Although Karen Gavan may want the Economical to be the leader in property and casualty insurance, it definitely won’t be leading in telematics. At least for now.
The company’s president and CEO says that the Economical Mutual Insurance Company has no intention to adopt telematics and usage-based insurance, instead deciding to take a wait-and-see approach.
“At Economical, we have taken a different position than many in the industry on telematics,” says Gavan. “While we have closely studied it and continue to monitor it, and are ready to move, we’re not pushing it forward at this time because we think the technology is changing so rapidly and its adoption is probably going to be driven by things much broader than the cost of insurance.”
While acknowledging that telematics has the potential to change the insurance landscape, “its real potential can be far greater than just managing your insurance rates,” she says.
While setting out Economical’s policy on UBI, Gavan took a shot at Queen’s Park mandated 15 per cent auto premium rate reduction, pointing out that the company has borne the brunt of most of the industry cuts.
“Ontario auto is going to challenge profitability as we were mandated to take some of the largest rate reductions,” says Gavan. “The industry as a whole, cannot meet the political commitments for a 15 per cent rate reduction without the government following through on its commitment to introduce measures that reduce costs.”
First and foremost among those measures include Bill 171 and the swift adoption of recommendations from last year’s Anti-Fraud Task Force. (continued.)
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Although Gavan is confident about the auto segment of the company, “we will see downward pressure on our top line as a result,” and is hopeful that the new majority government “has pledged to implement the necessary costs reductions.”
