July 8, 2020 by Canadian Underwriter Staff
In a nearly unprecedented situation, the province is in an economic state that reflects the rest of Canada, says Andrew McNair, CEO of the Insurance Brokers Association of New Brunswick.
“The last 18 months have been challenging. But this seems to be a national issue, not so much regional — which is a new experience in our industry. With the hard insurance market and the economy being very sluggish, this causes a lot of hardship for the consumer and increases workload for brokers.”
In January 2020, McNair saw signs that things were beginning to level out. “I did believe the market was going to start to move more in the stable direction in the next six to 12 months. Now, with the COVID-19 situation, that isn’t a subject I would consider offering any type of opinion on.”
More uniquely, the region continues to suffer from escalating rates in the seafood industry due to the frequency of fires at processing plants. Many don’t have sprinkler systems, making them a high underwriting risk.
At the end of May, a lobster processing plant went up in flames in Val-Comeau and was declared a “total loss” by the town’s director of public security. As well, due to COVID-19, there’s a labour shortage and lobster exports have dramatically decreased, driving down prices by 30% to 40%.
The pandemic has made brokers even busier. “Brokers are getting many more calls and quotes from consumers who are home and have more time to contact other options for their insurance, as well as calls from those who have unfortunately been affected financially by this environment.”
Unfortunately, he says, there’s no telling when things will get better. “The unknown is too vast. We can only plan for short periods at this point.”