December 20, 2021 by Canadian Underwriter Staff
Rob Wesseling, president and CEO, The Co-operators Group Limited
Canadians continue to interact differently with the economy and our industry. An accelerated shift toward digitization drove us to enhance digital solutions alongside our existing engagement models. The pandemic also emphasized emerging unmet and ill-met needs related to protection against risk, and underscored the need for long-term financial security.
Before the pandemic, P&C claims trends were deteriorating due to automobile results, large property losses and frequency of weather-related events. While COVID-19 slowed or temporarily altered some of these trends, we anticipate the return to more typical consumer behaviours, coupled with ongoing supply chain issues and inflationary pressures, will lead to further challenges for organizations that fail to adapt. Once the pandemic’s impacts truly normalize, claims will continue to trend upwards, and likely accelerate in the absence of intervention or systemic change.
It is increasingly clear we have a climate risk problem. While events of 2021 didn’t result in significant volume of insured losses from natural disasters here, this was only geographic circumstance. Globally, and in Canada, there was significant extreme weather and wildfire activity that could have been catastrophic had it occurred closer to populated areas. We need to be thinking of climate change in terms of adaptation and loss prevention and taking more definitive action in both areas. We need to evolve from an indemnity business model to a resiliency business model.
We are becoming more ambitious in investing our capital strength into building more resilient and sustainable communities and increasing our impact investments and transition financing, ensuring our societies can better adapt to the changing climate. We should also be using the asset side of our balance sheets to accelerate climate solutions. If the industry were to leverage just a percentage of the asset side and invest in resilient infrastructure or other climate-mitigation efforts, we could help support the transition to a more sustainable future.