Financial crisis should spell the end of the soft market, CEO predicts

Consumers are facing a global fiscal crisis featuring a severity of the type that only their grandparents have seen, and the current reigning soft market should be the first casualty, insurance brokers heard at the 88th annual convention of the Insurance Brokers Association of Ontario (IBAO).
In reacting to the crisis, insurance companies should take appropriate measures to reassure brokers and the public that they will not become the next victims of the impending recession, says George Cooke, the president and CEO of Dominion of Canada General Insurance Company. That means the industry should be adjusting practices that have led to the current soft market pricing.
“One message that we should be taking back [to policymakers and consumers] is that the softness of our market should be over,” Cooke said. “It is absolutely ridiculous to think that people can continue to offer product with the complexity of ours, below cost, on a go-forward basis in this kind of environment….
“If we haven’t figured out yet whether the soft market is over, it should be over.”
Cooke was responding to a question from an audience member, who asked CEO panelists what kinds of messages insurers should be relaying back to consumers in tough financial times.
Cooke said a second message consumers should be aware of is the severity of the financial difficulties they could potentially face.
He noted it is difficult for any member of the financial services industry to craft positive messaging to consumers at this point, because not enough information is available to make reassuring statements with any degree of confidence.