Yukon Territory

Northwest TerritoriesNunavut

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

Newfoundland and Labrador

New Brunswick

Nova Scotia

P.E.I.

Toward a Safer New Brunswick An update from New Brunswick’s home,

car and business insurers

2

Amanda Dean Vice-President, Atlantic

The year 2013 posed a tremendous challenge to Canadians from coast to coast, with catastrophic floods in Alberta and Ontario, a deadly train derailment in Quebec, and an ice storm that left many in Ontario and Atlantic Canada without power. The property and casualty (P&C) insurance industry responded quickly to help people recover from these events.

Insurance Bureau of Canada (IBC) – the voice of the P&C insurance industry – takes its leadership role seriously in making communities more resilient. To advance our work, we collaborate with federal, provincial and municipal governments and other stakeholders. The launch of IBC’s municipal risk assessment tool (MRAT) and an IBC-commissioned earthquake impact study are some examples of the industry’s efforts to help Canadians prepare for the biggest risks they face.

Beyond managing risk, providing peace of mind and paying billions of dollars in claims, the P&C insurance industry employs tens of thousands of Canadians and promotes economic development. The industry also advocates for improvements in financial literacy, emergency preparedness and severe weather adaptation. We take pride in sharing in the collective responsibility to keep people safe, whether they are at home or on the road.

This publication provides a summary of our efforts to help build a stronger, safer New Brunswick.

3

Over the last decade, New Brunswickers have benefited from affordable, effective car insurance.

Since the government introduced the minor injury general damages cap in 2003, average premium costs have dropped 36.4% from $1,239 in March 2003 to $788 in October 2013. Today, New Brunswickers enjoy some of the lowest car insurance rates in the country.

In 2013, the provincial government raised the minor injury general damages cap from $2,500 to $7,500. The government also plans to adjust that amount annually beginning January 1, 2015, in accordance with the Consumer Price Index for New Brunswick.

A sustainable car insurance system must strike a balance between providing

good benefits for the few people who make claims and affordable premiums for everyone who drives. IBC and the private insurers serving New Brunswick are committed to working alongside the government to ensure smooth implementation of the reforms.

In any reform process, there is always some uncertainty about the true impact of the changes, because it often takes years to fully understand their effects. IBC and insurers will work closely with the government to monitor the effects of the reforms, address any unforeseen issues and help keep the system working well for New Brunswickers.

Car insuranCe

is working in new Brunswick

$700

$900

$800

$1,000

$1,100

$1,200

$1,300 $1,239

-36.4%

$788

OCT.

2013JAN.

2012JAN.

2013JAN.

2011JAN.

2010JAN.

2009JAN.

2008JAN.

2007JAN.

2006JAN.

2005JAN.

2004MAR.

2003

*average written premium by entry month ($)Source: IBC, GISA

New BruNSwick - AverAge AuTo premiumS 2003-2013*

4

Severe weather took a devastating toll on Canadians in 2013. After each crisis, the insurance industry worked quickly to process and settle claims to help people recover. All told, the industry paid out a record-breaking $3.2 billion to policyholders in 2013 for losses related to severe weather – the highest amount in Canadian history.

To help Canadians build resilience in the face of natural disasters, the P&C insurance industry focuses on preparing before a crisis as well as responding afterward. In 2013, the industry achieved two milestones in collaboration with federal, provincial and municipal governments and took other proactive steps to cultivate and maintain relationships with governments at all levels:

• IBClaunchedmrAT, a new ground-breaking technology, to help municipalities identify sewer and stormwater infrastructure vulnerabilities that could result in sewer backups and basement flooding. Municipalities will use the MRAT information to plan and prioritize infrastructure repairs. Fredericton, NB, is one of three MRAT pilot cities.

• IBCreleasedascientificstudyontheeconomic impact of a major earthquake in British Columbia and the Quebec City-Montreal-Ottawa corridor. An earthquake in either of these regions would have major economic implications for Atlantic Canada. IBC, along with the P&C insurance industry, is dedicated to working closely with governments and other stakeholders toward the development of a national response framework.

• InOctober,IBCsponsoredthe Union of the Municipalities of New Brunswick annual conference. IBC Atlantic Vice-President Amanda Dean addressed attendees, focusing on strong partnerships and the role the P&C insurance industry plays in disaster management.

adapting to

severe Weather and natural disasters

partners in Building resilienCe: Fredericton, NB, is one of three pilot cities for MRAT. Pictured here at the MRAT launch event in Fredericton are (l-r) Deputy Mayor Stephen Chase, Mayor Brad Woodside, IBC Atlantic VP Amanda Dean and Councillor Greg Ericson.

5

Whether it’s hurricanes, rainstorms or ice storms, New Brunswickers are increasingly under siege from severe weather and the damage it inflicts.

The P&C insurance industry has a front row seat on the effects of our changing climate. Along with assisting to rebuild in the wake of disaster, the industry plays an active role in helping New Brunswickers protect themselves, their families and their property from severe weather.

• DuringhurricaneseasonintheAtlantic, as well as in advance of winter storms, IBC issued media releases that explained how to stay safe, how to prevent property damage and what typical insurance policies would cover if damage did occur. The releases also offered advice about starting the claims process and encouraged people to call IBC’s Consumer Information Centre toll-free for insurance assistance.

• In2013,IBCdeployedits“virtual”cAmp (Community Assistance Mobile Pavilion) program to respond to nine severe weather events in Atlantic Canada, including flooding in Digby, NS, and St. Stephen, NB, a tornado near Grand Lake, NB, and a forest fire in Wabush, NL. IBC worked with local government, emergency management, media and insurers to disseminate important insurance and safety information via traditional and digital media.

This barn was torn apart when a tornado struck near Grand Lake, NB.

Photo

: CTV

News

6

empowering ConsumersWhen Canadians know how their insurance works and have the right coverage, they can better protect themselves, their families and their property.

IBC is committed to being a trusted source of insurance information. Here are some of our efforts in 2013 to help Canadians understand their insurance:

• Answered more than 66,000 inquiries at five consumer information centres across the country

• Issued86 media releases and generated 9,599 articles

• Madeeffectiveuseofsocialmedia,resulting in more than 37 million Twitter impressions and over 1 million visits to ibc.ca and getintheknow.ibc.ca

• Respondedto884 media calls and participated in 124 events, speaking engagements and sponsorships

• Usedbothtraditionalandsocialmediato promote timely reminders about severe weather preparedness, water damage prevention, winter driving, insurance literacy, how to fight fraud and more

• Partneredwithpoliceforcesandotherorganizations across the country, such as Crime Stoppers, to fight fraud and other insurance crimes.

insuranCe outreaCh: IBC is an important insurance resource for consumers and media. Here IBC Atlantic VP Amanda Dean speaks with Global News.

7

Keeping Communities safeThe P&C insurance industry is committed to building strong communities and working with like-minded partners to ensure the Atlantic region is resilient and thriving.

Some examples of the industry’s work in 2013 include the following:

New BruNSwick pATNeT IBC co-founded the Provincial Auto Theft Network (PATNET) with the Saint John Police Force in 2010 to build partnerships between the insurance industry and law enforcement agencies to better combat auto theft. The network connects police officers across the province with IBC investigators through ongoing training programs and information sharing.

In 2013, IBC was proud to receive a Business Excellence Award from the Crime Prevention Association of New Brunswick and the Department of Public Safety for developing PATNET. The award recognizes organizations that have made an outstanding contribution to crime prevention in their communities.

reD croSS coNFereNce oN DiSASTer mANAgemeNT IBC was a platinum sponsor of the annual Canadian Red Cross Conference on Disaster Management held in Halifax from November 18 to 20, 2013. IBC Altlantic VP Amanda Dean was one of three participants in the Recovery Planning/Risk Management for Disaster panel, which discussed gaps in coverage and realities of insurance and government assistance in the face of catastrophes.

iBC honoured: (from left) Linda Patterson, Chair, Crime Prevention Association of New Brunswick; Guy Ouelette, Investigator, IBC Atlantic; and the Honourable Troy Lifford, Minister of Justice, Government of New Brunswick.

Amanda Dean speaks at the Red Cross disaster management conference in Halifax.

8

insurance 101 When people buy insurance policies, they put money into a pool to help the few who will suffer a financial hardship – such as a house fire, car collision or business interruption – in a given year.

A premium is based on how likely it is that the purchaser will collect from the pool by making a claim. Insurers gather information that they know from experience will help them produce fair and accurate rates.

Ask your insurance representative about your policies at least once a year.

Home cAr BuSiNeSS

• What does my policy cover? What are the limits? Are there any exclusions?

• Is there a specific kind of insurance for a house? A condo? An apartment?

• Are there risks for which I can’t buy insurance?

• Is optional coverage available for risks not normally included in a regular policy?

• What can I do to keep my premiums down?

• What does my policy cover if I’m involved in a collision?

• What optional coverage is available? Should I have collision insurance on an older car?

• What deductible amount is recommended?

• What can I do to keep my premiums down?

• What kind of insurance do I need?

• Are there perils for which I can’t buy insurance?

• If my business is home-based, do I need special coverage?

• What does errors and omissions or malpractice insurance cover?

• What can I do to keep my premiums down?

Did you know? Both federal and provincial governments closely regulate the insurance industry. Provincial governments oversee and must approve car insurance rates and coverages.

QueSTioNS To ASk your iNSurANce repreSeNTATive:

9

demystifying insuranceDespite the importance of insurance to their financial security, consumers are often unsure about what a premium represents and how it is calculated. Here are some factors that help insurers set premiums.

cAr iNSurANce:

• Claimshistoryofpolicyholder• Drivingrecordofpolicyholderand

other household drivers (at-fault collisions, moving violations, etc.)

• Vehicletype(make,model,year,etc.)• Vehiclerepaircostand/or

replacement value• Collisionandcrimerateswhere

vehicle is usually parked• Drivingdistanceandfrequency• Additionalcoverage,deductible

and discounts.

Home iNSurANce:

• Age,sizeandlocationofresidence• Typeandqualityoffinishes

and materials• Residencereplacementcost• Residencetype(single-family

dwelling, apartment, etc.)• Residenceconstructionmaterial

used (brick, cement, etc.)• Distancefromfirehydrantand

fire station• Claimshistoryofpolicyholder• Crimeratesofresidencelocation• Additionalcoverage,deductible

and discounts.

DiScouNTS mAy Be oFFereD For:

• Vehicleswithlosspreventiondevices• Driverswhohavegraduatedfrom

approved driver training courses• Insuringtwoormoreprivatepassenger

vehicles in the same household• Combinedcoverageforexisting

insured clients (for example, car and home insurance)

• Policyholderswhohavenever filed an insurance claim

• Driversovertheageof55• Vehiclesnotusedinwinter• “Loyalty”forpolicyrenewalsby

existing insured clients, subject to insurer’s criteria.

10 Source: IBC with data from MSA, SCOR, AMF, INSURECONOMY New Brunswick, 2012. www.insureconomy.ca/nb

Contributing to the economyThe P&C insurance industry plays a vital role in Canada’s economic health. By absorbing financial risk, particularly in a world of emerging new risks and changing needs, and investing in Canadian bonds and securities, insurers help to create and promote growth, development and employment.

Here are highlights based on the most recent data available:

The P&C insurance industry employed 118,600 people across Canada.

Health care levy: In 2012, P&C insurers paid $27.7 million in health care levies to help pay for the medical needs of car collision victims in the province.

Taxes: In 2011, P&C insurers paid $67.6 million in taxes to the government of New Brunswick .

Claims: In 2012, insurers paid out $509 million in claims to help policyholders in New Brunswick recover from injuries and rebuild damaged property.

Competition and choice: There are more than 100 home, car and business insurance companies serving the province of New Brunswick.

Supporting New Brunswick: P&C insurance companies employ more than 2,650 New Brunswickers.

The P&C insurance industry had $104 billion in invested assets, to support economic growth and stability.

Insurers paid out $27.8 billion in claims to victims of collisions, disasters and other losses in Canada.

Canadian insurers paid more than $7.5 billion in taxes and levies to federal and provincial governments.

11

investing WiselyThe P&C insurance industry offers the key service of risk management and is committed to covering losses when they occur. Providing these services necessitates the careful and safe investment of resources to ensure that funds are available when needed. With the bulk of its investment portfolio in federal, provincial and municipal bonds, the insurance industry is far less vulnerable to stock market fluctuations than other industries. This is also why P&C insurers historically weather an economic crisis better than others in the financial services sector.

n 54.0¢ Claims paid out to policyholders

n 20.5¢ Operating costs

n 16.1¢ Taxes and levies

n 9.4¢ Profit margin

n 80.7% Bonds

n 12.7% Shares

n 3.8% Term deposits

n 2.1% Other investments

n 0.7% Mortgage loans

Source: IBC, MSA, SCOR, AMF Source: IBC, MSA

The Insurance Dollar pie chart shows how Canada’s home, car and business insurers spent each dollar of revenue averaged over the seven years from 2006 to 2012.

wHere DoeS eAcH DollAr receiveD By iNSurerS go?

BreAkDowN oF NATioNAl p&c iNSurANce iNDuSTry iNveSTmeNTS

Questions? We’re here.Insurance Bureau of Canada’s Consumer Information CentreTel: 902-429-2730Toll-free: 1-800-565-7189 ext. 228 Hours: M-F 8:30 a.m. – 4:30 p.m. or visit ibc.ca

For additional copies of this booklet, please contact:Insurance Bureau of Canada’s Member Servicesmemberservices@ibc.ca

Insurance Bureau of Canada is the national industry association representing Canada’s private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada.

02/2014

Data in 2014 State of the Industry brochure have been gathered from several national and international sources, including IBC. Data are from 2011, 2012 or 2013 depending on when sources release their information. In some instances, figures may not add up to 100% as a result of rounding. Also because sources collect data in different ways, there may be small differences among similar data.