February 22, 2022 by Gloria Cilliers
A major shortage of seasoned commercial underwriting staff is impacting broker relationships and productivity, some brokerages have reported.
For an industry already struggling with a country-wide talent crunch exacerbated by the pandemic, renewed M&A activity and a hard market, brokers are feeling the effects of “cookie-cutter underwriting” more so than ever before, they say.
“Suddenly, it seems as though a large number of good underwriters are gone,” says Rorie McIntosh, CEO of Oshawa-based McCAM Insurance, a member of the Canadian Broker Network. At least, to brokers struggling with hard-to-place risk, he adds.
“In a hard market, whether there are seasoned underwriters or not, they’re often stripped of their underwriting authority. It’s a stressful environment to be in,” says David Edgar, chief broking officer of British Columbia-based CapriCMW.
Then the pandemic hit.
“I think the pandemic has prompted many experienced underwriters close to retirement age to retire prematurely. The problem is, the new generation coming in to fill that void aren’t staying in their roles long enough to get really good at it, or get poached for better opportunities as soon as they’ve been trained.”
In addition, the pandemic has made training more difficult, Edgar adds, “as there’s just no real substitute for working close to colleagues and mentors that can quickly answer questions, and context is often lost or delayed by written responses.”
Since the start of the pandemic, insurance companies have also accelerated their investments in automation and digitization, leading to brokers seeing more “cookie-cutter underwriting.”
“The impact of all this is brokers experiencing a real loss of underwriting expertise, knowledge and resources, which makes placing business harder than ever,” Edgar says.
Service levels have been adversely affected too, adds Bill Dalton, senior vice president of commercial at Atlantic Canada-based Cal LeGrow Insurance & Financial.
“When you lose good people, the service levels tend to drop dramatically,” Dalton says. “Since there aren’t enough seasoned staff joining, inexperienced talent is being hired, not trained fast enough and often overworked – and there’s a learning curve, so the existing relationships with brokers tend to suffer in the process. We’re relying a lot more on the insurers we’ve built good relationships with to see us through these unprecedented times.”
Embracing the new normal
The situation has become somewhat dire, but it’s not here to stay, predicts Paul Christie, vice president of commercial sales at Hamilton-based Lawrie Insurance Group.
“I do believe it’s somewhat of a blip,” Christie says. “The industry is slowly bouncing back and adapting to the new normal: enabling more work-from-home opportunities, focusing on work-life-balance and digitally interacting with employees and clients. This all bodes very well for the industry’s talent acquisition and retention strategies.”
In the meantime however, as the industry rides out the pandemic and waits for the market to soften, the biggest challenge is avoiding the ripple effect of productivity issues on the broker side, Christie warns.
Christie advises brokers to revisit their submissions control measures in order to facilitate faster turnaround. As well, he says broker need to be strategic on their placements by better understanding carriers’ appetite.
Feature photo courtesy of iStock.com/onurdongel