IBC sets sights on flood program and sharing economy for 2016
19 percent of Canadian households are at some level of risk from flooding
“Today, one of our key industry issues––flooding linked to climate change––is high on the new federal government’s agenda,” Forgeron told the crowd of about 40 at the IBC’s annual general meeting in Toronto on Thursday morning.
Forgeron noted that the attention of the previous government had been “focused elsewhere” but that current “meetings with the federal leaders are going well.”
The Parliamentary Budget Office predicts that storms, hurricanes and floods related to climate change will cost the federal disaster fund $900 million in the next five years, compared to $54 million annually from 1970 to 1994. And most of those costs will be as a result of floods.
The IBC’s own research shows that 19 percent of Canadian households are at some level of risk from flooding. However, Canada is the only G7 country that doesn’t have a national flood program, and many people in high-risk areas can’t purchase flood insurance or can only purchase it at a very high cost.
A national flood program, as conceived by the IBC, would aim to have reliable funds in place to ease the financial burden across the board.
“What we’re saying is, we’ll manage [year-to-year fluctuations], but some people really need a subsidy from the government to make it affordable,” IBC chair Sylvie Paquette said in an interview. “It’s really a public-private partnership that we’re looking at.”
In the wake of recent major earthquakes in Japan and Ecuador, Paquette reminded IBC members that the organization is also working on a national earthquake strategy because of “the very real risk of a major earthquake in Canada.”
Another top priority for the IBC in 2016 is regulating insurance for the rapidly growing sharing economy.
“UberX and Airbnb are just the beginning,” Paquette said in her speech at the meeting. “There are so many different models already here or on their way—everything from car-sharing, to food and package delivery, to skills trading to couch surfing. All of these have insurance implications. We can’t let each and every one of them develop their own insurance agenda.”
Commercial insurance coverage for drivers who transport paying passengers in their private vehicles, like with UberX, can be prohibitively expensive for casual drivers. So some insurance companies, such as Aviva, have begun to sell personal coverage designed specifically for drivers who charge through a ride-sharing service.
That doesn’t sit well with the IBC.
“By being proactive through the IBC, we can help develop a regulatory framework for the providers and their customers and insurers. This will benefit the public by reducing confusion and encouraging those involved in such services to get the proper insurance coverage to protect themselves and their customers,” Paquette said. “The goal for me is to bring some discipline to the market.”