Before carriers can roll out telematics-based auto insurance in Alberta, the issue of “informed consent” from consumers will need to be addressed, the province's Automobile Insurance Rate Board suggests in its annual report.
“A number of insurers and other stakeholders have approached the Board about introducing their version of (usage-based insurance) to Alberta,” AIRB stated in its recently-released annual report for 2013. “However, entry into the Alberta market will require the approval of the Superintendent of Insurance as this product introduces new rating factors. The issue of informed consent by Alberta consumers must be satisfactorily addressed prior to the introduction of any programs."
Although stating that the board is supportive of UBI as a voluntary discount program, the AIRB added the data gleaned from telematics - such as mileage, speed, time of day and incidents of hard braking - are “highly predictive of risk.”
The ability of insurers to monitor driving behaviour “can work to reduce claim costs by providing incentive to modify driving behaviour,” states the AIRB says, adding the board is “supportive of UBI as a voluntary discount program.”
Telematics is the hot product spreading across Canada, headlining its own conference in Toronto –Insurance Telematics Canada 2014 conference.
Although selling the product on the potential of premium savings is a strong lure, says Jack palmer, project director with Telematics Update, the conference organizer, brokers need to market the product on more than just the promise of discounts to retain their book of clients.
“To be sustainable, programmes must be designed to build and retain a loyal customer base,” Palmer told Insurance Business. “At the moment, Canadian insurers are luring consumers with the promise of discounts, but this will not keep their attention for long.” (continued.)
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The AIRB also noted in its report that 71 auto insurance companies “were active in Alberta in 2012, a decrease of four insurers over 2011.” The board reported that the private passenger loss ratio in Alberta for 2012 was 77 per cent, compared to 71 per cent in 2011.
The AIRB annual report also includes market share figures some corporate groups.
Intact had the greatest (21 per cent) market share, followed by Wawanesa with 14 per cent, TD with 13 per cent, The Co-operators with 8 per cent, Aviva with 7 per cent, RSA with 6 per cent, the Alberta Motor Association with 6 per cent,
Economical with 4 per cent,
State Farm with 3 per cent and Northridge with 2 per cent. The others had a combined total market share of 16 per cent.
