Insurance Market Outlook 2019

Insurance Market Outlook 2019

As in the past, we continue to monitor the industry and give an overview of where we feel the insurance market is at, how it will impact both availability and cost of insurance for our clients.

Industry wide we see ourselves in a ‘hard-market’ environment, which essentially means that we are seeing increasing premiums and tightening underwriting rules. This is due in no small part to a large uptick in natural and manmade disasters.

The insurance industry reflects not only local claims trends and costs but is also impacted significantly by events continent wide and globally. 2018 was the worst year in terms of catastrophe losses the insurance industry has ever incurred, besides California’s worst fire season in history, hurricane damage in the US alone to the end of Q3 2018 cost more than $31 Billion. 

On a more local basis, events like the May 4th windstorms and August 8th Flood in the GTA, cost  Canadian insurers over $8 Billion by the end of Q3, up over 22% from the same period last year.

Business insurance – “The Top 3”; Cyber Risk is now ranked #1 as the most important risk category in Canada, the US and Globally. (It was ranked 15th, 5 years ago) followed by Business Interruption and natural catastrophes. All 3 of which of course are connected.

Some good news is that business insurance in most sectors will fair better then other lines but still see average 10% rate increases we feel. However, certain industry sectors still face a challenge rate wise, including Long Haul Transportation, Hospitality & Commercial Residential Realty to name a few of the least profitable lines of business for insurers, a reflection of claims frequency and severity.

Ontario Home & Automobile Insurance Home insurance continues to be impacted by ever increasing claims, mainly from water damage due to weather events, resulting in upward pressure on premiums.  Auto insurance premiums are increasing due to claims and reflect costs of newer automotive technology. In addition, the frequency of claims has grown to levels that have not been seen in many years. Auto insurance fraud continues to cost Canadians more than $2 billion every year. 

Reports from various insurance companies and the Provincial regulatory body that controls premium’s, is that we will see increases in premiums in 2019. Several insurance companies have reported to us that they “must tighten underwriting rules and capacity to write business, in order to return to profitability.” 

We’ve got access to the entire market place and are confident in our ability to maintain affordable coverage options for our clients and don’t take our role as your insurance advisor lightly.

Our principal focus in 2019 will be to continue to advise our clients on the best road forward for them.


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