OMEX Suspends Underwriting Operations

OMEX announced today they will suspend underwriting operations for the Reciprocal effective immediately, to allow it time to fully assess the needs of Ontario Municipalities with a view to redesigning its products to better service the needs of its future members.

As a result of this decision, OMEX, will immediately cease to write renewal business for the remainder of 2016, and will not pursue new business. Existing members are being advised to seek coverage from alternate insurers.

All “in-force” policies will continue until their natural expiry, and OMEX will continue to serve all existing and former members as well as responding to all existing claims, and all new claims as appropriate.

This decision is an important step forward for OMEX and is part of a strategy to redesign the Municipal Reciprocal to more effectively address the emerging needs of its future members.

While it is regrettable that OMEX has had to take this step in its evolution, management is committed to invest the time and energy required to remodel the Reciprocal, with the full support of its Board of Directors. It has also taken this strategic step at a time when the finances of OMEX are very strong, enabling it to discharge all financial obligations as they arise. Other than the fact that OMEX will have no new or renewal premium for the next year, it will be “business as usual”.

While OMEX remains committed to the original concept of sharing risk and expertise between members of the Reciprocal, it has struggled in recent years to grow in an extremely soft insurance market, and a highly competitive business environment.   This low pricing environment, combined with the impact of joint & several liability on municipal claim settlements has made it difficult to offer sustainable pricing while still addressing the municipalities’ concern about retro assessments. OMEX will work with its reinsurers during the underwriting hiatus to address these issues in all future potential product offerings.

Ontario Municipal Insurance Exchange (OMEX) is a not-for-profit insurer dedicated solely to providing insurance to Ontario municipalities since 1989. It has been a member-governed alternative to the conventional insurance market, with a complete focus on serving the unique needs of Ontario municipalities.