This article was produced with Billyard Insurance Group (BIG).
Canada’s vibrant and diverse population is one of its greatest strengths, but it also poses unique challenges for industries like auto insurance. A significant hurdle has been assessing the driving history of new Canadians, leading to inaccurate ratings, potential claims denials, and challenges for markets when filing for accurate rates. Recognizing this gap, Billyard Insurance Group (BIG) has introduced an innovative solution that combines technology and strategic insight to transform the way insurers rate and serve new Canadians – ensuring fairness, accuracy, and long-term benefits for all.
A key part of the auto insurance rating process involves a review of an applicant's driving history. In Ontario, for example, this is completed by requesting a Motor Vehicle Record (MVR) from the Ministry of Transportation (MTO). This document typically includes key details about a driver, such as the issue date of their Canadian driver’s licence, which insurers use to calculate their driving experience. However, when completing this process for new Canadians, the MTO adjusts the issue date on their MVR to reflect their driving history from their previous country.
The challenge stems from a system primarily designed for domestic driving experience, creating disparities for those with international driving backgrounds. As a result, many new Canadians are inaccurately credited with domestic driving experience that should not qualify. This discrepancy has significant ripple effects, such as insurers experiencing premium leakage from clients receiving rates that are typically reserved for drivers with significantly more domestic driving experience. For a country where immigrants make up 23 percent of the population, this is a widespread and costly issue, impacting millions of policies and the financial stability of insurance providers.
Leveraging its AI-powered underwriting platform, Precision, BIG is tackling this problem head-on. The platform has addressed this issue by:
Through this process, Precision ensures that only verified driving experience within Canada and the US is considered when rating clients – reducing errors, fraud, and miscalculated risk.
The benefits of this innovation extend throughout the entire insurance ecosystem. “When each driver is rated accurately, it leads to better relationships with clients and stronger partnerships with markets,” says Michelle Bragg, Director of Underwriting at BIG.
Accurate ratings mean greater transparency for clients, ensuring they pay premiums that truly reflect their driving history. It also allows new Canadians to build their insurance history on a fair foundation, enabling them to access better rates over time.
For insurance providers, this solution gives them confidence in their pricing strategies, as Precision minimizes revenue leakage. This reduces instances of claims exceeding premiums, protecting profitability and strengthening their financial stability.
Accurately evaluating the driving experience of new Canadians has long been a challenge in the insurance industry, but Billyard Insurance Group has successfully addressed it. Through advanced technology and strategic insights, they have developed a solution that ensures fair and accurate auto insurance ratings. This approach provides a reliable framework for the industry, benefiting both clients and insurers while showcasing the impact of innovative leadership.
