Insurance Business Canada 6.06

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LEADING

RISK MANAGERS 2018

What exposures are keeping Canada’s top risk managers on their toes?

SERVING THOSE WHO SERVE OTHERS

Where to find comprehensive coverage for organizations in the social services sector

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TACKLING CHALLENGES IN CONSTRUCTION

What one brokerage is doing to solve common insurance issues faced by construction firms

CYBER FOR SMALL BUSINESSES

How to show your SME clients that cyber insurance is a necessary expense

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ISSUE 6.06

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CONTENTS

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UPFRONT

LEADING

RISK MANAGERS 2018

SPECIAL REPORT

24

04 Editorial

Is it time to sell your brokerage?

06 Statistics

FEATURES

TAKING CARE OF BUSINESS A new product from Markel responds to the varied exposures of organizations that provide care to vulnerable Canadians

PEOPLE

INDUSTRY ICON

Gallagher Bassett CEO Scott Hudson details how new technology can improve the claims experience

20 2

08 Head to head

Brokers weigh in on the biggest challenges in marine insurance

10 News analysis

Are your small business clients still ignoring their cyber exposures?

12 Intelligence

This month’s big movers and shakers

14 MGA update

There’s plenty of opportunity for brokers in Canada’s cyber market

16 Technology update

Leveraging the power of social media

18 Opinion

LEADING RISK MANAGERS

Ten of Canada’s top risk managers reveal which exposures are front and centre on their radar and what brokers can do to help mitigate them

38

Will 2018 end up being a lighter-thanaverage year for catastrophes?

FEATURES

40

BREAKING GROUND

What trends are shaping insurance coverage for the construction industry? IBC spoke to Wylie-Crump partner Nolan Heuchert to find out

48

Legacy technology is holding the industry back

FEATURES 42 How to create a winning presentation

Three tips that will help you wow your audience every time

44 Is too much flexibility killing productivity?

How to know if it’s time to put some limits on your flexible work policy

PEOPLE 46 Career path

Initially resistant to the insurance industry, Rissa Revin eventually found herself unable to stay away

47 Other life

A river runs through claims adjuster Deirdre Green’s life FEATURES

EXPERT ADVICE

How brokers can capitalize on the growing global specialty lines sector

INSURANCEBUSINESS.CA CHECK IT OUT ONLINE

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WHAT MAKES OUR

TRANSPORTATION INSURANCE UNIQUE? OUR

SPECIALISTS KNOW...

You can differentiate yourself in the market with The Guarantee.

The Guarantee has a long history of innovation.

That’s why our transportation solutions go beyond the traditional. Our committed, experienced team know the complexities of the evolving transportation industry. We focus our insights and services to provide exceptional coverage for your clients.

Find out how we are different. theguarantee.com

Excellence, Expertise, Experience …

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UPFRONT

EDITORIAL

Hungry for more

R

eflecting on the insurance industry in 2018, one word stands out above all others: acquisition. From AXA’s blockbuster purchase of XL Group and Marsh & McLennan’s move for JLT to CAA’s recent takeover of Echelon Insurance here in Canada, there have been plenty of headline-grabbing deals throughout the year. However, while the big names might have stolen the spotlight, it would be wrong to overlook the sheer volume of moves made on a smaller scale – deals for brokerages, underwriters and wholesalers have poured in on an almost-daily basis.

Market participants expected M&A activity to accelerate in 2018, and that has proven to be the case. According to AIG, global insurance M&A activity had reached nearly $9 billion by the end of the first quarter, an 18% increase

There’s a natural temptation to be bought out by a bigger player – a firm that can offer the resources and capital to make previously unreachable growth achievable over the first quarter of 2017.

For the acquirer, there are plenty of advantages to buying an established business: a proven brand, a built-in customer base and a host of talented employees. But what’s in it for the small brokerage that suddenly finds itself on the ‘wanted’ list?

For many, there’s a natural temptation to be bought out by a bigger player – a firm that can offer the resources and capital to make previously unreachable growth achievable, all for an attractive price. Many small companies are even able to retain their management teams and staff – it’s business as usual, but on a much bigger scale.

However, the prospect must be treated with caution. Ultimately, you’re putting your hard work in someone else’s hands. Even if a firm says you’ll retain your independence, that doesn’t mean you and your staff won’t be affected if their business takes a turn for the worse. Will you get an above-market price?

What level of financial backing and security will you receive? And is the business mix and ethos truly a match for yours?

If you’re considering a new start for your business, make sure you carry out your due diligence. Remember that any company that’s serious about your business needs to do a lot more than talk dollars – it needs to prove it can match the reputation you’ve earned.

The team at Insurance Business Canada

www.insurancebusiness.ca EDITORIAL Managing Editor Paul Lucas Writers Lyle Adriano, Hannah Go, Tom Goodwin, Alicja Grzadkowska, Lucy Hook, Libby MacDonald, Bethan Moorcraft, Joe Rosengarten, Ryan Smith, Ksenia Stepanova, Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS Bill Pieroni, Emma Bannister, Anna O’Dea

ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Ella Dayandante

SALES & MARKETING National Account Manager Eric Langille Business Development Manager Desiree McCue Sales Manager Dane Taylor Vice President - Sales John Mackenzie Marketing and Communications Melissa Christopoulos Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries eric.langille@kmimedia.ca desiree.mccue@keymedia.com

KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Denver, London, Sydney, Auckland, Manila, Singapore, Bengaluru, Seoul

Insurance Business Canada is part of an international family of B2B publications, websites and events for the insurance industry Insurance Business America cathy.masek@keymedia.com T +1 720 316 0151 Insurance Business UK nathan.beach@keymedia.com T +44 20 7193 0935 Insurance Business Australia peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

4

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Creating value for brokers means listening and constantly refining what we do.

Tom Reikman, SVP & Chief Distribution Officer

The benefits of innovation are often clouded by the challenges of transforming how we do business. We get it — this type of change forces us to rethink each aspect of our operations as we improve and strengthen the experience for brokers and customers. At Economical®, we’re continuing to listen and incorporate feedback to refine programs like Vyne™. We stand behind our promise to equip brokers for the future and protect what matters most to our customers. We thank our teams and broker partners as we work together to make insurance better — one step at a time.

Get ready for the future, with us. economical.com property | auto | business

t e

Economical Insurance includes the following companies: Economical Mutual Insurance Company, Family Insurance Solutions Inc., Sonnet Insurance Company, Petline Insurance Company. ©2018 Economical Insurance. All Economical intellectual property belongs to Economical Mutual Insurance Company. All other intellectual property is the property of their respective owners.

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UPFRONT

STATISTICS

A break in the weather

The first half of 2018 was relatively untroubled by catastrophic events So far, 2018 hasn’t exactly been unmarred by catastrophes – heatwaves have ravaged North America and many other corners of the globe, causing at least 70 deaths in Quebec and providing an ideal environment for the wildfires that ripped through BC, California and Greece. Both Europe and Australia have been hit by drought, and recent hurricanes brought more devastation to the US Gulf Coast.

84

48

Number of natural disasters worldwide in the first half of 2018

Number of man-made disasters worldwide in the first half of 2018

Yet the first half of 2018 was comparatively quiet for catastrophes on a global scale – not only are losses lower than the same period last year (US$36 billion versus US$64 billion), but they’re also well below the 10-year average of US$125 billion. Natural catastrophes accounted for US$34 billion of total economic losses worldwide, while man-made disasters made up the remaining US$2 billion.

3,900

THE COST OF NATURAL DISASTERS Aon Benfield’s analysis of natural-disasterrelated losses worldwide over the past five years underscores the fact that 2018 has been relatively benign in terms of natural disasters so far. What’s troubling, however, is that a significant gap between insured and uninsured losses persists throughout the world, most notably in the Asia Pacific region.

4,600

Global fatalities due to catastrophic events in the first six months of 2018

Global fatalities due to catastrophic events during the same period in 2017

Insured losses

Uninsured losses

Source: Swiss Re Institute, August 2018

TOTAL LOSSES DOWN

MAN-MADE VERSUS NATURAL DISASTERS

Total economic losses due to catastrophes were down 44% during the first six months of 2018 compared to the same period in 2017.

The number of man-made catastrophes spiked in 2005 and gradually fell for several years before being overtaken by natural catastrophes in 2010. For the last decade, the number of natural disasters has remained high, while the number of man-made events has generally continued to decline.

$140bn

Man-made

Number of catastrophes

$100bn $80bn $60bn $40bn $20bn

160 120 80 40

17

16

20

20

15

14

20

20

13

12

20

20

11

10

20

20

09

08

20

07

20

06

20

05

20

04

20

03

20

20

02

0 20

Previous 10-year average

01

1H 2017

00

1H 2018

Source: Swiss Re Institute, August 2018; all figures in US$

6

Natural

200

20

$0

Man-made

240

20

$120bn

280

Natural

Source: Swiss Re Institute, August 2018

www.insurancebusiness.ca

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EUROPE/MIDDLE EAST/AFRICA

2014

$6bn $13bn

2015 2016 2017

ASIA PACIFIC

2014

2018*

2015

$0bn $10bn $20bn $30bn $40bn $50bn $60bn $70bn *First six months only

AMERICAS

2016

2014

2017

2015

2018*

2016

$0bn $10bn $20bn $30bn $40bn $50bn $60bn $70bn *First six months only

2017 2018* $0bn $10bn $20bn $30bn $40bn $50bn $60bn $70bn *First six months only

Source: Global Catastrophe Recap: First Half of 2018, Aon Benfield Analytics, July 2018; all figures in US$

INSURED VERSUS UNINSURED

INSURED LOSSES DROP

According to Swiss Re, because most of the disasters in the first half of 2018 happened in areas with high insurance penetration, nearly 56% of all losses were insured. That represents an improvement on the first half of 2017, when only 47% of total economic losses were insured.

Total insured losses fell by 33% in the first half of 2018 compared to the same period last year, and by 43% against the 10-year average.

Insured losses

$500bn

Uninsured losses

$40bn

$450bn $400bn

Natural

Man-made

1H 2017

Previous 10-year average

$30bn

$350bn $300bn

$20bn

$250bn $200bn

$10bn

$150bn $100bn $50bn $0

$0 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(first six months only)

Source: Swiss Re Institute, August 2018; all figures in US$

1H 2018

Source: Swiss Re Institute, August 2018; all figures in US$

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UPFRONT

HEAD TO HEAD

What’s the biggest threat to marine insurance?

From unsustainable market conditions to newly emerging risks, marine insurance is facing a number of challenges

Anne Marie Elder Chief underwriting officer, marine – the Americas XL Catlin

“We’re our own worst enemy. For many carriers, the desire to grab business at any price has set underwriting discipline and business acumen adrift. Today’s marine market is filled with too much capacity, unsustainable rates, aggressive terms and conditions, and a push for more broker compensation.

It’s taken a hit on the marine market’s overall profitability. It has prompted Lloyd’s to deliver a stark message, warning marine syndicates to correct their unprofitable ways or they won’t be a syndicate for long. Unprofitable businesses do not stay afloat. Our clients need us to be there for the long haul.”

Anita Farmer

Mark Bernas

SVP and Northeast Series Marine Unit leader Lockton Companies

Executive vice-president Sentinel Marine Underwriters/ AmWINS Group

“The biggest threat is emerging risk.

The increasing size and cost of vessels, infrastructure challenges across the entire transportation industry, cyber threats, and climate change are constantly evolving risks.

While experienced marine insurance professionals can navigate this changing environment, the next generation of marine insurance executives don’t have the experience or training to create solutions and mitigate these risks. It’s incumbent upon those of us with years of experience to ensure that we provide mentoring, training and guided experience for these individuals so they can assist their marine clients in preparing for the risks of the future.”

“Profitability. Due to ever-increasing risk factors, profitability of a portfolio of marine business is on a razor’s edge. Over the past several years, increased capacity, often coupled with inadequate terms, conditions and pricing, has the market teetering on continued unsustainable margins.

With record unprofitable results for 2018, following similar negative results in prior years, many carriers are asking, ‘What is the end game; how do we right the ship?’

In 2018, we have already witnessed several markets withdraw completely from writing marine coverages. We expect the pullback will continue. This seems to be the start of a long-overdue market correction.”

TAKING ON WATER Earlier this year, Lloyd’s of London – which controls around 20% of the world’s marine insurance market – announced it was considering closing some of its loss-making marine syndicates. According to a London broker quoted in The Wall Street Journal, “The [insuring groups] have been asked to come up with a viable plan until the end of the month or risk closing down.” Reportedly, several syndicates have already downsized their marine business to the tune of approximately $100 million, and others are expected to make similar cuts. One of the most unprofitable line items is hull insurance, where brokers estimate premiums would have to double in order to be profitable. According to a second broker, “Only about 18 syndicates were profitable on hull insurance over the past three years, and around 50 were in the red.”

8

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14/11/2018 1:39:47 AM

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UPFRONT

NEWS ANALYSIS

The small business cyber gap Cyber insurance might seem like a topic that’s never out of the spotlight, but brokers can do more to help small businesses fully understand their exposures

THE PAST several years have brought cyber attack after cyber attack, often leaving a trail of business downtime, financial loss and even legal action. Add to that the growing global focus on data protection, catalyzed by the Facebook–Cambridge Analytica data scandal and a clampdown in regulation, and insurance brokers have had no shortage of evidence to make their case for the necessity of investing in cyber insurance.

But while most large companies are well versed in their cyber exposures by now – and are typically pumping a significant amount of cash into both cybersecurity and insurance

informed, educated and supported around the risks that they face.

In September, research from Argo Group revealed that a staggering 100% of brokers cited cyber threats as a medium- or highpriority emerging risk in the next 12 months, followed closely by virtual technologies and the Internet of Things. Similarly, Zurich found in its latest broker survey that cyber cover remains the dominant issue among SME clients – almost two in five brokers reported that they’re providing regular counsel to their smaller clients on the topic.

But while cyber does increasingly seem to

“Smaller businesses ... have been forced to spin a lot of plates, complicating the decision-making process” Paul Tombs, Zurich programs – many businesses at the smaller end of the scale are struggling to grapple with the extent of their cyber risk, and are underinsured or even uninsured as a result.

For brokers, that presents both an opportunity and a challenge: An underserved client base offers opportunities for further cyber growth, but clients need to be better

10

be on the horizon for SMEs, the reality is that with fewer resources, managing the risk can be a difficult juggling act. “Smaller businesses in particular have been forced to spin a lot of plates, complicating the decision-making process and stretching many businesses to the breaking point,” says Paul Tombs, head of SME proposition at Zurich UK.

In addition, business both large and small are growing more reliant on technology and data, which means the stakes are only increasing when it comes to the ramifications of cybersecurity failings.

“The impact on their reputation of getting it wrong has increased significantly,” Tombs says. “If something does go wrong, it can now spread a lot quicker than it has ever done in the past.”

As a result, brokers need to provide a more holistic service to smaller business clients when it comes to cyber, which should include tailored advice that covers both insurance programs and pre-loss risk mitigation.

“I think the important piece here is really understanding what the end client needs as part of this,” Tombs says. “From an overall proposition perspective, you need to [have] the right product, the right pricing structure and make sure it is relevant for those

www.insurancebusiness.ca

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14/11/2018 1:38:32 AM

THE CYBER THREAT TO SMALL BUSINESSES

77%

of small business owners in Canada say they’re concerned about being the victim of an attack

71%

of data breaches happen to small businesses

1 in 5

small businesses believe they don’t have the resources to defend against an attack

smaller SME customers, compared to larger customers. The key message for brokers is to continue to talk to their clients and educate them on the risks that they face now, but also

accounts, leaving small businesses underserved. As a result, cyber is not just the biggest focus for his business, but also where he sees the biggest growth opportunities.

“With SMEs, there is a massive disconnect between what they do and where they buy or don’t buy insurance” Peter Goddard, Daulby Read Insurance Brokers the emerging risks. It’s about risk assessment, advice, understanding SMEs’ needs and putting the right cover in place. That’s the key role of a broker.”

Peter Goddard, managing director of Daulby Read Insurance Brokers, says that much of the current attention in the cyber insurance realm is focused on the ‘Hollywood’

“With SMEs, there is a massive disconnect between what they do and where they buy or don’t buy insurance,” he says. “I think where the whole market is at the moment, we’re not doing much to help them with their risks and getting them to understand what those risks are. There’s quite a long way to go in talking to SMEs and getting them to

40%

of insurance brokers say they’re providing regular counsel to SME clients on cyber risk Sources: StaySafeOnline.org, Scalar Security Study 2018, Canadian Internet Security Survey 2018, Zurich

realize it’s a necessary form of insurance.”

Cyber, data and technology will undoubtedly remain under the global microscope, so cyber insurance and cybersecurity offerings will continue to top the agenda for businesses of all size. Brokers who can help plug the gap that currently exists for small businesses by offering their clients both education and support are likely to see continued growth in their cyber books.

“There are absolutely growth opportunities for brokers,” Tombs says, “and I think that’s because there’s a real demand and a need for the cover from the end-client base.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Applied Systems

Dynamis Software

Dynamis, a developer of employee benefits software, will enhance Applied’s employee benefits offering

Cincinnati Financial

MSP Underwriting

Cincinnati is acquiring the London-based Munich Re unit, which underwrites property and aviation, for around $174 million

The Co-operators

Assurance Robert Poirier

The Quebec-based brokerage’s portfolio includes both personal and commercial insurance

CoreLogic

Symbility Solutions

CoreLogic is purchasing the remaining shares of the Toronto developer of cloud-based workflow solutions

Fairfax Financial

AXA Insurance Ukraine

The acquisition follows Fairfax’s previous purchase of QBE’s Ukranian business in 2015

Marsh & McLennan

JLT Group

Marsh & McLennan has agreed to acquire the British insurance brokerage for consideration of £19.15 per share

PROLINK

Manzer Insurance Services

New Brunswick-based Manzer gives the network its first foothold in the Atlantic region

Rhodes & Williams

Caiger-Watson Insurance Brokers

Ottawa-based Caiger-Watson will continue to operate under its own name following the merger

Totten Insurance Group

Anderson McTague & Associates

Anderson McTague, a New Brunswick-based MGA, is Canada’s longest-standing Lloyd’s coverholder

Marsh & McLennan acquires JLT Group

Marsh & McLennan, which currently employs nearly 65,000 people around the globe, is set to become even bigger. Known for its units Marsh, Guy Carpenter, Mercer and Oliver Wyman, the global professional services firm has reached a deal that will add JLT Group to its roster.

Marsh & McLennan agreed to buy the UK-based multinational brokerage for consideration of £19.15 per share, which equates to £4.3 billion in fully diluted equity value, or an estimated enterprise value of £4.9 billion. Once the deal is finalized, Dominic Burke, group chief executive of JLT, will join Marsh & McLennan as vice-chairman and a member of the executive committee.

12

a

Crawford & Co. develops cannabis claims solution

Claims and risk management solutions provider Crawford & Company has created a new service solution for Canada’s cannabis market.

Developed to process risks such as residential and commercial property and auto losses, Crawford’s claims solution also includes employee risk management, forensic accounting and legal services.

It’s designed to handle losses such property damage and theft related to growing, management and transportation at grow-ops; automobile incidents resulting from cannabis use; and employee management addressing cannabis use.

BI&I unveils home cyber insurance plan

The Boiler Inspection and Insurance Company of Canada [BI&I] has launched a new home cyber insurance plan, Home Cyber Protection, which is its first personal lines cyber product for Canadian consumers. The product offers coverage and services for cyber extortion, cyber attacks, online fraud, and the breach of personal information via smartphones, computers, and connected home devices. BI&I also provides professional assistance to customers to help them respond to ransomware attacks and make approved ransom payments.

www.insurancebusiness.ca

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14/11/2018 1:40:32 AM

PEOPLE Blue Cross partners with insurtech on travel product

Blue Cross Canassurance has partnered with insurtech developer Blink to enhance its travel insurance product. The expanded product offering will include real-time travel solutions for flight disruptions, powered by Blink’s platform, which tracks flight delays as they happen. This will allow Blue Cross to provide customers with mobile app services to compensate for the delay, such as access to select lounges, hotel rooms or cash payments. The services are now included in a large number of Blue Cross products sold in Eastern Canada.

Sovereign enhances manufacturing coverage

Sovereign General Insurance Company is rolling out new and enhanced coverage features for its manufacturing solutions. The new features include coverage for communicable disease and food contamination, contingent business interruption extension, depreciation in value of undamaged stock, manufacturer’s E&O, product impairment, products recall endorsement, and radioactive contamination.

The updated product will be available December 1; Sovereign noted that it has a broadly defined appetite for mid-sized to large manufacturing classes within 24 manufacturing sub-industries.

Zurich reveals global cyber proposition

Zurich Insurance Group has launched what it claims to be the first cyber policy to include network security monitoring and pre-breach services. Available to the insurer’s customers worldwide, the product includes protection against social engineering, reputational risks and breach of the EU’s General Data Protection Regulation. Such coverages, which were previously only available through endorsements, add to existing coverage for breach costs, business income loss and dependent business income loss. The new policy offers limits up to US$25 million.

NAME

LEAVING

JOINING

NEW POSITION

Alister Campbell

N/A

CRU Group

Board member

Chris Floyd

N/A

Ontario Teachers Insurance Plan

President, individual insurance services

Andrew Kemp

N/A

Canadian Broker Network

Chairman

Toria Lessman

N/A

QBE North America

Senior vice-president, head of transactional liability

Blair McGregor

Alberta Lawyers Insurance Association

CRU Group

Associate director of operations, Maltman International and CRU Group

Stacey Meade

N/A

QBE North America

Senior vice-president, head of financial institutions

Adrian Montague

N/A

Aviva

Interim executive chair

John Neal

QBE

Lloyd’s of London

CEO

Mary Parsons

N/A

Chubb

Executive vice-president, North America personal risk services division

Matt Shulman

N/A

Arch Insurance

Chief executive officer, Arch Insurance North America

Nikolaus von Bomhard

N/A

Munich Re

Chairman, supervisory board

Lloyd’s names new CEO

Lloyd’s of London has selected John Neal to replace Inga Beale as CEO. The former group chief executive of QBE, Neal boasts more than three decades of experience in the insurance industry, starting his insurance career at Lloyd’s in 1985.

“It is a privilege to take the helm at Lloyd’s, the world’s most important commercial insurance and reinsurance marketplace,” Neal said. “As I begin this role, it is important that we focus on maintaining the market’s reputation for innovation, accelerating our efforts to modernize the ways in which we do business, and take the time to listen to all of our stakeholders, who are critical to the future well-being of the Lloyd’s market.”

Chubb taps company vet as head of personal risk

Chubb has named Mary Parsons as EVP for its North America personal risk services division. Parsons joined Chubb in 1998 as a personal lines underwriter and has held various roles in sales and distribution. In her new role, she will be responsible for achieving profitable growth targets across all regions of the US and leading the North American sales and distribution team.

“Mary brings deep sales acumen and a tactical rigour we need to further drive our sales organization forward,” said Ana Robic, COO of the North America personal risk services division. “Her leadership will be instrumental in helping our agents and brokers to succeed in growing their businesses and spearheading efforts around Chubb’s next phase of growth in North America.”

www.insurancebusiness.ca

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14/11/2018 1:40:39 AM

UPFRONT

MGA UPDATE

Canada is still a “cyber greenfield” According to one MGA, Canada’s cyber insurance industry remains ripe with opportunity

and more attacks, the notion that you need to make cyber insurance part of your risk management plan [is growing]. We’re very excited about the growth, and we’re going to figure out more and better ways to take care of our brokers.”

The company set up shop in Canada in 2016, and while the cyber market has evolved considerably during that time, there’s still much work to be done, as an estimated 22% of firms still remain completely uninsured against the risk.

“The notion that you need to make cyber insurance part of your risk management plan [is growing]”

While cybersecurity has always been an important issue in Canada, cyber threats are still a distant afterthought for many Canadian businesses.

Enter Ridge Canada Cyber Solutions, a division of US-based Ridge Global, which was founded by Tom Ridge, former US secretary of homeland security. Ridge explains that while Canada might not have the same level of cyber threat awareness

NEWS BRIEFS

as the US, the market is ripe for insurers to jump in and help.

“While cyber risk doesn’t appear to be quite as high on everybody’s mindset in Canada as it is in the United States, where I deal with it on a daily basis,” Ridge says, “because Canada is such a strong and vibrant economic market [with a] strong democracy, in time, with growing awareness, education and unfortunately with more

Totten Insurance Group acquires Anderson McTague

Totten Insurance Group has acquired New Brunswick-based Anderson McTague & Associates, which has served independent insurance brokers in Atlantic Canada since 1937. Anderson McTague is Canada’s longest-standing coverholder for Lloyd’s and was named MGA of the Year at the 2017 Insurance Business Canada Awards. Totten hopes to leverage the MGA’s experience as a Lloyd’s coverholder, as well as its local knowledge of Atlantic Canada.

Anderson McTague president Chuck McTague will join Totten as part of the deal.

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According to Ridge Canada Cyber Solutions president and CEO Greg Markell, Canada is a “relatively greenfield market when it comes to cyber,” so Ridge Canada is laserfocused on helping both clients and brokers understand how cyber coverage really works.

“Our mission critical is cutting through some of the minutiae that you hear out there from the market – ‘cyber doesn’t cover this; it’s not paying claims,’” Markell says. “I can say that we have multiple claims on the go right now, and how we’re helping clients and how we’re helping brokers understand how we’re getting policies … has been helpful, I think, for the brokerage community.”

AXIS and DUAL partner on environmental risk

AXIS Insurance has partnered with DUAL North America to provide a broad environmental risk program specifically designed for contractors, consultants and engineers. The program will provide cover for specialized and typically dangerous environmental projects such as removing underground storage tanks, abating asbestos and remediating contaminated soil. DUAL North America will operate as an MGA on behalf of AXIS to underwrite and distribute the multi-product environmental coverage.

www.insurancebusiness.ca

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Q&A

Mithles Lynch President XPERT UNDERWRITING

Martin Lynch COO XPERT UNDERWRITING

Fast fact: Before founding Xpert Underwriting, husbandand-wife team Mithles and Martin Lynch amassed decades of experience working for major insurers in the construction and manufacturing sectors

Stepping in to cover the “ugly contractors” Tell us about Xpert Underwriting. What does your MGA offer, and how does it stand out from other MGAs in the construction insurance space?

while exploring ways we can help. In the process, we’re learning an awful lot every day, and each broker meeting motivates us to be better.

Xpert Underwriting was created to help brokers throughout Ontario serve the needs of contractors local to their communities. We stand out by bringing decades of underwriting experience in the contracting and construction space to brokerages that often aren’t getting the chance to work on more complex infrastructure projects or to help their local, tougher-toplace contractors, as those risks often end up placed with global insurers who only deal with a select handful of ‘alpha’ brokerages.

Xpert particularly specializes in ‘ugly contractors’ – those contractors with hard-to-place exposures like blasting, bridges, tunnels and dams, contractors with railway or airport exposures, demolition and pollution work, or even nuclear remediation.

What are the biggest issues currently affecting construction companies and contractors? What can insurers do to help?

As a fairly new player in the construction insurance space, can you describe the experience of launching an MGA? Starting Xpert Underwriting has been an amazing experience for us – the entire insurance community has been exceptionally encouraging and supportive.

We’re laser-focused on providing a great experience to the brokers we deal with in every way possible, and on adding genuine value at every step.

We’re loving the experience of touring Ontario to meet brokers to better understand their pain points

MiniCo introduces cyber program for SMEs

MiniCo Insurance Agency has launched a new cyber insurance program that offers monoline coverage for small and medium-sized businesses to address both the direct and indirect costs of a data breach. Underwritten by Lloyd’s coverholder Barbican Insurance Group, the program provides coverage for a range of risks, including security and privacy liability, data recovery and loss of business income, privacy regulatory defence and penalties, crisis management costs, and data extortion.

One of the biggest changes we’re seeing is insurers moving more and more toward an algorithm-driven, inthe-box underwriting approach, with those boxes getting increasingly smaller. Contractors, meanwhile, are ultimately businesspeople – they’re constantly looking for opportunities to do more, and that sometimes means taking riskier jobs.

These opposing dynamics result in situations where a standard contractor might engage in 5% alarm installation, or a very small percentage of sprinkler installation, and no longer qualify for insurance from their existing insurer. There is also a reluctance to insure contractors with decades of experience who start their own businesses and are treated as ‘new ventures.’

It’s difficult for any billion-dollar insurer to create a platform that allows each risk to be judged on its unique merits – their economies of scale are in putting risks in buckets, then evaluating those buckets. That’s where Xpert comes in – we’re specifically designed to judge every risk individually, consider each account’s particular nuance and underwrite accordingly. We love new ventures started by seasoned contractors, and we’re open to contractors with all sorts of exposures.

Liberty Mutual rebrands underwriting outfit

Liberty Mutual has announced that it is rebranding Liberty International Underwriters [LIU Canada] and Ironshore Canada under one name: Liberty Mutual Canada. The rebranding will not impact the paper LIU Canada or Ironshore Canada policies are written on; for the remainder of 2018, the policies of each business will continue to be written on their respective papers. Both entities will officially align as a branch of Liberty Mutual once regulatory approval has been granted; the official rebrand is expected to take effect in 2019.

April draws takeover interest from private equity

French insurer April, the parent company of MGA April Canada, is mulling a sale, and according to sources familiar with the matter, private equity firms such as CVC Capital Partners, KKR & Co. and BC Partners all have their eyes trained on April. The company confirmed that, as part of a strategic review that could lead to a change in its holding, it has now opened discussions with its majority shareholder, private equity firm Evolem, and had received “preliminary expressions of interest” from other firms.

www.insurancebusiness.ca

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14/11/2018 1:41:43 AM

UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Marsh and IBM broaden blockchain solution

Marsh is expanding its collaboration with IBM in order to provide clients with wider access to the industry’s first blockchain solution for commercial proof of insurance. The proof of insurance solution will now be accessible to clients through Marsh’s Salesforce platform. “By making proof of insurance accessible digitally and instantaneously for our clients through Salesforce, we are streamlining a key business requirement through easy and secure sharing of proof of insurance,” said Marsh chief digital and chief data & analytics officer Sastry Durvasula.

Symbility integrates 3D property assessment

Symbility Solutions has integrated its cloud-based claims management system with Hover, a platform that allows users to view properties as 3D interactive models. Insurance adjusters using Symbility’s system can tap into Hover’s data package to view details on a property – including re-creations of exterior and roof diagrams, as well as customer-submitted photos of the property – to process claims quickly.

Hover also engages homeowners by allowing them to take photos of their property using a proprietary app; these photos can then be used by insurance adjusters to immediately process claims.

Co-operators releases ondemand product for homesharing

The Co-operators’ new digital insurance brand, Duuo, has launched an on-demand insurance product for hosts on homesharing platforms such as Airbnb, HomeAway and VRBO.

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Available in Ontario, Alberta and British Columbia, the product can be purchased just for the nights that a property is rented; it is intended to cover the additional risks hosts face with short-term rentals that are not covered by standard home insurance.

Hosts can pay an average of $8 a night to cover the full replacement cost of a home and its contents.

Insurer and insurtech hookups becoming the new normal

The rapid growth of the insurtech sector has ushered in a new era of collaboration between tech firms and incumbent insurers, according to Capgemini and Efma’s recent World Insurtech Report. The report found that most insurance executives believe insurtechs will be a major catalyst to redefine the customer experience, deliver widespread efficiencies and create new business models. The industry also expects disruption and new competition to come from tech giants such as Amazon and Google, as well as manufacturers.

AXA XL taps supply-chain data to boost marine protection

AXA XL has partnered with Parsyl, a Denver-based supply-chain data platform that helps shippers, insurers and their clients understand the conditions that sensitive or perishable products are kept in. Parsyl allows customers to place sensors alongside sensitive cargo in order to monitor products as they pass through the supply chain. AXA XL will use Parsyl’s sensors in large-scale data mining, analyzing data such as location, temperature, light, humidity and movement impact of cargo to offer its clients enhanced loss-mitigation and risk-prevention services.

The power of social media Small brokerages are finding that the savvy use of social media can be an inexpensive tool in their brand strategy Small independent brokerages might not have the resources and advertising budgets of the much larger direct-to-consumer insurers, but many are finding that social media can help level the playing field – or even give independent brokerages a unique edge over their larger competitors.

Brokers who want to appeal to a newer generation of insurance clients can no longer ignore the potential social media holds.

Indeed, even the large insurance companies have gone online to reach out to consumers.

But the way social media is distributed and consumed has changed radically in the last few years. Even the way it handles marketing has transformed – targeted ads and suggestions are now a prominent (if questionable, in terms of privacy) feature on platforms such as Facebook. These changes present new challenges for smaller firms.

“There was a time not so long ago when a brokerage could share some good content on social media, such as ‘10 tips for saving on your insurance,’ and that would push them ahead of the pack,” explains Tim Rooney, a managing partner at sales and marketing firm Rooney, Earl & Partners. “However, as more and more firms got involved and started publishing blogs and white papers, it became much more difficult for smaller firms to differentiate themselves online.”

Rooney adds that the days of social media as a ‘free lunch’ have ended. “Whereas social

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Q&A

media used to be free, now firms have to spend money to promote posts on Facebook or extend their reach on LinkedIn,” he says. “If they don’t spend money, they will struggle to gain traction on social media.”

“Social media is a tool every brokerage can make the most of” The need to spend on social media advertising to gain an advantage seemingly favours corporate giants, but there’s more to using social media than just throwing money at it.

Broker Frédérik Tessier of Ontario-based MLS Insurance Brokers has been using social media as a way to boost client relationships rather than generate new leads.

“Social media is a tool every brokerage can make the most of,” Tessier says. “A big marketing budget is something not all brokerages have. If your budget is low, social media is a fantastic alternative because it’s very inexpensive. You can start a Facebook page for zero dollars and start building your brokerage’s presence in the digital community.”

MLS Insurance Brokers’ strategy of community interaction and “getting a finger on the pulse of [local] clients” has helped the brokerage gain both the trust and the business of its local community.

“Social media sites like Facebook and LinkedIn can be very useful tools for starting conversations as part of your brand strategy,” Rooney says. However, he cautions brokers that “managing your social media effectively takes time and effort. Are you able to generate leads via social media? It all depends on your network, your strategy and how you differentiate yourself.”

Craig Rowe

The competitive advantage of AI

CEO CLEARRISK

Years in the industry 29 Career highlight “Leaving a good risk management job and starting ClearRisk in 2006 was a big risk, but one I’ve never regretted”

Tell us more about ClearRisk. What do you specialize in, and do you have any plans for new products or services in the near future?

ClearRisk is a web-based RMIS company. Our software provides customers with the tools to manage risk more effectively through automated workflows for incident, claims and certificate management, and enhanced data analysis and utilization. By eliminating time-consuming tasks and providing meaningful data insights, we allow risk managers to focus on high-ROI initiatives that reduce their total cost of risk.

We are constantly delivering upgrades, enhancements and new features to our customers. But we are particularly excited about upcoming releases that will help our customers manage risk and through predictive analytics and AI.

What do you think are the biggest risks organizations currently face, and what can they do to mitigate those risks?

Technology-related risks are at the top of everyone’s risk register these days. Technological advancements in all aspects of business and private life are changing the nature and complexity of risk on a daily basis. Risk managers and insurers are struggling to identify and quantify how these technological changes will impact business.

It’s almost an impossible task, but one that must be undertaken.

The best any organization can do is to be ever vigilant and to make sure they are regularly scanning the environment, updating their risk registers and risk plans. Being flexible and innovative is essential if any organization is going to be able to keep up with rapid changes. Having very good data and the tools to analyze it is becoming more and more important.

What are your thoughts regarding the increasing interest in insurance automation? How can human risk management advisors or insurance brokers compete with AI? Automation is becoming the norm in every industry, and organizations as well as individuals must embrace it. Human risk managers and insurance brokers should view AI as a competitive advantage instead of a threat. By introducing automation into their processes, they can perform work more efficiently and provide better results for their clients. This will create more meaningful jobs, as well as bring value that can attract and retain customers.

Aside from AI, what other tech trends do you think will make a big splash in the industry in the near future?

The Internet of Things [IoT] is going to have a big impact. The increase in connected devices means more data and better analysis. Insurance providers can use this to monitor their policies and reduce their own risks.

Another trend is the mobile and cloud revolution. Insurers that haven’t adopted these into their processes will soon be left behind as customers turn to those who can provide greater levels of technology.

www.insurancebusiness.ca

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14/11/2018 9:12:32 PM

UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email insurancebusiness@kmimedia.ca

Past, present and paradox Insurance was an early adopter of technology – and it’s now lagging behind because of it, writes Bill Pieroni MENTION THE insurance industry to a layman – or even an industry insider, for that matter – and the image that springs to mind is usually not one of a pioneer on the cutting edge of technology. To be fair, that reputation isn’t exactly undeserved.

The paradox at the heart of the matter is that insurance was one of the first industries to aggressively use technology and now often finds itself lagging behind not in spite of that fact, but because of it. Where other industries might be able to deploy state-of-the-market tech solutions, insurance enterprises often must navigate the complex process of integrating them into their existing – perhaps decades-old – infrastructure. It’s not surprising that the industry is seen as a tech laggard, open to disruption by nimble insurtech firms.

As one of the earliest adopters of computing technology, the insurance industry has matured through three increasingly sophisticated periods. In the 1970s, the goal of ‘data processing’ – as we called it back then – was to support business through cost optimization.

The first forays involved using technology as a tool to efficiently execute non-core activities such as billing and printing. In essence, the computer was simply a more sophisticated adding machine or typewriter – but this established the groundwork for development.

In the 1980s and ‘90s, the industry continued to marry new technology with legacy processes, but with a more sophisticated understanding of its potential.

Computing technology was increasingly incorporated into core areas such as claims and underwriting. ‘Systems integration’

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became the watchword as solutions dealt with managing the transfer and distribution of information within the enterprise.

As companies realized they could leverage technology to not only reduce costs but also increase revenue, they began to create new technology-centric processes. At the turn of the millennium, insurance turned to technology to deal with changing consumer

and executing transformational change.

Budgets become dominated by maintenance expenses, and skills are geared to last-generation capabilities. Moreover, shareholders often balk at near-term outlays for the potential of long-term benefits.

Successful long-term value creators are positioning themselves to deal with these pressures by embracing the new technology era. This Outcome Era includes several characteristics: The merging of operations and technology to develop and deploy fundamentally new operating models beyond simply optimizing revenue and expenses Merging business and technology to create differentiating capabilities to increase strategic flexibility and operating adaptability A focus on positioning the business to most effectively take advantage of opportunities to expand into new products, customer segments, geographies and channels An acute awareness of option value in strategy and tactics, an appreciation of

“The industry must deal with the limitations born of legacy. It’s difficult to simultaneously support legacy capabilities while funding and executing transformational change” demands and product imperatives and the emerging internet phenomenon.

Are we now in a fourth era? Somewhat.

Around 2015, the Outcome Era emerged, with a focus on the integration of operations and technology to create novel business models and enhance positioning. Certain inevitabilities drive these developments. Data is front and center. Customers will demand digital interaction across devices. Change driven by market forces is increasing at an accelerated rate. Technology disruption will continue to occur across the insurance value chain, and established players need to leverage the lessons of the insurtech revolution.

In addressing these inevitabilities, the industry must deal with the limitations born of legacy. It’s difficult to simultaneously support legacy capabilities while funding

value management as a key skill, and the prioritization of outcomes Embracing digitization as the most effective way to achieve and support change Across all of these activities, those who execute the transition into the Outcome Era understand that throwing technology at every problem is not the path to success. By making purposeful decisions aligned with strategic intent, they’re positioning themselves to thrive in the 2020s and beyond.

Bill Pieroni is president and CEO of ACORD, the standards-setting body for the global insurance industry. His insurance career has spanned technology, operations and executive roles with leading carriers, brokers and consultants.

www.insurancebusiness.ca

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14/11/2018 1:42:15 AM

PEOPLE

INDUSTRY ICON

MAKING A DIFFERENCE Gallagher Bassett’s Scott Hudson tells Alicja Grzadkowska how the company is keeping pace with digital innovation and evolving customer expectations to ensure the claims process is as efficient as possible IN THE relationship between an insurer and a client, the moment of truth often comes at claim time. Whether the claim involves a medical malpractice lawsuit, an employee who gets injured on the job or a collision involving a company vehicle, loss comes in many forms.

As the president and CEO of global claims manager Gallagher Bassett [GB], Scott Hudson knows the importance of helping claimants navigate difficult situations.

Recently, one of GB’s clients experienced an employee fatality, and the resolution manager assigned to the claim took it upon herself to make sure the individual’s personal effects were sent home to the family. The client wrote to GB, praising the resolution manager’s action – another ‘go beyond’ moment that sets GB apart from other claims service providers.

“When I get notes like that, it’s proof that our people are living and realizing the vision of who we are as a claims management company – having an impact on people’s lives, making a difference, putting people’s lives back together,” Hudson says. “Insurance is a promise, and we in claims are the fulfilment of that promise.”

Hudson joined GB in early 2010, after Gallagher CEO J. Patrick Gallagher Jr. was scouting potential successors for the company’s claims arm and reached out to Hudson about the position. Hudson had already established a relationship with

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Gallagher while working as a consultant at Bridge Strategy Group, so he had intimate knowledge of the organization, its culture and the industry as a whole.

Hudson admits that because he’d never worked directly for a risk and claims management organization, Gallagher was taking a

captives. Despite their different needs, they all seem to agree that GB is doing something right. Advisen, a provider of specialty risk data for the commercial P&C insurance market, recently revealed that GB landed at the top of its claims satisfaction survey of more than 500 risk managers.

“Our people are living and realizing the vision of who we are as a claims management company – having an impact on people’s lives, making a difference, putting people’s lives back together. Insurance is a promise, and we in claims are the fulfilment of that promise” gamble by bringing him on as the next leader of GB, but it was a bet that paid off.

“On day one, many people thought I was just a consultant and were wondering how I would lead,” he says. “But today I am proud to say that I am viewed as a ‘claims guy,’ and I love this business.”

Leading the pack GB’s clients are a diverse group, ranging from corporate and public entities to carriers and

Getting that seal of approval from customers was a meaningful moment for the company. “It’s really satisfying seeing the excitement in our people when they know that the work they’re doing is recognized by industry leaders and that we’re making a difference,” Hudson says.

Claims management is an area of the insurance business that is especially sensitive to customer expectations – a challenge Hudson knows well. Moreover, as digital innovation has

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PROFILE Name: Scott Hudson Title: President and CEO Company: Gallagher Bassett Services Based in: Rolling Meadows, Illinois Years in the industry: 8 Fast fact: In 2017, Hudson received the CLM Foundation’s first Leadership Award

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14/11/2018 6:35:56 AM

PEOPLE

INDUSTRY ICON

opened up lines of communication, customers expect faster results.

“Ten years ago, it was acceptable to return a phone call within 24 hours; now people expect a phone call to be returned immediately,” Hudson says. “So we’re innovating to ensure the interaction we’re having with people who have a claim is via technology that runs that communication in real time. There’s a wealth of additional information available to our resolution managers that they can introduce into the claim handling process, so they’re given new tools and new data, and they

announced it was acquiring WCD Group, which is headquartered in the US and focuses on managing and mitigating risk across several industries. GB was attracted to WCD Group’s risk mitigation components, which it hopes to develop further.

“Our clients are just as interested in the loss prevention side of risk and claims management, so this was a natural fit from that standpoint,” Hudson says. “They’re very strong in real estate, construction and property, which fits very well with our overall offering, so it’s always about building deeper

“Ten years ago, it was acceptable to return a phone call within 24 hours; now, people expect a phone call to be returned immediately. So we’re innovating to ensure the interaction we’re having with people ... is via technology that runs that communication in real time” have to be able to quickly assess, evaluate and decide whether it has relevance in the handling of a particular situation.”

The rules for the insurance industry are also evolving, which means that GB has to stay on top of changing regulatory standards.

“The work that we do is in a highly regulated industry, and every day, whether it’s state or federal governments, they are introducing new regulations, so I think the challenge is understanding the expectations from all parties involved,” Hudson says, adding that as the world gets more complex, it’s raising the bar to perform even higher. “We have to work to make sure our people are properly equipped to work effectively in our environment.”

Partners in performance Evolving services and offerings is part and parcel of growing a business. In July, GB

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expertise and new capabilities that work well for our clients.”

The WCD purchase is the latest of several acquisitions, including National Transportation Adjusters, a US-based long haul and commercial fleet third-party claims administrator, and TriEx Health, Safety & Wellness, a provider of occupational health and safety services in New Zealand.

Looking to the future of the company, Hudson sees more growth and innovation on the horizon.

“We’re a global company, and we’re constantly looking to expand our global reach to guide and guard those who need us most,” he says. “In parallel with expanding geographically, we’re also expanding our offerings and solutions to be in the best position to serve our clients everywhere around the world. It’s an incredible time to be at Gallagher Bassett.”

GALLAGHER BASSETT BY THE NUMBERS

1962

Year the company was founded by Jim Gallagher and Sterling Bassett

2

Number of Gallagher Bassett offices in Canada (in Toronto and Burnaby, BC)

4,800+

Number of organizations GB partners with across a variety of sectors

60+

Countries around the world in which Gallagher Bassett manages claims

US$46 billion

Parent company Gallagher’s total adjusted revenue for 2017

www.insurancebusiness.ca

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14/11/2018 6:35:57 AM

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14/11/2018 6/10/2018 6:36:01 2:27:46 AM

SPECIAL REPORT

LEADING RISK MANAGERS

LEADING

RISK MANAGERS 2018

The world’s risks are changing rapidly. IBC’s Heather Turner spoke to 10 Canadian risk managers who are staying ahead of the curve to protect people, companies and municipalities across the country THROUGHOUT 2018, cities and companies across Canada have been challenged by record-breaking perils and national events – from natural disasters to the recreational legalization of cannabis – that have altered the way risk professionals view and manage key risks.

This year’s selection of Canada’s top risk managers is drawn from a wide swath of industries and organizations, from a large construction corporation and a global real estate firm to a tech-

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nology pioneer and a community organization that’s also the subject of a popular disco song.

What these leading risk professionals all have in common is a passion for mitigating and preventing today’s most critical threats. On the following pages, they share the risks that are top of mind for them today. They also reveal the key strategies they use to mitigate these risks and what they’re looking for in an insurance partner.

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progress or delay completion of the project.

We also develop mitigation responses based on our control of the risks and zones of influence affecting mitigation – i.e. external factors. These are evaluated by internal joint-venture experts in their specific fields for suitability, practicality and accuracy.

Our preparedness and alternative options are driving risk mitigation elements. We need to act quickly to reduce damages that could cause or increase delays. Monitoring and recalibrating risks and controls as required are practiced throughout the project cycle.

IBC: How do you promote risk management across various infrastructure projects?

AK: Being an engineering and major

AARON KONARSKY Senior risk manager DRAGADOS CANADA

An expert in the development and management of infrastructure and services, Aaron Konarsky is responsible for managing and mitigating the operational, hazard and project management risks of civil contractor Dragados’ Canadian operations.

This involves risk management and insurance activities, as well as complex claims resolution related to designbuild civil infrastructure and publicprivate partnerships.

Konarsky has experience in various insurance aspects of major construction projects and has led risk identification, risk transfer, risk allocation and projectspecific insurance for multi-billion-dollar infrastructure projects.

IBC: Which risks are top of mind for you today?

Aaron Konarsky: For infrastructure

projects, the emphasis is usually on completing the project on time, with quality and on budget – the risks that matter the most. Given the sheer size and scope, duration, and technical challenges of civil infrastructure projects, I am very concerned with planning and execution,

construction contractor, risk management is inherently baked into the process of project management. You literally cannot have one without the other.

However, we have e-training, as well as classroom training, where risk management and insurance programs are communicated to different audiences, subject to what relative requirements are necessary.

As a project is being implemented, specific training on insurance and risk

“Risk management is inherently baked into the process of project management. You literally cannot have one without the other” pricing or estimation risk, schedules and delays in completion, contract terms and conditions in terms of risk allocation and transfer of risks – insurable or otherwise – and proper risk management at milestones of the project.

IBC: What are some of your key mitigation strategies?

AK: Based on the size and duration of these projects, we develop detailed issue logs and then project risk registers based on varying loss events that could impede

management material is tailored to address the type, size and duration of the infrastructure project. Major claims scenarios are also examined, from thirdparty liability events to direct damage on infrastructure project assets, including business project interruption.

Dragados has built more than 7,000km of highways, 3,500km of roads, 1,500 bridges and 1,380km of tunnels throughout the world

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14/11/2018 6:41:32 AM

SPECIAL REPORT

LEADING RISK MANAGERS BF: Three things: One, make sure you have the right risk culture and escalation processes in place, wherein people are rewarded for bringing forward risks or early warning indicators.

Two, have the maturity and trust as an organization that will foster transparent communication.

Three, get the right team in place with sufficient diversity and specialties to bring forward a varied viewpoint and create a healthy dialogue that challenges one another in a constructive way. These elements complement the traditional monitoring and reporting that are industry-standard and will best prepare an organization to evaluate a situation and act accordingly.

IBC: How can insurance providers better help you address risks?

BF: The way business is conducted has

BONNIE FRANK Vice-president, enterprise risk and crisis management PSP INVESTMENTS

As part of the leadership team for PSP Investments, one of Canada’s largest pension investment managers, Bonnie Frank leads a group of diverse risk professionals responsible for PSP Investments’ robust enterprise and operational risk framework, crisis management, and global insurance program. Frank is responsible for corporate-wide risk initiatives and plays an integral role in ensuring the smooth implementation of the company’s five-year strategic plan, as well as the successful operation of its recently inaugurated offices in London and New York.

IBC: What have been your top priorities since taking over PSP’s global insurance program?

Bonnie Frank: PSP has gone global in the past few years, with new offices in New York and London. This, coupled

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with the ever-changing environment we operate in, prompted us to refresh our global insurance program. We took a risk-based approach and conducted an in-depth review of our insurance program, from types of risks to coverage, ensuring they are adequate and really speak to who we are as an organization. We took into account the long-term sustainability of the programs. You want the insurance to cover your present needs, but also be adaptable to cover future growth and objectives.

IBC: What risks and exposures are top of mind for you today?

BF: Those who are just entering the marketplace may not remember the full context of the last market correction.

If you’ve lived through it, you know it’s impossible to know when it’s coming, how hard it will hit and how long it will last. So top of mind for me would be mitigation strategies for the coming correction to ensure organization responsiveness, to ensure we can mitigate potential impacts as efficiently and effectively as possible.

IBC: What are some of your key risk mitigation strategies?

changed radically in the past couple of decades, and insurance providers have made some progress in adapting.

The willingness to custom-design insurance policies to reflect the specific needs of each organization will be paramount for providers. Leading insurance companies are also beginning to see the need to modernize the language in their policies to evolve it to today’s business landscape and areas of exposure.

IBC: What has been one of your proudest accomplishments as a risk management professional?

BF: I’m extremely proud that the team we have built has such a rich diversity of expertise – people with backgrounds in everything from international security [and] finance to art history, law and more. It speaks to how the profession is evolving to keep up with the increasingly diverse nature of risk and the wider scope risk managers must cover to be effective.

PSP Investments manages funds for the pension plans of the federal public service, the Canadian Forces, the RCMP and the Reserve Force

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14/11/2018 6:41:43 AM

SPECIAL REPORT

LEADING RISK MANAGERS Council [RCC], as well as RCC treasurer and co-chair of the 2014 RIMS Canada Conference. She is currently involved with the National Conference Committee, a subcommittee of the RCC.

IBC: What emerging risks is Manitoba facing right now, and how are you navigating them?

Valerie Barber: Cyber risks, risks

VALERIE BARBER Acting director, insurance and risk management – Department of Finance PROVINCE OF MANITOBA

After spending five years in accounting and a decade in claims, Valerie Barber joined the Government of Manitoba in 1999 as a manager of agency claims and loss prevention. She was then promoted to insurance and risk manager in 2015; earlier this year, she assumed her current role as acting director of insurance and risk management for Manitoba’s Department of Finance.

Barber is responsible for making arrangements for risk financing, including the centralized purchasing of commercial insurance, establishing and maintaining self-insurance plans for Manitoba departments and agencies, and providing advice on insurancerelated legislation and contracts.

Barber has taught risk management courses at the University of Winnipeg and is an active member of the Manitoba chapter of the Risk and Insurance Management Society.

She has served as the Manitoba representative on the RIMS Canada

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associated with the emergence of cannabis, and climate change continue to be top of mind. The exodus of significant numbers of veteran civil servants due to retirement is also a risk we face.

Measures undertaken to navigate the risks [include] improvements to technology and the purchase of some select cyber insurance products, a measured approach with respect to the cannabis industry, a

departments and agencies is communication and an open-door policy, and encouraging consultation with the insurance and risk management branch through relationship-building.

Government entities are provided with the opportunity to reduce the cost and impact of unexpected loss, as well as maximize potential opportunities.

Manitoba’s Risk Management Policy Manual, risk assessments, presentations and committee involvement promote risk management at every opportunity.

IBC: How can insurance providers better help you address the risks your province faces?

VB: Long-term relationships with insurance providers are a valued commodity. Enhancements to policy

“The foundation of promoting risk management across government departments and agencies is communication and an open-door policy” whole-government approach to protect our interests in advance of anticipated impacts arising from climate change, and succession planning compounded with recruitment of talent to supplement our workforce.

IBC: What are some of your primary mitigation strategies?

VB: Primary mitigation strategies include commercial insurance policies with large deductibles, a self-insurance fund implemented close to 25 years ago for select government agencies, and risk transfer by contract where applicable.

IBC: How do you promote risk management across the various departments and units under the Government of Manitoba?

VB: The foundation of promoting risk management across government

wordings and policy terms, as well as underwriting based on the risk and exposure so that the appropriate premium is charged, are also desirable.

IBC: What has been one of your proudest accomplishments as a risk management professional?

VB: One of my proudest professional accomplishments as a risk management professional has been to leverage previous experience in the private sector to assume a newly created position in the public sector, where I was able to play an integral role in the development of a customized database that Manitoba relies upon.

Manitoba contains more than 100,000 lakes, including Lake Winnipeg, one of the world’s largest inland bodies of fresh water

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IBC: What are some of your key mitigation strategies?

KD: Having procedures in place (e.g. health, safety and environment), good relationships with long-term partners and a crisis management plan.

IBC: Which exposures are top of mind for you today?

KD: Availability of transport capacity; changes to the legal environment; and heath, safety and environment.

IBC: How do you promote risk management across various facilities and operation sites?

KD: By being on the ground and having face-to-face time with our operations and offices so they know who I am and know about our risk management program. Also, by identifying and having regular in-person meetings with key risk stakeholders and influencers who promote the risk management philosophy within their areas.

KATHERINE DAWAL Manager, risk and insurance K+S POTASH CANADA

Since taking on the role of risk and insurance manager at K+S Potash Canada, Katherine Dawal has been responsible for transitioning the construction-based corporate insurance program and changing the nature of risk management into an operation in itself. To achieve this, Dawal led the establishment of new procedures and has been involved in expanding reporting scope and providing training to enhance the culture of risk mitigation.

Before joining K+S Potash Canada in 2017, Dawal amassed more than 10 years of risk and insurance experience in the corporate mining sector. She is a Chartered Insurance Professional and serves as a vice-president for the Saskatchewan chapter of RIMS.

IBC: What are the unique risks

your organization faces, and how do you address those exposures?

Katherine Dawal: At an investment of about $4.1 billion, the Bethune mine began operating mid-2017 after nearly five years in construction. As expected with

IBC: What do you look for in an insurance partner and in your insurance coverage?

KD: In addition to the common criteria such as financial strength, good ratings,

“We want insurance partners who value long-term relationships. A partner should understand our business and be willing to work with us to provide the coverage we need� any new facility, and especially one of this magnitude, challenges in the transition to regular operations can occur. For example, product that temporarily does not conform to specifications may result in product being reworked or price reductions.

We address these exposures through quality management, including utilization of technical resources within the K+S Group. Communication and proactive planning are key to identifying and managing these challenges.

etc., we want insurance partners who value long-term relationships. A partner should understand our business and be willing to work with us to provide the coverage we need for sustainability.

The K+S Potash’s $4.1 billion Bethune mine is the first new potash mine in Saskatchewan in nearly 50 years and is the single largest project in the history of the K+S Group

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SPECIAL REPORT

LEADING RISK MANAGERS Governments, parents, students, funding agencies, partners, unions and academic units – they can pull the university in all directions, with ever-greater urgency in this age of social media and instantaneous backlash. Just keeping the whole thing together is a superhuman task for university leaders in these times.

IBC: What is the key to effective risk management in higher education?

AL: Persistence is critical, and you must

ANDREW LEITCH Director, ERM programs, Risk Management Services UNIVERSITY OF ALBERTA

In 2008, after spending years as a freelance writer, corporate communications officer, public affairs associate, presidential speechwriter and policy developer, Andrew Leitch joined Risk Management Services at the University of Alberta.

With an initial focus on communi­ cations and project planning, he worked closely with the associate vice-president to develop the university’s first enterprise risk management framework.

Since then, he has been extensively involved in the ongoing activities of the university’s risk management committee, including all aspects of reporting and communications.

IBC: What was your strategy behind building the ERM program for the University of Alberta?

Andrew Leitch: Our team recognized that a large and complicated institution such as a university needs a highly formalized approach. We needed to

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make intangible concepts as concrete as possible while making sure the framework fit our culture. We needed clear and simple definitions and reporting, and definite pathways into senior administration and the board of governors. Finally, we needed to get on the right agendas and speak a language that resonated with the leaders and governors of the university in a way to help them achieve their objectives.

be thinking at every moment of how you’re adding value to the organization with your efforts. You have to choose your battles and learn when to let things go. You have to communicate constantly and actively build relationships. You have to provide the best tools you can and trust that the people in the organization will do what’s right. And you have to collaborate and compromise, but you need to know where and when you’re going to take a stand on any particular issue.

IBC: What has been one of your proudest accomplishments as a risk management professional?

AL: I’m proud of being able to work with senior administrators and academics

“You have to provide the best tools you can and trust that the people in your organization will do what’s right” IBC: Which risks are top of mind for you today?

AL: Top risks today are anything to do with funding. With so many variables and sources of funding, it’s difficult to plan when you don’t know how much money will be available next year or where it’s going to come from. Showing up quickly in any budget reduction scenario are risks to student success, the research mission, health and safety, and reputation.

Another thing we experience almost daily is the multiple demands and expectations of stakeholders.

from across the university to help build a common language and a positive risk culture. It’s satisfying to hear the enrolment expert, the safety expert, the budget expert and the reputation expert in a room together making new risk-related connections that can help us all be better.

The University of Alberta is one of three Canadian artificial intelligence hubs; the federal government recently invested $125 million to build and grow AI strengths across the hubs

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SPECIAL REPORT

LEADING RISK MANAGERS at continuously improving our policies and procedures around the safety and protection of children. This includes training, selection of employees and volunteers, policies, reporting, and access.

Cybersecurity is a real challenge for many businesses. It’s not ‘if’, it’s ‘when,’ so we try to prepare for recovery and awareness to help us with potential social engineering schemes.

Also, we have many unique programs that can be considered higher-risk activities, and we also tend to have many young staff, which can also be a challenge.

IBC: What are some of your primary mitigation strategies?

MH: Primary mitigation strategies are

MARILYN HIMBURY Vice-president, risk management and IT YMCA OF WESTERN ONTARIO

Marilyn Himbury has been with the YMCA of Western Ontario for 24 years, working in risk management for the past 12 years. The YMCA of Western Ontario provides community programs and services for 170 sites, from Woodstock to Windsor, and is supported by 2,000 employees.

Having started out in operations after university, Himbury went on to develop the Y’s risk program, transitioning it from operational to full ERM. Since then, her responsibilities have expanded to include purchasing insurance, managing claims, building relationships with brokers and adjusters, training supervisors and managers in risk control activities and policy development and implementation, and serving as the key resource person for association employees.

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IBC: What’s the key to effective risk management in an organization such as the YMCA that has a range of offerings?

internal controls, awareness and education.

Our risk management program consists of a risk register with risk owners for our top risks. We rely on having good practices in place for training and learning from any incidents that do occur. All managers take responsibility for risks and incidents in their areas and are able to call upon risk management for support or advice. We also rely on having good risk-control activities that coincide with our written policies.

“Allegations are a real risk when you offer programs where you supervise children ... we work at continuously improving our policies” Marilyn Himbury: The key is under­ standing our business and our mission.

They go hand-in-hand, and risk mitigation has to take these into account. Safety is always a top priority, and our controls must align with our goals.

IBC: What exposures are top of mind for you today?

MH: Allegations and cybersecurity. Closely after this would be the management of people. Allegations are a real risk when you offer programs where you supervise children. To this end, we work

IBC: What has been one of your proudest accomplishments as a risk management professional?

MH: My proudest accom­plishment is having the opportunity to share with others information about our risk management program and being able to grow the program from operational risk to full ERM.

The YMCA is Canada’s largest childcare provider, welcoming more than 72,000 children to its childcare programs every year

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the regulatory environment like everyone else. Because their activities and services are so diverse, so are their compliance obligations. Municipalities might not be fully aware of all of the compliance obligations to enforce or could be in violation themselves.

IBC: What is your involvement with the insurance services offered by Alberta Municipal Services Corporation [AMSC]? How do its offerings differ from a typical insurance brokerage?

CM: I work collaboratively with our general

CHRISTINE MALIGEC Director, risk management ALBERTA URBAN MUNICIPALITIES ASSOCIATION

Christine Maligec boasts more than a decade of experience in risk management, including overseeing large corporate insurance programs and claims within multiple jurisdictions in North America. Before joining the Alberta Urban Municipalities Association [AUMA] this past July, Maligec was risk officer for Alberta Blue Cross and worked in various risk-related roles for major companies such as PCL and Enbridge.

Maligec is an active member of Northern Alberta RIMS and was appointed president for 2016–2019.

She is also co-chair of the 2019 RIMS Canada Conference.

IBC: What are some emerging risks AUMA is facing today, and how are you navigating them?

Christine Maligec: One risk that is continuously evolving for us is cyber. More Alberta municipalities are accessing broadband service, increasing the opportunity to automate

services and connect facilities. This does come with great caution, as many companies struggle to keep good IT staff in major centres, and smaller municipalities may have a greater challenge finding and retaining qualified technology professionals. Coupled with limited experience and digital literacy, this could pose a risk to vulnerable municipalities.

We continue to find opportunities to engage, educate and support municipalities to become more risk-aware and digitally literate. The biggest financial impact won’t be ransomware or downtime, but the cost of mandatory breach reporting from the privacy-related impacts.

One new risk for municipalities is from construction. There may be a lack of understanding on insurance for construction projects within the municipality. Larger municipalities have a mature owner-controlled insurance program [OCIP] and leverage this as a strategic advantage. Others rely on what the contractor has without understanding the consequences. We continue to work with our members to help them understand the risks of their projects and provide them with the bulk-purchased OCIP solutions they could not get on their own.

Municipal governments have to navigate

insurance and claims teams. Where we differ from your typical insurance brokerage is we offer services to members who are also our shareholders, and we are beholden to them. Also, any profits made do not leave the province, but are reinvested back into the program to benefit the members.

We were born by necessity when the market would either not insure munici­ palities or provided unstable pricing. We are able to provide broad and consistent services at a value that administrators can depend on for budgeting.

IBC: How do you promote risk management across various municipalities and organizations?

CM: We have an advocacy group that helps manage big political risks that are strategic in nature or align with our casual legal service program for elected officials.

We also provide business solutions at better pricing with bulk purchase programs for utilities, employee benefits, pension offerings and investment services. Our insurance program has many other valueadded services. We are also available for ad hoc conversations and advice, as we know that municipal operations are continuously evolving.

AUMA represents urban municipalities in Alberta that comprise more than 85% of the province’s population

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SPECIAL REPORT

LEADING RISK MANAGERS discussing with internal audit, network security, IT, finance and various operation leads. These policy guidelines and controls should be reviewed, examined and followed through with regular updates and modifications in accordance with the latest technology development, claims experience and industry practice.

IBC: What’s the key to effective risk management in an organization with global operations?

GG: Have regular discussions with legal and operation leads in different countries to understand their concerns, exposures, new operations, contractual requirements and legal/regulation changes to ensure that first, the insurance program is adequate to cover the risk and meet all local regulatory requirements, and second, that indemnity and limitation of liability provisions are in place and updated to protect the organization by transferring risk to the other contracting party and limiting the organization’s liability exposure.

GLORIA GAO Senior risk manager, insurance and enterprise risk

management team, which provides ERM, claims and brokerage functions at both the corporate and building-owner levels.

IBC: What has been one of your proudest accomplishments as a risk management professional?

GG: Setting up a risk matrix to determine

COLLIERS INTERNATIONAL

Gloria Gao has more than a decade of experience in risk and insurance. During the earlier years of her career, she was an underwriter for a leading carrier, where she achieved top production underwriting across Canada. She joined Colliers International in early 2018, tasked with managing global insurance placement for the international real estate company’s operations.

Her role includes managing insurance due diligence for global M&As and post-acquisition program considerations, reviewing contract language from a risk and insurance perspective, placing special project insurance and specialty lines to meet contractual and regulatory requirements, and overseeing the risk

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“[The impact of social engineering fraud and cyber] can be significant, due to both internal and external factors being difficult to control” IBC: Which risks are top of mind for you today?

Gloria Gao: I would say social engineering fraud [SEF] and cyber, because their impact to organizations and their clients can be significant, due to both internal and external factors being difficult to control.

IBC: What are some of your primary mitigation strategies?

GG: With respect to SEF and cyber, I would suggest ensuring internal policy, guidelines and controls are in place, established by

adequate insurance and contractual languages for each type and level of risk for global operation, while using captives to ensure the most comfortable exposure for our organization.

For the eighth consecutive year, Colliers International took home the award for Best Property Consultancy, Canada, in addition to three other honours, at the International Property Awards gala in September

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MD: A combination of risk mitigation by employing best practices in everything we do, along with a sensible risk transfer program using various insurance products.

IBC: What do you look for in an insurance partner and in your insurance coverage?

MD: Our insurance partners need to be several things. First, [they must be] willing to learn all they can about our business and our challenges. Having an in-depth understanding of our business helps to ensure they can provide solutions that work and make sense for Celestica.

Second, they must be financially secure and able to not only transact business in all of the countries where we have operations, but also in our target expansion countries.

Finally, they must be collaborative and agile.

Today business moves at the speed of light, and it’s critical that our insurers have the flexibility to adjust.

IBC: What has been one of your proudest accomplishments as a risk management professional?

MD: Building this risk management

MICHELLE DREW Manager, insurance risks CELESTICA INTERNATIONAL

Michelle Drew draws on decades of experience when handling the risks at Celestica, a provider of design, manufacturing, hardware platform and supply-chain solutions for a range of industries, including aerospace and defence, communications, and healthtech. Drew is the main risk management contact for all business units and brokers and is responsible for the administration of insurance policies, assisting in the identification of hazards and exposures, collecting underwriting data from all business units, and handling insurance renewal submissions.

In addition, Drew is the director of professional development at the Ontario

Risk and Insurance Management Society.

IBC: Which risks are top of mind for you today?

MD: Given the complex nature of the work we do, liability in its various forms is what I think about most. The unprecedented rate of change we see nowadays means traditional ways of viewing risks and their associated liabilities is becoming more and more intense. Solutions to manage those risks need to be adaptive and responsive to these changes.

IBC: Are there any emerging or unique risks that organizations in your industry face?

MD: Complex contractual liability obligations involving multiple parties and the staggering numbers involved.

IBC: What are some of your key mitigation strategies?

role from the ground up. Spending time with local teams, working with them and developing their support on implementing our corporate risk strategy, and then taking that support and demonstrating to our senior management team the value of our insurance strategy.

With senior management support, we have been able to implement several risk management initiatives.

I have appreciated every opportunity to work with very talented people during my 20 years at Celestica. I also joined the ORIMS board last year, and working with this amazing group of volunteers to promote risk management has allowed me to grow and learn even more.

In 2017, Celestica was named one of Corporate Knights’ Best 50 Corporate Citizens for the fourth year in a row

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14/11/2018 6:43:42 AM

SPECIAL REPORT

LEADING RISK MANAGERS disasters signals companies to always be prepared in case an unfortunate event strikes. Even if companies are not physically touched by catastrophes, their suppliers or clients might be affected, which, in turn, could impact business operations.

Another example of a key exposure is social media, which allows any type of news, especially negative, to spread rapidly. That indicates a potential reputational risk, which could have an impact on the business and its investors.

IBC: What are some of your key mitigation strategies?

LC: Be a risk-averse manager, but

LAURENT COURION Director, risk management and insurance ABB CANADA

Laurent Courion has more than 20 years of experience as a risk consultant/manager. Since 2012, he has acted as the director of risk management and insurance for ABB Canada, a company specializing in power and automation.

Prior to ABB, Courion worked for a variety of organizations, including Zurich, Hub international and engineering firm SNC-Lavalin.

Courion’s education in mechanical engineering, fire prevention and risk management have helped him develop and successfully apply extensive risk control methods, which have led him to be regarded as a strategic business partner by his peers. His involvement in the Quebec chapter of RIMS also helps him to stay in touch with current and emerging risks in the industry.

IBC: Which risks are top of mind for you today?

Laurent Courion: Cyber risks are usually on the top of the list, but it is crucial to remain aware of all the other risks that we face on a daily basis.

The trend of increasing natural

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ensure that you do not eliminate existing

enough flexibility to businesses in terms of solutions appropriately suited for their needs and risk appetite.

IBC: As an organization that produces robotics, what are the unique risks you face, and how do you address those specific exposures?

LC: As one of ABB’s vast areas of expertise, robotics is a branch of engineering that has been an integral part of major manufacturers for a long time; therefore it is a known risk. However, the Internet of things [IoT] has brought new challenges to our customers and us since we are now capable of connecting, communicating and controlling almost anything in real time. As

“As risk managers, we should focus not only on financial, cyber or operational risks, but also be aware of a wider scope of risk that could affect viability of our respective companies” or upcoming opportunities. Mitigation strategies have evolved, and we are now taking a different approach at an enterprise level. Business continuity and employee safety are the main elements to take into consideration in risk mitigation. It is also important to understand that not all risks can be eliminated or should be transferred to the insurance market.

IBC: What do you look for in an insurance partner and in your insurance coverage?

LC: We don’t look at insurance companies the same way we used to a few years back.

They have become our financial advisors and partners, offering their professional support in situations that require their expertise. Nowadays, risk managers have an advantage of choosing which method of risk transfer works best for their business, whether through forming partnerships with the insurance industry or self-insuring.

Insurance companies should offer

an example, our liability increases as we program the entire manufacturing process through our complete integrated systems.

With the reality of these new risks, we have had to innovate to help our customers develop their existing technologies with a focused commitment on safety, reliability, network security and data protection.

Companies nowadays are affected by a multitude of potential risks. As risk managers, we should focus not only on financial, cyber or operational risks, but also be aware of a wider scope of risk that could affect viability of our respective companies. Risk managers shouldn’t be perceived as a tool to increase a company’s earnings, but rather as a strategic business partner in reducing the financial uncertainties of corporations.

ABB operates in more than 100 countries and employs around 136,000 people

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14/11/2018 10:10:20 6:43:52 AM 12/09/2018 PM

SPECIAL PROMOTIONAL FEATURE

THE CARE SECTOR

Taking care of business David Crozler, managing director and president designate at Markel, tells IBC how brokers can best serve the booming care sector IBC: What types of organizations are in the ‘care’ sector, and what are some of the most common risk exposures that these companies face?

David Crozler: We’ve defined organizations that exist to provide supervision, support, education and healthcare for young, elderly, vulnerable and disadvantaged members of society as falling in the care sector. These organizations can be both nonprofit or for-profit, and most are classified under the social services industry, although there is some overlap with

from the obvious forms of sexual abuse and corporal punishment, abuse such as bullying, harassment and even inappropriate photos all are equally troublesome.

Another often unrecognized exposure surrounds the professional responsibility these organizations carry. The definition of a professional has expanded beyond the traditional use of the word, which means professional risks fall more on organizations that might not consider themselves as providing a professional service. Lastly, we have noted an

“Some of the issues can be very sensitive in nature, so brokers want to partner with an insurer that has experience with the nuances of handling sensitive claims” David Crozler, Markel the education and health industries.

Care organizations face many of the traditional risk exposures, but there are unique exposures as well – many stem from the people they serve. Service users can have cognitive impairments or aggressive behaviour. This, of course, impacts risk to staff, other service users and the public – all of which the organization can be held responsible for.

In addition, many of these organizations have a duty to protect vulnerable persons in their care from physical or sexual abuse. Aside

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uptick in active assailants, and these organizations are often the target of such attacks.

IBC: What are some of the main challenges these companies face in their daily operations?

DC: These establishments face a range of challenges, which are especially acute for smaller organizations. For example, with real estate prices continuing to rise, we see increasing inequality and exclusion, particularly within larger cities. Consider that in

cities such as Toronto and Vancouver, the rental vacancy rate is less than 1%. This shift increases homelessness and the use of shelters and food banks.

On the other hand, fundraising has become increasingly sophisticated and complex, which means many organizations are fighting for donor dollars. Add to all of this an increasingly intricate regulatory and tax regime, and demographic changes impacting donor and volunteer profiles, and it becomes apparent that this sector faces many challenges.

IBC: Why is it so important for brokers in this space to provide their clients with policies from insurers with an in-depth knowledge of the care sector?

DC: One of the main reasons is claim handling. Some of the issues can be very sensitive in nature, so brokers want to partner with an insurer that has experience with the nuances of handling sensitive claims, particularly in relation to allegations of physical and sexual abuse. These issues need to be handled with the utmost discretion.

Another reason is that these clients can be very diverse in their operations and the underlying activities can be quite varied. Brokers need a partner that can understand these variances and address them in a comprehensive way, both from a product standpoint as well as an underwriting perspective.

Lastly, partnership is important because a single policy forms only part of the relationship that a broker has with their insurer.

This is why Markel is working very hard to identify key brokers and provide them with superior marketing and underwriting support so that we can mutually help benefit individual policyholders.

IBC: What are some of the key features of the Markel Care product?

DC: In addition to the standard coverages such as property, CGL and D&O, Markel has looked to provide coverages that will round out the unique needs of the sector. For instance, we have a claims made professional malpractice liability form, a cyber risk extension that includes first- and third-party covers, as well as abuse liability coverage on

both a claims-made and occurrence basis. The limits for these coverages are in addition to the CGL limits.

Furthermore, we have incorporated extensions that provide specialized coverages for these clients, such as crisis management emergency response expenses, as well as donation assurance, just to name a few. In addition, we have added outbreak extra expense with murder/suicide, as well as terrorism coverage, including active assailant, loss of attraction and threat of terrorism, all in an attempt to provide a true solution for the sector.

IBC: What are the advantages for a client who holds a Markel Care policy compared to a policy with another, less experienced or specialized insurer?

DC: Simply put: peace of mind. Our policy is robust and has been designed to meet the needs of the sector. Markel also has a style that flows throughout the company, and part of that style means we listen to our customers. As a result, we are consciously keeping an open line of communication to recycle customer feedback into our product improvement process.

An example of that feedback in action is that we will be looking to add social engineering and legal expense coverage to our offering in the coming months.

Another advantage is that we have deep experience in the sector, not only in Canada, but building upon the success of our social welfare product in the UK and our human services product in the US. Markel is an organization widely committed to the care sector, and that means stability and longevity is built into our offering, which is not always the case with other generalist insurers. Another point to consider is that we are looking quite holistically at the sector, not just at insurance. Our aim is to become embedded in the space in a way that extends beyond insurance.

IBC: Understanding that non-insurance services are still in development for this product, what will be the first value-added service?

DC: The most pertinent service will be care and health consultancy. The aim is to provide support in areas that intersect the very core of

our clients’ operations. We will look to assist policyholders with regulatory advice, registrations, inspections, independent complaints, pre-regulation health checks, responding to regulators or other government bodies, assistance with planning and assessment, HR policy and manual development, training for staff and volunteers, and much more.

This is something we have done successfully in the UK, and our hope is to bring this deep expertise to Canada. We have had extremely positive feedback from our clients from this service, so it is our priority at the moment. Policyholders can expect to receive complimentary consulting hours with an option to purchase more.

IBC: Could you talk a little about the gaps that similar products in the market have and how the Markel Care

policy fills those gaps?

DC: In some situations, what we’ve seen is that a single policyholder may have separate policies with different insurers in order address their known risks. This approach often creates unintended gaps or opens up the possibility of dispute between insurers after a claim. We see this in particular between the CGL, professional liability and abuse liability coverages. To address this, we offer all three coverages under one policy.

We have also combined elements of our traditional medical malpractice wording with our miscellaneous professional wording in order to provide a comprehensive coverage termed professional malpractice liability.

In addition, we have ensured that our CGL, professional malpractice liability and abuse liability contain language inclusive of volunteers, not just employees.

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PEOPLE

BROKERAGE INSIGHT

Breaking ground For nearly 50 years, Wylie-Crump has specialized in the construction and development industries. Partner and principal Nolan Heuchert tells IBC about the key trends affecting this dynamic sector today

IBC: How did you develop your specialty in construction insurance?

Nolan Heuchert: I’ve been in the insurance industry since 1994, starting my career with a large international insurance brokerage.

In the initial 15 years of my career, I learned my craft in the large brokerage community, and working for a large firm allowed me to be very specialized in servicing the construction sector. Throughout my entire 24 years in the industry, I have always worked with and provided services to the construction sector … if I had to lean toward an expertise, it would be in the area of heavy civil, such as road and bridge construction.

My personal claim to fame was the 2010 Vancouver Winter Olympics; I was involved with the Vancouver Olympics organizing committee, and I assisted with the ownercontrolled insurance programs for the various projects and venues that were undertaken in the buildup to the 2010 games.

IBC: What trends are you seeing in the construction sector today?

NH: In BC, Western Canada and across most of the country, there’s a foreseeable problem with an aging workforce and demographic.

Not many new entrants are coming into the construction industry, so labour is becoming more and more of an issue, and construction firms are stretching their resources further and further. As a result, we are seeing two

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trends: One, we are seeing construction firms going into default or bankruptcy. Is that a result of resources being stretched too thin?

We think so.

Also, we are seeing a fair amount of amalgamation in the industry, further enhanced by international firms coming to Canada and acquiring Canadian construction companies.

That’s partially a solution to the changing demographic, but it’s an issue we are seeing across the industry as a whole.

From an insurance risk perspective, one trend I am witnessing is the push towards a design-build model, whether a formal contract model or an informal model, whereby the designer and contractor are almost becoming one entity. Some firms are embracing this wholeheartedly, and some are fighting the trend. As a result, we have to look more and more at not only standard property & casualty coverage, but also professional liability as a common coverage maintained by the constructors and even trade contractors.

IBC: How have recent changes in the insurance industry affected the construction sector?

NH: Insurance is also facing similar changing demographics. There seems to be a disappearing level of experience and expertise as a younger, more mobile workforce comes into the insurance industry.

We are also starting to see a tightening of the insurance market when it comes to the construction sector. It’s not fully realized yet, but I expect we will see more changes in the next 12 to 24 months with less capacity, higher rates and more coverage restrictions.

IBC: From an insurance perspective, what are the unique aspects of the construction industry?

NH: As mentioned previously, the line between contractor and designer is blurring, and it’s a challenge for some in the insurance industry to look at the two cohesively.

We try to align either individual products or

CONSTRUCTING EXPERTISE A former senior officer and construction practice leader for a large international insurance brokerage firm, Nolan Heuchert has been engaged in a broad range of complex domestic and international insurance programs, as well as several P3 projects in British Columbia.

An active member of several local and national construction and design industry associations, Heuchert is the current chair of the risk management committee for the Canadian Design-Build Institute, a chapter of the Canadian Construction Association.

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FAST FACTS: WYLIE-CRUMP

Established: 1972

Based in: Vancouver

Leadership: Partners and principals Nolan Heuchert, Brian Lawson and Graham Sibbald

“The line between contractor and designer is blurring, and it’s a challenge for some in the insurance industry to look at the two cohesively” combined products that can better service the needs of the construction industry by looking at those two together.

The other area I find unique is contractual risk exposures imposed upon the contractors, because contract terms are critical in determining the risk allocated to each party in a project. Sometimes there’s not enough attention paid to those contractual terms, and they create confusion or misalignment on the risks being allocated to the various levels of construction.

IBC: What’s a common challenge you face in construction insurance?

NH: We find that there’s a varying base of knowledge among underwriters; we are constantly educating the insurance industry about what actually occurs in a construction project. One example is that we work with a number of blasting contractors who work with explosives. With the level technology and monitoring available, blasting can be a very controlled and managed process, whereas an underwriter might think of it as things

Specialty: Approximately 90% of brokerage revenue is derived from general contractors, trade contractors, design professionals or ownercontrolled insurance programs

Partnership: Earlier this year, Wylie-Crump became a broker partner with Navacord

blowing up uncontrollably. It’s not as bad as it seems at first. It’s about understanding what is a good risk versus a bad risk.

Because of our knowledge base and specialization in the industry, we pride ourselves on knowing where the best fit is in the marketplace. That is constantly changing, but we strive to stay on top of which market wants to look at which risks. If a good underwriter moves from one market to another, we will follow that expertise to make sure our clients and projects are getting the best fit.

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14/11/2018 7:21:19 AM

FEATURES

PRESENTATIONS

How to create a winning presentation The key to an effective presentation is to make your message simple and genuine, writes professional communicator Emma Bannister

EVERY TIME I go to speak or train at a different company, I get the same response: “You make presentations sound so simple.

I get it, but I don’t get how I get buy-in from everyone else.”

The goal of any presentation is to influence your audience to act. Maybe you want your employees to get on board with your new vision or idea, or to motivate your client toward a new outcome. You want to make them feel excited, inspired or raring to go.

Yet nine out of 10 times, at the completion of a presentation, you’re probably met with chirruping crickets, blank faces or stifled yawns (if your audience hasn’t fled the room).

So what gives?

Make a point You can only claim that you have a ‘winning presentation’ if your presentation achieves what you wanted it to achieve. If your audience does what you want them to do and they respond in the way you want them to respond, that’s how you measure the success of your presentation.

The problem most of us trip up on is that you need to think about the behaviour of your audience long before you start talking.

All too often, when I ask a speaker what their objective is, they don’t know. They can’t tell me why they are presenting (other than because they’ve been told to), or what they want the audience to feel, act or do after they have seen the presentation. You have to be 100% clear on the purpose of your presentation.

Be human The key challenge we all face, regardless of industry, is that the world is more and more competitive every day. It’s harder than ever to stand out and be noticed, and to communicate your point of view with the right people in the right way.

One thing that’s not going to help is using business or corporate jargon as a crutch. All

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this does is create unnatural, overcomplicated messages that people can’t engage with.

What the world needs today – what your customers, clients, stakeholders and team members are crying out for – is natural, human-to-human connection through compelling visuals and emotional stories.

In business, we’ve been taught to stick to the facts and leave out any hint of emotion, yet research proves that our decisions – whether we buy or buy into something – are influenced by our emotions.

Remember, people buy from people they like. So you need to make your audience feel something toward you other than the urge to flee the room. The best presenters are those who can use a combination of facts and emotions to explain a future place that everyone wants to work toward.

Use images and video to create excitement, inspiration or action, if it’s appropriate to your cause. Pair these with infographics and diagrams that sum up your main points and data. I’ve also seen people use videos to successfully create something that tugs at the heartstrings and lingers for a long time in everyone’s memory.

When you share your vision and goals through compelling stories and slides, you reduce fear and instill confidence in your audience. That’s when they will connect to a future they want to be a part of.

Own up and own it Many of us believe that sharing everything and anything and blinding our audience with numbers is the best way to be transparent and open when it comes to a presentation, but that couldn’t be further from the truth. This will only put off the people you are trying to engage and make them lose interest faster.

It’s more important than ever to cut out all the clutter from your presentation. A powerful presentation has content that is clear, easy to understand, and uses simple

IDENTIFY YOUR PRESENTATION’S PURPOSE What’s your main message?

You should have only one. Less than 10% of a presentation is remembered, so if you start jamming in too many messages, you will lose your audience.

What’s your objective?

Are you trying to educate your audience, share results or sell something?

Again, you should only be doing one of these.

What are your audience’s needs?

Do you have a clear understanding of who you’re presenting to? What do you want them to think, act or feel after you present? You must assess their beliefs, values and motivations. What makes them tick? Get into their shoes at the start, listen to them as you walk through the presentation and gather feedback at the end.

The best presenters are those who can use a combination of facts and emotions to explain a future that everyone wants to work toward language and images to connect with and engage your audience through a balance of emotion and analytics. Your audience will leave the presentation feeling different – inspired or excited to act on what you want them to do.

A poor presentation, on the other hand, has content that is overloaded with facts, stats, numbers, corporate jargon and dense text. It leaves the audience feeling confused, turned off and disengaged. They will leave the room with no idea of what to do next – except never attend one of your presentations again.

You must be clear and honest in your presentation. It’s also important not to try to hide or cover up negative information or numbers. Nothing turns clients or customers off more than when you lie about your financial position.

You need to be future-focused and take ownership of any problems. Explain the steps

you’re implementing to turn things around to minimize loss, and get your team involved to help with this, too.

Be open and honest about where you are right now and what’s involved in the journey to get where you’re going – together. Leave your audience inspired, not deflated like it’s their fault or you’re looking for an out.

Bad slides and presentations are used like a security blanket to hide things under.

So start with small changes to your content and attitude, and stop hiding and hoping for the best. Your customers, clients and team members will respect you for that.

Emma Bannister is passionate about presenting big, bold and beautiful ideas. She is the founder and CEO of Presentation Studio and the author of Visual Thinking: How to Transform the Way You Think, Communicate and Influence with Presentations. Find out more at presentationstudio.com.

www.insurancebusiness.ca

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14/11/2018 1:43:29 AM

FEATURES

FLEXIBLE WORK

Is too much flexibility killing productivity?

Are your employees taking a flexible work policy too far? Anna O’Dea offers some tips for getting productivity back without taking away a desirable benefit

IN TODAY’S digital world, employees expect the opportunity to work at times and in places that suit them. The days of being chained to a desk from nine to five are disappearing as companies embrace the digital tools that free their talent to work from anywhere at any time, yet still stay connected.

cracks are showing. Some leaders are worried that productivity is taking a hit and team culture is dying, as people aren’t as present in the office. They know some employees are taking too many liberties, but they don’t want to snatch back the benefit.

If this sounds familiar, it might be time to

When setting boundaries, look at your own behaviour first. Are you being responsive when off-site, taking interest in your staff so they feel energized?

Strategy planning in a cute café, a conference call in transit to save time, skipping train delays to sort spreadsheets from the couch – the appeal is obvious.

The employers I talk to at Agency Iceberg know that offering freedom is a competitive way to attract and retain great people. But

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tighten up flexibility in your business. Here are some questions to consider.

Are my employees taking advantage?

If you’ve hired well, you should have committed people. But talent of all

tenures, generations and personal situations can lose focus when you loosen structure.

Watch for signs such as missing meetings, being difficult to reach online or via mobile within agreed hours, not hitting targets, or failing to meet deadlines.

Keep an eye on increasing requests for flex-time favours that don’t suit your business. Too many Friday afternoons off, despite the promise of making up time on the weekend, is unlikely to suit clientfacing roles.

How much flexibility suits what we do?

Think about the type of work that must be done, and when and where it’s best performed. Consider the ideal situations for teamwork, client meetings and mentoring.

What’s the right mix of in-person or online interactions for each – for example, daily in-person WIPs, weekly face-to-face strategy sessions or continual dialogue online?

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Should flexibility be earned?

If you give freedom to one part of the business, you should give it to all, with awareness of what’s appropriate for each role. But for new hires, it could help to set a probation phase. You can understand their working style, build trust and ensure they know what’s expected.

How can I get some discipline back?

When setting boundaries, look at your own behaviour first. Are you being responsive when off-site, taking interest in your staff so they feel energized? Then ask your team how they view the situation, as they could be struggling to adjust to digital life, and you can think about how to better manage the change.

Easy ways to get structure back include

booking regular in-person meetings and agreeing on hours employees must be available to clients and colleagues. Set expectations for response times, regardless of where the employee will be working from.

How can technology help?

You can keep everyone in easy reach by supplying quick messaging tools (such as Skype for Business, Slack or Google Chat) and video conferencing capabilities. Project management cloud platforms such as Toggl are great for time tracking, and workflow dashboards such as Trello help you see what everyone’s up to on projects.

How can culture help?

You want people to be self-motivated and happy to come into the office,

and to stay focused on their work when off-site. Culture can play a big part in getting momentum back. Set up workshops to share insights, challenges and encouragement. And there’s nothing wrong with team lunches and Friday celebrations to bring back the spark!

Flex is the future – but within reason.

Digital freedom is here, and everyone wants to embrace the benefits. Considering these questions should help you offer flexibility while keeping productivity high and a great company culture alive.

A recruitment expert and the founder and director of Agency Iceberg, Anna O’Dea has placed thousands of employees in the best workplaces. O’Dea is also the founder of #LeadingLadies, an award-winning interview series featuring C-suite professionals’ career journeys.

www.insurancebusiness.ca

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PEOPLE

CAREER PATH

MAKING CONNECTIONS From law to insurance, Rissa Revin has always prioritized relationships Although Revin set out to study architecture at university, she changed course and set her sights on the legal world after the Charter of Rights and Freedoms was signed into law “I initially wanted to be a litigator focusing on human rights and change the world. During law school, I became less idealistic and wanted to handle big commercial litigation”

1986

GOES TO LAW SCHOOL

1992 DISCOVERS E&O When her mentor introduced her to E&O claims and litigation, Revin’s view of the insurance industry began to shift “The cases themselves would be complex with an overlay of insurance; it opened my eyes to where insurance comes into play, who needs it, and who uses it. That experience taught me how to speak my mind. However, I didn’t love the ‘hired gun’ nature of a litigator; I wanted a consistent lens, and that led me to go in-house”

2001 GAINS STARTUP EXPERIENCE A move to Liberty Canada gave Revin experience in a startup-like environment. She helped to set up D&O team and was later chosen to lead the global claims team “At times it was head-banging; mostly it was fun. Having that opportunity to be creative was very freeing. It was very unusual for a Canadian to be the one who was picked to lead the global team. I learned about being culturally diverse”

2014 JOINS MUNICH RE Wanting to learn more about the reinsurance side of the industry, Revin joined Munich Re with an eye to adding to her skill set “Of course I knew of its long history in the industry, but its emphasis on innovation was a great surprise. At Munich Re, including DAS where I’m now CEO, the core of what we do is relationships – and when we innovate with that in mind, that’s when we get it right”

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1989 STARTS LITIGATING Revin’s first post-university position at Blaney McMurtry LLP provided her with an introduction to the insurance industry, but she was reluctant to embrace it “It felt like I was home as soon as I walked through the door. I said, ‘I don’t want to do insurance law; can I still work here?’ They started me off on commercial. I didn’t realize that insurance made the world go around from a business perspective; I was very myopic about the industry”

1999 MOVES TO CHUBB Revin’s desire to be in-house at an insurance company led her to Chubb, where she found herself drawn to directors & officers insurance and, as a result, came to understand the importance of relationships

“I worked with a mentor who was known as the godfather of D&O; he would often tell us that this was a relationship business – he would hammer that home, and that resonated” 2012 LEAVES AND RETURNS After a sojourn in banking that left her missing insurance, Revin returned to the industry to take a role as a senior vice-president at Aon “It hit home what diversity we have in insurance and how much I missed that – I realized how much the insurance bug had taken hold. I wanted to be on the brokerage side; the takeaway [from working with Aon] was the ability to speak to actual insureds every day. It was eye-opening and made me understand the expectations on multiple sides”

PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email insurancebusiness@kmimedia.ca

Green spends much of the winter tying her own flies at the fly stations she a nd her partner have set up in their base ment

40"

Length of the largest fish Green has caught, an Atlantic salmon

1,500

Estimated number of hand-tied flies Green owns

$1,200

Price of the most expensive rod in Green's collection

PLENTY OF FISH When she’s not adjusting claims, there’s nowhere Deirdre Green would rather be than on the river with a fly rod in her hands DEIRDRE GREEN held her first fishing rod at the encouragement of her partner, himself an avid angler, but since that day in 2015, the Nova Scotia-based claims adjuster has made the activity her own.

Indeed, fly fishing tends to dominate Green’s summer. “All week I’m gearing up for the next weekend,” she says. “One

evening a week I’ll shop, one evening I’ll do meal prep, one I pack, and then Friday at five, I’m ready to go so I can spend the whole weekend on the river.”

Green’s passion for fishing has much to do with the joy of being out nature, particularly at the prime fishing times of dusk and dawn. “Those are special times to be out –

the wildlife is at its most active,” she says.

“Just the other weekend, I saw a mother black bear with her cub.”

The peace she finds there doesn’t hurt, either. “Time on the river is cathartic; it’s my form of meditation,” she says. “Concentrating on casting and my fly drifting downstream leaves no time for errant thoughts.”

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FEATURES

EXPERT ADVICE

The future of specialty in a global market BOTH SPECIALTY and risk management in general are evolving – the last five years have seen an increase in the number of industry players. Many of these players will be tested by the volatility of results in their book of business, net and gross line impacts to capacity plays, and, of course, increased regulatory and rating agency scrutiny. The last is especially important as it pertains to underwriting rigour, solvency on a return-period basis and the ability of enterprise risk management to identify and

48

address emerging operational risk. Operational excellence is also key, particularly in the face of increasing digitization.

Now is the time for insurers to re-evaluate their roles in specialty and risk management and shift the dialogue from being a capacity player to a strategic partner across all segments of business.

Growth in specialty lines RSA Canada, like other insurers in the

specialty sector, has experienced considerable growth across its global speciality lines [GSL].

One path to success has involved breaking out of the traditional silos between specialty divisions to leverage each more effectively. In the GSL context, this means putting ourselves in the shoes of our clients, adopting their worldview and then underwriting the important details. This is more powerful and effective than attempting to create a ‘forced fit’ insurance solution.

“We have to look at the enterprise risk management of the insured holistically to more adequately and elegantly create solutions for brokers that are relevant to our clients,” says Yvonne Steiner, head of global specialty lines at RSA Canada. “We approach this by ensuring that good local standards in all regions are well understood, especially as they differentiate from master policies. Having an industry-wide knowledge of differentiated business models creates a differentiated view into Canada. The global benchmark and business model view is necessary to meet business objectives.”

Building on the success of RSA’s personal insurance, mid-market, SME and large commercial lines, the growth potential for GSL is immense. According to Steiner, RSA is nearing the 50% of the CI volume in its GSL portfolio.

The opportunity for insurers will be based on their willingness to expand their portfolio and accrue more knowledge across the different disciplines within specialty lines.

The role of the GSL broker Brokers have an important role to play in the growth of the specialty sector. Not only do they inform the development of various markets’ offerings, but they also work to strategically meet the needs of everyone at the table and can help identify the best opportunities for the client.

The future success of the GSL sector is bright, buoyed by innovative approaches to underwriting new and emerging risks and building bench strength of industry-leading subjectmatter experts. Collaboration across all sectors of the business is key, as it is always possible to learn more – especially from the personal insurance side, SME and mid-market sectors – about how to evolve, transform and remain relevant in an era of constant adaptation. To learn more, visit rsabroker.ca/gsl.

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13928

Growing clients need someone who gets the big picture.

Your large commercial clients with multinational business deserve 360-degree coverage.

RSA’s Global Specialty Lines gives your clients access to an expert network that spans more than 150 countries and territories, making the whole world feel like it’s their own backyard. Talk to us to see how we’re ready for even more of your international ambitions.

We’re growing. How about you?

Come grow with us at rsabroker.ca/gsl

© 2018 Royal & Sun Alliance Insurance Company of Canada. All rights reserved. RSA, RSA & Design, and related words and logos are trademarks and the property of RSA Insurance Group plc, licensed for use by Royal & Sun Alliance Insurance Company of Canada. RSA is a trade name of Royal & Sun Alliance Insurance Company of Canada.

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14/11/2018 1:45:32 AMAM 2018-11-07 10:40

RESTORE WHAT

MATTERS MOST

CONGRATULATIONS TO ALL OF THIS YEAR’S NOMINEES, FINALISTS & WINNERS

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