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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

Jun

Temperature Screening & Glove Use - Insurance Industry Advice

Industry sources are telling us that business’s may expose themselves to legal risk if they don’t adhere to all government recommendations to protect their clients and employees from the spread of coronavirus while re-opening, legal professionals warn. As social distancing rules loosen in various parts of the country, businesses are looking for way...s to ensure customers and staff entering their premises are not showing signs of carrying the virus. Some are implementing temperature readings, for example, or mandating the use of gloves. But don’t just rely on just one measure or another, legal experts say. Health and safety measures such as temperature checks and glove use should be used in conjunction with other methods to prevent the transmission of the virus. Screening for temperature and wearing gloves don’t in and of themselves protect clients from liability risks, according to lawyers from Miller Tomson. They have published multiple news bulletins about insurance law developments during the COVID-19 pandemic. Commercial clients have many factors to consider when screening their customers and employees for COVID-19, wrote Karen Weslowski, Vancouver-based partner at law firm Miller Tomson and Stefanie Gladders, an articling student. Debra Curcio Lister, an Edmonton-based partner, cautioned separately that while face coverings have been recommended by the Public Health Agency of Canada (PHAC), there hasn’t been any guidance on the use of consumer-grade disposable gloves. “To avoid liability, businesses should comply with all of the government’s recommendations upon re-opening in terms of protecting their employees, as well as reducing the spread of COVID-19 among the public,” Curcio Lister wrote. “Such recommendations are subject to change, including the use of gloves, as health agencies learn more about the virus and determine the best ways to combat it. Therefore, it is important that businesses regularly monitor the evolving guidelines and remember that gloves may not protect you from COVID-19 nor liability.” Relying too heavily on one measure could create risk exposure. For example, the purpose of temperature testing is to screen for those who may have a fever, one potential symptom of the virus. The novel coronavirus was declared a pandemic by the World Health Organization (WHO) on Mar. 11. “One of the main problems with using temperature testing as a screening method for COVID-19 is that as many as 50% of carriers are asymptomatic,” Weslowski and Gladders wrote. “This allows them to pass the screening and potentially infect large numbers of other employees or customers.” Another issue around temperature screening is that a fever is not always the first symptom that shows up in those who test positive for COVID-19. Sometimes, it doesn’t develop at all. Therefore, clients shouldn’t be heavily relying on temperature screenings when allowing access to its place of business, Weslowski and Gladders said. “It is only partially effective and should be used in conjunction with other screening methods,” they wrote. Some supermarkets and restaurants open for takeout are using temperature screening. British Columbia’s Restaurant and Foodservices Association proposed temperature screening both guests and staff as part of the recommended measures to safely begin reopening, said Weslowski and Gladders. “However, the chief public health officer of Canada was quick to condemn the idea, citing the ineffectiveness of temperature screening during the SARS outbreak in 2003.” Using gloves is another potential measure to prevent the spread of COVID-19. However, Curcio Lister cited information from the WHO that said wearing gloves in public is not considered an effective way of preventing spread. “First, people often wear the same set of gloves everywhere,” she wrote in the bulletin. “This results in touching various surfaces causing the virus to be transmitted through the gloves to different locations.” Even though the PHAC has included an advisory that employees should wear disposable gloves if they come into contact with infected people or surfaces under its re-opening recommendations, officials maintain that frequent hand-washing is considered the best way to prevent spread, she commented. Source: CDN Underwriter Magazine More

Jun

Risk Management & Insurance

Restarting a business after coronavirus lockdown – a risk manager's perspective Countries are easing their lockdowns in different ways, but businesses are facing similar challenges to resume their activities. Douglas Barnett, director for mid-market and customer risk management at AXA UK, is back at work after recovering from coronavirus. With his ...team, he has designed a series of guides that give practical advice, sector by sector, on how to restart a business safely. The lockdowns that we`ve been going through, across five continents, are unprecedented. The situation is like nothing people have experienced before; and it is like nothing businesses have experienced before. Of course, some companies close for the holiday, but that usually lasts two weeks – not several months. And summer or festive breaks are very different from entire countries grinding down to a halt, with only key activities being maintained. No entrepreneur has ever had to restart their business amid such human and economic distress. One essential thing that business owners and managers must bear in mind as their local lockdown is eased or lifted: the duties they owe to their employees and customers are not eased, they are enhanced. Businesses need a plan to resume activities in a controlled and safe manner. And if some activities cannot be carried out safely, they should not be undertaken at all. For various reasons, it is unlikely that all staff will come back to work at once. Some may have childcare or transport issues, for instance. Others may need to self-isolate. Or perhaps the business will restart gradually, bringing people in progressively. These restarters will need to be trained, or at least inducted, about the new working arrangements. It is also for business owners to understand and, importantly, to support the mental wellbeing of their staff: many may fear for their own health or their loved ones’, and some may be grieving. PROTECTION AND DISTANCES Businesses need to provide their employees with the right protective equipment, like gloves and masks and perhaps visors. They need to share guidance with them on how to correctly place, wear and remove face masks. If employees already wore PPE before the pandemic, employers must ensure that protective equipment meets the COVID-19 requirements. The premises may need to be altered or reorganized to allow for greater distance between colleagues. In particular, face-to-face workstations must be avoided. Shift patterns will reduce the number of people present at one time and allow staff to avoid peak travel times. Staggered meal breaks may need to be considered. For deliveries, a new protocol may be needed to reduce contacts. Shops need arrangements for lines, door control to limit the number of people inside, and a one-way flow between narrow aisles. Neighboring shops need to consult each other and find arrangements for their lines not to overlap. HYGIENE Workplaces will want to deep clean their toilets, canteen and other specific areas before reopening, and then implement a thorough regime of sanitizing. Obviously, particular attention should be given to desks, computers and phones – and hot desking could become a thing of the past. Besides, the trash will need to be emptied frequently to avoid a build-up of used gloves and masks. Hand washing is a vital measure, so hot water, soap and paper towels must be available at all times. And hand sanitizer should be available, particularly at points of entry and exit. Shops may want to reduce opening hours to allow for more cleaning before and after receiving customers. Baskets and trolleys should be wiped after every use. And card payments should be encouraged to avoid cash. SECURITY Before restarting after such a long closure, businesses need to run several checks. The building must be inspected for signs of deterioration or damage needing repair. Security installations also need to be checked; they include alarms, CCTV, sprinklers, fire doors and extinguishers. Equipment such as heavy plant needs to go through start-up checks. Water should be reopened slowly to avoid water hammer, which could damage pipes. The taps and showers that have been left unused for weeks need to be run for five minutes to minimize the risk of legionella. Fleet operators need to check their vehicles are road-legal, with safe tires, brakes and levels. Drivers should be confident about their skills and they will need to be trained on revised procedures, including how to work in compliance when at customer premises. SUPPLY CHAIN While the security checks are somewhat similar to what needs to be done after a usual temporary closure, restarting a business after a national or even international lockdown brings about many logistic challenges. A business will need to assess how long its stock levels can last while its supply chain ramps up. It will need to talk with its suppliers, especially if they provide critical spare parts. The priority should be to speak with tier-1 suppliers first and to secure adequate supply for the next six months. If a company uses temporary premises, perhaps to stock more, it will need to tell its broker to arrange appropriate cover. It will need also to take into account its logistics partners’ distribution capacity. Businesses restarting their activities need to take all those precautions – and they need to be able to prove it. They need to document how they’ve assessed the risks, designed the cleaning regime and informed their staff about the new rules. More importantly, they need to put their employees and their customers at the centre of their restart plan. They should consider people’s anxiety about returning to their workplace. And they should understand their customers’ needs, which will likely have changed tremendously. Source: Insurance Business Magazine More

Apr

The Canadian Emergency Response Benefit - What You Need To Know

The Canadian Emergency Response Benefit (CERB) portal is finally live as of Monday, April 6. This is a resource for all those who have lost their jobs because of the COVID-19 pandemic. Canadians who qualify for this benefit can visit the Canada.ca website for more information or call the toll-free line at 1-800-959-2019. There are two ways to acce...ss the funds – which amount to $2,000 a month for up to four months – either by setting up a direct deposit or by mail. The direct deposit payments should between three-to-five days to come through whereas the payments by mail may take up to 10 days. Those who have been applying for employment insurance will be automatically enrolled into CERB. With a high volume of applicants expected, a system has been put in place to ensure that the portal does not become overloaded and crash. Applications will be staggered over the work week based on birth months. This means that those born in January through March should apply on April 6 and people born in April through June should apply on April 7. Those born in July through September should apply on April 8 and finally those born in October through December should apply on April 9. On April 10 and moving forward however, applications will no longer be dependent on birth month. Those who apply online will need to sign into their CRA My Accounts and follow the procedure set forth on the website. This will include selecting the period the application is for as well as declaring that they qualify for the benefit. Once the right payment information is confirmed, it should only take three-to-five days for the direct deposit to come through. If applying on the phone, call the toll-free line listed above – this is a dedicated CERB line. Applicants who choose to use the line are advised to have their Social Insurance Number and Postal Code at hand to verify their identity. While these services will run seven days a week, they will be closed from 3 A.M. ET to 6 A.M. ET for maintenance. This benefit is available from March 15 to October 3rd – with the deadline for these applications being on December 2nd. There are certain criteria that those who apply for CERB need to meet. This includes being over the age of 15 and residing in Canada and having stopped working because of COVID-19. Moreover, applicants will need to have had an income of at least $5,000 in 2019 or in the 12-month period prior to the date of the application. Applicants will also need to have been or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week-period. The aforementioned income of $5,000 can be from a combination of any of the following: employment, self-employment, maternity and parental benefits under EI, or similar benefits paid in Quebec under the Quebec Parental Insurance Plan. The bottom line is that this benefit only applies to those who have stopped working and receiving income because of COVID-19. If you have any questions regarding how this could effect your insurance or benefits, contact one of our experts today at This email address is being protected from spambots. You need JavaScript enabled to view it. document.getElementById('cloak8a9752073d8324af751ab08e97000548').innerHTML = ''; var prefix = 'ma' + 'il' + 'to'; var path = 'hr' + 'ef' + '='; var addy8a9752073d8324af751ab08e97000548 = 'better' + '@'; addy8a9752073d8324af751ab08e97000548 = addy8a9752073d8324af751ab08e97000548 + 'hubbardinsurance' + '.' + 'com'; var addy_text8a9752073d8324af751ab08e97000548 = 'better' + '@' + 'hubbardinsurance' + '.' + 'com';document.getElementById('cloak8a9752073d8324af751ab08e97000548').innerHTML += ''+addy_text8a9752073d8324af751ab08e97000548+''; or by simply calling us at 905-696-9090. Source - CBC More

Mar

COVID-19 Update

The situation with the COVID-19 pandemic continues to evolve and we wanted to provide you with an updated overview of the changes we have implemented to keep business running as smoothly as possible. The insurance industry is deemed an essential service along with mail and courier services, so we are here and fully operational. We wanted to reach o...ut and address some of the questions we have been receiving regarding our office and your insurance coverage. What has changed at Hubbard Insurance? We remain operational; all staff have secure, confidential, and full system/phone access from home offices. Our physical office is closed and we will not be having face-to-face meetings. However, we are fully reachable via email and phones in the traditional way, as well as video conference as necessary. What is the impact on my insurance coverage if I have to close business locations? Policy wordings do restrict coverages when locations are unoccupied or vacant. However, in the current situation this is an area where insurers are indicating they will show some flexibility as they completely understand the necessity of everyone needing to play a role and either work remotely or close their business completely. While this clause will only kick in typically over the 30 days mark, we think it is a wise risk management process to have someone check on your business location every 2-3 days just to make sure the heat is still on and everything is okay. Government of Canada Announcements The Government of Canada announced an aid package to help Canadians and businesses cope with COVID-19, including income supports, wage subsidies, and tax deferrals. The Emergency Care Benefit, of up to $900 bi-weekly and 15 weeks, provides income support for workers, including self-employed who have to stay home and do not qualify for employment insurance. There is also an Emergency Support Benefit to provide up to $5 billion for workers not eligible for EI and who are facing unemployment. What if I can’t pay my monthly premium or miss a payment? We are, as previously indicated, still waiting for formal written positions from each of the insurance companies; however, they are indicating: · They will NOT cancel policies for non-payment in the current environment · They will NOT charge NSF fee’s · They will offer some flexibility on monthly withdrawals should there need to be a delay in payment(s) Why doesn’t Business Interruption coverage for my business respond due to COVID 19? The current Covid-19 pandemic situation we are all faced with is not something that insurance polices are designed to cover. Business interruption insurance is usually triggered only because of a peril covered under a commercial property policy as previously indicated. As such, we are expecting to see insurance carriers take the position that COVID-19 does not trigger coverage and generally speaking, that this is a largely uninsurable event. We are however, taking the position that it is in our clients’ best interests – if they are not sure and this situation has had an impact on their business – to report a claim and let the insurance company come back with a formal decision on coverage. Our feeling is that if the Government does offer support for businesses that have lost income, we imagine that it would require evidence that the insurance policy does not respond – before a businesses can access those funds. Therefore, in our view, having a formal written position from the insurance company could be a valuable tool. To this end, we are advising business insurance clients to maintain records detailing any reduction in revenue and other costs. What steps should we take in regard to our Group Benefits Coverage? As you can probably expect, there have been many questions asked by employers regarding the impact to Benefit Plans resulting from Covid-19. Most common questions (so far) have been. · What if my benefits are up for renewal now? o Every situation is different and insurers recognize the challenging times we are in. There may be delays with renewals getting to you. Premium payment deferments may be able to be arranged but again this is insurer dependent. It is best to have a conversation with us in advance to better understand your situation before we approach insurer(s) on your behalf. · What if I have to lay off employees or reduce their hours? What happens to their benefits? o Insurers are stepping up here and allowing for continuation of benefits (Short Term Disability and Long Term Disability on a limited basis) for 90 days and this is subject to change depending on how long we are under this Covid-19 cloud. Again, it is best to have a conversation with us. · What if I have to reduce work hours for my employees? o Effective immediately and until May 31st, 2020 most insurers are waiving the ‘minimum hours’ required to be eligible for benefits. · Out-of-country trip limit increases o If an employee and/or family member is quarantined or unable to get back to Canada in a timely fashion, these exceptional cases will be reviewed on a case-by-case basis with a view to providing further support. · Providing paramedical services virtually o Many providers have started offering services virtually (i.e. Dietitian, Naturopath, Physiotherapist, Psychologist, etc.) and most insurers are accepting these claims assuming they are part of your plan design and covered services. Our office is participating at the provincial level on calls with brokers and insurers and as more information is available, we will reach out to you and will, as promised, continue to keep you up to date. This is, of course, still a very fluid situation. In the interim, if you have questions, reach out and talk to us. We are here for you. Useful Links 5 Tips For Working From Home Essential Workplaces in Ontario Canada’s Economic Response Plan Again, we are available to connect with you by phone or email if you have questions or concerns. We greatly value our relationship with you and maybe it is time that all of us take stock of what really matters, family & community. Let us look after each other, be good neighbours - stay healthy and take care! More

Mar

Surge In Demand For Delivery Drivers

Frontline workers represent the best of us right now – the medical professionals putting themselves at risk every day to ensure our safety, the service industry workers working tirelessly to keep everyone fed, and the delivery drivers who make sure we can get our food without exposing ourselves to the virus. This in turn has resulted in a demand f...or delivery drivers. Some may think they have auto insurance in place and therefore can jump right in and start deliveries BUT do they have the right insurance coverage? Are they protected? According to Pete Karageorgos, the director of consumer industry relations at the Insurance Bureau of Canada (IBC), there are a few things to take into consideration. He states that “Anytime you’re using your vehicle for a business purpose, anytime you’re turning your car from a private passenger vehicle into a commercial, money-making enterprise … that use needs to be noted by your insurance company so they are aware of your changing risk.” Using your vehicle for deliveries turns it’s use into “business use” and you must advise your insurance company to ensure you have the proper coverage in place to protect you and others in case of an accident or claim. With the government forcing restaurants to restrict business to take-out and delivery services only, the demands for delivery drivers is expected to surge. Major corporations such as Walmart Canada and Dominos have stated they will be mass hiring delivery workers . s some people lose income because of this pandemic, many will turn to delivery as a means of getting by- but it isn’t as simple as just using your care to deliver goods. The IBC have made it clear to their customers that they need to let their insurance companies and brokers know if they are planning on pursuing work in delivery. If adjustments aren’t made to policies that do not account for these changes, it could leave delivery drivers at increased risks for not being able to access claim payments if something was to go wrong. Pete Karageorgos adds that “insurance is based on the principle of utmost good faith and that requires the client, the insured, to notify their insurer of any changes to their driving habits [and] to their risk factors,” and that “It’s up to insurance professionals to educate people and advise them of why it’s necessary to call in the change — and to outline the possible repercussions if that doesn’t happen and there’s a claim.” On the plus side, if your policy already covers deliveries, then a surge in demand for deliveries is highly unlikely to cause an increase in premiums at this time. To understand what your policy covers during this time, reach out to our expert brokers by emailing us at This email address is being protected from spambots. You need JavaScript enabled to view it. document.getElementById('cloak1dc7742a9f5ae26567751909ab268ae5').innerHTML = ''; var prefix = 'ma' + 'il' + 'to'; var path = 'hr' + 'ef' + '='; var addy1dc7742a9f5ae26567751909ab268ae5 = 'better' + '@'; addy1dc7742a9f5ae26567751909ab268ae5 = addy1dc7742a9f5ae26567751909ab268ae5 + 'hubbardinsurance' + '.' + 'com'; var addy_text1dc7742a9f5ae26567751909ab268ae5 = 'better' + '@' + 'hubbardinsurance' + '.' + 'com';document.getElementById('cloak1dc7742a9f5ae26567751909ab268ae5').innerHTML += ''+addy_text1dc7742a9f5ae26567751909ab268ae5+''; or calling 905-696-9090. Source: Canadian Underwriter More