How auto theft, Cats are affecting Aviva Canada’s bottom line

Aviva Canada has seen a 1,000% increase in reVINing since 2022. ReVINing is the practice of stealing a vehicle and putting on a vehicle identification number (VIN) that looks real.

Not only that, the insurer has seen some of the single costliest Cat events this year since the Fort McMurray, Alta., wildfire in 2016, Paul Tsipas, assistant vice president of property and corporate risk with Aviva Canada’s global corporate and specialty department, said last week at the RIMS Canada Conference in Vancouver.

Auto theft is an ongoing trend in the Canadian P&C insurance industry. Even though the country saw a 19% decrease in insurance claims for auto theft in the first half of the year compared to 2023 H1, auto theft in Canada continues to soar above historical levels, Insurance Bureau of Canada (IBC) reported earlier this month.

Re-VINing involves putting fake VINs on vehicles and selling them back to customers who have no idea of the vehicles’ origins, Tsipas explained during the session, The “Black Box” of Underwriting, Actuarial and Claims.

“Aviva has seen a 1,000% increase in reVINing since it was first identified,” he said. “We went from 10 investigations in 2022 to over 100 in 2023.”

Overall, the insurer has seen a 44% increase in auto thefts since 2022. “Breaking it down to the simplest elements, if you happen to own a Top 10 stolen vehicle in Canada, you’re at higher risk of experiencing a loss. Hence, it could factor in your insurance premium.”

AI and fraud

Artificial intelligence (AI) is also helping criminals improve their fraud tactics. It can be used to quickly produce texts, emails and messages “in a style and language of a specific person,” Tsipas said, adding AI can even be used to clone someone’s voice.

“In minutes, it can use and make simple fake images [and] videos of real people,” he said. “We are also seeing an increase in falsified invoicing.

“The use of receipt generators, Google Maps, and simple editing programs makes fabricating invoicing a simpler task for anyone to ignore,” Tsipas said. “Sometimes, it’s hard to tell what’s real and what’s fake.”

Cat roundup

From a NatCat perspective, last year Aviva Canada had nearly 8,000 claims across 17 Cat events with incurred losses of up to $200 million, Tsipas reported.

This year is also shaping up to be a costly one, particularly given the four major Cats this summer — Toronto and southern Ontario floods ($940 million in insured damage); Jasper, Alta. wildfire ($880 million); Calgary hailstorm ($2.8 billion); and Quebec floods ($2.5 billion).

“In Calgary, Alberta, they had hailstorms with hailstones up to seven centimetres in diameter,” Tsipas said. “This was the single-costliest event for Aviva since the Fort Mac wildfires in 2016.

“In Quebec, again, they’ve experienced flooding as well, with 8,000 residents evacuating their homes,” he said.

IBC says the 2024 flooding in Quebec was the single-costliest NatCat in the province’s history, with insurers paying out more $2.5 billion to repair the damage.

To date, the Canadian P&C industry is projected to pay out more than $7.7 billion in insured losses this year due to catastrophes, the majority from the four summer events. Last year, the industry paid out $3.1 billion for the entire year.

Feature image by iStock.com/andreswd