The global mining insurance sector has yet to experience a truly hard market, according to a recent report from Willis Towers Watson, but that doesn’t mean insuring this industry is an easy task, even in one of the world’s largest mining centres.
“From a market point of view, I think the biggest issue in Canada at the moment is the resource. There’s some really good talent on the underwriting side and the broking side, but unlocking the working capital is proving tough. Everything is taking three more conversations than it has previously,” said Adam McGeorge (pictured), the newly appointed National Centre of Excellence manager of mining, broking for Aon in Canada. “I look at it as the fluffy capacity is disappearing and we’re really leaning into our mining specialists to make sure that they are leading the way, not just for Canada mining, but global mining.”
While McGeorge agreed that the industry hasn’t hit a hard market quite yet since there are pockets of capacity and coverage is available, he pointed to the fact that there is a return to profitability happening across the mining sector.
“It’s more about bringing the whole industry back to the standard where it needs to be, and making sure that asset base is at a level that is sustainable for the insurance industry and for our clients,” he told Insurance Business.
One of the understated risks impacting mining at the moment is data. As the mining industry starts to rely more on digitalization, the cyber threat becomes more top of mind. While the mining expert said that there haven’t been any market-changing losses concerning cyberattacks to-date, it is becoming an increasingly critical issue.
Other risks include tough geopolitical stances and climate change as different activist groups target bigger mining companies, though one threat that seems to have impacted almost every industry is not significantly hurting the mining sector.
“Natural disasters have not caused as many impacts as they have on other sectors of the insurance market,” said McGeorge. “I think the state of the market is definitely being driven by the technical underwriting, the fire, the mobile equipment and those sort of things more so than these natural disasters.”
Coming into his new role at Aon, McGeorge sees the firm’s global capabilities in the mining sector as second-to-none and believes that its access to the global banking centres and creative individuals that can provide bespoke solutions for clients helps Aon stand out.
“Aon’s global footprint allows a huge amount of knowledge-sharing,” he said, adding that a top goal for him in this position will be establishing the national mining practice. “We’ve got a really strong foundation and some really good expertise within Canada, and we’re looking to build that out and lean into Aon’s global capabilities – not just becoming a solidified national practice, but uniting and being collaborative with Aon’s global capabilities.”
