Insurance Business What is the future of Canadian auto insurance?

What is the future of Canadian auto insurance?Proof of insurance modernization in Ontario is widely seen as an overdue step towards the digital auto insurance experience consumers expect.

But what’s next?

One step may be improving the litigious nature of personal injury claims following car accidents by creating independent medical evaluation centres and focusing on an evidence-based system of care. The Insurance Brokers Association of Ontario’s CEO, Colin Simpson, said he strongly supports the Marshall report’s recommendations in this regard.

“You’re taking insurance coverage out for any catastrophe that you may have in your life - it’s a shame that lawyers and other people take advantage of that particular system to create an industry in its own right,” Simpson said, adding that insurance isn’t supposed to improve policyholders’ lives, but protect them instead.

“If you can get the framework to be efficient, if you can get people back to a position of health or their physical assets back to a position where they can use them more easily, then that will benefit everyone. The issue we’re seeing play out in the news these days in connection with legal costs of the current system needs to be addressed, because the people who suffer here are the policyholders.”

Darryl May, president of KTX Insurance Brokers, also wants a tightening of rules around personal injury litigation and compensation.

“There’s a lot of legal intervention today that wasn’t around 10 years ago that doesn’t seem to be benefiting consumers or driving claims costs lower,” May said. “More regulation around the bodily injury portion of the premiums might be of value to consumers today.

“I feel for consumers in Ontario, I understand how much the cost of car insurance, as a portion of household income, is - it’s too high and we need to do a better job of lowering costs and benefiting consumers.”

However, addressing personal injury claims is not the only reform that’s likely to occur in the industry. Another could see the industry increasingly move down the path of digitisation, as indicated by the recent decision on proof of insurance. May, whose company was offering digital proof of insurance alongside the mandatory paper version before Ontario went paperless, said provinces like New Brunswick or Saskatchewan could soon put license plate stickers and insurance on one app.

“Every jurisdiction is going to be slightly different,” he explained. “I could see in Saskatchewan, where government insurance and plates are all tied in one ecosystem, harmonizing them might be a more viable system there.”

“All of it should all be available through your driver’s licence, let alone through an app,” he continued. “If you’re driving, you’ve got a license. There’s a magnetic strip on there, there’s no reason why you couldn’t have all your tax and insurance details through that. Technology obviously isn’t there today, but that would be the easiest way to do it in my mind.”

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