Complex risk is big business. According to research from IBC, the industry, encompassing complex risk insurance, contributed approximately $8.5 billion to Canada's GDP in 2022 – generating 115,000 jobs and $8 billion in labour income. For William Chan (pictured), president at BrokerTeam Insurance Solutions, it’s about seizing these opportunities in the commercial space while the market is soft and carriers are open to business.
“It’s a highly competitive environment right now,” he told IB. “Part of what we're doing is a lot of focus on recruiting and developing new talent in the commercial space. We're also working on redeploying our sales force towards this area and making it a key focus.”
However, Chan was keen to point out that they’re very consciously trying to evolve the organization to be more commercially focused – something which is looking positive.
“I think it's such a cliche to say that providing quality services is key,” he said. “It's a cliche, but at the same time it is true. The reality is business and clients are often underserved by their current provider, and they need some attention from brokers. They need brokers to approach them in a customer-oriented manner. Brokers perhaps haven’t visited them in some time, and maybe their coverage hasn’t been reviewed. These are excellent opportunities for us to step in and make a difference.”
Part of this customer-focused strategy hinges on uncovering underserved markets – such as cyber insurance. According to research from IBC, cyber liability premiums in Canada rose from $18 million in 2015 to $550 million in 2023, with the average cost of a data breach in Canada set at a staggering $6.9 million.
“We want to get deeper into cyber insurance,” Chan told IB. “It's been around for some time, and it remains to be a segment that's using that’s underserved. The uptake for Canadian businesses is still very low – I believe it’s 20% or less. So there’s a lot of opportunity in that space – and going in that direction actually opens up for other discussion for the clients’ other insurance needs.”
The insurance industry is in constant flux, driven by new regulations and the rise of emerging risks. For Chan, the first step in addressing regulatory changes is to adopt a client’s perspective.
“We have to first take the client's perspective and understand the potential impact of the new regulations,” he said. “For example, there are proposed changes to provide consumers with the option to opt out of most mandatory accident benefits coverages. But as brokers, we have to ask ourselves, by offering this option, what is the impact on the driver? In case of injury, will the savings be worth it?”
Chan stressed the importance of education and transparency in these situations.
“Ultimately, consumers have the decision-making power. At the same time, we have a responsibility to first understand the impact, then proceed to advise and educate. It’s about helping the client make the right decisions,” he said. “The only effective way to manage change is to stay one step ahead. With this opt-out option, for instance, it’s not here yet, but we’re already analyzing the issue, engaging in dialogue with our brokers and staff, and providing training. When the time comes, we’ll be well-prepared to give clients the proper advice.”
Beyond regulatory challenges, the insurance industry is grappling with increasing losses from catastrophic weather events. For instance, in 2023, catastrophic weather events resulted in insured damages totaling $3.1 billion, marking it as the fourth worst year for insured losses in Canadian history.
And Chan told IB that 2024 has been even more devastating.
“Year to date, catastrophic events have cost the industry upwards of $8 billion,” he said. “If you ask about the future of commercial insurance, I’d say carriers are going to have to respond to return to higher profitability. We may see carriers follow the example of personal lines, where flood or overland water coverage becomes restricted based on zoning. They might also sharpen requirements for infrastructure maintenance, such as updating roofs and electrical systems.”
While these changes may not be entirely consumer-friendly, Chan believes they’re necessary in order to really thrive in the coming month.
“The insurance product may evolve over time to address these challenges,” he said. “When we talk about addressing client challenges, it’s about ensuring our colleagues are equipped to engage with and guide clients through these complex issues. Our goal is to stay ahead, understand the impact, and ensure our team is ready to provide the best possible advice.”
