Brokers are becoming vital to insurance industry during tough market conditions
Published: June 11, 2019
Updated: June 30, 2019
Author: Luke Jones
CATEGORY: Industry News
The insurance industry is coming to terms with a hard market, especially in specific areas such as personal auto. Due to tough market conditions, brokers will need to be increasingly dynamic and prepare for some customer backlash.
Consumers are likely to show displeasure to brokers as their premiums rise, according to Donna Ince, senior vice president of personal insurance for RSA. Ince says there are no indicators that the hard market will ease anytime soon, putting more pressure on brokerages.
“I do think [the hard market] will last longer,” she said while speaking on a panel at the Insurance Brokers Association of Ontario’s Young Brokers Conference. Ince referenced the challenges in the auto insurance market and the problems weather events are causing insurers.
Auto insurance is an industry-wide problem that is affecting all provinces in Canada. Ontario has faced a notorious battle with auto premiums, while British Columbia has become the country’s most expensive car insurance market. In Alberta, the Insurance Brokers Association of Alberta (IBAA) has said insurance companies are losing money compared to premiums, mostly due to a 5% cap on premium increases.
“So if we don’t see that move, if we don’t see some improvement there, [a hard market] could continue for much longer,” Ince said.
Brokers are on the frontline and dealing with customers, so the pressure is on brokerages to find ways to enhance the customer experience. One way to boost relations with consumers is to offer added value through advice into increasingly complex coverage options. Jurisdictions around Canada are giving customers more choice, so brokers will need to be in place to explain those choices clearly.
“That’s a place where brokers have a great role to play,” Ince said.