Is the current hard market different for Brokers?

Published: July 22, 2019

Updated: August 1, 2019

Author: Luke Jones



Insurance companies and brokers in Canada are now operating in a hard market. An array of issues face the industry, but the truth is hard markets have happened before, what makes this one so different?

The number of problems facing brokers and insurance companies make this hard market tougher than the rest. That is not just a feeling passing through younger members of the industry experiencing their first troubles. It is also echoed by older generations in the insurance industry, who say something is different about this hard market.

Speaking to Canadian Underwriter, Caleb Maksymchuk, CEO and partner of Ravenhill Agencies in Edmonton, says he is seeing market challenges that are unique. Despite being a broker for 12 years, Maksymchuk says market conditions are also being felt by colleagues who have been in insurance for longer.

“For those who have been in the business, whether they’re underwriters or brokers, they say this is a different kind of hard market,” he said. “It’s not like it was, and it’s a lot more challenging than previous hard markets.”

So, what’s changed in the industry to make this hard market different? The answer according to Maksymchuk is data, which is now easily accessible.

“It poses challenges because they [carriers] see the data more bluntly,” Maksymchuk says. “Say, in commercial, they’re getting in and out of different types of business [quicker],” he explained. If an insurer struggles in one area of the market, “they’re then able to shift quickly.”

The result can be cancelled contracts, which are an increasing problem across Canada. In an upcoming study, Canadian Underwriter highlights the issue, pointing to around half of over 200 brokers in Canada says a carrier has cancelled a contract over the last year. Two-thirds attribute the cancellations to the hard market.

Maksymchuk admits he has not suffered a cancellation. However, he is a board member with the Insurance Brokers Association of Alberta (IBAA) and has seen how other brokers have been hit by cancelled contracts.

“If you run into anything like auto right now, that poses new underwriting restrictions,” he said. “We’re not able to write business at the end of the day. With brokers facing cancelled contracts, it’s creating a surplus of policies floating around out there.”