The Insurance Bureau of Canada (IBC) has spoken out about claims challenges amid the rising frequency of extreme weather events in the country, saying the industry is working to adapt its claims capacity to a “new normal.”
In a statement, IBC leaders acknowledged that the industry is coping with a massive increase in the number of claims. Between 2004 and 2013, there were roughly 694,000 claims related to extreme weather events; in the last 10 years, the number has risen to well over 1.3 million, according to the IBC.
IBC strategy vice president Liam McGuinty and communications manager Mark Cripps wrote: “The claims capacity of the P&C (property and casualty) insurance industry will be tested for years to come, as it adapts to the ‘new normal’ of more frequent and severe weather events.
“This is where government regulators can help. When claims capacity is at its limits, such as in the aftermath of a large catastrophic weather event, insurers will often turn to independent adjusters and external adjusting capacity to boost their claims response.
“Yet there are often challenges in mobilizing these adjusters across provincial borders because every province has different adjuster licensing requirements. This means that out-of-province adjusters require permission from the regulator to work in the province and, even then, the period of time they are allowed to work in the province is limited.”
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The IBC leaders also addressed a decision by the Financial Services Regulatory Authority of Ontario (FSRA) in 2022 that created an expedited approach for out-of-province adjusters entering the province.
McGuint and Cripps said: “This was a welcome move by FSRA, but it begs the question: Are Canadians best served by having 12 different sets of adjuster licensing requirements across the country? Is an adjuster’s job in Alberta so vastly different than one in Ontario or Nova Scotia?
“The industry’s view is that these barriers are artificial and are impacting the industry’s ability to respond to policyholders in times of crisis.
“There is hope that this will be rectified. A coalition of insurers has come together to raise awareness of the need for change. Insurance Bureau of Canada, the Canadian Association of Mutual Insurance Companies, the Canadian Insurance Claims Managers Association, the Canadian Independent Adjusters’ Association, the Insurance Brokers Association of Canada, and the Canadian Association of Direct Relationship Insurers are calling for full reciprocity of adjuster licensing across the country.
“The coalition is encouraged that the Canadian Insurance Services Regulatory Organizations is launching an Adjuster Licensing Committee to look into the issue. We hope the committee is the start of a long-awaited solution.”
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