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Insurance Market Outlook 2020

Rasikh Khan

Insurance News

At the beginning of each year, we delve into the “Crystal Ball” and predict where the insurance market is going for the next year. We have talked about the onset of the changing insurance market for several years now, and 2019 was when it rea...lly hit home; impacting virtually every line of property and casualty lines of business. The Cause Put simply, the foundation of the change in the market was largely reported as the big result of insurers paying out more in claims than the premiums they take in. This was an unsustainable business model, especially when ROI’s are not driving large multiples to offset it. We also feel that there is a lingering effect of some irresponsible underwriting over the past decade. The Effect Market cycles, or “corrections”, are common in many industries – and for the insurance industry, it’s resulting in three main areas of change: increased premiums, stricter underwriting rules, and reduced capacity (or an unwillingness to write business). So if a ‘triple whammy’ wasn’t a thing before, it is now - “thanks insurance industry!” … said no one ever. Some of the hardest hit industries continue to be transportation, hospitality, realty, and retail to name a few. However, virtually every industry sector and personal insurances have all felt the pinch and many large insurers are telling us not to expect the pressure on prices to ease up any time soon. We do see a bit of light at the end of the tunnel though. For “Best In Class” business, we think we will see a leveling off of the drastic rate increases; being replaced by more predictable, low-single digit increases. Cyber liability saw a huge spike in claims ratio from 22.3% in 2018 Q3 to 114.1% in 2019 – and continues to top the list as Risk Managers #1 concern, followed closely by Business Interruption. General Liability Rates Increasing There has been pressure on liability rates for some time, especially with claims in areas not as prevalent historically such as: psychological damage, concussions, post-traumatic stress disorder, and chronic pain. Illustrated by a greater representation of lawyers on files is the inflation in liability premiums. Property Insurance One trend of note in Q3 of 2019 was that there were marginally improved results in property lines – both personal and commercial – which should mean we will see a leveling out of increases in both of those areas of insurance. Automobile Insurance Claims ratios in the auto insurance sector continue to climb nationwide, led by an ongoing increase in personal auto claims payments. We hope that further increases will return to only single-digit increments going forward. Directors & Officers Liability (D&O) Following a prolonged flat-to-declining rate environment and an expansion of coverage for more than 10 years, Public, Private, and Not-For-Profit segments will see increased premiums this year. This is the result of higher claims frequency, severity, and increased loss costs. More

Sep

Cyber Crime and Transport

The concept seems a strange one. Why would cyber criminals go after transport? The usual suspects when it comes to cybercrime tend to be financial institutions – such as the recent hacks on Desjardins and Capital One. The answer, though, is rather simple. Cyber criminals go wherever there is technology. If that technology can be exploited in a boo...ming industry, then they’ve basically hit the jackpot. This is what is happening in the transport industry. There has been substantial growth in the transport industry largely spurred on by the introduction of innovative technology. How have we seen technology benefiting and making a greater presence in the transport industry? 1. Interconnected networks has streamlined industry-related processes e.g. the introduction of route planning incorporated with GPS services so that the best route is always readily available. 2. Improvements in safety features e.g. accident prevention sensors reducing the number of collisions on the road 3. Driver monitors censoring important physiological details such as fatigue or intoxication furthering keeping the roads safe To make sure that all this technology is being used effectively and efficiently, most organizations within the transport industry rely on centralised IT systems. This means that all of the necessary information regarding vehicles, their cargo, and the drivers can be stored in one place. However, as much as technology increases profits, it also increases vulnerability. The transportation industry has adopted technology at such a fast pace that the infrastructure to keep these IT systems secure hasn’t had a chance to catch up. This means that cyber criminals often target centralised IT systems to isolate and take control of cargo and equipment. If a hacker is able to gain access to the centralised system, then they have the entire organisation in the palm of their hands. The damage that can be done from such a position could be immeasurable. Let’s look at cargo as an example. A new tactic, called “fictitious pick-up”, is the current hottest trend with cyber criminals. In this crime, these criminals search for valuable loads on online load boards and, using false information, obtain contracts. Then it’s a simple matter of showing up with a truck, driving to the point of collection, and leaving before anyone is any the wiser. There is also business identity theft – where criminals create false documentation in a company’s name, learn pick-up locations and company information through online systems, and then arrive at the agreed-upon pick-up points to steal cargo. Ransomware is the cybercriminal’s bread and butter – and the transport industry is no exception to this. Hackers can implement ransomware to hijack a truck’s control system in order to suspect deliveries and strand drivers until the demanded ransom has been paid. In fact, a study from the University of Michigan found that trucks are far easier to hack into and control than a regular car. It seems crazy but because technology is so strongly integrated in these vehicles, hackers can break into these control panels and disable the brakes or affect the acceleration. It is a scary reality. Companies around the world lose hundreds of millions of dollars every year due to different forms of cyber breaches. The transport industry is no exception to this. At this point, you will want to know if you’re at risk. The simple answer is that if you don’t have protection against cybercrime, you are at great risk. As discussed in previously, cybercriminals are increasingly targeting medium-to-small sized businesses. Many may think that, since their company is not a big multinational corporation, that they are safe from this risk. Sadly, that just isn’t true. Smaller organizations lack the resources and in-house teams to tackle massive breaches and therefore are targeted at an increased rate. If you are concerned about your company’s safety, contact one of our licensed brokers today at This email address is being protected from spambots. You need JavaScript enabled to view it. document.getElementById('cloakb104072aed44ec8c98c99134c3c8d951').innerHTML = ''; var prefix = 'ma' + 'il' + 'to'; var path = 'hr' + 'ef' + '='; var addyb104072aed44ec8c98c99134c3c8d951 = 'better' + '@'; addyb104072aed44ec8c98c99134c3c8d951 = addyb104072aed44ec8c98c99134c3c8d951 + 'hubbardinsurance' + '.' + 'com'; var addy_textb104072aed44ec8c98c99134c3c8d951 = 'better' + '@' + 'hubbardinsurance' + '.' + 'com';document.getElementById('cloakb104072aed44ec8c98c99134c3c8d951').innerHTML += ''+addy_textb104072aed44ec8c98c99134c3c8d951+''; or call us at 905-696-9090. Let us help you stay protected. More

Sep

Data Breaches Cause Long-Term Damage To Businesses

According to a major study conducted by KPMG, as much as 84% of Canadians state that they will reconsider doing business with an organization that has suffered a data breach. To those who have kept their finger on the pulse, this comes as no surprise. As we have mentioned before, cybersecurity is becoming an essential part of any organization’s in...surance plan in the modern day. The consulting firm surveyed thousands of people and found that, not only did a vast majority of people distrust businesses after they had suffered data breaches, but also that approximately a quarter of those people had their login credentials stolen as a direct result of data breaches. Whilst cybersecurity has been a major topic of discussion in tech circles for the better part of a decade, this discourse has found its way in the mainstream in recent years. Why is this? Simply, more Canadians are affected by data breaches today than ever before. This has raised awareness of the issue in the general populous. Another important factor was the timing of this survey. Only a month prior, the federal government revealed that thousands of stolen usernames and passwords has been used to apply for various services. Since then, the Treasury Board of Canada has revealed a whopping 48,000 Canada Revenue Agency accounts had suspicious activity attached to them after cyberattacks occurred in July and August of 2020. Furthermore, KPMG stated that cybersecurity threats had been greatly heightened by COVID-19 as people began using more online accounts for work and leisure. “Cyber criminals are ruthless. They’re after your identity, login credentials, money, and sensitive information,” said Hartaj Nijjar; a national leader in cybersecurity. Moreover, another reason for this surge in cyber awareness amongst the population is that the government itself led a national public awareness campaign on the dangers of inadequate cybersecurity. The messaging for the people seems to be clear as ever – if an organization does not take care of its customers’ data, the vast majority of those customers will take their business elsewhere. There is a demand for companies to be held accountable with their cyber security that has never before been seen. KPMG’s survey further showed that 90% of responders were reluctant to share any personal or financial information with an organization that had suffered a data breach. This could prove to be especially destructive to organizations in the online age as the emphasis on a good reputation is more important today than ever before. More and more Canadians are using online platforms in all aspects of their life; something that is caused either by necessity due to the Coronavirus and/or because people are becoming more technologically inclined. This has clear consequences for organizations that do not take cybersecurity seriously as they will no doubt be left behind and lose millions in revenue. If your company does not have adequate cyber protection, now is the time to act. Cybersecurity is no longer an idea of the future, it is a necessity of the present. To learn more about how to keep your business protected, email one of our licensed experts today at This email address is being protected from spambots. You need JavaScript enabled to view it. document.getElementById('cloak4f2c0950f9fe7cd34ea5fb2f435a9b84').innerHTML = ''; var prefix = 'ma' + 'il' + 'to'; var path = 'hr' + 'ef' + '='; var addy4f2c0950f9fe7cd34ea5fb2f435a9b84 = 'better' + '@'; addy4f2c0950f9fe7cd34ea5fb2f435a9b84 = addy4f2c0950f9fe7cd34ea5fb2f435a9b84 + 'hubbardinsurance' + '.' + 'com'; var addy_text4f2c0950f9fe7cd34ea5fb2f435a9b84 = 'better' + '@' + 'hubbardinsurance' + '.' + 'com';document.getElementById('cloak4f2c0950f9fe7cd34ea5fb2f435a9b84').innerHTML += ''+addy_text4f2c0950f9fe7cd34ea5fb2f435a9b84+''; or call us at 905-696-9090. Let us help you stay safe! More

Sep

Natural Disasters & Insurance

The world seems to simultaneously be both on fire and under water. There has been a spree of natural disasters all around the world – from the wildfires and floods in Europe and Asia in July to the wildfires and floods in Canada and America today. We have previously covered how climate change is worse than we all think – but what does this ...mean from an insurance perspective? In short, “climate change is exacerbating extreme and freak weather events so rapidly that even the insurance industry is struggling to keep up.” (Bloomberg) These rapid extreme and freak weather events are now making their consequences felt in the form of billions of dollars worth of losses in the insurance industry. Swiss RE AG, for example, released a mid-year report which showed that insurers had to cover $40 billion in losses caused by natural catastrophes – up $7 billion from the 10-year average. The problem seems to be two-fold. Firstly, these events are happening quicker than ever. Once-in-a-100-year weather events have turned into semi-regular occurrences. Take the winter storm in Texas this past February as an example. Despite being a record storm causing approximately $15 billion in losses, it has quickly been forgotten due to how many other environment catastrophes have occurred since then. Secondly, these weather events are becoming more powerful and damaging with every iteration. Weather events such as snowstorms, hail, tornados, and wildfires which have historically caused relatively minor damage are now becoming increasingly stronger. Combining the increased strength of these weather events with an even greater frequency leads to insurers not being able to rely on previous models. According to Swiss Re, “the insurance industry needs to upscale its risk assessment capabilities … and expand its contribution to financial resilience.” Erdem Karaca, who overseas catastrophic perils in the American region for Swiss Re, added “models are less mature for secondary perils. A peril like wildfire is also impacted by humans. Ninety percent of ignitions are caused by humans so it is difficult to quantify through models.” However, it isn’t all doom and gloom. According to Karaca, modellers have gotten much more sophisticated over recent years at predicting flood risk – one that is particularly relevant right now with extreme floods being seen all around the world. Whilst better modelling and better information will mean higher premiums for some, it will also mean a much higher level of protection. Ultimately, we must all do our part in slowing down climate change and going as green as possible – whether that is through individual actions or through pressuring corporations to be more environmentally friendly. If we all work together towards the same goal, there is no limit to how much of a positive change we can all make. More

Aug

Cyber Insurance 101 - A Primer

Cyber insurance is a bit of a catch all and covers cybercrime such as social engineering, ransomware (extortion), electronic compromise, breaches, phishing schemes and the like. It is without a doubt the single biggest claim area for insurance, in the first half of 2021 we saw seen more cyber claims then in the past 5 years combined. Given ... More

Jul

How Will Group Benefits Change in 2021 & Beyond?

There is no doubt that the pandemic has affected the working world significantly – with a rapid shift to working-from-home occurring as a direct result. A change of this magnitude, then, means that traditional benefits plans are no longer serving their purpose and must also change in kind. Here are some changes you can expect to see in an i...ncreasingly virtual workplace. HRIS Systems Will Grow Human Resources Information Systems, or HRIS, are a crucial part of streamlining administrative work in order to achieve better efficiency. In turn, this allows for enhanced access to health services for employees. As organizations grow and inter-departmental work becomes the norm, it is imperative to have a system that allows for seamless communication within those departments. This means that more and more organizations are looking into agnostic HRIS systems that can work in their existing structure with any other program already in place. Ultimately, these systems ensure simplification of renewals as well as a push for virtual enrolment – a trend that shows no signs of stopping anytime soon. Better Use of Analytics Analytics have long-been an important aspect of any company’s growth; however, the ways we use them and the capabilities surrounding analytics are always changing. Whereas in the past it may have been enough to offer paramedical and dental coverage alone, that is no longer the case. Coverages for childcare or elder care, as well as mental health assistance, are becoming necessities for employers who want to offer their workers a better working environment. Those who succeed will adopt forward-thinking, analytically backed modules that offer personalised coverages based on what the data says. Today’s analytics allow for deeper, more insightful information on the needs of the employees so that personalised flex plans can be created. It is no longer competitive to only analyse broad data. Expansion of Virtual Care Though virtual care was always going to be the future, the pandemic has significantly brought forward its introduction to the mainstream. In turn, this has led to a major expansion of virtual care services – and experts suggest that this trend is one to keep a close eye on. For example, telemedicine initially was only used for primary care but has since grown broadly. In fact, there has been a greater adoption of virtual care services in the first half of 2021 alone than there had been in the previous decade altogether. Another major driving force behind the adoption of virtual care is how accessible it allows mental health assistance services to be. The data is clear on the subject – it is imperative for mental health services to be readily available on-demand in order to offer the best possible working environment for employees. Employers who don’t take this data seriously risk being left behind. Prevention Mindset There has been an attitude shift amongst Canadians in the past 12 months especially in regards to healthcare – and that shift is towards a prevention mindset. The focus amongst Canadians now is not just on how to get well, but rather more importance is being placed on how to stay well. This means that employees now look through benefits plans and gravitate towards those plans that help in this endeavour. An example of this could be incorporating a virtual physical fitness platform – one that offers group or individual fitness classes with challenging coaches but also gamification and recognition of employees’ fitness journeys. Any organization that does this is sure to stand out. Good physical fitness is highly linked to strong mental health – and offering these services may prevent more difficult mental health struggles for many employees. Furthermore, with working from home now an established part of the workflow, preventing musculoskeletal injuries will become majorly important in order to keep the rising costs that come with chronic health problems at bay. Being proactive today will save organizations significant amounts tomorrow. Financial Literacy and Wellness It comes as no surprise that the past 12-18 months have been a time of financial stress for many Canadians – with businesses closing, jobs being lost, and retirees beginning to feel financially insecure. Though financial literacy and wellness has traditionally been part of a complete benefits package, the resources required change from generation to generations. As the baby-boomers are replaced in greater magnitude by millennials in the workforce, the emphasis switches from retirement to issues surrounding paying back student loans and saving up to buy a house. Financial literacy and wellness services must adjust to these new challenges. Potential For New Specialty Drugs Though nationalised pharmacare is likely to take a while longer, questions are being asked of the role of privatised pharmacare and costs can be managed better. In the current market, the pharmaceutical pipeline is endlessly filled with drugs that cost thousands upon thousands of dollars per year – and it is critical to manage these costs if a sustainable drug plan can be made. In this regard, information is power. Advisors and sponsors alike will require up-to-date information as questions surrounding these drugs develop in real time. The best way to make the right decisions is by having the right information. Cannabis Will Receive A DIN Cannabis was officially legalized in Canada about two years ago – and in that time, the cannabis market has grown substantially. Due to this, there is now an increased push to research cannabis in order to understand the true efficacy of the drug. New clinical trials are approved regularly and the findings that will come from these trials will significantly shape how cannabis is used in a medical capacity. This all means that cannabis is approaching a threshold – and on the other side of this threshold is the likelihood that it will receive a Drug Identification Number (DIN). Once that becomes reality, organizations will find it much easier to offer cannabis coverage – as then it can be treated like any other drug. Once cannabis receives a DIN, it will signify the biggest change to drug benefits in the past 10 years. Advisors, sponsors, and organizational leaders alike should take this time to prepare for this change as it will shape the landscape going forward. As the Benefits industry continues to undergo changes, it can be overwhelming to try and keep track of all the trends. To better understand how you can stay on top of these trends, contact one of our licensed experts today at 905-696-9090 or simply email us at This email address is being protected from spambots. You need JavaScript enabled to view it. document.getElementById('cloak43febd07fb2c42e1d95a946905a2ea50').innerHTML = ''; var prefix = 'ma' + 'il' + 'to'; var path = 'hr' + 'ef' + '='; var addy43febd07fb2c42e1d95a946905a2ea50 = 'better' + '@'; addy43febd07fb2c42e1d95a946905a2ea50 = addy43febd07fb2c42e1d95a946905a2ea50 + 'hubbardinsurance' + '.' + 'com'; var addy_text43febd07fb2c42e1d95a946905a2ea50 = 'better' + '@' + 'hubbardinsurance' + '.' + 'com';document.getElementById('cloak43febd07fb2c42e1d95a946905a2ea50').innerHTML += ''+addy_text43febd07fb2c42e1d95a946905a2ea50+''; . More