It’s not great news but the death bell isn’t tolling.
The Canadian insurance market posted flat growth in the first quarter of 2017 following floods in the country’s most populous regions, an auto insurance landscape undergoing transformation and mixed commercial results, according to MSA Research.
With near-stagnant premium growth, the emphasis is on insurance brokers to earn their clients now more than ever, according to Joel Baker, President and CEO of MSA Research and CatIQ.
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“Brokers have to be aware that more than ever they have to earn their business,” Baker said. “The adage goes: ‘if it can go direct, it will go direct’. Brokers must continually add value to remain relevant and valuable to both their clients and the insurance partners that they work with.”
Despite the lack of growth and income, the Canadian insurance industry is still in decent shape, Baker believes.
“There are rapid developments on the technological front that are in the process of transforming the market,” he pointed out. “It is an industry that serves a definite need in times of escalating CAT losses. The industry is changing but there are definite reasons for optimism for those that adapt the best.
“The industry is not in immediate danger. It is well capitalized and the way it emerged from the Fort Mac disaster is a testament to its risk management acumen - though had the fire losses been larger it would have threatened the solvency of some players. In the long term, as profits erode and capital levels go down, rates will naturally harden. In a hard market most of the industry does well - in challenging times only the best companies thrive.”
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