March 2008 Archives

Desjardins General Insurance (DGI) is now offering direct home and auto insurance in Ontario.

In an effort to better manage risks during a period of large-scale catastrophes, insurers should consider offering long-term policies to homeowners in hazard-prone areas.
"Such a long-term policy could be tied to a mortgage, and home improvement loans can encourage the adoption of cost-effective mitigation measures," says a report co-authored by the Wharton University of Pennsylvania, the Insurance Information Institute and Georgia State University.
"A program of insurance vouchers, similar in concept to food stamps, could assist low-income residents in disaster-prone areas to purchase adequate insurance coverage."
The report found that, among other things, most homeowners in hazard-prone areas consider only premium payments, without taking into consideration the benefits of protection, when considering their insurance purchases.

American International Group, Inc. (AIG) reported loss of US$5.3 billion for 2007 Q4, and a net income of US$6.2 billion for the full year 2007, representing a 55.9% decrease over the prior year.
In 2006 Q4, AIG reported a profit of US$3.4 billion. "The 2007 other-than-temporary impairment charges resulted primarily from the significant, rapid declines in market values of certain residential mortgage-backed securities in the fourth quarter, for which AIG cannot reasonably determine the recovery period will be temporary," the company reported in a statement.

In order to respond to the rising costs of climate change-related damages, insurance companies are going to have to focus more on micro-solutions (i.e. on a policyholder-by-policyholder basis), Colin Empke, partner at Blaney McMurtry LLP, told delegates at the Canadian Defence Lawyers 4th annual insurance coverage symposium in Toronto on Feb. 28.
Empke was speaking on behalf of Anthony Saunders, partner with Guild, Yule and Company, who was unable to attend the symposium.
Empke observed an increasing number of weather-related insurance losses, causing the industry to seek ways to deal with increasing costs and solvency issues.