Despite rising premiums, nearly all consumers are satisfied with homeowners and auto insurance cost.

Insurance Research Council: A division of American Institute (CPCU) & Insurance Institute of America
December 11/2002                                                                                                                                                                                                                                                                                              MALVERN, Pa. According to a recent Insurance Research Council (IRC) survey of U.S. households, most Americans are satisfied with the companies that provide their personal insurance. More than nine out of ten respondents with homeowners policies (93 percent) stated that they were satisfied with their homeowners insurers, while 86 percent of respondents with auto policies were satisfied with their auto insurers. The study found that the percentage of satisfied consumers has declined somewhat since the last survey, which took place in 2000. Respondents’ satisfaction with the companies that provide their homeowners insurance dropped five percentage points since 2000 (from 97 percent to 93 percent), while satisfaction with auto insurers dropped ten percentage points (from 96 percent to 86 percent). However, current satisfaction is virtually identical to levels noted in 1995 (92 percent satisfied with homeowners insurers and 86 percent satisfied with auto insurers). “These declines in satisfaction may be attributed, in part, to rate increases across nearly every line of personal property and liability insurance,” said Elizabeth A. Sprinkel, senior vice president, who heads the IRC. “Rate increases have been triggered by declining profitability due to rising repair costs, falling investment income, the September 11 terrorist attacks, and other catastrophes. Despite these trends, however, consumer satisfaction with the insurance industry remains exceptionally strong,” Sprinkel said. “Improvements in technology, customer service, and product offerings have helped to offset the impact of rising costs on consumer satisfaction.”
Survey respondents also indicated that they were satisfied with how the insurance industry handled the needs of customers affected by the September 11 terrorist attacks. Most respondents (61 percent) who recalled hearing about how insurers responded to the attacks believed that the industry had been responsive to the needs of its customers affected by this disaster. The results contained in IRC’s recently released report, Public Attitude Monitor 2002, Issue 3, were based on a survey conducted by RoperASW. The survey consisted of in-home interviews with 1,995 men and women eighteen years old and older. Survey participants were selected to be representative of the population of the continental U.S. The survey also assessed public understanding and awareness of insurance regulation and opinions on how insurers should handle claims for losses that their policies were not priced to cover. For more detailed information on the study’s methodology and findings, contact Elizabeth Sprinkel by phone at (610) 644-2212, ext. 7568; by fax at (610) 640-5388; or by e-mail at irc@cpcuiia.org. Or visit IRC’s Web site at http://www.ircweb.org. Copies of the study are available at $10 each in the U.S. ($20 elsewhere) postpaid from the Insurance Research Council, 718 Providence Rd., Malvern, Pa.19355-0725. Phone: (610) 644-2212, ext.

7569. Fax: (610) 640-5388. ###

NOTE TO EDITORS: The Insurance Research Council is a division of the American Institute for CPCU and the Insurance Institute of America. The Institutes are independent, nonprofit organizations dedicated to providing educational programs, professional certification, and research for the property-casualty insurance business. The IRC provides timely and reliable research to all parties involved in public policy issues affecting insurance companies and their customers. The IRC does not lobby or advocate legislative positions. Leading property-casualty organizations support the IRC.

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Oilpatch prepares for life with Kyoto

Chris Varcoe
Calgary Herald
December 11, 2002

After the most acrimonious battle with federal politicians since the National Energy Program two decades ago, Canada’s oilpatch is now preparing for life with Kyoto. But that doesn’t mean the industry likes it.  The federal government passed the controversial Kyoto protocol Tuesday by a 195-77 vote in the House of Commons, committing Canada to reduce greenhouse gas emissions over the next decade. The head of the Canadian Association of Petroleum Producers said the industry’s relationship with Ottawa has cooled, as Kyoto created “frustration and disappointment” in the sector.

“We feel many of the issues that are important to us are going unresolved,” said CAPP president Pierre Alvarez.  “We still don’t know (Kyoto’s) costs . . . and we still can’t calculate the competitiveness implications. While Ottawa may have taken a few baby steps forward, we still have far more questions than answers.”

Executives in downtown Calgary were equally unimpressed.  “I’m not satisfied. I don’t think we ever had a truly informed debate – lots of conjecture, no real analysis,” said Charlie Fischer, chief executive of Nexen Inc., one of Canada’s largest oil producers.  “I am still a long way from knowing what this will cost our company.”

The country’s energy sector opposes Kyoto, fearing it puts Canada at a disadvantage to countries not bound by the international agreement.  Canada was one of 160 nations that gathered in Kyoto, Japan, five years ago and signed the protocol to slash emissions to six-per-cent below 1990 levels by 2012.  However, Canada’s emissions rose steadily throughout the 1990s due to a booming economy and record energy exports to the United States.  Canada now needs to reduce emissions by 240 megatonnes, or more than 20-per-cent below 1990 levels.  The oil and gas sector – the lifeblood of Alberta’s economy – is responsible for about 18 per cent of all industrial emissions.  The energy sector is worried about the treaty’s impact, as man-made emissions are created mainly by burning fossil fuels such as crude oil, coal and natural gas.  Experts say any significant attempt to reduce emissions will drive up operating costs in the energy business.

“A lot will depend on how the accord is carried out,” said Lawrence Solomon, managing director of Energy Probe Research Foundation in Toronto.  “We’re already seeing some investor uncertainty” in oilsands ventures due to the accord.

Since summer, the Alberta government has fiercely fought Ottawa on Kyoto, saying the deal’s timetable is too aggressive and the targets are unattainable.   According to a provincial study, the deal could cost Alberta’s petroleum-rich economy up to $5.5 billion a year and result in 70,000 lost jobs.  Ottawa, however, says the impact will be moderate, with the price to produce a barrel of conventional oil rising by three cents.  Energy Minister David Anderson told reporters that implementing the protocol will be “painless and seamless.”  His department estimates forcing companies to reduce emissions and consumers to pay more for energy will cut economic growth by 0.4 percentage point between now and 2010.

Industry received some concessions during negotiations with the federal government this fall.  Ottawa has agreed to cap the amount of emissions reduction required by heavy industry – including oil and gas producers, miners and manufacturers, along with power generators – at 55 megatonnes.  Ottawa also said this week it would likely cap the amount of money industry would pay for green credits – the right to emit carbon – at $15 per tonne, minimizing the price risk.  Environmentalists say the industry won major gains, with the federal government bending over backward to accommodate business concerns.

“What a number of people in the oilpatch undertook was really just scare-mongering – trying to frighten people as a negotiating tactic,” said Robert Hornung of the Pembina Institute.  “At this point, any more industry whining or complaining about Kyoto, quite frankly, needs to fall on deaf ears.  “Every key point that has been raised has been addressed.”

With files from Bloomberg

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Romanow’s nether regions

Lawrence Solomon
National Post
December 4, 2002

Roy Romanow recommends expanding medical services to rural communities to address the appallingly poor health of rural Canadians. This recommendation, he says, conforms to his goal of being “evidence-based and values-driven.”

Give him a 50% grade on that one.

Values-driven, yes. Mr. Romanow’s values pervade his report. As for being evidence-based, Mr. Romanow falls short, but then again, he has to, because he gave himself a goal that he could not meet.

The evidence and his values do not co-exist.

Mr. Romanow is correct in citing the need for improved health outcomes in rural regions. As Statistics Canada data demonstrates, rural people suffer longer and die sooner than their urban counterparts. Rural cancer and circulatory disease death rates are 10% higher; rural mortality rates are 15% higher; rural infant mortality rates 40% higher.

But Mr. Romanow is incorrect in repeatedly fingering lack of access to health care for the rural regions’ poor health. “Problems in access to health services quite often stem from serious shortages in health-care providers in rural communities,” he states in one passage. Elsewhere he blames “difficulty accessing primary care” and difficulty “accessing diagnostic services” for the urban-rural disparity, and asserts that rural people “are not as well served and have more difficulty accessing health-care services than people in urban centres.” Mr. Romanow then summarizes the disparity in a statistic: “The average resident in rural communities and small towns was 10 kilometres from a physician, compared to less than two kilometres for a resident in larger urban centres.”

The statistic makes for good trivia, but trivia cannot substitute for substance. Had Mr. Romanow’s analysis been evidence-based, he would have accepted the findings of the definitive series of studies on the subject of urban-rural health disparities in Canada produced just this year by Statistics Canada. The series, which analyzes the socio-economic and demographic factors underlying health outcomes, is part of a world-wide realization that hard medical services – whether in the form of doctors, hospitals or drugs – count less than attitudinal and spiritual factors such as individual empowerment, which stems from having control over one’s environment. Statscan found that the availability of doctors, specialists and hospitals in major centres does not explain why urbanites enjoy superior health. Says Statscan: “The variations between regions in the availability of these health-care services do not appear to play a role in accounting for individual health status differences.”

Put another way, the difference between being 10 kilometres away from a doctor and two kilometres away is not meaningful, based on the evidence.

Mr. Romanow, of course, understands that empowerment is important and that the shortcomings of rural society are widespread. His own report acknowledges that rural people not only get sick far more often, they have higher rates of violence, of poisonings, of unintentional injuries leading to death – differences that cannot be explained by a lack of health-care workers.

Yet Mr. Romanow makes the difference between access to urban and rural medical help the basis of his chief rural recommendation: the creation of a Rural and Remote Access Fund that would attract and retain health-care providers.

Why would Mr. Romanow recommend spending scarce health dollars in the absence of any evidence that it would do any good? And why would he want this Rural and Remote Access Fund to “support provinces, territories, communities and health authorities” – everyone but patients themselves, who, the evidence shows, would become empowered by having more say in decisions affecting their health?

The answer lies less in promoting health than in promoting values – Mr. Romanow’s values. In his vision of Canada, the state decides what we’re entitled to and the state makes us what we are. Giving rural Canadians a personal health-care budget, and letting them override the judgment of rural health-care administrators – a form of privatization, he believes – offends Mr. Romanow’s sense of values. So does the notion that Canadians might migrate away from rural areas to cities to obtain more convenient health care. So does allowing immigrant doctors to service rural areas, when we could be using the homegrown kind.

One other value permeates Mr. Romanow’s health-care work: deference to interest groups. To obtain support for his vision, Mr. Romanow has set out to please workers in virtually every existing health-care lobby – from the doctors and nurses who deal directly with the patients to the union workers who toil in more menial work. He has offered them proposals designed to increase their take-home pay, and they have responded with lobbying to have his report adopted.

In Mr. Romanow’s report, his values trump the evidence. The rights of the bureaucrats trump those of the patients. And the health of the rural population, which – as his report notes – worsens with its remoteness, is simply trumped.

Related articles by Lawrence Solomon :

The phoney MSA debate

Empowerment is the best medicine

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Congestion charging: the public concerns behind the politics

London Assembly
December 1 2002

Londoners deserve be made aware of all the potential risks – not only for basic accountability but because excessive secrecy or news management may encourage suspicion and a backlash against the proposed scheme.

Click here to view file
http://www.probeinternational.org/old_drupal/UrbanNewSite/congestion_charging.pdf

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Levies, fees, charges and taxes on new housing (2002)

Canada Mortgage and Housing Corporation  
December 1/2002

Government-imposed costs on new housing can be substantial. They have a direct effect on the total cost of housing–and, therefore, on housing affordability.

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