Between paper cheques and mailed policies, the insurance industry is facing potential disruption as Canada Post union workers gear up for a possible strike Friday.
Brokers and insurers must prepare to mitigate logistical issues, and ensure their customers understand what a strike could mean for the timeliness in which they receive their paper insurance documents, sources tell Canadian Underwriter. And digital alternatives should be considered.
If postal negotiations don’t lead to a deal by 12:01 am on Nov. 15, The Canadian Union of Postal Workers will be in a legal position to strike. The union says it’s seeking to negotiate a collective agreement that addresses issues such as safe working conditions, fair wages, retirement security and expanded public services.
Canada Post says it will continue to operate in the event of a rotating strike (in which union members withdraw their services on a rotating basis), although customers should expect delays. “Canada Post’s goal throughout these negotiations with CUPW has always been to reach negotiated agreements, without any labour disruption,” the Crown corporation said in an earlier statement.
As of press time at 4 pm on Nov. 14, no deal between the postal service and its workers has been struck.
The Insurance Bureau of Canada says it’s too early to tell how insurers’ operations may be affected if a deal isn’t reached.
“A postal strike does create logistics issues for insurers,” IBC tells Canadian Underwriter. “This is especially true with policy cancellations, which may require notice by registered mail. Notice requirements will vary by jurisdiction.”
Why paper postage prevails
Though many insurers made the move to digitize their mailing operations during the COVID-19 pandemic, it’s possible a significant portion of customers still receive their insurance correspondence the old-fashioned way — through snail mail.
Cheques make up more than half of the payments in North America’s insurance industry, compared with a quarter or less of those in other industries, according to 2022 data by PYMNTS, a proprietary research and payment data provider.
It may come down to customer preference, data suggests. According to an Insurance Brokers Association of Ontario consumer survey in 2022, more than 50% of clients said it was important for them to receive their insurance documents in paper format.
Plus, paper documents remain relevant in the industry because regulations sometimes require physical proof of insurance, such as pink slips for auto policies.
Most provinces and territories (Ontario, Alberta, Nova Scotia, New Brunswick, P.E.I., Newfoundland & Labrador, Quebec, Yukon and the Northwest Territories) accept electronic slips (eSlips) as legal proof of insurance.
But insureds in provinces that don’t accept eSlips will still need physical proof of insurance. And it’s recommended that any out-of-province insureds driving in those regions also keep physical proof.
How to avoid postal delays
“Doing business digitally is the best way to avoid the postal service disruptions,” an Aviva spokesperson told CU when asked how insurers plan to mitigate delays. “We encourage broker partners to take advantage [of] the alternate electronic options.”
For Aviva and its brokers, alternate options include emailing customer documents; encouraging clients to register for electronic funds transfer (EFT) or online banking; online payment processing through services like ClearPay; and digital document transferring through services like DocXpress, the insurer tells CU.
Particularly time-sensitive documents or cheques for customers will be couriered to insureds or their brokers in the event of a strike, Aviva adds. “We are also encouraging brokers to send temporary electronic pink slips to customers renewing during this time.”
IBC advises consumers with questions to contact their insurance representative for information.
Feature image by iStock.com/Christa Boaz
