Four years ago, the commercial insurance landscape began to show signs of strain. In insurance terms, hard market conditions took hold, with higher rates and reduced underwriting capacity for certain lines of business.
The challenging conditions resulted from years of insufficient underwriting profitability. This was driven by rising claims costs and low returns on investments and led to an overall decline in net income between 2015 and 2019 for Canada’s home, car and business insurers.
In Canada, the condominium and strata commercial insurance market experienced these challenges first. After the pandemic took hold, the difficulties expanded to other businesses. The hospitality sector, in particular, bore the brunt of the challenging market conditions.
For Insurance Bureau of Canada (IBC), the challenges that businesses were experiencing were a call to action. While it was impossible for a trade association to have any impact on global commercial insurance market conditions, IBC put together a robust strategy to help support businesses across the country that needed help navigating the challenging commercial market.
The centerpieces of IBC’s support services include a dedicated Business Insurance Helpline and website, free risk manager services and the Business Insurance Action Team.
Since 2020, more than 3,150 businesses have reached out to the helpline and 375 have received one-on-one risk management assistance.
Some of the highlights of IBC’s support services include:
$1 billion in premium rebates and deferrals to businesses across Canada.
$2.3 million invested by IBC and its members to support specialized commercial insurance services.
IBC’s risk managers helping find affordable insurance for more than $1 billion in properties.
20 Ontario-based hospitality businesses securing insurance during the pandemic lockdowns through the Business Insurance Action Team – 95% of these are still in operation.
IBC has helped a wide range of businesses over the past four years, including condominiums/stratas, businesses in the hospitality and tourism sector, veterans’ associations, sports organizations, charities and non-profits, day care centres, farms and ranches, to name a few.
A condominium manager recently provided this feedback on the help they received from IBC’s risk manager: “With the advice and guidance of IBC’s risk manager, our condo corporation was able to secure insurance at renewal, at a significantly lower rate. Without the assistance provided, I feel that a successful outcome would not have been possible.”
Recent data suggests that the commercial insurance market continues to stabilize. However, certain commercial insurance lines are still facing challenges with a number of complicating factors at play, including elevated inflation, high interest rates, increasing reinsurance costs, severe weather, skilled labour shortages, supply chain delays and high costs for materials.
Over the past year, however, there has been a dramatic drop in requests for help from IBC’s risk managers. This service will conclude on December 31, 2023.
Considering the uncertainty that remains in the economy, IBC is committed to providing ongoing support to Canadian businesses in 2024. IBC’s support includes the dedicated Business Insurance Helpline (1-844-2ask-IBC), which is staffed by trained insurance professionals ready and willing to help business owners who are having trouble navigating the current market.
In addition, IBC continues to add new risk management resources to the Business Insurance Help website. The most recent pages include insurance and risk management tips for charities and non-profit organizations, as well as general insurance risk management considerations for any business.
Challenges will continue into 2024, and IBC remains committed to working with stakeholders, governments and businesses to navigate the year ahead.