December 29, 2017 by David Levinson
As 2018 begins, capital remains at the forefront in Canada. An active hurricane season in the United States will cause insurance carriers to look at their own exposures here in Canada, including earthquakes, fires, and floods. This may cause property rates to increase. Pricing pressure could come from reinsurers raising rates. Look for mergers and acquisitions among insurers and brokers to become more attractive as margins shrink.
Auto insurance will continue to be a hot topic, especially in Ontario and British Colombia. A push for increased government rate control in Ontario and Alberta will cause smaller players to exit and put further strain on the profitability of the larger, personal lines players.
Cyber is no longer an “emerging” risk in 2018. A continuing string of major breaches has demonstrated that we as an industry must address this risk now. More business leaders and corporate boards are talking about how deal with cyber risk. They are evaluating insurance solutions, but are more focused on mitigation tactics and educating their employees, who are the first line of defense against cyber criminals.
Insurance providers will continue to focus on the fundamentals of the business to ensure they can deliver an underwriting profit. But they also need to be creative and responsive to remain relevant to their customers and brokers distribution channels. Customers’ exposures are rapidly changing, and they are expecting quicker solutions. This is an opportune time for talented and motivated Millennials and Generation Xers to step up and help redefine the customer experience for the insurance industry.