Canada is traditionally quite slow in taking up new insurance products.
Take cyber insurance as an example. Just across the border, the USA is trailblazing global cyber insurance product innovation and cyber risk mitigation. Canada, on the other hand, has been a little bit slower off the blocks, according to Ulrich Kadow, chief agent in Canada,
Allianz Global Corporate & Specialty Americas.
“Canada’s a bit unique in that take-up on a new insurance product is much slower than it is in other territories like the UK, the US, or Germany,” he told Insurance Business. “I don’t have an answer as to why that’s the case, but it’s something I’ve noticed and also something our key distribution partners have clocked into.
“Cyber insurance is a good example of a fairly new product. The take-up rate and adoption of risk managers to buy cyber is significantly slower in Canada than it is in the US. I’m assuming that’s in-part driven by the fact that they might not see as much cyber risk, or are in the process of comprehending the exposures, and therefore understanding the need to buy coverage for the risk.”
In the US, there’s a high level of publicity and notoriety around cyber incidents. American media activity around data breaches and cyber hacks “may have increased awareness disproportionately to Canada,” according to Kadow.
There also seems to be a bit of a ‘sweep it under the rug’ confidentiality culture in Canada, with smaller cyber events being withheld by corporations from the public domain. This tidy ‘behind locked doors’ system is a stark comparison to the US press preaching ‘BREACH’ from the rooftops. However, this could all change with the Canadian mandatory breach notification legislation coming into play.
But is this widespread confidentiality contributing to a slow uptake in
cyber insurance? Who knows. And it doesn’t explain the slow uptake of other new products that wouldn’t generate such snappy buzzwords in the press like “HACK”, “CYBERCRIME” and “PHISHING”.
“Overall, the insurance penetration does tend to be lower in Canada than it is elsewhere in the world – and that of course, does apply particularly to new products like cyber,” Kadow added.
Why do you think insurance production penetration is traditionally quite slow in Canada? Let us know in the comments section below.
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