on the scene OTS Winmar Toronto/Brampton held its annual Boat Cruise Fundraiser on May 5. Guests boarded the Captain Matthew Finders, Toronto’s largest and grandest ship, and enjoyed a fun filled afternoon of great food, beverages and live entertainment while raising awareness and support for the St. Michael Brian Injury Research Foundation. Funds will be directed to the ‘Rick & Mindy Gelman Fund’. l
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www.claimscanada.ca
14-06-25 10:53 AM
Our TIME MACHINE is ready for you to climb aboard! www.CU80Years.com Prepare for the journey of a lifetime and climb aboard Canadian Underwriter’s time machine to the industry’s past – all the way back to the start of the magazine in 1934, with stops at every year along the way…
Because Our History is Your History — Help Us Build The Journey — Submit Your Historical Photos at CU80Years.com!
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14-06-24 10:05 AM
If you’re in Manitoba, this is considered an automobile. Surprised? ARC isn’t.
ARC Group Canada is a national network of independent law firms, each intimately connected to their local market. Insurance and risk management experts. Regional strength. National scope. That is the ARC Group.
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The ARC Legal Reporter Winter Issue – Article #1 A National Network of Independent Law Firms
When is a medical examination considered a second examination under Rule 36 of the New Brunswick Rules of Court? ARC ad 2014_golf.indd 1
14-06-02 4:08 PM
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14-06-24 2:58 PM