Julie Dickson on tighter underwriting

Julie Dickson on tighter underwriting

Julie Dickson on tighter underwriting

Question: Is it conceivable that OSFI may be giving specific advice in the future to the Ontario Ministry of Finance?  For example, is it conceivable you may say we advise you not to do what it is that you are planning on doing with respect to auto?

Julie Dickson: Usually we talk to other regulators.  We don’t really talk to Ministries of Finance about these things.  I think the industry certainly has an obligation to make its views known to other parties and make their views known to us on OSFI-related matters.  We do rely on the industry to do that.

From our perspective, what we’re really focused on is what this does to the industry’s capital position etc.  We live in a world where auto premiums are regulated and I remember a speech a few years ago where the message was that the industry does have some of ability to influence what happens there.

If the industry, if a company waits and waits and waits before putting in a request to increase premiums, they’re not going to be in the best position relative to a company that is ahead of the curve, has the data; is in there early. That’s really what we encourage. We’re seeing some clarity from the Ontario government on this, which I think means that the outcome here might not have been what people thought it was going to be when these changes were first announced.

Question: I got the sense that you had some concerns about the convergence capital coming into the P&C industry, basically from pension funds.  It used to be from the hedge funds.  It’s probably $40 - $45 billion right now. It could go up to $100 billion, some people predict, in five years’ time.  Is this a concern that you have that companies here in Canada or around the world may be using that capital more so than the traditional markets? (continued.)


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