2012 CENSUS DATA IS IN. ARE YOU PREPARED TO HARNESS THE POWER OF GROWTH MARKETS? ....

ISSUE 1

NOVEMBER 2012

RAINING CATS AND DOGS. DOGS GOT YOU DOWN? HERE S WHERE THE CATS SEEM TO BE ............... 4

BELL WEATHER. THE EFFECT OF CLIMATE CHANGE ON CANADA S INSURANCE MARKET .... 3

DELIVERING DATA-DRIVEN INSIGHTS TO

EDMONTONS INSURANCE PROFESSIONALS

Premium facts
factored into raw scores, our unpublished analysis identifies statistically significant causative factors which will most likely expose insurers to increased personal risks in mature areas of the city. The Northern periphery of the city does not seem to be growing as rapidly, but carries a risk profile very similar to the Southwest zone. Most importantly, given a dramatic upswing in key predictive factors, the most dramatic growth in 2015 will likely be seen in the citys West zone.

With a 16.97% annualized rate of population growth, Southwest Edmonton Is todays rapid-growth residential market. The area also harbours some of the citys most profitable personal risks.

City suburbs fair well in latest census

According to the 2012 Municipal Census, the City of Edmonton continues to embrace a policy of rapid suburban growth. And, while the
redevelopment of urban landmarks may be making headlines, recent data suggests the urban core may not be the most resilient market for residential clients. Central neighbourhoods consistently ranked lowest for personal lines profitability in our analysis (based on 2012 census data, see page 2). While crime statistics and traffic hazards were not

THE FUTURE OF RISK SHARING

Albertan organizations must increasingly insure against complex, volatile risks.
With empowering legislation and low management costs, Reciprocal Insurance Exchanges (RIEs) represent the future of cooperative risk sharing. Our next issue explores provincial trends among RIEs and some local innovations which are leading the way.

Population Growth from 2009 to 2012, by Residential Zone

60.0% 30.0% 0.0% -0.8% -30.0% Central North Northeast -18.2% Northwest Southeast Southwest West 50.9% 13.6%

9.0%

1.9%

11.7%

RESIDENTIAL STRUCTURE TYPES (2012)

Structure Type 1 2 3 4 5 6 7 8 9
SINGLE DETACHED HOUSE APARTMENT, 1-4 STORIES APARTMENT, >4 STORIES ROW HOUSE DUPLEX OR FOURPLEX COLLECTIVE RESIDENCE MOBILE HOME OR TRAILER RV, TENT OR OTHER HOTEL OR MOTEL

TOP 10 NEIGHBOURHOODS
Population Growth (% Change, 2009 to 2012) AMBLESIDE 840 % WINDERMERE 562 % SECORD 225 % TAMARACK 216 %
CHARLESWORTH CAMERON HEIGHTS SCHONSEE MACTAGGART

Dwelling Count 185,259 85,014 34,153 31,697 23,845 4,460 2,941 196 182

Percent Total 50.4 % 23.1 % 9.3 % 8.6 % 6.5 % 1.2 % 0.8 % 0.1 % 0.0 % 1 2 3 4 5 6 7 8

1 2 3 4 5 6 7 8

Population Density (persons/km2) GARNEAU 11,422 OLIVER 10,488 CLAREVIEW 8,961 CRAWFORD PLAINS 7,425
CALLINGWOOD BOYLE STREET STRATHCONA DOWNTOWN

111 % 105 % 85 % 82 % 79 % 67 %

7,248 6,036 5,699 4,896 4,843 4,837

9 MAGRATH HEIGHTS 10 THE HAMPTONS

9 MACEWAN 10 EMPIRE PARK

NEIGHBOURHOOD PROFITABILITY RANKINGS PERSONAL INSURANCE (2012)

SMALL NEIGHBOURHOOD (500 1499 Residents) OVERALL RAW DENSITY NEIGHBOURHOOD POPULATION CITY SECTOR RANK SCORE1 (people/km2) 1 8 SECORD 914 345 West 3 27 CAMERON HEIGHTS 1,125 1,422 West 9 53 WEBBER GREENS 549 469 West 183 146 PRINCE RUPERT 1,339 1,157 Central 186 148 VIRGINIA PARK 793 1,375 Central 232 166 SHERWOOD 1,254 2,846 Central MEDIUM NEIGHBOURHOODS (1500 4500 Residents) OVERALL RAW DENSITY NEIGHBOURHOOD POPULATION CITY SECTOR RANK SCORE1 (people/km2) 2 25 MACTAGGART 1,687 1,616 Southwest 4 29 WINDERMERE 2,136 521 Southwest 5 34 CHARLESWORTH 2,941 1,475 Southeast 243 172 LENDRUM PLACE 1,888 2,194 Central 244 173 MALMO PLAINS 3,305 3,517 Central 245 176 CROMDALE 1,927 1,636 Central LARGE NEIGHBOURHOODS (> 4500 Residents) OVERALL RAW DENSITY NEIGHBOURHOOD POPULATION CITY SECTOR RANK SCORE1 (people/km2) 6 38 SUMMERSIDE 7,976 2,035 Southeast 8 45 THE HAMPTONS 9,405 3,282 West 12 61 RUTHERFORD 8,407 3,631 Southwest 236 168 BOYLE STREET 6,947 6,036 Central 239 170 INGLEWOOD 6,310 3,791 Central 241 172 CENTRAL MCDOUGALL 4,712 3,879 Central
1 2

NEW NEW UNEMPLOY- DRIVER RESIDENTS2 CANADIANS3 MENT4 RATIO5 20.7 0.33 % 0 32.14 1.17 0.54 % 4.79 8.85 31.11 1.50 % 13.25 8.26 0.52 1.36 % 32.13 2.79 0.22 0.51 % 26.40 3.13 0.26 1.44 % 48.28 4.22 NEW NEW UNEMPLOY- DRIVER RESIDENTS2 CANADIANS3 MENT4 RATIO5 5.86 0.89 % 3.96 11.11 4.74 1.43 % 5.82 12.12 7.57 0.65 % 8.68 8.39 0.23 1.01 % 28.27 1.95 0.47 3.13 % 50.51 2.09 0.91 4.05 % 78.45 1.42 NEW NEW UNEMPLOY- DRIVER RESIDENTS2 CANADIANS3 MENT4 RATIO5 0.98 1.09 % 7.36 9.72 1.13 0.84 % 10.72 8.62 0.61 0.84 % 6.69 5.11 1.11 1.28 % 76.47 1.67 0.72 1.98 % 55.84 1.85 1.47 2.14 % 74.64 0.89

Calculated based on weighted demographic criteria associated with higher insurance use. No hazards are included in the raw score. Number of residents living 1 yr in neighbourhood for every neighbour 5 yrs 3 Percent of recent immigrants in neighbourhood compared to total accessible population 4 Households unemployed per 1,000 residents 5 Number of drivers versus number of alternative commuters [Data: Statistics Canada. 2012 Edmonton Census Neighbourhoods via http://data.edmonton.ca]

Total Liabilities

Total Assets

140 120 100 80 60 40 20 0

The market value of Canadian property and casualty insurers continues to rise, suggesting many national insurance companies
are well-positioned to protect shareholder equity from climaterelated risks.
[Data: Statistics Canada. CANSIM Table 378-0100 National balance sheet, property and casualty insurance companies .]

Canadian insurers see silver lining in the clouds

Climate change continues to cost American insurers, but Canadian insurers appear ready to weather the storm.

Hurricane Sandy uprooted trees, stripped bricks from sidewalks and flooded neighbourhoods. And, this
$20 billion storm is only the latest disaster to affect American insurers. Since the onset of Hurricane Katrina in 2008, state regulators have closely monitored the financial sustainability of U.S. property and casualty insurers. American firms had undercut premiums to compete in a soft market,

Anthropogenic climate change is believed to be a signicant loss driver... it particularly affects the formation of heatwaves, droughts, thunderstorms and in the long run tropical cyclone intensity.
MUNICH RE
GLOBAL RE-INSURER

Globally, government regulators have also focused on preserving capital. Insurers continue to predict sustained increases in weather-related claims internationally, and rising re-insurance premiums. Canadian property and casualty insurers are now actively pursuing underwriting gains to prepare for future uncer-

tainty. And, their keep cash strategy seems to be very successful, with insurers reporting a positive net worth of $28.6 billion in March 2012. Just dont expect a break in premiums any time soon. Canadian insurers continue to see clouds, and must brace for tomorrows storm.

bond yields were at an alltime low, and cash reserves were dwindling after a smattering of major storms.

Edmonton
ESTIMATED TOTAL COST FEDERAL PAYMENTS PROVINCIAL PAYMENTS

J rna o
T

7 98 y 1 do ul

3 92 92 99 rm 19 rm 19 rm y 1 e Sto g. e Sto ept. e Sto l Au ver S ver Ju ver e e e

S S S

5 99 rm y 1 e Sto ul
r ve Se

4 00 rm y 2 e Sto ul
r ve Se

Ju vere e
S

7 00 m e 2 Stor n

$ 32,748,959 $ 19,948,463 $ 12,800,496

$ 20,170,168 $ 22,522,000 -

$ 21,095,828 $ 12,398,407

$ 34,511,612 $ 18,858,612

$ 13,500,000 $ 13,500,000 -

$ 18,000,000 $ 9,100,000 $ 8,900,000

$ 14,434,443 $ 14.434.443

Edmonton remains particularly susceptible to climate-related losses during summer storms. In the future, storm proofing
properties may result in lower premiums for local clients.
[Data: Canadian Ministry of Public Safety. Canadian Disaster Database, accessed 02-Nov-2012.]

Billions (CAD)

NEIGHBOURHOOD RANKINGS
T5Y DOG POPULATION TOP 5
(% of all dogs registered in city)
1 T5T West Edmonton 7.28 % 6.87 % 5.13 % 4.86 % 4.79 %

T5X T6V T5E T5V T5S T5P T5T T5R T5L T5G T5M T5N
T5J T5K

T5Z

T5C T5A T5B T5W T6S

2 T6L Millwoods 3 T5Y Northeast Edmonton 4 T5X Castledowns

T5H

T6A

5 T6R Southwest Edmonton

T6G T6H

T6C T6B T6E T6P

NUMBER OF DOGS (FOR EVERY CAT) < 0.5 0.5 - 0.9

HIGH-RISK BREEDS TOP 3 1,2

(% hazardous breeds among all registered dogs in neighbourhood) 1 T5B Northlands/Parkdale 2 T5G Kingsway/Alberta Ave. 3 T5P Mayfield/Jasper Place 17.83 % 16.89 % 16.63 %

T6M T6R

T6J T6K T6N T6L T6T

1.0 - 1.4 1.5 - 1.9 2.0 - 2.4

T6W

2.5 +

LOW-RISK BREEDS TOP 3 1,2

(% non-hazardous breeds among registered dogs in neighbourhood) 1 T6R Southwest Edmonton 2 T5K Oliver/Downtown 3 T6J Century Park 93.67 % 92.67 % 91.42 %

T6X

City of Edmonton animal registration statistics, categorized by Canada Post forward sortation areas,
suggest that residents preferentially choose to own dogs in the periphery of the city.
[Data: City of EdmontonCommunity Services, http://data.edmonton.ca]

Calling off the dogs: Measuring Risk Exposure in Edmonton

There are 62,329 registered dogs in the City of Edmonton. 11.41% of all dogs are classifiable as high-risk breeds.
For the longest time, weve felt that the bylaw in its previous state was discriminatory.
SHAWNA RANDOLPH
EDMONTON HUMANE SOCIETY

1 2

Industrial zones excluded from ranking.

Hazardous breeds are classified based on common insurance risk categorizations among North American insurers. Classified Breeds Include: Akita, Alaskan Malamute, Chow Chow, Doberman Pinscher, German Shepherd, Pit Bull, Presa Canario, Rottweiler, Siberian Husky, Staffordshire Bull Terrier, Wolf hybrids [Data: City of EdmontonCommunity Services, http://data.edmonton.ca]

Effective October 22nd, the City of Edmonton has altered its restricted dogs by-law.
Dogs are no longer designated restricted based on breed, but by past behavior. The by-law also mandates that previously aggressive dogs must be insured for a minimum of $1 million.

Given the recent by-law change, the moral hazard associated with insuring high-risk breeds is expected to rise. Edmonton brokers would be wise to intensify screening for restricted dogs in specific neighbourhoods. Local crime and animal control statistics identified the following hazard zones:
Potential Residential Risks: T5B Northlands/Parkdale T5G Kingsway/Alberta Ave. T5P Mayfield/Jasper Place Potential Commercial Risks: T6S Refinery Row T6N South Edmonton T5V North Industrial Zone

 Market Research Regional Exposures Provincial Trends Emerging Statistics Customer Profiling

Premium Facts represents a student-led project designed to connect with some of Edmontons most influential insurance professionals.
All statistical data is obtained from sources that I believe to be reliable, but is not intended to guide business decisions. Any information contained in this report should be thoroughly evaluated prior to use. This report does not take into account any operating or financial needs of any professional or legal entity.

Data-driven insights. Delivered.

Adam Henley Student, Insurance and Risk Management Twitter: @ajaminski