PROFESSIONAL ARTICLES

Une étude de l’état de la finance au Québec et au Canada
by Martin Boyer                                                                                      

La Cour suprême du Canada établit un nouveau test pour l’interprétation de la clause  d’exclusion « conception défectueuse ou inadéquate »
by Brian Elkin et Jacques Perron                                                                 

Evaluating Federal and Provincial Solvency Standards in Canada
by Norma Nielson                                                                                       

Le développement durable et l’assurance
by Rémi Moreau                                                                                         

UK General Insurance : Changing Distribution Paradigm
by Shishir Kumar                                                                                         

Current Events
under the responsibility of Rémi Moreau

1. Un changement de cap sur le réchauffement climatique sera jugé prioritaire par le président élu Obama – 2. L’assurance santé est également une priorité du président élu – 3. Le monde entier a basculé dans la récession – 4. Les résultats des assureurs américains dans le dernier droit de 2008 – 5. La sinistralité mondiale en 2008 – 6. La sinistralité aviation en 2008 7. Après Baden-Baden, un retour à la hausse est prévisible dans les tarifs de réassurance – 8. Pirates des temps modernes 9. L’attentat perpétré à Bombay coûterait 600 millions de dollars aux assureurs – 10. Le scandale Madoff – 11. Une hausse des tarifs prévisible à la SAAQ – 12. La vague de vols de cuivre se poursuite à Hydro-Québec – 13. China Life Insurance Company serait intéressée à acheter les actifs asiatiques de AIG – 14. Le plan Paulson modifié – 15. Plan de sauvetage du géant bancaire Citigroup – 16. La banque de Montréal achète la filiale canadienne de l’assureur américain AIG – 17. Les tricheries sur internet se multiplient dans les universités – 18. Les bonnes pratiques en gestion des risques peuvent influencer positivement les investisseurs – 19. Les feux californiens de novembre ont provoqué des dommages pouvant atteindre 800 millions de dollars – 20. Une réforme législative du Lloyd’s est entrée en vigueur en novembre

Une étude de l’état de la finance au Québec et au Canada
by Martin Boyer 

In this article we examine the state of the financial profession in the top Canadian universities based on the scientific contribution of faculty members as measured by the number of citations their publications receive. We concentrate our analysis on articles published since 2000 in refereed scientific and professional outlets. We find that Canadian universities can be classified in three groups depending on their output. In the first group, by itself, we find the Rotman School of the University of Toronto. McGill, HEC Montréal, UBC, York and Alberta compose the second group. All other universities are found in the third group since their research production in finance in significantly lower than what we find in what I call the six original Canadian universities in finance.

La Cour suprême du Canada établit un nouveau test pour l’interprétation de la clause d’exclusion « conception défectueuse ou inadéquate »
by Brian Elkin et Jacques Perron

The authors comment the decision rendered on 2008-11-21 by the Supreme Court of Canada (Canadian National Railway Co. v. Royal and Sun Alliance Co. of Canada, 2008 SCC 66) concerning an “all risk” insurance policy excluding from coverage costs of making good “faulty or improper design”. Nevertheless the Court held the insurers liable. Because it exhausted the state of the art, the insurers did not meet the onus of bringing the loss within the exclusion. The authors suggest the insurers make some change to the terms of that exclusion to avoid this problem.

Evaluating Federal and Provincial Solvency Standards in Canada
by Norma L. Nielson

This article benchmarks solvency supervisory system for the federal and provincially-licensed companies who write insurance in Canada against/The IAIS Common Structure for the Assessment of Insurer Solvency/. The federal regulator (OSFI) is the only one with statutory authority that provides both sufficient power and flexibility to be considered as meeting the core principles of IAIS. At the provincial level, the insurance supervisory system in some provinces falls short of the international standards to varying degrees and, by extension, the practices of the federal insurance regulator. Alberta, British Columbia, and Québec are not far behind. All other Canadian provinces exhibit extensive deficiencies when compared against international standards.

Le développement durable et l’assurance
by Rémi Moreau

More and more insurance companies or mutual insurance are interested in sustainable development because this topic is today an essential part in the comprehension and prevention of insurable risks. The author tries to shortly explain what is sustainable development, its origin, its objectives, and to identify some products, services and initiatives developed by insurance/reinsurance companies or mutual insurance organizations. With their extensive risk expertise, insurance groups are in a unique position to form, and help promote, effective responses linked to sustainable development.

UK General Insurance: Changing Distribution Paradigm
by Shishir Kumar

UK General Insurance industry is going through structural changes. Increased regulatory burden and rising operating cost are forcing all insurers to reduce the cost and improve the efficiency. In addition, increasing commoditization of underwriting and insurance products and proliferation of “me too” distribution channels are further making it difficult. Hence, insurers are embracing innovative operating model to retain cost. Direct or Virtual distribution- internet- is playing larger role due to lower cost model. Companies are using direct channel as a complimentary to the traditional channel. However, given its associated advantages and consumer willingness will put forth as a dominant distribution channel.

Les jeunes conducteurs : surprimes ou fidélisation ?
by Olga A. Vasechko, Marie Odile Albizzati et Michel Grun-Rehomme

The French automobile insurance companies can charge an extra premium for the young drivers (less than three years of driving license) during the first two years. Our paper deals with the opportunity of this higher premium. If we analyze the risk in an insurance portfolio, this subprime is necessary to make a mutualization between homogeneous risks. As for the young drivers, we can think that such an initiative based on the trust and the empowerment may positively explain the accident variable through this “win-win” strategy. And as for the insurer, it relies on the development of customer loyalty or its member’s loyalty. Indeed, insurants are rather faithful to their first insurer as far as they do not meet particular difficulties. We estimate the financial stakes for the insurer within these two strategies: with or without extra premiums. There is evidence that the higher is the extra premium charged to young drivers, the more difficult it is for the insurer to bear departures and the further is the return in balance. The situation seems viable for the insurer as soon as the number of young people entries exceeds 50% and as soon as the number of departures among these entrants is below 50%.