Will greater Canadian ownership in the insurance industry lead to more clout with provincial regulators? One CEO thinks so.
Joel Baker, president and CEO of MSA Research Inc., told delegates gathered for the recent Canadian Insurance Financial Forum that Canadian ownership within the industry has never been higher, and should translate into a greater receptiveness to insurers’ needs from the various regulators.
“We can expect to have more clout with the regulators,” said Baker. “For 2014, we’ve increased to 67 per cent Canadian ownership, compared to only 14 per cent American and 17 per cent European. The P&C segment in Canada is now more aligned with the banking and life sectors now.”
The Financial Services Commission of Ontario is currently looking for input from interested stakeholders, after releasing its draft priorities for the year back in April.
This year’s priorities focus in part of licensing of service providers (such as health rehabilitation clinics), and FSCO will be introducing a “licensing regime to reduce fraudulent billing practices in the sector.”
FSCO has been accepting licence applications from service providers that invoice auto insurers since May 1, and licences will be required as of Nov. 1 this year. The final outline of its priorities is due to the Minister of Finance by June 30 each year.
The regulator will also be continuing its current three-year review of the auto insurance system in Ontario. (continued.)
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Baker described the increase in Canadian ownership as a “seismic shift,” citing direct premiums written (DPW) allocations in 1999 that had 45 per cent Canadian ownership, 18 per cent U.S.-owned and 36 per cent European-owned.
“That shift has happened thanks to
Desjardins acquiring State Farm,” said Baker. “This has enhanced local decision-making ability – but will it mean more Canadian-owned insurance groups will become serious global players? That remains to be seen.”
