Insurance pricing has been on the rise for a while now, with widespread premium hikes across all types of insurance. After years of stable or even decreasing premiums and ever broadening coverage, commercial insurance companies have had to react to a profit crunch.
This “hardening” of the market, with lower risk tolerance, higher rates and tighter acceptance criteria, has not occurred in over a decade. Canadian businesses are struggling to navigate this unfamiliar environment.
In this report, discover:
1. How the insurance industry defines a hard market;
2. Which factors create a hard market;
3. What does the future look like in the insurance industry, particularly after the pandemic;
4. What are the implications for your commercial insurance;
5. What you can do to successfully navigate the hard market.
Insurance pricing has been on the rise for a while now, with widespread premium hikes across all types of insurance. After years of stable or even decreasing premiums and ever broadening coverage, commercial insurance companies have had to react to a profit crunch.
This “hardening” of the market, with lower risk tolerance, higher rates and tighter acceptance criteria, has not occurred in over a decade. Canadian businesses are struggling to navigate this unfamiliar environment.
In this report, discover:
1. How the insurance industry defines a hard market;
2. Which factors create a hard market;
3. What does the future look like in the insurance industry, particularly after the pandemic;
4. What are the implications for your commercial insurance;
5. What you can do to successfully navigate the hard market.
Insurance transfers financial risk away from individuals into a community risk pool. Insurance buyers contribute to the pool by paying a premium. When a loss occurs, the insurance company dips into the pool to pay for that loss. Simply put, the contributions of many fund the losses of a few.
But insurance is a business like any other. That means companies have to be profitable in order to stay in business and pay claims. How does the industry characterize the situation when, like today, it’s close to or operating at a loss?
For years, insurance companies have been paying out more money than they can get back in premiums and investments. As a result, they’re now being more cautious about what risks they can take on. They’re pulling back on coverage, lowering limits, and raising premiums. This is known as a “HARD MARKET.”
And until the insurance industry starts making money again—fewer claims, lower payouts, higher returns—rates will keep climbing upwards.
Claims have risen in frequency and severity with higher payouts all-around.
Years of premium reductions, and heavy losses, are making companies unprofitable.
Various financial crises, along with the pandemic, have virtually eliminated interest gains from stocks and bonds.
SOCIAL TRENDS are a key factor. The result? Profuse litigation, high settlements, and higher claims payouts due to legal fees and compensatory damages.
CLIMATE CHANGE is another reason. Record-breaking numbers of catastrophic weather events nationwide have led to extensive property and auto damage.
After a few tough years, the Canadian insurance industry has been operating at a loss across all lines. With billions of dollars in losses, the industry began experiencing a hard market in 2019. These conditions have persisted with the outbreak of COVID-19 and extended the hard market beyond what was anticipated well into 2022.
Even the most prepared organizations have had to adapt. Businesses have been facing: higher premiums, reduced coverage, stricter underwriting criteria, and fewer coverage options to choose from.
Partner with a broker you trust—a broker with a background in your industry, who will keep you up-to-date on market trends, and guide you to the coverage you need. Connect with your broker to gauge how the hard market will affect your business.
Brokers—like PROLINK—are knowledgeable advisors who will advocate for you when you need it most. For more advice, speak to a representative today.
Insurance transfers financial risk away from individuals into a community risk pool. Insurance buyers contribute to the pool by paying a premium. When a loss occurs, the insurance company dips into the pool to pay for that loss. Simply put, the contributions of many fund the losses of a few.
But insurance is a business like any other. That means companies have to be profitable in order to stay in business and pay claims. How does the industry characterize the situation when, like today, it’s close to or operating at a loss?
For years, insurance companies have been paying out more money than they can get back in premiums and investments. As a result, they’re now being more cautious about what risks they can take on. They’re pulling back on coverage, lowering limits, and raising premiums. This is known as a “HARD MARKET.”
And until the insurance industry starts making money again—fewer claims, lower payouts, higher returns—rates will keep climbing upwards.
Claims have risen in frequency and severity with higher payouts all-around.
Years of premium reductions, and heavy losses, are making companies unprofitable.
Various financial crises, along with the pandemic, have virtually eliminated interest gains from stocks and bonds.
SOCIAL TRENDS are a key factor. The result? Profuse litigation, high settlements, and higher claims payouts due to legal fees and compensatory damages.
CLIMATE CHANGE is another reason. Record-breaking numbers of catastrophic weather events nationwide have led to extensive property and auto damage.
After a few tough years, the Canadian insurance industry has been operating at a loss across all lines. With billions of dollars in losses, the industry began experiencing a hard market in 2019. These conditions have persisted with the outbreak of COVID-19 and extended the hard market beyond what was anticipated well into 2022.
Even the most prepared organizations have had to adapt. Businesses have been facing: higher premiums, reduced coverage, stricter underwriting criteria, and fewer coverage options to choose from.
Partner with a broker you trust—a broker with a background in your industry, who will keep you up-to-date on market trends, and guide you to the coverage you need. Connect with your broker to gauge how the hard market will affect your business.
Brokers—like PROLINK—are knowledgeable advisors who will advocate for you when you need it most. For more advice, speak to a representative today.
With over 40 years in the industry, PROLINK has seen it all—soft markets, hard markets, and everything in between. We’ll take the time to understand your unique circumstances and get you the best possible protection at the best possible rate, no matter what’s happening in the market.
If you have any questions about your business, your continuity planning, or your insurance, we are only a call or email away. And if you’re curious about how the hard market will affect your personal insurance contact us below.
With over 40 years in the industry, PROLINK has seen it all—soft markets, hard markets, and everything in between. We’ll take the time to understand your unique circumstances and get you the best possible protection at the best possible rate, no matter what’s happening in the market.
If you have any questions about your business, your continuity planning, or your insurance, we are only a call or email away. And if you’re curious about how the hard market will affect your personal insurance contact us below.