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With temperatures plummeting and snow expected this week in southern Ontario, it likely won’t be long until the ski season will be back in full swing.
Insurance Business spoke with Jeff Krause, principal at Krause Edwards Insurance Brokers, in Barrie, ON, about insuring ski resorts and alpine clubs in Ontario and eastern Canada.
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As a retail brokerage, Krause Edwards sells its MountainGuard program with an arrangement through AmWINS, as the managing general agent, and AIG, as the carrier. Krause Edwards sells MountainGuard from Ontario to the east, while Integro Canada (recently bought up by Hub International) sells it from Manitoba to the west.
In Ontario, where there’s a particular focus on business, Krause said the province is becoming more litigious. And this, he said, forms a large part of ski resort insurance.
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“Some of them [the resorts] have fairly significant property assets – pretty big chalets and snow-making equipment, aerial lifts worth millions of dollars – so you have to insure their property. The property is pretty straightforward.
“But the liability is the looming concern. It’s a liability-driven programme. It’s what drives things, it’s what most of the risk-management initiatives are surrounding.”
And from a risk-management standpoint, the resorts do a great job, Krause said, minimising accidents and injuries for the 3.5 million skier visits each year in Ontario alone.
But claims do happen.
“Unfortunately, from time to time, bad things happen … it’s part of the inherent risk [of the sport]. And most of the claims come from there [accidents], for sure,” he said.
“From a frequency perspective, of things happening, and also from a costing perspective from the insurance point of view, it’s liability driven. People are always hurling allegations of negligence, for whatever reason.”
Until last week, the MountainGuard program was administered by Willis Towers Watson, but the program was bought up by AmWINS, as one of the pieces in the wholesaler’s swoop for multiple insurance programs from Willis.
Krause said he has been insuring ski resorts for 20 years. In the early days, with his former colleague David Butt, it was more difficult to place ski resort business at competitive prices. But that’s changed, he said.
“The problem with insuring a small group of [resorts], is that really in insurance you want to pool the losses of the few and spread them across the many,” he explained. “I mean, this is the very basis of insurance. With ski resorts – if you take Ontario, for example, we’ve got 41(ish) alpine ski resorts, and in Canada it may be a number somewhere around a couple hundred – it’s very difficult to create a stable insurance environment in such a small sampling. There’s only so much premium you can pool to absorb losses.”
So, rather than relying on markets that may pull in or out at any moment, the alliance with MountainGuard and AIG – which has been writing ski resort insurance since the 1960s in the US – has meant the sector in Canada become more reliable and has grown larger and stronger, Krause said.
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