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Insurance considerations for manufacturers pivoting to personal-protective-equipment production

The COVID-19 has moved the course of everything, including Canadian businesses. Canada Goose, Bombardier Inc, Ontario Power Generation, the Labbatt Brewing Company, are some of the manufacturing firms that have joined the list to pivot their operations to non-traditional production amid the COVID-19 pandemic.

Lawyers have suggested manufacturers restructuring their business operations and pivoting to the production of PPE or medical equipment, should reach out to their brokers in advance of making any changes in order to ensure they’re adequately protected.

“They might be bringing larger volumes of chemicals and/or brand-new chemicals and resins onto their sites. A lot of them are going to be switching into industries that involve a lot of plastic, whether that’s in handling, fabricating or production, which could pose new risks. These are all things that may not have been conceived of or contemplated in their initial risk management strategy.” told Karim Jaroudi, environmental specialist at Burns & Wilcox Canada.

Another thing for manufacturers to consider from an environmental exposure standpoint – which many probably aren’t because of the fast-evolving nature of the COVID-19 pandemic – is what happens when things eventually get back to normal. Is it safe to convert your plant back to its original use? Are you still storing different chemicals or hazardous materials? How has your environmental exposure changed since you made the switch? Are you going to switch back or do you plan to keep producing PPE?

“I think we cross that bridge when we get to it,” Jaroudi commented. “There is absolutely an underwriting endeavour to be had there. Brokers will have to work closely with their manufacturing clients to understand their way back and what is being done to facilitate that.”

Source: https://www.insurancebusinessmag.com/ca/news/specialty-insurance/insurance-considerations-for-manufacturers-pivoting-to-ppe-production-220361.aspx

Majority of Fort Vermilion residents affected by flooding lack insurance.

The community of Fort Vermilion, Alberta, was evacuated on April 26 when the nearby Peace River overflowed due to an ice jam. About 750 people were forced to flee from their properties.

Over 150 structures in Fort Vermilion were damaged by the disaster, and to complicate matters, the majority of Fort Vermilion residents do not have flood insurance. Even though the community is on a known flood plain, insurance is too expensive for many.

In an advisory published shortly after the northern Alberta flooding, the Insurance Bureau of Canada offered a reminder to homeowners in the area that overland flood insurance is an optional add-on to regular homeowners’ and/or business insurance.

Fort Vermilion is expected to receive about $47 million of the funding allocated for northern Alberta communities affected by flooding.

Source:https://www.insurancebusinessmag.com/ca/news/flood/majority-of-fort-vermilion-residents-affected-by-flooding-lack-insurance-222724.aspx

How does the insurance industry sell their way through The Next Great Recession?

At the beginning of the COVID-19 pandemic, financial analysts predicted the Canadian Property & Casualty industry would be able to manage through the crisis in the short term. But in the medium- to long-term, they warned, the industry’s financial situation would get more difficult.

The Canadian economy will re-open in fits and starts while we wait for the vaccine to be developed. This new economic reality will make insurance a tough sell over the next year or two.

But not everything is lost. What do GE, Disney, HP and Microsoft have in common? They were all startups during steep declines in the U.S. economy. Entrepreneurial insurance companies and brokers should seek opportunities in those sectors of the Canadian economy that they expect to start up, bounce back quickly, or even thrive after the business lockdowns. In short, the secret to selling during this crisis may involve identifying pandemic-proof economic sectors that can generate at least some premium growth while the virus runs its course through the Canadian economy.

Source: https://www.canadianunderwriter.ca/insurance/cu-editorial-a-survival-guide-for-the-next-recession-1004178124/

Is insurance a commodity?

The commoditization (or commercialization) of products means consumers are no longer distinguishing differences in brands, regardless of who made them.

Given the product variations and efforts on market and service differentiation, it isn’t easy to define insurance products as commodities. However, carriers have freedom in their ratings, market experiences, and services to truly differentiate (or distinguish themselves) from others.

Certain insurers often struggle to differentiate their products, given that industry regulators and market conditions force them to offer similar coverages and definitions.

By designing intuitive products, adding risk appetite options to the buying process, and using online platforms to support self-education and product awareness, insurers could design digital offerings that ensure clients purchase the right insurance.

Another option to consider is the Hybrid digital model, which would help guide user experiences and educate customers, while engaging advisors to ensure purchasing success.

To find out how this may affect your coverage, contact your insurance agent or broker.

Source: https://www.canadianunderwriter.ca/brokers/opinion-is-insurance-a-commodity-1004178273/

Men pay more than women for car insurance in Canada

Among the many factors that help determine auto insurance premiums are a person’s driving record, years of driving experience, insurance history, vehicle make and model, type of usage and even gender.

LowestRates.ca published a report with data collected on male and female drivers aged 17 to 60, from three major cities in Canada, Toronto, Montreal and Calgary, to understand the correlation between age, gender and car insurance premiums. The report shows that men are much more likely to be involved in traffic accidents, and are also more than three times as likely to be driving under the influence of drugs and alcohol than women. They also saw that men are more likely than women to commit traffic violations, such as dangerous driving.

For the full report, visit:  https://www.lowestrates.ca/blog/auto/gender-auto-insurance-report-2020

Source: https://www.newswire.ca/news-releases/in-canada-men-pay-more-than-women-for-car-insurance-across-all-age-groups-according-to-a-new-report-from-lowestrates-ca-808905467.html

How has online shopping affected insurance?

Today, digital technology offers clear advantages in the online shopping experience, but for the insurance market, it seems difficult to replace the value of broker support when offering a complex product so tailored to customer needs. So, how will insurance companies ensure clients get the right policies if they buy online?

It is not new that customers from different generations are making insurance purchase decisions using online tools to search for information, regardless of the final purchase method.

Gen Zers, on the other hand, prefer to do most shopping online when they can out of convenience. Factors such as brand familiarity, refundability and product knowledge seem to influence online purchase of this generation.

Gen Z insurance clients are often first-time insurance buyers, so will experience calls geared towards professional advice to supplement digital marketing or product education tools.

Source: https://www.canadianunderwriter.ca/brokers/opinion-how-has-online-shopping-affected-insurance-1004178177/

What to know about getting a reduced car insurance rate.

While private auto insurers are regulated by the government, they are not mandated to provide a certain level of relief during the pandemic.

There’s no uniform approach with private insurers, so they could be classified into one of three groups: those who aren’t offering any relief; those leaving it up to the consumer to contact them to obtain a discount; and those who are “proactively” giving blanket reductions to all their policyholders, regardless of whether they are driving less or not.

In addition to discounts, some insurance companies are also offering flexible payment options to customers who are struggling financially amid the pandemic and might be late with a payment or are not able to make payments.

Of note, people who have completely stopped driving in the middle of the pandemic also have the option of removing their coverage completely, keeping in mind that even in an emergency situation, they will not be able to use their car.

You can find a compiled list of car insurance companies offering COVID-19 relief and the details of those measures through InsuranceHotline.com. Contact your broker or agent to find out how you may be affected by this.

Source: https://globalnews.ca/news/6887254/coronavirus-reduced-car-insurance-rates/

Northwest Territories Approves Electronic Proof of Auto Insurance.

The Centre for Study of Insurance Operations (CSIO) has approved effective immediately the Northwest Territories to now use electronic proof of auto insurance, also called eSlips.

This solution allows insurance providers across Canada to send attachments and eSlips to personal and commercial customers through secure email, using a consistent look and feel, regardless of sender. Electronic documents may be delivered through smart phones, apps, emails or tablets without having to carry the paper copy.

CSIO launched My Proof of Insurance in February 2018 in order to provide the industry with a modern method of delivering digital proof of auto insurance and policy documents.

Northwest Territories joins a growing number of jurisdictions, including Nova Scotia, Alberta, Ontario, Quebec and Newfoundland and Labrador in allowing consumers the option of using eSlips.

To find out more, contact your insurance agent or broker.

Source: https://www.insurance-canada.ca/2020/04/03/northwest-territories-auto-eslips-electronic-proof/

Are your commercial clients budgeting for a hard market?

Since Canadian Underwriter first raised the issue of commercial insurance rate increases at the Top Broker Summit last November, experts in the field have been giving their views on the main challenges ahead for the industry.

Albert Benmichol, the CEO of Axis Capital Holdings Ltd., expects the hard market to persist. During an earnings call this past July he stated that “even with the increases that we have seen in the last two years, many lines of business are still not at acceptable pricing.”

At the Top Broker Summit, panelists were asked when they believe the hard market will end. Carol Jardine, president of Canadian property and casualty operations at Wawanesa Mutual Insurance Company, responded “unfortunately for customers I think it’s got a long run.”

Experts agree that the key to success in 2020 will be discussing and understanding the client’s perspective, while still getting the rate they need for their shareholders.

Source: https://www.canadianunderwriter.ca/insurance/are-your-commercial-clients-budgeting-for-a-hard-market-1004173067/

Cyber leads global business risks for the first time

In the digital era, corporate data has become a key competitive asset. As a result, cybersecurity threats pose new global business risks.

For the first time ever, the Allianz Global Corporate & Specialty annual survey on global business risks ranked cyber incidents as the most important business risk in the world. Business interruption and changes in legislation and regulation ranked second and third, respectively.

Seven years ago, cyber ranked 15th with just 6% of responses, but today cyber incidents have become a major expense for businesses, resulting in costly lawsuits and litigation.

Climate change has also risen to its highest-ever position on the Allianz Risk Barometer. This is the result of concerns about increasing physical losses caused by rising seas, droughts, storms and flooding. 

Source: https://www.insurance-canada.ca/2020/01/16/allianz-cyber-business-risk-barometer/