How solvency risk has changed since the days of the eight-track tape

When Bob Tisdale started his career about 40 years ago, insurers were more likely to get into financial trouble.

“When I first started in this industry in the early days, I was doing commercial underwriting and there were a lot of subscription policies and just a lot of small companies around that would [accept risks] on different things,” said Tisdale, who retired this past summer as president and chief operating officer of Allstate Canada units Pembridge Insurance Company and Pafco Insurance Company. (Pembridge distributes through brokers, while Pafco writes non-standard auto.) “A lot of those companies ended up going bankrupt because they weren’t properly capitalized or they just got into risks that they probably should not have.”

In a recent interview, Canadian Underwriter asked Tisdale for his perspective on how the P&C insurance industry has changed over the past few decades. One of the biggest changes has been the level of governance, he suggested.

“The biggest change I have seen in the industry is more of the professionalism, level of education and governance that organizations have brought into place. People who are coming into the industry have much stronger educational backgrounds. There is much better governance to ensure integrity in the industry, so those are big things from that standpoint.”

Tisdale started his career in 1978. At the time, “there were a lot of small, poorly-capitalized companies. So it was pretty easy to get a company set up. As long as you could get a reinsurance treaty somewhere, you could start writing business and you could stray from your underwriting appetite very easily because there was not as much oversight as there is today.”

Today, insurers tend to be bigger and more sophisticated at the board level, with their own enterprise risk management departments, Tisdale observed.

“Companies can still get into trouble, which is why there are things like Property and Casualty Insurance Compensation Corporation (PACICC), et cetera, but I do think oversight is much better. I think there are a lot more eyes on the ball.”

Tisdale is still active in the industry. He currently acts as a consultant to Allstate Canada, and the independent adjusting firm CRU Group announced this past August it has appointed Tisdale to its board.

Tisdale has been active with various organizations such as the Insurance Institute of Canada, which he chaired in 2015-16. A former chairman of the board of directors of the Facility Association, he has also been chairman of the CIP Society and a member of various Insurance Bureau of Canada (IBC) committees.

Feature image via iStock.com/Tom Kelley Archive