Small businesses face an evolving landscape of economic pressures, regulatory shifts, and technological advancements. For insurance brokers, adapting to these changes is critical to providing small business owners with the coverage they need to succeed. At AA Munro Insurance Brokers, they’ve taken a proactive approach by creating a dedicated unit led by Elisha Deamel (pictured).
"We have actually created a small business unit within AA Munro," said Deamel. "I'm the Small Business Unit team lead for our group, for our team, and we handle all of the small business that comes through our brokerage. We make sure we have a dedicated team that understands what markets we have, the risks that are coming in… So we understand the risks, we understand our markets, we make sure that we stay up to date on appetite, and we have a lot of options for our small business clients."
But it’s not just having a dedicated team that makes a difference – insurers have to keep a close eye on fluctuating market trends which affect the accessibility and cost of coverage. Luckily for small businesses, these recent changes have been favourable.
"I'm finding that the markets in general are starting to soften for us,” Deamel said. “More and more of the new business requests that we have come in, it's been a little bit easier, I will say, over the last couple of months to find coverage and get those taken care of.
"Whereas the same time last year, we were in a more, I would say, more hard market. It was a little bit more difficult to place the small business and to find the right premium. [Now] that’s definitely softening up with our markets and being able to get that for the insured."
However, some challenges persist, particularly in cyber insurance. Data from IBC found that cyber insurance claims in Canada surged by 50% in 2023, with the average cost of a data breach in Canada landing at $7 million.
"Cyber is still something fairly new that clients aren't quite understanding," Deamel said. "They're not quite understanding what coverage is offered or even that they need it. Anybody that's got any database that's holding any personal information obviously should have some sort of cyber coverage in place.
“I think that we will get there with the small business clients. Again, I think they're so price-focused, and they just want what they need to be able to get their job done, that sometimes they don't really understand or see what the coverage is or what value it provides."
Small businesses often operate on tight budgets, and insurance can be perceived as an additional cost rather than a necessity. Deamel stressed the importance of education in bridging this gap.
"For us, where we do operate in the smaller clients, I think a big thing is the education portion,” Deamel said. “A lot of them don't understand what it is that they're purchasing. For me, I know at the end of the day, when I'm dealing with a client, they need a CGL [Commercial General Liability] policy again to either bid on a job or get a job done, or somebody has requested a certificate. They need to have this coverage. They're not sure what it's even for."
And, by breaking down complex insurance concepts into understandable terms, brokers can demonstrate value.
“A big part of that, for me, is just an education piece on what a basic CGL covers, you know, and how that protects them,” Deamel said. “And I find once I've had that conversation and explained it to them … once I've done that, I find that that does add value, and they can see it a little bit more and understand what it is they're actually covering – not just, 'Oh, this is something else I have to pay for in order to operate my business.'"
Beyond selling policies, brokers are becoming trusted advisors for small businesses, offering guidance on risk management and business continuity. "I think that falls on the education piece," Deamel said. "A big part of it is educating them on the coverages available, what key coverages make sense for their business, what they should be insuring.
"Once you've laid out the recommendations and you've explained the coverages to them, then they have a better understanding of what they can select and maybe choose to forego for the time being."
The personal relationship between brokers and clients remains critical, even in an era of online insurance purchases.
“I know a lot of people go buy an insurance policy online or through the computer, but you're not having those conversations with them,” Deamel said. “I've had conversations with existing clients just on potential claims that have come up where, you know, a customer is threatening but they actually were not negligent in any way, and that scares them, right? And just having that broker to call – 'This has happened, what should I do?' – makes them feel better."
With the rise of cyber threats, climate risks, and supply chain disruptions, businesses must stay prepared. Deamel noted that while supply chain issues have not been a major concern for AA Munro’s client base, the company remains proactive.
“We’re locally owned and operated. We don’t see a lot as far as the supply chain. We have a lot of businesses that only operate in the Canadian space, so that has not been a huge threat."
However, staying ahead of potential risks is essential.
"I think the biggest thing is to be proactive in that sense, and take a look at what clients might need our support so that we can be prepared to be there for them in the event that something does affect their business,” Deamel said. “It’s about how we can help them through that.”
