BREAKING NEWS! QB Strikes Down Cap On Minor Injuries!

[macker]

Originally Posted by Bobblehead

Well isn't it a conflict of interest if they are taking the money I am paying for insurance then gambling that on the stock market? I would think that there would need to be some sort of distinction or separation.

Otherwise that is a heck of a gig - make it a law that people must buy your product, then use that money to gamble on the stock market. Talk the government into putting a cap on the amount you may ever need to pay out on the premiums, and start swimming in the suckers money a la Scrooge McDuck.

It is after all a business. If you don't like the fact that your rates are going up then hedge yourself and buy stock in the business that is increasing your rates Capitalism is full of conflicts of interest...I do see both sides of this but still feel that there will be rising costs (inflation) all around us going forward and p&c insurance is not imune to this...
I should also add that there is a reason Warren Buffet is so fond of Geico and there is a guy who knows how to work the float!

[Slava]

Originally Posted by macker

Not the P&C insurers in Canada.....Take for example the largest P&C insurer in Canada's latest earnings.....they lost 36.3 million....http://www.newswire.ca/en/releases/a.../13/c2325.html
The perception is that they are making billions but the reality is that they are losing millions....

This is where the games the insurers are playing become evident though; the combined ratio for a lot of these companies is still below 100%. In other words they are taking in more than it costs them to pay claims and adjudicate them.

Plus, if they are losing too much money due to one time market events (or at the very least inconsistent market events) then should we expect a huge rate decrease when the bull market gets roaring again?

[Finny61]

Originally Posted by Bobblehead

Well isn't it a conflict of interest if they are taking the money I am paying for insurance then gambling that on the stock market? I would think that there would need to be some sort of distinction or separation.

Otherwise that is a heck of a gig - make it a law that people must buy your product, then use that money to gamble on the stock market. Talk the government into putting a cap on the amount you may ever need to pay out on the premiums, and start swimming in the suckers money a la Scrooge McDuck.

Your warping this idea that insurance companies are gambling addicts, insurance companies actually are some of the most conservative investors in Canadian business, some are stupid yes but most are actually savvy, if an insurance company is losing money on their investments then wow the overall market really must suck. I don't even want to look at my retirement numbers.

[Finny61]

Originally Posted by Slava

This is where the games the insurers are playing become evident though; the combined ratio for a lot of these companies is still below 100%. In other words they are taking in more than it costs them to pay claims and adjudicate them.

Plus, if they are losing too much money due to one time market events (or at the very least inconsistent market events) then should we expect a huge rate decrease when the bull market gets roaring again?

What insurance companies take in is based on lines of business, there is no money to make in auto insurance, the money they make is investments and profitable lines of business which these days is only commercial business and a bit in life insurance. Farm loss ratios are through the roof on average and HAB or home insurance is steadily increasing and starting to get concerning.

In bull markets there are huge decreases in some insurance products but not auto or home, why is that? Because costs steadily increase, they don't drop, people don't become better drivers in bull markets and house selling prices do not affect the cost to replace them if lost in a claim. In bull or soft markets most insurers are fighting over commercial insurance because it is lucrative.

Investments make up a significant portion of what insurers use to cover their bases, but paying claims isn't the only thing your money pays, it covers claims/administration or business expense/agent commissions/profit. For every dollar an insurance company typically looks for .10-.15 pure profit but making that for one line of business isn't so peachy when for another line such as auto you are paying .20-.30 on top of what is coming in because that is the reality of what many of the insurance companies are facing.

Why do you figure ING sold it's Canadian arm of insurance? Why is Aviva laying off a few hundred across the country? Because investments have dried up and insurers are scrambling to either pay claims or pay expenses to run their business because it's either one or the other.

[Slava]

I think that we are on the same page here Finny. I get that investments cover the bases for the insurers and don't really have an issue with that.

I think that you are missing the point on the combined ratio though; that measure is the cost of the claims plus expenses as a percentage of the premiums paid. When that ratio is under 100 (and in some cases WELL under 100) that means that they are making money without investing in anything.

ING sold the P&C business in Canada because the parent company was having other difficulties. That is a profitable business and has huge market share here. When you're having money troubles though, you sell what is easy to sell.

[onetwo_threefour]

There is of course the question of whether a captive market should be exposed to capital risk at all. If insurance is mandatory then exposing the premiums that are being collected to potential losses is IMO prima facie unfair to the insurance consumer. We are required to purchase this product, but have no effective control over the activities of the companies that should be custodians of those premiums. It's all well and good to say that you should therefore buy stock so you can have a say, but institutional investors or billionaires will always control this type of company.

This is one of the strongest arguments for public insurance in my mind.

[Finny61]

Originally Posted by Slava

I think that we are on the same page here Finny. I get that investments cover the bases for the insurers and don't really have an issue with that.

I think that you are missing the point on the combined ratio though; that measure is the cost of the claims plus expenses as a percentage of the premiums paid. When that ratio is under 100 (and in some cases WELL under 100) that means that they are making money without investing in anything.

ING sold the P&C business in Canada because the parent company was having other difficulties. That is a profitable business and has huge market share here. When you're having money troubles though, you sell what is easy to sell.

Or perhaps ING backed out because their bully tactic of buying up market share by taking out key brokers didn't work. ING was notorious for gaining hold of the overall market through flat out purchases of independent broker companies. What they didn't realize is insurance is all about risk selection and not about the size of the company. They were starting to get burned an ING parent bailed.

[ken0042]

Global News just reported this as being "Good news for drivers." I just fired off an email to them:

I'm just watching Global News Hour Final, and I cannot believe what I just heard Brienne just said about the cap being upheld for soft tissue injuries being "good news for drivers."

Did she mean to say "good news for the insurance companies?" Because that's the only people I see this being good news for.

Or does Global news believe that drivers should not be protected by the insurance coverage we pay for?

I would appreciate a response, or an on-air correction.

Thank you
Ken

[Sylvanfan]

I propose that we plan to exterminate all Deer to get the cost of car insurance down. How much does each claim cost these companies and they can't even sell off the corpse as salvage to get back any of the money. Personal injury claims aren't making rates go up. It's freaken deer!

[fredr123]

Despite recent headlines that major insurance industry players would be looking for 40 per cent hikes on basic premiums starting Nov. 1, there was no discussion of dramatic increases at the Automobile Insurance Rate Board hearings that started Tuesday.

At least two insurance companies said they would not seek any increases at all for basic insurance coverage.

"With the decision from the Alberta Court of Appeal, we've taken a quick look at what our rates are . . . and we think we'll have adequate rates . . . if they say no increase," said Robert Katzell of AMA Insurance.

The rate board's own actuary, Ted Zubulake from the firm Oliver Wyman, said that with a cap in place, mandatory insurance rates should go down three per cent.

http://www.calgaryherald.com/news/Al...273/story.html

Rick Bell making up names for some of the participants at the rate board hearing. Click if you're into that kind of thing.

http://www.calgarysun.com/news/colum...24001-sun.html

Grid system in place in Alberta means young women are paying about the same rates as men... or, as the "article" spins, young women are paying for young men.

http://www.calgarysun.com/news/alber...23996-sun.html

[FlamesKickAss]

That last story is bull . Doing quotes... I don't see under 25 females on the grid system unless they have had a claim or two. its close but still about 50 bucks a year less with no driver training and with driver training its about 200 different than the grid system (what new males drivers fall under)

I just did a ballpark quote for liab ins to back it up

[KevanGuy]

Originally Posted by Sylvanfan

I propose that we plan to exterminate all Deer to get the cost of car insurance down. How much does each claim cost these companies and they can't even sell off the corpse as salvage to get back any of the money. Personal injury claims aren't making rates go up. It's freaken deer!

I fully support this plan!

[troutman]

The Supreme Court of Canada has announced it will not hear an appeal regarding Alberta's minor injury cap.

I am a bit surprised by this - there was a similar challenge in Nova Scotia, so I thought this would be of sufficient "national importance".

What happens next? I suppose cases would will be litigated on the grounds that the plaintiff's injuries are not "minor injuries", as this term has been vaguely defined.

[VladtheImpaler]

I gave up the ghost when Rowbotham stabbed me in the back in June, so this was nothing.

[troutman]

I'd like to hear WAP's platform on the cap.

[VladtheImpaler]

Originally Posted by troutman

I'd like to hear WAP's platform on the cap.

Post it in the other thread to make sure the lady sees it...

[troutman]

Originally Posted by VladtheImpaler

Post it in the other thread to make sure the lady sees it...

I have asked for their position before - still waiting.

[VladtheImpaler]

Originally Posted by troutman

I have asked for their position before - still waiting.

Ah - well, FireFly, if your position is the "correct" one, I will donate some money...

[troutman]

Me too.

[fredr123]

Originally Posted by troutman

The Supreme Court of Canada has announced it will not hear an appeal regarding Alberta's minor injury cap.

I am a bit surprised by this - there was a similar challenge in Nova Scotia, so I thought this would be of sufficient "national importance".

What happens next? I suppose cases would will be litigated on the grounds that the plaintiff's injuries are not "minor injuries", as this term has been vaguely defined.

Earlier this week, the Nova Scotia Court of Appeal released their decision upholding the cap in that province:
http://www.cbc.ca/canada/nova-scotia...ap-upheld.html
http://www.courts.ns.ca/decisions_re...009nsca130.pdf

As you may recall, the cap in Nova Scotia was upheld at first instance and upon appeal. Here in Alberta, the cap was first struck down and then restored by our Court of Appeal.

Now that the Supremes have decided not to hear the appeal from Alberta, I can't imagine they would hear the Nova Scotia appeal either (if one was launched) unless there was some other glaring deficiency in the reasons of the Nova Scotia Court of Appeal.