July 10, 2020 by Canadian Underwriter Staff
Nova Scotia has had a hard few months, and not just because of COVID-19, says Darren Lipsett, president of the Insurance Brokers Association of Nova Scotia.
Brokers are dealing with rate hikes and the national capacity crunch as insurers try to “work towards rate adequacy. That creates some limitations for market placements for certain types of accounts. The return to profitability is certainly the main focus for insurers.”
Lipsett says things were fairly stable in personal property until Hurricane Dorian hit the shores in September 2019. “A lot of companies were having a good year until that point. Water products are still in a state of flux — there’s flood mapping that’s different from one market to another. Dorian was a test in September in how these products were to respond.”
And just as in the rest of Canada, the commercial market in Nova Scotia has been tough. “Capacity [and] pricing have been fluctuating because, again, the insurers are trying to return to profitability. We’re definitely in a hard commercial market,” especially in condo coverage, he says. “I’ve had clients that own condos, and their condo [corporation] has advised them they hadn’t been able to secure insurance at acceptable terms.”
Similarly, on the auto side, “I don’t think we’ve seen [rate increases] less than 10%. The cost to repair vehicles is one of the key drivers, plus injury claims. A few companies have been making rate decisions that are more marginal, and [they] can manage [rising claims costs].”
The provincial government has been working with key stakeholders to reform the auto product. “At the end of the day, if we can’t sell an auto product that’s fair from a benefit and a pricing standpoint, that’s going to be a challenge for consumers.”