NHL prepared for Lokomotiv-like catastrophe

By Colby Cosh - Friday, September 16, 2011 at 10:40 AM - 0 Comments

Alexey Nikolsky/AFP/Getty Images

The catastrophe that annihilated Russian hockey team Lokomotiv Yaroslavl last week was terrible—but not unthinkable. Every top athlete with any significant service time has air-charter horror stories, and while the major North American pro sports have been spared, it is by the narrowest of margins.

In 2009, litigation surrounding the bankruptcy and aborted sale of the Phoenix Coyotes led to the NHL’s hitherto closely guarded bylaws being put on the public record. Those bylaws include an “Emergency Rehabilitation Plan” (ERP) that activates if an NHL club loses five or more players to death or disability in a single incident. Each team is required under the bylaw to carry a catastrophe-insurance policy of $1 million per lost player. The plan foresees an initial, voluntary effort to bring the affected team back up to playing strength, with the insurance money being used to bid for players in outright sale.

Remaining roster holes would be filled in an “ERP draft,” with the other teams protecting one goalie and 10 skaters. Only one player per contributing team could be sold or claimed, and the drafting club would be allowed to replace its losses only on a position-by-position basis. It’s a fascinating exercise for hockey fans to imagine—and one they hope never to see performed.

Insurance orange alert

By Josh Dehaas - Thursday, December 16, 2010 at 4:20 PM - 1 Comment

Getty Images

Canada has one of the lowest risks of terrorism in the Western world, according to the recently published 2010 Terrorism Risk Index. Yet this year was also one of the busiest on record for those offering insurance against terrorism, according to Marsh Canada, the country’s largest insurance broker offering terror coverage.

Canada’s terrorism insurance industry dates back to 2001, when the Sept. 11 attacks on the World Trade Center cost insurers $40 billion. After that, most insurance companies in the Western world excluded acts of terrorism from their coverage. The U.S. and the U.K. responded by promising to back companies that continued to offer terrorism coverage as part of their regular policies. Canada (with the exception of a temporary reprieve for the airline industry) did not follow their lead. That meant worried companies had to find their own stand-alone insurance. Following Sept. 11, just over a quarter of Marsh’s clients bought the insurance.

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Pitchmen gone wild

By Colin Campbell - Thursday, December 2, 2010 at 10:40 AM - 1 Comment

Lori Moffett/Bloomberg/Getty Images

The scandals that hit athletes Tiger Woods and more recently Wayne Rooney sent a loud warning to companies that pay millions of dollars for big-name endorsements: no pitchman is immune to embarrassing and costly meltdowns. For many firms anxious to avoid a marketing black eye, the answer is “disgrace insurance.” Insurance brokers say in the past few years there has been a marked rise in the number of firms seeking to guard against losses stemming from misbehaving spokespeople, reports the Independent.

Disgrace insurance can cover lost sales and lost ad campaign expenses (Rooney was dumped from Coca-Cola ads this year following reports that he cheated on his pregnant wife with a prostitute). It can also cover crisis management fees incurred from the fallout of Woods-like marketing messes. The policies cost as much as one per cent of the amount being insured. But with tens of millions of dollars on the line, firms are finding there is such a thing as bad publicity.

Insurers strike back

By Chris Sorensen - Thursday, September 16, 2010 at 1:20 PM - 0 Comments

Heath Korvola

There are few sights more spectacular than a lightning strike—unless you happen to be an insurance company. With some 40,000 lightning-related claims filed each year in Canada, totalling between $500 million and $1 billion, adjusters often find themselves trying to recreate events that literally happened in the blink of an eye.

Now help has finally arrived. A new database maintained by the Weather Network includes strike data collected since 2007 by a network of 71 sensors located across Canada and the northern United States. While firefighters and utility companies already rely on the real-time data for monitoring purposes, Bruce Caven, the Weather Network’s vice-president, says there was a need for an archival service so past strikes could be verified by insurance companies and other businesses. “They want to go back and reaffirm where the strike was struck, so to speak,” he says.

It’s not a perfect system. Information about strike locations is only considered accurate to within 250 m 18 times out of 20. But that is likely enough to help adjusters determine whether a claim is truly an act of God, or the work of an unscrupulous property owner trying to cash in on his policy.

Cuban Confusion

By Ron Pradinuk, Takeoffeh.com - Monday, May 10, 2010 at 2:00 PM - 0 Comments

That is the question.

On February 16^th, the Cuban government announced that as of May 1 all tourists – including Canadians – would require medical coverage to be allowed into the country. Travellers who did not comply would have to buy insurance from local Cuban companies available at the airport, port or marina in order to enter Cuba.

Understandably, with 1.5 million Canadians visiting Cuba every year, the news of enforced health coverage had private insurance providers here in Canada chomping at the bit. Press releases and flyers were churning and everyone assumed supplemental health insurance was required.

Then came the clarification that, in fact, provincial health insurance cards are proof enough for the Cubans — which launched a confusing barrage of news reports. For the record, although the Cuban tourist board has not updated their Canadian website to indicate this important point of difference, they have confirmed to Take Off eh that Canadians with provincial health cards are permitted entry into the country. And although the rule was in force as of May 1, local Cuban airport officers have apparently not yet begun asking for the document.

The downside of the miscommunication is that consumers may be left with the impression that they shouldn’t bother buying additional health insurance. Supplemental health insurance should be viewed as a priority no matter what your destination. Without it you could face significant costs.

The Travel Health Association of Canada provides guidelines for coverage on their website www.thiaonline.com.

Here are several important points to consider:

1. Because Canadian Provincial Health Insurance Plans do not make direct payments to out-of-country (or out-of-province) hospitals, doctors or clinics, you will have to bear the costs yourself and then apply to the Department of Health for re-imbursement. Wait times for reimbursement by Provincial Health Plans varies by province, but range between 90 days and 18 months.
2. In-patient hospitalization reimbursement rates will be different, depending on the Provincial Health Plan in effect. The rates vary from province to province – from $200.00 to $400.00 per day for in-patient or intensive care. The cost of these services in most other countries often exceeds these amounts.
3. Outpatient clinics, lab services, and other incidental charges related to out-of-country emergency medical care are often not covered by the Provincial Health Plans.
4. Provincial plans will not provide evacuation back to Canada in emergency situations by airline or air ambulance, nor will they cover out of country ambulance services.

There are hundreds of disturbing stories of Canadian tourists incurring thousands of dollars of debt from travel mishaps. Ask any travel agent who has witnessed their own clients’ struggles — the small additional expense for insurance can pay back many times over.

For Cuba, the bottom line is that whether or not you buy additional medical coverage is totally up to you. But remember the old insurance adage ‘We hope you never need it, but we hope you have it…just in case.’

By Ron Pradinuk
Ron Pradinuk is past national president of the Association of Canadian Travel Agencies.

Photo Credits: debstheleo

Halifax’s insurance industry is expected to grow 25 per cent

By Tom Henheffer - Thursday, April 15, 2010 at 2:00 PM - 0 Comments

Insurance is big business in Nova Scotia. According to a recent Conference Board of Canada study, the industry directly contributed about $470 million in GDP to the provincial economy in 2008, and is expected to grow by 25 per cent in the next three years. With around 4,500 people (up 20 per cent since 2005) currently working for one of more than 360 insurance businesses, Halifax has the second-highest concentration per capita of insurance employees of any Canadian city (only Regina has more). And the jobs pay well, too. The average insurance industry worker in Nova Scotia earns $51,000, which is 38 per cent higher than the provincial average. “It doesn’t make a lot of noise but it’s been one of the fastest growing sectors of our economy for a long time,” says Fred Morley, chief economist with the Greater Halifax Partnership, an organization dedicated to attracting new companies to the city.

An insurance hub since the early 1800s, Halifax has the infrastructure needed to encourage and maintain growth. Being centrally located between Toronto, London and New York, Halifax provides workers the opportunity to live in a low-cost region and be just a short flight from major business capitals. That’s helped entice large international companies—including Admiral Insurance, a British firm—to set up shop. Richard Nason, an associate professor of finance at Dalhousie University, says insurance is one of the few industries that hires students straight out of school, making Halifax—with its six universities—a hotbed for new talent. A real benefit for an industry that, as noted in the Conference Board’s report, is faced with an aging workforce.

And, says Nason, the city is a great place for young workers to settle down, offering a small-town setting with big-city benefits. “You get to have your cake and eat it too,” he says.

Depressed girls gone wild?

By Colby Cosh - Wednesday, November 25, 2009 at 2:39 AM - 38 Comments

I realize nobody has all that much interest in being strictly fair to insurance companies, but I’m sort of horrified by the way the Nathalie Blanchard story is being handled in the press and electronic media. The evidence for the notion that Ms. Blanchard lost her long-term disability benefits “over Facebook photos” appears to amount entirely to “She says she was told that’s what happened.” Now, she could be quite right. Manulife admits it does use Facebook to investigate disability claims, as anyone would expect them to do. Here’s a news flash for particularly naïve children and desert-dwelling stylites: an insurance company following up a suspicion of a false claim uses every kind of evidence it can scrape up. Its hirelings will quiz your neighbours, co-workers, and friends! They will rummage through your garbage! They will engage in photo and video surveillance! They’ll Google you until the cows come home!

In short, this is, like this spring’s “Craigslist killer” news story, a narrative to which the supposed cynosure of attention really has no special relevance. At all. It would be nice if news organizations could get together, run one last banner headline announcing that THE INTERNET EXISTS, and be done with these trumped-up technology angles for all time.

Anyway, since we don’t know what other evidence Manulife’s investigation turned up, and they are bound not to tell us, it seems inappropriate for the headlines and the secondary commentary on the story to take Blanchard’s version as the gospel. Which is exactly what everybody is doing, even though Manulife may have had a dozen other reasons for cancelling the claim.

I’m not suggesting, mind you, that they necessarily do. An insurer makes decisions like this with hypothetical litigation in mind. That’s not necessarily conducive to clear thinking: it’s conducive to thinking like a juror, which may well be the diametrical opposite. It would not be surprising if some excitable junior associate had been shown Blanchard’s Facebook pictures of fun in the sun and thought “Well, well, well. These will be awfully hard to for her to explain to a jury.” You would have to be an idiot to think that such pictures are, in themselves, good evidence that Blanchard is not depressed. And, unfortunately, the world is full of idiots.

The key question for an insurer, however, is not whether Blanchard has depression, but whether she is making bona fide efforts to return to her job. Her duty isn’t to stop being ill, but to do what she can to get as well as she can and start earning her paycheques again. There are plenty of seriously depressed people who still manage to drag their butts out of bed and punch the clock most days. Blanchard’s statements to the CBC leave me wondering a little about her self-understanding, and since thousands of bloggers and editors apparently have no trouble questioning Manulife’s credibility, I feel quite licensed to wonder.

She says, for instance, “that on her doctor’s advice, she tried to have fun, including nights out at her local bar with friends and short getaways to sun destinations, as a way to forget her problems.” I suppose that a physician treating depression would recommend, in a general way, that his patient should try to get exercise, seek pleasant new experiences, maintain strong social networks, etc., etc. On the other hand, I can’t see any doctor having a display of travel brochures on the wall of his office, or publishing a guide to Eastern Townships nightlife. Again, pictures of Blanchard at a bar cannot possibly demonstrate that she is not depressed. But they could show that she was defying a doctor’s advice concerning the safe use of psychiatric medication, or the consumption of alcohol itself, if she were at risk of co-morbidity from substance-abuse problems.

Blanchard also says, by the way, that she “doesn’t understand how Manulife accessed her photos because her Facebook profile is locked and only people she approves can look at what she posts.” I hope that since this interview, someone has taken her aside and gently explained the Sherlockian maxim that “when you have eliminated the impossible, whatever remains, however improbable, must be the truth.” In this case, the compelling conclusion is that somebody Blanchard trusted snitched on her to the insurer, perhaps in a spasm of dudgeon over her insurance-subsidized lifestyle. It happens. In fact, it was known to happen before there was such a thing as Facebook.

Idea alert

By Aaron Wherry - Thursday, October 22, 2009 at 1:11 PM - 59 Comments

Jack Layton talks pension reform.

NDP Leader Jack Layton is proposing a national pension insurance program to protect workers whose companies go bankrupt and leave retired employees in the lurch. The self-sustaining program would be funded by employer contributions and guarantee pensioners $2,500 per month in the event their plan is wound up.

Layton says other countries, including the United States and the Netherlands, have similar programs that adopt so-called orphaned pension plans. The NDP is also proposing an increase to the Guaranteed Income Supplement for low-income seniors – a measure that would cost the federal treasury about $700 million a year.

One colossal waste

By Nancy Macdonald - Thursday, October 8, 2009 at 9:01 AM - 42 Comments

Twice a year, raw sewage spews from the drains and toilet, flooding Sophie Bourassa’s antique store in Montreal. When the water recedes, the basement of Quelque Chose is left with a carpet of “twigs, dirt and human excrement.” A single storm in July left her ankle-deep in sewage and with a $5,000 bill for damages. Bourassa is not alone. Some 100 homeowners and several nearby businesses, including a flower shop, a jeweller, and a high-end baby shop, have gone through the same ordeal. (The florist even tried to staunch the flow by sandbagging his drains with heavy bags of potting soil—to no avail. The bags shot straight into the air from the pressure.) Bourassa’s insurer has left her in the cold, and her landlord cited a no-fault clause against water damage in the lease. The city, which last year denied 2,697 claims after major overflows, called the July storm an “act of God” and dismissed Bourassa’s claim, leaving her to foot the bill. “It’s not an act of God,” she says. “It’s an act of the sewers being too old.”

On that point, the city seems to agree, although the blame, it says, belongs with past administrations. “For decades there was no investment at all in water infrastructure,” says city hall spokesperson Bernard Larin, noting Montreal plans to invest $350 million in sewer and water infrastructure this year. It’s a good start. Currently, a staggering 40 per cent of Montreal’s water is being lost through cracks and breaks in antiquated water mains and pipes. Cracks aside, every day Montreal wastes the equivalent of Paris’s daily drinking water supply, and residents share part of the blame. Montrealers are billed for water through their property tax; by design, the system encourages waste. Residents don’t see a bill and no matter how often they fill the pool or water the lawn, their rate stays flat. No surprise, Montrealers use more than double what most other Canadian cities do. Continue…

Moto madness

By Tom Henheffer - Thursday, October 1, 2009 at 12:20 PM - 3 Comments

Last weekend, hundreds of Quebec motorcyclists took to the highways for Operation Snail, the 16th in a series of protests aimed at Quebec’s insurance board, the Société de l’Assurance Automobile du Québec (SAAQ). The bikers drove along at sluggish speeds, clogging up main traffic arteries, and rallied on the steps of the Quebec City legislature. They are angry over rate hikes instituted by the SAAQ: registration costs have soared for all types of motorcycles—the most powerful models have been worst hit, with fees spiking from $667 last year to $1,030 in 2009 and $1,410 for 2010.

Audrey Chaput, a spokesperson for the SAAQ, admits the new rate hikes aren’t about safety—they’re meant to correct a huge deficit in provincial insurance funds caused by motorcycle accidents. Bikers only pay about $35 million into the insurance system each year, but claim approximately $144 million. “If we kept it the way it was . . . there would not be any more funds for insurance in 20 to 30 years,” Chaput says. Bikers admit that motorcycle accidents are often more severe than car crashes, leading to larger insurance payouts. But they argue that they’re as safe as car drivers, and so are being unfairly targeted. “We aren’t asking the government to drop the fees, because we know we have to pay to keep the program alive. But we don’t agree with how they apply it,” says Normand Noiseux, spokesman for Coalition Moto, the organization that arranged the protests. Continue…