Top 4 industry issues in 2011

Several pressing issues kept the industry buzzing this year.

Throughout the month of December, our year-end coverage will feature a series of list items that detail the most important stories of 2011. 

This year several industry issues became headline news not only within the insurance industry, but also across the board with many major media outlets reporting these stories. According to Canadian Insurance Top Broker, here are the top 4 industry issues in 2011.

1) Intact-AXA deal

In May 2011, Intact Financial purchased AXA Canada in a $2.6 billion cash deal. The acquisition was completed in September 2011, and the two companies continue to integrate processes and systems. This deal is expected to increase Intact’s market share by 16.5% and its premiums to $6.5 billion.

Read about what this deal means for brokers here. 

Read about the details of this acquisition here.

2) Economical demutualization

After announcing plans to demutualize in late 2010, Economical continued to move forward with those plans this year. Although the path wasn’t always smooth (the board was challenged by a group of dissident mutual policyholders, it reorganized its corporate structure and appointed a new president and CEO in June), Economical stuck to its plan. When the Federal Budget announced a framework for demutualization earlier this year, Economical supported the government’s decision.

Read about the revised Federal Budget with support for demutualization here. 

Read about Economical’s submission for demutualization here.

Read about the top 3 rumours at Economical here.

3) Fraud

Fraudulent insurance claims are increasingly the result of staged accidents and loosely regulated health clinics, creating big problems for the auto insurance industry. In Ontario, Auditor General Jim McCarter recently stated fraud cost the industry $1.3 billion per year. However, it’s not only the industry that pays—honest customers are also forced to pick up the bill in the form of higher premiums. This is why insurers, and the Ontario provincial government in particular, are working to fight fraud.

Read about Ontario’s Anti-Fraud Task Force here. 

Read about State Farm’s lawsuit against several clinics here. 

Click here to read other stories relating to fraud.

4) Cyber risk

Depending on the size of the company and information that is stolen, cyber crime can cost a business a few thousand dollars to a few billion. For example, when hackers broker into Sony Corporation databases earlier this year, they stole nearly 12 million credit card numbers, costing the tech giant about $2 billion to deal with after the fact. Cyber crime can occur from anywhere at anytime, so it’s important for companies to take precautionary steps to mitigate this risk.

Learn about cyber liability coverage here. 

Learn how to protect your business from cyber crime here. 

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