BOARD OF DIRECTORSValerie Fox, PRESIDENT / Colleen Bryan, VICE PRESIDENT / Mark Cosgrove, TREASURER / Tanya Diedrick, SECRETARY

James Eka, DIGITAL COMMUNICATIONS / Gloria Dang, EVENTS / Cindy Chan, INDUSTRY RELATIONS Helen Trajanos, EDUCATION / Michelle Drew, PROFESSIONAL DEVELOPMENT / Roman Parzei, MEMBER RELATIONS

Tina Gardiner, PAST PRESIDENT & *COMMUNICATIONS *Acting

ABOUT ORIMSINCORPORATED IN 1960, ORIMS IS THE LARGEST RIMS CHAPTER IN CANADA.

WE ARE A VOLUNTEER-BASED ORGANIZATION. ORIMS HOLDS REGULAR SOCIAL EVENTS, PROFESSIONAL DEVELOPMENT SESSIONS AND NETWORKING OPPORTUNITIES FOR MEMBERS THROUGHOUT THE YEAR.

LEARN MORE ABOUT US: ONTARIORIMS.ORG

JAN 2019EDITION

THE PULSETHE HEARTBEAT OF RISK MANAGEMENT

what’s in this editionTABLE OF CONTENTS

president’s message: happy new year

PAGE 01.

5 reasons for the canadian p&c industry to look up

PAGE 02.

how other countries are utilizinginsurance to increase their

climate resiliencePAGE 04.

municipal liability: what’s reasonable

PAGE 06.

upcoming eventsPAGE 09.

annual christmas luncheon recap

PAGE 10.

FOLLOW US FOR EXCLUSIVE INSIGHT INTO WHAT ORIMS IS UP TO! DON’T FORGET TO TAG #ORIMS ON YOUR POSTS FOR A CHANCE TO BE FEATURED ON OUR PAGES

THE PULSEMANAGING EDITOR: ALANNA BUTLER / COPY EDITOR: KAREN GILPIN / ARTICLE COORDINATORS: KATE BRYUKHANOVA & MATTHEW CIMICATA

The Pulse is a publication of the Ontario Risk and Insurance Management Society and is published quarterly throughout the calendar year. The opinions expressed are those of the writers and the volunteer members of the Pulse Editorial Committee. Articles submitted to the Pulse for publication are subject to the approval of the Pulse Editorial Committee. Approval of such articles is based upon newsworthiness and perceived benefit to the readership. All decisions of the Pulse are

not subject to appeal. Individuals submitting articles to the Pulse hereby acknowledge their acceptance of the Pulse Editorial Policy.

On November 28, 2018 your ORIMS board had the great pleasure of welcoming members and associate partners to kick-off the holiday season with our 58th Annual ORIMS Christmas Luncheon. Regardless of your reli-gious beliefs or traditions at this time of year, it was our hope to capture the essence of the season by:

Exemplifying the spirit of giving.Our outstanding partners donated amazing prizes for our charity raffle. Through the generosity of all who pur-chased raffle tickets, we were able to donate $10,000 to the Daily Bread Food Bank; we also decorated our tables with gifts for sick children in the spirit of caring for each other.

Bringing together friends and colleagues.Old friends were able to reconnect, and new friends to bond over a delicious meal and the opportunity to spend quality time together;

Recognizing and celebrating the past and present.We recognized the many people who have, and con-tinue to, contribute their time and energy to support our Risk Management community. We also honoured the top Canadian and Ontario CRM graduate, Ann Ma-rie Gillingham, and our new Emeritus member, Nancy Chambers, both of whom we are immensely proud of.

We hope that the seasonal kick off helped you to em-brace the hectic time of year with positive energy but also inspired you to take time to reflect on our blessings and enjoy time with friends and family.

So now it is time to embark on a new year! Whether your goals for 2019 are work-related, academic, social, family or personal goals, we wish you every success. Let me leave you with 2 quotes that I hope will inspire you:

“A person who never made a mistake never tried anything new.”Albert Einstein

“Yesterday is history; tomorrow is a mystery; today is a gift, which is why it is called the present.”Bil Keane

president’s message: happy new year

BY VALERIE FOX, PRESIDENT, ORIMS

nominate someone outstanding 2019 DONALD STUART AWARD NOMINATIONS ARE NOW OPEN

ORIMS THE PULSE JAN 2019 EDITION

Do you know an outstanding member of the Risk & Insurance Management community? Nominate them to be considered for the Don Stuart Award!

Find more info at: www.ontariorims.org/don-stuart-award

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see more pictures fromour annual orims christmasluncheon PAGE 10-11

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Call it a UAV, UAS, drone, RPAS, RPV, or quadcopter. It doesn’t matter. What matters is that it’s up there so that you can stay down here and it’s a great enabler. UAVs have the insurance world buzzing.

Unmanned Aerial Vehicles (UAVs) have been available for a few years. However, equipment costs, flight time, training and certification requirements, and corporate inertia have combined to keep them out of the insur-ance world till quite recently. Funnily enough, the in-dustry went from ground level to satellite imagery quite willingly but left out the airspace between down here and way up there for a very long time. It’s time now.

As with most new technologies, it’s much easier to list the drawbacks than the advantages. So, here are the current perceived barriers to using UAVs in the property insurance world vs. the advantages:

1. There aren’t a lot of opportunities to use UAVs in the insurance industry: This is a common falla-cy. There were over 50,000 roofing insurance claims in 2016 in Canada. The Prairie Provinces regularly sustain major summer hailstorms. Then there are the underwriting opportunities – risk assessments are a lot easier without ladders and safety equip-ment.

2. UAVs are expensive: Yes, many cost hundreds of thousands of dollars. A lot more cost a few tens of thousands of dollars. However, in reality, the ones that the insurance industry needs cost about $3,500 (with a lot of extras included). Training and certi-fication cost under $2,000 per operator, and UAV insurance is getting cheaper all the time. These are Year 1 costs. Year 2 and beyond will incur insur-ance plus nominal service and maintenance costs. The UAV will last a few years under normal working conditions.

3. They have limited flight time capability: Yes if you compare them to helicopters and airplanes. A resounding “NO” if you evaluate productivity. A $3,500 UAV will fly for about 30 minutes per bat-tery. That’s enough time for up to 3 roof inspections with the right system. It takes under 5 minutes to swap batteries and get the UAV airborne again. Throw in driving time, set up, and coffee breaks (for the operator, not the UAV) and you should get about 10 inspections done per day quite easily. Ev-ery day.

4. The regulations are prohibitive: Transport Can-ada (TC) has many rules in place and is evaluating them all the time. The emphasis is on public safe-ty and operator knowledge. You currently need a Special Flight Operations Certificate to legally fly. The initial paperwork can be daunting and the pro-cess can take a few weeks. However, TC is actively working on simplifying the former and speeding up the latter. Changes could start taking place as early as January 2019.

5. The outputs aren’t all that good: The most com-mon tool carried on a UAV is a camera. Inspecting a roof with a hobby drone equipped with a 2MP camera controlled by an operator fiddling with a joystick will result in poor to average image quali-

5 reasons for the canadian p&c industry to look up

BY KABIR SHAAL, ACII, VP CLIENT SERVICES, DRONE SOFTWARE CANADA INC.

ORIMS THE PULSE JAN 2019 EDITION

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ORIMS THE PULSE JAN 2019 EDITION

ty. However, a 20MP camera operating on a drone with stabilizing technology controlled by software designed for the task will produce phenomenal re-sults. Satellite imagery doesn’t come close to the quality of photographs that are taken from UAVs. Details down to one-tenth sq cm are possible and measurement accuracy is extremely high. More im-portantly, high-quality images allow an adjuster to

determine not only that damage has occurred but also assess type of damage (e.g., pre-existing).

Simply put, there’s considerable misinformation - or no information at all – hovering around. A lot of vendors are trying to migrate UAV services to the p&c industry from businesses that have used them for years (e.g., mining, pipelines, and aggregates). That’s a bad case of the uninformed attempting to lead the unwilling. Insurers, roofers, restoration contractors, and IAs have specific work processes, desired outputs, data require-ments, and customer service standards that simply ar-en’t the same as in other industries.

To recap:FACT: A UAV will keep your roof inspectors safe from falls and injuries. No more slippery roofs to traverse.FACT: It’s cheaper to insure a UAV and associated lia-bilities than a roof inspector. A lot cheaper to fix, too, if things go wrong.FACT: A UAV will get 4x to 5x the number of roof in-spections done per day compared to an experienced roof inspector with a ladder. Every day.FACT: A UAV will pay for itself in a matter of weeks when you factor in acquisition, running costs and pro-ductivity.FACT: A UAV will reduce your claims cycle times, im-prove your underwriting risk assessments, and remove a considerable risk from your inspectors’ job.

It’s time to fly.

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Both India and Jamaica have been having discussions on disaster risk financing and risk transfer solutions, in-cluding ILS [insurance linked securities], with the World Bank and other international organisations, as the two countries look to put in place measures to ensure fund-ing is quickly available when the most impactful natural disasters strike.

It’s no secret that Jamaica has been looking at how bet-ter to protect itself against the frequent tropical storms, hurricanes and also extreme rainfall threats that it faces.

With natural disasters across 2001 to 2010 having cost Jamaica more than $1.2 billion and a single hurricane having the potential to drive hundreds of millions of economic costs to the island nation, having sufficient risk financing, insurance and risk transfer in place is key.

Jamaica has been in discussions with the World Bank and other entities, including the Inter-American Devel-opment Bank, as it looks to put in place a formal Na-tional Disaster Risk Financing Policy by late 2019, when its current financing arrangement with the International Monetary Fund (IMF) expires.

We understand the policy is expected to feature pre and post-disaster risk financing and transfer measures and of course insurance, reinsurance and capital mar-kets solutions have been on the agenda at recent dis-cussions.

Jamaica has been discussing catastrophe bonds, as a way to tap sources of efficient insurance or reinsurance capital, for some years now, but the discussion appears to be moving forwards with the assistance of the World Bank and other entities; including this week at a con-ference at which Inter-American Development Bank (IDB) spokespeople highlighted the potential roles of risk pooling, catastrophe bonds and other insurance or reinsurance related solutions.

Meanwhile in India, the 15th Finance Commission ex-plored disaster risk financing at a two-day workshop recently, with attendance from the World Bank and the United Nations Development Programme (UNDP). Here, the officials discussed the full range of disaster risk financing and transfer options, from credit facilities such as the World Bank’s Catastrophe Deferred Draw-down Option, to catastrophe bonds and other insur-ance or reinsurance like solutions, as well as other uses of parametric insurance for protection and catastrophe risk pooling at both national and regional levels.

India is considering how to secure financing specifically to finance disaster relief, one of the prime use-cases for parametric catastrophe bonds and other capital markets backed reinsurance solutions. We understand India has also discussed how forecast-based solutions could pay-out even before extreme weather conditions have occurred.

how other countries are utilizinginsurance to increase their climate

resilienceBY STEVE EVANS, OWNER, EDITOR-IN-CHIEF, ARTEMIS

ORIMS THE PULSE JAN 2019 EDITION

get involved with orims WE’RE LOOKING FOR NEW VOLUNTEERS TO HELP SUPPORT OUR EFFORTS

ORIMS is a volunteer based organization and we always welcome assistance from our members. Please contact any board member if you are interested in volunteering with ORIMS events, programming or committees.

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INDIA AND JAMAICA BOTH IN DISASTER RISK FINANCING TALKS, INCLUDING INSURANCE LINKED SECURI-

ORIMS THE PULSE JAN 2019 EDITION

For India, like Jamaica, it could take a year for any rec-ommendations to be finalised, with the Finance Com-mission looking to provide the government with its rec-ommendations for a five year disaster plan which would run from 2020. Of course, discussions like these are ongoing all the time now, with entities like the World Bank, UNDP and others including the Inter-American Development Bank (which is hiring for an ILS expert right now), all pushing the theory of insurance-linked solutions to transfer and financing of disaster risk backed by the capital markets and ILS capital.

Having robust mechanisms in place to secure funding

when catastrophes strike is vital to protect the econom-ic development of local regions and countries; putting catastrophe bonds, parametric insurance and other solutions front and centre of the efforts to increase climate resilience in both developing and developed economies.

Learn more:http://www.artemis.bm/

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The City of Hamilton has been busy recently at the On-tario Court of Appeal, acting as appellant on two sepa-rate appeals relating to findings of liability for non-repair of intersections. The City was found partly at fault at the trial level in both actions, on similar facts.

Although the two appeals, Chiocchio v. Hamilton (City), 2018 ONCA 762, and Smith v. Safranyos, 2018 ONCA 760, deal with similar fact scenarios, they were heard by separate panels.

Given that the panels came to different conclusions on liability against the City on similar facts, one queries whether the results would have been different were the appeals argued together.

Read together, we are left with some guidance on how the Courts will address municipal liability in the context of allegations of non-repair. The distinction between the facts in this case, however, provide lower courts with little guidance on how to determine when a municipality has failed in its duty to ensure safe intersections.

Section 44 of the Municipal Act, S.O. 2001, c.25 imposes on a municipality the obligation to keep highways under its jurisdiction, …in a state of repair that is reasonable in the circumstances, including the character and location of the highway.

The Court of Appeal in Fordham v. Dutton-Dunwich (Mu-nicipality), 2014 ONCA 891, outlined that a municipality is required to prevent or remedy conditions on its roads that create an unreasonable risk of harm for ordinary drivers, exercising reasonable care.

The court in Fordham stressed that ordinary drivers make mistakes, and are not perfect, and a municipality must take that into consideration in its obligation with respect to highways. However, the court made it clear that a municipality’s du-

ties with respect to repair do not extend to remedying conditions that pose a risk of harm caused by negligent driving. It is this last point that came to a head in both Chiocchio and Smith.

Chiocchio v. Hamilton (City) – Trial Decision In Chiocchio, the plaintiff was a passenger in a motor vehicle which was travelling northbound when it was t-boned by the defendant Mr. Ellis. Mr. Ellis had been stopped at a stop sign at the intersection, and had accel-erated into the intersection.

There was no stop sign facing the plaintiff’s motor vehi-cle, and no dispute that Mr. Ellis was responsible for the accident. He conceded at trial that he did not see the plaintiff’s vehicle.

At issue was the state of the intersection. The stop sign was located between 8.4 and 9.4 metres back from a faded stop line, which itself was located between 1.9 and 2.9 metres behind the entrance to the intersection. The stop line had last been painted about two years pri-or to the accident.

Furthermore, any driver stopped at the stop sign would have his view of southbound cross-traffic completely ob-scured by a house. The sightlines for southbound traffic were clear, once a driver reached the edge of the inter-section.

The trial judge apportioned liability at 50% against both the municipality and Mr. Ellis.

The City of Hamilton appealed.

Smith v. Safranyos – Trial Decision In Smith, the injured plaintiffs were passengers in a vehi-cle operated by the defendant Safranyos. Ms. Safranyos’ vehicle was travelling westbound, intending to turn left onto a more major roadway.

municipal liability: what’s reasonableBY TOM MACMILLAN, ROGERS PARTNERS LLP

ORIMS THE PULSE JAN 2019 EDITION

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ORIMS THE PULSE JAN 2019 EDITION

As in the Chiocchio case, she stopped at the stop sign, and without stopping again proceeded to enter the in-tersection thinking it was clear of traffic. It was not, and her vehicle was t-boned by a vehicle operated by the defendant, Mr. McHugh.

In terms of the intersection, the stop sign facing Ms. Sa-franyos was located ten metres back of the intersection. There had been at one point a stop line, but it had been removed about three years prior to the date of the ac-cident.

In addition, there was evidence that the rising elevation of the arterial road approaching the intersection from the south, combined with a guardrail along the side of that road, made for partially-obstructed visibility to vehicles in Ms. Safranyos’ position.

As an added wrinkle, Mr. McHugh had consumed alco-hol prior to operating his vehicle, and it was accepted by the trial judge that at the time of the impact he was travelling at least 15km/h over the speed limit. The trial judge apportioned liability as follows:

• Ms. Safranyos: 50% • Mr. McHugh: 25% • City of Hamilton: 25%

Both Mr. McHugh and the City of Hamilton appealed.

Appeal Decisions Despite the similar facts in these cases, the two separate panels that heard these appeals came to different con-clusions on liability with respect to the municipality. In Chiocchio, the court granted the City’s appeal, and dismissed the action as against it.

In Smith, the court rejected the City’s appeal, leaving it with 25% of the liability for the accident for reason of non-repair of the intersection. The Court granted Mr. McHugh’s appeal, dismissing the action against him.

So what are we to make of these differing rulings on the issue of non-repair? In particular, how are we to under-stand the standard of care of a municipality with respect to negligent drivers? The most dynamic component of this question comes from the interplay between two statues, the Municipal Act and the Highway Traffic Act, R.S.O. 1990, c. H8.

As noted above, the Municipal Act imposes on munici-palities the obligation to keep highways in a state of re-pair, keeping in mind the reasonable driver, a prudent driver who nevertheless makes mistakes.

Added to the mix is the Highway Traffic Act, which dic-tates how motorists must behave on the roads, including at intersections where there are no stop lines.

Section 136(1) of the Highway Traffic Act outlines that, in the absence of a stop line, a driver must stop at the first painted marker of the pedestrian crossing at an inter-section. In the absence of a pedestrian crossing, then a driver must stop at the edge of the intersection.

In addition, the courts have consistently held that a rea-sonable driver only proceeds through an intersection when she believes it is safe to do so, meaning that a reasonable driver puts herself in a position to adequate-ly observe the intersection, even if that means stopping again further ahead than the stop line or stop sign at an intersection.

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The City of Hamilton in both Chiocchio and Smith argued that the intersections at issue in these cases were not un-safe for the reasonable driver, because the reasonable driver would have stopped at the stop sign, and then stopped again before proceeding into the intersections.

Furthermore, the City argued that, by failing to do so, the defendants Mr. Ellis and Ms. Safranyos were not reasonable drivers, but negligent drivers. Implied in this latter argument is that their behaviour went beyond the accepted “mistakes” that reasonable drivers make, and that the City was not under an obligation to design and maintain intersections with such negligent behaviour in mind.

The Court of Appeal agreed with the City’s arguments in Chiocchio, and rejected them in Smith.

The panel in Chiocchio found that the trial judge erred, in that he did not support his conclusion that the inter-section at issue posed an unreasonable harm to ordinary reasonable drivers.

The Court of Appeal found that a reasonable driver would have stopped at the stop sign, and then stopped again at the edge of the intersection, before proceeding into the intersection.

The Court of Appeal indicated that the municipality was not under an obligation to contemplate the obviously negligent actions of a driver that operated his vehicle in the manner of Mr. Ellis.

The panel in Smith, however, came to a different con-clusion on the facts of that case. On appeal the court found that the trial judge did not err in concluding that the absence of a stop line amounted to non-repair as contemplated by the Municipal Act.

The trial judge in Smith had based her finding of liability against the City both on the absence of a stop line, and on the fact that there was partially obstructed visibility at the intersection.

The Court of Appeal was careful to point out that the trial judge did not ground her finding of liability against the City solely on this latter issue. To find otherwise would be to suggest that any intersection with partially obstructed visibility would, by its very existence, attract liability on a municipality.

Instead, the Court noted that it was within the right of the trial judge to find that the sightlines at the intersec-tion contributed to the danger, already caused by the absence of the stop line.

The Court further noted that, even if the trial judge’s findings on sightlines were in error, that error was not palpable, given the non-repair finding based on the missing stop line.

Conclusion The result of these two rulings leaves us with little in the way of guidance in determining municipal liability for non-repair, in the context of intersection layout. In both cases, there were stop signs situated well back of the intersection.

Both cases featured limited sightlines for drivers stopped at the stop sign. In Chiocchio there was a faded stop line, and in Smith there was none. Moreover, each panel had similar accidents, suggesting that the alleged non-repair resulted in the same type of behaviour by confused mo-torists.

There is enough in the two judgments to suggest that the sightline issue in Smith was more pronounced, but even so, this is a relatively thin factual distinction, partic-ularly when the court in Smith went out of its way to say that partially-obscured sightlines cannot, in themselves, ground a finding of liability against a municipality.

In short, these two cases leave future litigants with uncer-tainty on how the courts will treat cases of this nature in the future. One can perhaps sympathize with the City of Hamilton for feeling like it has been left with insufficient clarity, when faced with intersections like those in these two cases.

One questions whether a further panel will be convened to make sense of these two rulings, or whether we will be left to argue in the future whether an intersection is of the Chiocchio variety or the Smith variety.

Having robust mechanisms in place to secure funding when catastrophes strike is vital to protect the econom-ic development of local regions and countries; putting catastrophe bonds, parametric insurance and other solu-tions front and centre of the efforts to increase climate re-silience in both developing and developed economies.

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ORIMS THE PULSE JAN 2019 EDITION

JANUARY 22 10:30AM-12:00PMORIMS PD Webinar:

Cybersecurity and the Human Element: How to Build an Effective Cyber RiskCulture Presented by: Thomas Finan,

Willis Towers Watson

FEBRUARY 25ORIMS Edward C. Ricketts Curling Bonspiel St. George’s Golf & Country Club, Toronto

MARCH 2019ORIMS PD Seminar and Networking Session

Details TBA, Toronto

APRIL 16 3:00PM-4:30PMORIMS PD Seminar: Managing Hot Potato

Claims: Best Practices to Anticipate and Avoid Finger-Pointing

Presented by: Aon Risk Solutions Networking to follow

APRIL 28 - MAY 1RIMS USA Conference, Boston, MA

MAY 30ORIMS AGM & Annual Professional

Development Day (Hosted by: McCague Borlack)

Spring Fling networking event to follow

JUNE 18ORIMS Annual Golf Tournament

Deer Creek Golf & Country Club, Ajax

SEPTEMBER 8 - 11RIMS Canada Conference

Edmonton, AB

DECEMBER 5ORIMS Annual Christmas Lunch

Hilton Hotel, Toronto

upcoming eventssave the dateWE HOPE TO SEE YOU THERE!

When you’re resilient, you’re in business. That’s why more than one of every three Fortune 1000 companies turn to FM Global for their commercial property insurance and risk management needs.

Established nearly two centuries ago, FM Global is a mutual insurance company whose capital, scientific research capabilities and engineering expertise are solely dedicated to property risk management and the resilience of its client-owners.

Learn more at fmglobal.com

ORIMS THE PULSE JAN 2019 EDITION

In 2018, ORIMS hosted another sell-out lunch to 750 professionals in the Risk & Insurance community. A spe-cial thanks to our sponsors below for their continued support!

The entire event was in support of the Daily Bread Food Bank. Our most prized accomplishment this holiday season is continu-ing our tradition of donating $10,000 to the Daily Bread Food Bank.

The lunch could not have been the success it was with-out the help of our dedicated volunteers: Gloria Dang (Director of Social Programs), Sue Whittick, Stephanie Roidi, Daniel Chadwick, Chun Lam, Ann Hildreth, Rubie Ling, Mevan Sri, Chelsea Lau, Craig Smith, Craig Hodg-es, Jeff Slasor, Shaleen Kim, Brad Legget, Alicia Pandith-aratne, Sandra Dan, Neha Sangni, and Jessica Walker.

It is events like this that give us an opportunity to show thanks to our fellow colleagues and recognize the out-standing commitments to our community.

We were thrilled to announce the recipient of the Fred Bossons Award to the CRM Program Top Graduate, Ann Marie Gillingham. ORIMS was especially honoured to present the Emeritus Member status to Nancy Cham-bers. Congratulations Ann Marie and Nancy, on well de-served achievements!

The board members enjoyed playing Santa as we raf-fled off fantastic gifts from: Allianz Global Corporate & Specialty; Crawford & Company; FM Global; Liberty Mutual Insurance Company; Marsh; BI&I; Willis Towers Watson; Zurich Canada; Thomas Gold Pettingill; and Aon. Thank you to all who attend-ed and all the best for the new year.

highlights & recap from ourannual christmas luncheon

BY ALANNA BUTLER, THE PULSE, MANAGING EDITOR

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ORIMS THE PULSE JAN 2019 EDITION

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