Canadian Underwriter

Opening up the Borders

August 2, 2019   by David Gambrill, Editor-in-Chief

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cu | The word ‘specialty’ means different things in different organizations. What does ‘specialty’ mean to you?
For me, what defines ‘specialty’ is a real depth of expertise. It’s not necessarily about years of experience — it’s really about understanding the issues in a particular line of business. For example, you have what I call “retail” underwriters: they are good at underwriting a restaurant business one day; the next day, they are doing an apartment building. And the next day, they will do something else. On the other hand, if you are in specialty, say, as a marine underwriter, you do that every day. That’s all you do every day. It’s much more focused than what you will see in other commercial lines.

Peter Weightman, Senior Vice President, Specialty Solutions & Surety, Canada, Intact Financial Corporation

cu | Can you describe some of the key issues affecting the specialty market right now?
Generally speaking, I would say three main drivers are influencing the specialty marketplace. Right now, in both the United States and Canada, we are seeing some tightening in property capacity. Recall that late last summer, we started to hear about some of the larger syndicates “retrenching” in the marketplace and capacity was being dialed down in a number of places. That’s one driver. Second, some of the domestic players — especially in Canada — have pulled back some of their property capacity, which has created some disruption in the marketplace. And third, the first quarter of the year was quite challenging weather-wise, specifically in eastern Canada, Ontario and Quebec. So, the combination of these three things really put some stress on any line of business in Canada that has a property component. In our portfolio, this affects the farm and the non-standard property portfolio – the latter which we define as a property risk with a construction, occupancy, protection and/or exposure (COPE) deficiency. In other words, something unique about the building has pushed it out of the standard market, and now it’s in specialty. A good example of non-standard property would be a vacant building.

cu | Does a hardening retail market benefit the specialty market?
Our non-standard property portfolio is where you will see the impact of the market shift. That’s because business previously handled by retail commercial insurers gets pushed out into the specialty markets. It will shift because a retail market may have said, ‘We don’t have the capacity for this anymore,’ or ‘We don’t have the appetite for this.’ And then it will show up at our door. This is one of the ways we can gauge what’s going on in the marketplace: business flows in or out [of specialty] based on market conditions, and right now, it’s flowing in.

cu | Intact acquired U.S. specialty insurer OneBeacon in 2017. What was the strategy there?
The OneBeacon acquisition really helped us build awareness and raise our profile as a specialty insurer. Ultimately, we see the acquisition as a growth platform going forward, and it allows us to take advantage of the product opportunities OneBeacon has in the U.S., along with their expertise. We have some aggressive goals and we’ve been public with our desire to be a $3-billion specialty operation in North America by the end of 2020.

cu | How does the OneBeacon acquisition help Canadian brokers?
In Canada, we’ve introduced a couple of lines of business that came from OneBeacon: We brought their technology and entertainment products into Canada. Also, we were able to introduce our cross-border solution to the Canadian marketplace.

cu | How does the cross-border solution benefit brokers?
Canadian brokers who don’t have a lot of experience in the cross-border area may experience frustration because they don’t have a partner in the U.S. The service from U.S.-based markets may not be ideal, or they may just not be familiar with the local markets.
Intact can help solve these problems with our cross-border solution, which is more of a workflow than a product. Our cross-border underwriters work in Montreal, Toronto or Vancouver and have direct access to the OneBeacon systems, so they are able to get quotes; the service turnaround is quick, and if Canadian brokers need it, we can provide them with a U.S. agent that is part of OneBeacon to facilitate the transaction.

cu | Are you planning to introduce any other U.S. products into Canada?
We have regular discussions about lines of business that could move from south to north. Some lines that OneBeacon writes in the United States either don’t make sense for us or we’re not sure they would be successful in Canada.
In terms of opportunities, if you look at the OneBeacon portfolio, they have a financial institutions business in the United States through which they write some of the larger establishments such as broker dealers. OneBeacon also sells an environmental product in the United States that we don’t sell in Canada, which might have some legs. But we want to move forward thoughtfully. We need to demonstrate to the marketplace that we can be successful with the lines that we’ve brought in before we bring more U.S. products into Canada.

Peter Weightman

Title: Senior Vice President, Specialty Solutions & Surety, Canada, Intact Financial Corporation
Experience at Intact: 30+ years

Previous roles at Intact: President, BrokerLink; Senior Vice President, Claims; Senior Vice President,
Commercial Lines

Education: BSc in Business Administration, MSc in Business Education, Illinois State University

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