The imminent legalization of marijuana in Canada is hard to ignore for insurers as provincial governments announce plans for pricing, legal possession, and dispensaries.
In New Brunswick, the government released the locations of nine more CannabisNB stores on January 31, in addition to the 11 locations announced in December. The stores will open across 15 communities by July 2018, the expected date of cannabis legalization in the country.
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Insurers in the province see legalization as an opportunity to educate customers on risks, particularly relating to impaired driving and the implications for auto insurance.
“For the most part, the insurers seem concerned with the effects that the legalization is going to have on automobile insurance, particularly whether or not legalization is going to result in more collision accidents due to impaired driving,” said Brian Schryer, the president of the board of directors for the Insurance Brokers Association of New Brunswick.
With marijuana still illegal in Canada, exact numbers on collisions related to its consumption are hard to find. Schryer, who is also the president of Kent and White Insurance, looks to the US as a guide for the effects of cannabis on driving and, specifically, studies from the Insurance Institute of Highway Safety.
“They actually found that there’s a 3% increase in collisions after legalization took place,” said Schryer, referring to a 2017 status report. “3% may seem like a small number, but of course it can be significant in terms of insurance. Again, it remains to be seen here in Canada, and I think that the insurers are probably going to be looking at those statistics very closely once legalization actually starts.”
The key to a smooth transition for companies selling auto insurance, and their clients? Education.
“One misconception out there is that marijuana might not affect you that much, so there could be a risk of some people not understanding the effects that it has on the brain and the effects that it would have on somebody driving a vehicle,” said Schryer. “There’s an opportunity there for the insurance industry to create a lot of awareness and education for the public.”
It’s not just the personal insurance market that’s preparing to adapt. Commercial insurance for cannabis businesses is another area insurers are planning to take a closer look at.
“With this new emerging industry, we’re going to have basically the wholesalers and the growers, and then all the offshoots of that,” said Schryer. “I think there might be a bit more work to be done by the insurance companies to make sure that their commercial packages address the specific needs of that specific industry.”
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