Insurance Business Canada 5.05

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ISSUE 5.05

CONNECT WITH US Got a story or suggestion, or just want to find out some more information? twitter.com/InsuranceBizCA

CONTENTS

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UPFRONT 04 Editorial

The complexity of cyber insurance

06 Statistics

FIVE-ST R

MGAs SPECIAL REPORT

28

42

Can robots replace insurance brokers?

10 News analysis

THE VALUE OF MGAS

Expert advice on what makes a good managing general agent

The world is changing for brokers, but it isn’t ending

12 Intelligence

XL Catlin launches new aviation product and RSA appoints global risk COO

14 MGA update

How can MGAs thrive in a competitive market?

16 Cyber update

There’s more to cyber than hacking

18 Opinion

Brokers reveal their picks for outstanding MGAs FEATURES

INDUSTRY ICON

08 Head to head

FEATURES

FIVE-STAR MGAS

PEOPLE

The boom of the Chinese insurance industry is felt across the globe

44

SPORT AND FITNESS

The importance of specialist insurance

Ivan Gonzalez from Swiss Re Corporate Solutions focuses on growth and innovation

Transforming insurance with the Internet of Things

FEATURES 24 Waivers of liability

Jeff Smith from Markel on the tricky world of liability waivers

26 Adjusting to a market need

Catastrophe Response Group’s Kyle Winston on the role of CAT adjusters

46 Proud to be Canadian

Challenges facing Canadian brokerages in today’s industry

64 Expert advice

Insuring against the ever-changing climate

PEOPLE

20 2

FEATURES

48

TOP CYBER BROKERS

The new wave of cyber insurers

60 Career path

Kristin Coulombe puts people first

63 Other life Julie Prévost’s dancing days

INSURANCEBUSINESS.CA CHECK IT OUT ONLINE

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UPFRONT

EDITORIAL

Chasing an evolving threat I f there is one word bouncing off the tongue of insurers in 2017, it’s “cyber.”

Whether through global attacks like WannaCry and Petya, or breaches at firms like Yahoo and InterContinental Hotels, cyber insurance has been grabbing headlines daily and is even the top search on our Insurr platform.

However, while everybody may be talking about cyber insurance, how many of us actually grasp its plentiful complexities?

“The way organizations need to address cybersecurity is changing,” Tracey Malcolm, leader of the Future of Work practice at Willis Towers Watson told Insurance Business in August. “They’re moving from a technical, execution-focused space to a prevention-focused mindset, which requires much more planning and consultation at the offset.”

It’s that planning and consultation that brokers are expected to play a key part in, with clients increasingly turning to them for advice about mitigating risk. Yet unlike traditional areas of insurance, in which brokers often boast decades of experience, cyberattack prevention is an entirely new concept made all the more

“Cyber insurance needs to show a level of flexibility unheard of with the typical annual auto insurance policy” complex by the fact that each business faces unique risks. Even accidental data breaches account for almost a third of incidents, according to Beazley Breach Insights.

Then there are the policies themselves which could be out of date as soon as they are written. With new malware emerging every minute, cyber insurance needs to show a level of flexibility unheard of with the typical annual auto insurance policy most consumers are used to acquiring.

This led Peter Erceg, SVP of global cyber & technology at Lockton, to tell Insurance Business that the industry should be a driving force behind global cyber standards.

“It’s not going to happen from governments and regulators – they will always be looking at what’s important for that country,” he said. “The companies themselves aren’t going to do it, so it needs to be a central point that can drive it, and I think insurance has a part to play in that.”

Regardless of the wider industry issues, however, what’s clear for brokers is that cyber is no longer just insurance’s internal hot topic – it’s the problem clients demand solutions for now. There’s no standardized direct-to-consumer offering that can drive price-focused cyber insurance purchases – your reassuring voice and educated mind is very much in demand. So if you’re not yet sure what this cyber business is all about, make sure you get up to date and fast – the business opportunity it presents cannot be ignored.

The team at Insurance Business Canada

www.insurancebusiness.ca EDITORIAL Managing Editor Paul Lucas Writers Heather Turner, Lucy Hook, Libby Macdonald, Tim Garratt, Joe Rosengarten, Lyle Adriano, Sam Boyer, Bethan Moorcroft Copy Editors Jo Crichton, Roslyn Meredith

CONTRIBUTORS

Janine Garner, Karen Gately, Peter Kochenburger, Warren Kennaugh

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

SALES & MARKETING National Account Manager Eric Langille Associate Publisher Trevor Biggs General Manager, 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

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 CMCA AUDITED

Insurance Business Canada is part of an international family of B2B publications and websites for the insurance industry Insurance Business America cathy.masek@keymedia.com T +1 720 316 0151 Insurance Business UK jonathan.connelly@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.

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UPFRONT

STATISTICS

AROUND THE WORLD

Canada

MANULIFE (#12)

Industry momentum is shifting eastward as China’s insurance companies continue to boom

THE WORLD’S largest insurer isn’t located in the US, UK or Europe – it’s in China.

Ping An Insurance Group rocketed to the top of Forbes’ list of the world’s largest insurance companies, beating out industry stalwarts such as Allianz (which fell to number two) and AXA (number three). In fact, Asia-based companies occupied four of the slots on the list of top 10 insurance companies, which was rounded out

318,588

People employed by Ping An, the world’s largest insurance company

US$106.6bn Revenue recorded by Ping An for the most recent fiscal year

by European and British multinationals.

US companies, meanwhile, failed to crack the top 10; the largest American insurer, MetLife, came in at number 16, just behind China Pacific and Tokio Marine. The increasing dominance of Asian insurers demonstrates the rapid growth of the industry in the region, in contrast to more mature markets in North America and Europe.

8.8%

Insurance spending as a percentage of GDP within OECD countries between 1996 and 2015

United States

METLIFE (#16) TRAVELERS (#17) AFLAC (#20)

LEADING THE WORLD The 25 largest insurers in the world are scattered across the globe, but Asia is now on equal footing with the traditional insurance stronghold of Europe. Each region lays claim to 40% of the group; North America is home to the remaining 20%.

2

Insurers named among the top 100 most valuable brands globally Sources: Forbes, OECD, Brand Finance

MOST VALUABLE BRANDS

TOP INSURERS BY ASSETS

Chinese insurer Ping An ranks as the highest-value insurance brand, with a brand value of US$16.3bn, overtaking Allianz, which is valued at US$15.1bn.

1 Brand value rank

50

#79

#85

100

#127 #143

150

200

#165

1

AXA

US$944bn

2

Allianz

US$935bn

3

MetLife

US$899bn

Ping An Insurance Prudential 5 Financial Japan Post 6 Insurance Nippon Life 7 Insurance Co. Berkshire 8 Hathaway

US$803bn

9 Prudential PLC

US$578bn

Legal & General

US$575bn

4

10

Ping An Insurance

Allianz

Anthem

AXA

Aetna

Source: Global 500, 2017; Brand Finance

6

France’s AXA Group holds the position of world’s largest insurance company by total assets. The top 10 also includes three US companies and three based in Asia.

US$784bn US$691bn US$621bn US$621bn

US$0

US$100 billion

US$200 billion

US$300 billion

US$400 billion

US$500 US$600 billion billion

US$700 billion

US$800 billion

US$900 billion

US$1 trillion

Source: Relbanks.com, as of 31/12/16

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United Kingdom

PRUDENTIAL (#6) LEGAL & GENERAL (#18) AVIVA (#23)

Japan

JAPAN POST HOLDINGS (#4) TOKIO MARINE HOLDINGS (#14) DAI-ICHI LIFE INSURANCE (#19) MS&AD INSURANCE (#22)

Germany

ALLIANZ (#2) MUNICH RE (#10)

Italy

GENERALI GROUP (#13) France

AXA GROUP (#3)

Switzerland

ZURICH INSURANCE GROUP (#7) CHUBB (#8) SWISS RE (#11) China

PING AN INSURANCE GROUP (#1) CHINA LIFE INSURANCE (#5) CHINA PACIFIC INSURANCE (#15) PEOPLE’S INSURANCE COMPANY OF CHINA (#24)

Hong Kong

AIA GROUP (#9) Taiwan

CATHAY FINANCIAL (#25)

Source: The World’s Biggest Public Companies 2017, Forbes

TOP INSURERS BY MARKET CAP

RANKING BROKERS

American multinational conglomerate Berkshire Hathaway, which operates in both the insurance and reinsurance space, vastly overshadows other insurance companies in terms of market capitalisation.

The highest-ranking insurance broker among the world’s biggest public companies is UK-based Aon, which came in at number 444.

350

1

300

#444

US$bn

250

#458

500

200

1,000

150

#1,362

100

AIA Group

AIG

AXA

Chubb

4

5

6

7

8

$48 bn

Allianz

$48 bn

$55 bn

3

$59 bn

2

$61 bn

1

$67 bn

Berkshire China Life Ping An Hathaway Insurance Insurance

$74 bn

$87 bn

$91 bn

0

1,500 $346 bn

50

Prudential MetLife PLC 9

10

Source: Relbanks.com, as of 31/12/16

2,000

Aon

Assets: US$27bn

Marsh & McLennan Assets: US$18bn

Arthur J. Gallagher Assets: US$11.5bn

Source: The World’s Biggest Public Companies 2017, Forbes

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UPFRONT

HEAD TO HEAD

Can robots really replace insurance brokers?

More than half of all consumers are open to the use of roboadvisors – so is this the end for the flesh-and-blood broker?

Michael Gottlieb

Lambros Lambrou

Andrew Barile

Founder and CEO BizCover

CEO Aon Risk Solutions Australia

President and CEO Andrew Barile Consulting Corporation

“Yes … and no. Yes, because part of the market is interested in self-education and self-service and is comfortable doing this on their own. As technology improves and people gain more confidence in the technology, more and more people will shift to self-service.

However, if a better outcome is achieved by using a broker, people will stick with a broker; specifically, this includes those whose insurance needs are more complex and require the assistance of an expert. Brokers who are able to demonstrate knowledge in their area and add value to the process will be the ones sought after.”

“Technological advances will not be able to completely replace brokers. Insurance has always been a ‘people’ business; the inability of robots to replicate human interaction is key to brokers’ sustainability.

Robots and AI will certainly be able to bring efficiencies and drive a new level of analytical insight. However, it will be the ability of brokers and advisors to create trust, responsibility and accountability in the client relationship that robots and AI will struggle to compete with. In the future, our industry will invest in both talent and robotics, each achieving what they are ideally suited for today and tomorrow.”

“The robot will not be able to completely replace the personal service provided by insurance brokers for years. Many insurance products, such as alternative risk insurance products, require a good deal of creativity and negotiation.

Agency captives, deductible buy-back policies and fronting insurance products are beyond the scope of robots.

Brokers who are flexible enough to embrace those insurance products that are simplistic in nature, like a renter’s policy, will be serviced by robots. Technology will make the broker more efficient and help drive prices down.”

CUTTING OUT THE MIDDLE (HU)MAN According to a report from consulting firm Accenture, almost three quarters of consumers worldwide would be amenable to basing their insurance purchases solely on the opinion of a robo-advice platform, which they deem to be faster, less expensive and more impartial than a human. What’s more, a recent study from Oxford University put insurance underwriting in the top five jobs most vulnerable to automation out of the 702 professions surveyed. However, brokers shouldn’t panic just yet. Trevor Maynard, head of innovation at Lloyd’s, recently told the Financial Times: “The bespoke risks in society will never go away, as there is always innovation in the economy.

Providing underwriters embrace the new technology, they have a very strong future.”

8

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UPFRONT

NEWS ANALYSIS

The shifting landscape Despite regular warnings that the end is nigh, it’s not all doom and gloom for brokers – a changing world is bringing about new markets and new opportunities

WITH THE global business landscape in a state of flux, the warning has been issued time and again that insurance brokers are under threat from myriad challenges, both internal and external. From aggressive consolidation trends to the digital revolution and insurers edging toward direct offerings, there are certainly obstacles on the road ahead. But for some, those challenges are nothing more than veiled opportunities that could herald the rise of a new era for brokers.

The explosive growth of technology has undoubtedly been one of the most talkedabout potential threats to the intermediated

industry, many of which are focusing on direct models of business. Major insurers, too, have been emboldened by new digital platforms that allow them to cut out the middleman and communicate directly with consumers, a trend that is not music to brokers’ ears.

But while the plates may be shifting beneath them, brokers continue to provide an invaluable service, according to José Manuel Fonseca, CEO of global firm Brokerslink. “Brokers have a great asset, which is the knowledge of the client and the relationship with the client, and that is critical,” he says. “If brokers can integrate

“Brokers have a great asset, which is the knowledge of the client and the relationship with the client” José Manuel Fonseca, Brokerslink channel. Digital transformation itself has been inescapable across almost all industries but has presented a specific set of challenges for insurance. While technology has had a positive impact in areas such as productivity, efficiency and analytics, it has also brought with it a stream of new entrants to the

10

technology and form some partnerships with new entrants, I think there is a lot to do, and I see this as a huge opportunity.”

The accusation often thrown at the insurance industry – that’s it been too slow to adapt to the fast pace of digital change – is an unfair one, Fonseca adds. “We are not the

fastest industry to change,” he admits, “but I think there is some explanation for that.

Insurance is very much related to nature, to ‘acts of God’. You cannot predict or always understand that. I think insurance is much more complex than, say, banking. We deal with nature; we deal with people; we deal with lots of different lines of business.”

The fast-changing world has not just created new technologies but new risks, too, many of which are opening up new markets for brokers. The cyber market, for example, was non-existent 15 years ago but is seeing huge growth globally as cyberattacks on businesses increase in frequency and impact.

“That’s one of the beauties of insurance – we are always adapting to new risks and to the new behaviours of society,” Fonseca says. “From natural disasters to terrorism to

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NEW THREATS, NEW OPPORTUNITIES

According to Clyde & Co., there were 170 M&A deals in the global insurance industry during the first six months of this year

More than $1.97bn has been invested in insurtech worldwide since 2016

The global cyber market is expected to generate $20bn in premiums annually by 2025

Four fifths of Airmic members do not think insurers are innovating enough to cope with new risks such as cyber and reputational damage Sources: Clyde & Co., Tällt Ventures, Allianz, Airmic

cyber, they are all becoming more and more important and require a lot of consulting.

Brokers have an important role there.”

are continuing to add irreplaceable value.

“While [going direct] might herald some benefits in pricing for the insured,

“Brokers need to establish a niche and their own distribution platforms to avoid missing out on these opportunities” David M. Dickson, Safeonline Lloyd’s cyber broker David M. Dickson, head of technology, cyber and media at Safeonline, says it’s no secret that a number of insurers and MGAs are now going direct to clients, but he adds that in those emerging and niche lines, where “coverage and appetite continuously change and evolve”, brokers

when it comes to specialist or technical lines of business, such as technology E&O, cyber, media and intellectual property, I am confident about the role of the London broker and the value we continue to add,” he says. “As an industry, insurance is ripe for disruption, and with an increasing number of ways in

which insurance products are distributed, clients are undoubtedly benefiting from more options to access the market and coverage.

Brokers need to establish a niche and their own distribution platforms to avoid missing out on these opportunities.” Ultimately, they are left with two options, he adds: accept and adapt, or deny and die.

Given all that change, is the environment for brokers today more challenging than it was 20 years ago? “I wouldn’t say so – we are still growing; we are still relevant,” Fonseca says, pointing to the continued interest in the industry from the equity world as evidence that there is still more growth to come.

In fact, the need for knowledge, consulting and advice is even more important today as the world faces up to some increasingly complex risks. “I would not dramatize,” Fonseca says, “but I think [these are] very challenging times.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

AJ Gallagher

GPL Assurance

GPL president, CEO and associates will continue to operate their current locations and report to AJG operations head

McDougall Insurance and Financial

Monkman Gracie Johnston Insurance

The merger results in an independent broker with 30 offices in eastern Ontario and the Ottawa Valley

HUB International Limited

Assets from surety broker Patrice Varin

Varin brings with him a commercial line book of business focused on providing bonds and other surety-related products

Markel Corporation

State National Companies

Texas-based State National is the largest and longeststanding pure-play insurance fronting business in the US

AXIS Capital Holdings Limited

Novae Group

The combined group represents a global specialty (re)insurer with more than US$6bn in gross written premiums

a

Economical enters cyber market with product

Economical Insurance has just launched a cyber insurance product – one that hopes to be more affordable than the competition while adequately protecting local businesses from internet harm. The Expert Cyber policy offers “best-in-class response services and coverage for both first and third party losses due to a data breach. We believe our competitive advantage is its affordability,” said corporate underwriting director Brenda Smythe.

“We’re offering a broad array of limit options to suit businesses of all sizes — from $50,000, with options to purchase higher limits.”

XL Catlin aviation product launches

AXIS bids $765m for Novae

AXIS Capital Holdings Limited improved its bid to acquire Novae Group plc, from 700 UK pence per share back in July to 715 UK pence.

The offer values Novae’s entire share capital at approximately $765m and was given approval by 99.7% of shareholder votes. Subject to approval, the transaction is expected to close Q4 2017.

“We are excited by the possibilities this presents and look forward to welcoming the Novae team as we work together to achieve our shared ambitions,” said AXIS Capital president and CEO Albert Benchimol.

12

XL Catlin is introducing a new Safety Optimization and Aviation Resource (SOAR) program for its general aviation insurance clients in North America. The program will provide clients access to such services as emergency response planning, crew training, executive and personal protection, safety management, crisis management and more. “Through our SOAR program, we’re vetting and partnering with pre-qualified vendors and putting together quite a network of aviation safety and training experts,” said aviation insurance business North America regional manager Eric Donofrio.

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PEOPLE Allstate expands usagebased auto insurance

Allstate Canada announced that it is expanding its usage-based auto insurance program, Drivewise, in Nova Scotia.

A small telematics device is installed in the policyholder’s car that monitors driver behaviour.

Allstate can reward policyholders with premium discounts if the device picks up safe driving habits.

Customers can access their own data online for reference.

“We hope programs such as this, that reward drivers for good driving behaviour, will help make our roadways safer, while reducing insurance costs,” said vice-president of product operations David MacInnis.

Chubb broadens cyber risk management

Chubb has broadened its offerings for commercial cyber policyholders in Canada and the US. Cyber Enterprise Risk Management (Cyber ERM) and DigiTech® Enterprise Risk Management (DigiTech ERM) “combine market-leading cyber insurance with extensive loss mitigation and incident response services. All organizations can benefit from this coverage, from the smallest businesses who can take advantage of the ability to quote and issue the policy via Chubb’s online portal, to the largest organizations with very customized needs,” said cyber risk practice division president William Stewart.

Canada slow with one product?

Canadian insurers have been slow off the blocks with regards to one aspect of manufacturer insurance, according to Kent Pitkin, vice president, April Canada. “One coverage that small to medium-sized manufacturing companies often don’t have, but could really use, is legal expense coverage,” Pitkin told Insurance Business.

“Manufacturers have to deal with lots of contracts in order to make or sell products and patents. They might need legal advice around contracts or some legal assistance to deal with internal and external disputes.

Legal expense coverage can be very beneficial.”

NAME

LEAVING

JOINING

NEW POSITION

Liz Daly

N/A

Chubb

Senior vice-president and house counsel manager for NA Claims

Roger Dunbar

AutoTrader

Sonnet Insurance

Senior vice-president

James Fryer

Torus Insurance

CNA Hardy

Class manager, mining specialist

Anny Khaitan

Aspen

RSA

Global Risk Solutions chief operating officer

Jason McCormick

Cowan Insurance Group

Aetna International

Sales vice-president, Canada

Neil Monahan

Swiss Re

AXIS Re

Senior vice-president, professional liability

Chrissy Piraino

Great West Life

Aetna International

Sales vice-president, Canada

Jacques Potvin

N/A

iA Financial

Chief actuary

Jennifer Wilson

Fidelis

Liberty Specialty Markets

Underwriter, global financial risks

RSA names new global risk COO

Insurer RSA has named Anny Khaitan (who came on board last July) as global risk solutions (GRS) chief operating officer.

Khaitan will be responsible for RSA’s GRS operations, change, IT and risk & compliance across the UK, Europe and DIFC (Dubai International Financial Centre) offices.

Aspen’s former head of change in London, Khaitan has nearly 15 years’ insurance market experience in senior operations positions. She has worked at Aon and Tokio Marine Kiln, as well. “I am pleased to join RSA on its journey towards becoming a best-in-class insurer,” said Khaitan, who also spent several years with DHL.

LSM appoints global financial underwriter

Liberty Specialty Markets (LSM) has appointed Jennifer Wilson as underwriter for its global financial risks team in London.

Prior to LSM, Wilson was with Fidelis as an underwriter with a focus on political and credit trade risks, and an underwriter for XL Catlin’s political risk and credit team for four years.

“We are very pleased to have Jennifer join our London team. She’s a respected underwriter whose experience in political risk and credit is an excellent addition to our underwriting capabilities,” said LSM head of global financial risks Peter Sprent.

LSM employs approximately 1,000 people in 22 offices worldwide.

www.insurancebusiness.ca

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20/09/2017 6:53:24 AM

UPFRONT

MGA UPDATE

How can MGAs thrive?

With plenty of competitors in the market, underwriters have been challenged to prove their worth

“Brokers want efficiency. The challenge for MGAs is to think about the underwriting as well as being efficient distributors,” he said.

“MGAs need to consider their products, their distribution and their underwriting at the same time. Anyone who can think about all of those things at once and get them right, will survive in the market.”

“If MGAs don’t invest in data, they will be dead in the water,” he added.

The use of data aside, a little competition in the insurance industry is not necessarily a bad

“The challenge for MGAs is to think about the underwriting as well as being efficient distributors” To say that the MGA insurance distribution space in Canada is highly competitive is an understatement. What was once a relatively uncontested space in which underwriters could thrive is now being encroached on by hopeful start-ups leveraging the latest in insurance technology (aka ‘insurtech’), as well as the insurance producers MGAs have partnered with.

So with their existence on the line, what can MGAs do to survive and thrive?

MGAs could try focusing on product distribution as their selling point, suggested David Howden, CEO of Hyperion Insurance.

NEWS BRIEFS

“It’s all about distribution. If you can’t get your product out there – then don’t bother,” Howden explained. “We need to look at how we can deliver value to the client.”

In a Managing General Agents’ Association (MGAA) conference in London, UK, Howden addressed the participants present, saying that some of the pressure on MGAs is a result of insurtech companies utilizing data to lower premiums. Howden pointed out, however, that the use of data to compute premiums is a tech trend the entire insurance market has to adapt to, not just MGAs.

Soccer – most overwhelmingly insured sport

Contrary to popular belief, hockey is not the sport that needs the most insurance in Canada – it is soccer, if data from K&K Insurance is to be believed. “What I think we’re actually seeing more of, believe it or not, is soccer,” said K&K Insurance Canada underwriting director Joan Warren-Phenix. “And that’s for 12 months of the year. And I would say, what we’re seeing now, is a good 70–75% are under the age of 18 in these leagues and associations that we insure.”

14

thing, noted CHES Special Risk president and CEO Gary Hirst.

“New entrants are coming in and are trying to buy market share,” said Hirst. “But MGAs earn income as a result of commission and not necessarily through the underlying profitability of an account, so one would be skeptical about the motivation of an MGA coming into the market space and cutting price.”

Hirst also believes MGAs have an edge over insurance companies: “MGAs can be a lot more innovative in terms of product application because reporting lines are usually fairly short, whereas with an insurance company they are extended and often involve a treaty agreement.”

Ascot Group creates specialty MGA

Ascot Group Limited has launched its first specialty MGA cell under Ethos Specialty Insurance Services. Vertical Underwriting Managers (VUM) will underwrite standard and specialty P&C business. The MGA will also target underserved market segments.

Vertical’s core lines of business include property, casualty, specialty lines, professional liability, and insurance technology. In addition, Ascot has appointed three executives to lead VUM: Joe Calise as CEO, Adam Schell as CCO, and John Casella as SVP.

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Q&A

Grant D Kimball CIP

Insurance is still a people business

President ANGUS-MILLER INSURANCE

Career highlight Attending my first American Association of MGAs meeting a few years back.

There were over 700 MGAs and specialty lines companies in attendance. It was a real eye opener for me!

What makes Angus-Miller different from other MGAs with the same lines of business?

What separates Angus-Miller Ltd from other MGAs is our history and focus on service. We were established in 1919 so have a long history of providing service and underwriting expertise to the maritime insurance market. Our history in the local market allows us to understand the needs of the broker as well as their clients. We live and work in the same area as our brokers and their customers so we focus on providing solutions that are uniquely tailored for the maritime insurance market. We also put a high value on service and realize that in today’s competitive market, speed is of the utmost importance in making the sale.

Angus-Miller has recently expanded its commercial offering, so it can now write for both US and international exposures. What are the challenges in writing for different regions?

Are there any differences you’ve noticed between writing for Canadian and US clients?

We have recently expanded our territory to include all three maritime provinces as well as risks with some US exposure. The biggest challenge in writing in any new territory is understanding what the needs of the customer are and aligning those with a carrier who can fill the needs. It is also important to add value to the process in both underwriting expertise as well as service so we stick to quoting what we know and can service. You don’t want to try to be all things to all people!

Schinnerer Group acquires ICAT

Schinnerer Group, which includes Canadian underwriting manager ENCON, has entered an agreement to acquire International Catastrophe Insurance Managers LLC (ICAT), an MGA that provides property catastrophe insurance across the United States. “The insurance market for catastrophe-exposed small commercial property is underserved with opportunity for expansion,” said Christopher Schaper, CEO of The Schinnerer Group, in a release.

ICAT was founded in 1998 and works through retail agents and wholesale brokers.

What insurance trends, whether emerging or ongoing, are you keeping a close eye on? What’s on the cards for Angus-Miller?

The two biggest trends we are paying attention to right now are 1) continuing merger and acquisition activity both at the insurer and broker level, and 2) data management. We are in the process of building a database to help us understand, at the risk level, what we are successfully writing, not only from a quoting perspective but also from a profitability perspective. We hope to get to a point in the not-too-distant future where we know what class of business, region, coverage and broker perform well for us so we can allocate our resources where we stand the best chance of assisting the broker in getting the client.

Do you have any advice for other insurance operations looking to open their business to even larger markets?

My only advice for operations looking to expand into new territories would be to do your homework so you understand what sets the region apart from others.

Canada is a large country with vastly different regional needs, so what works in other parts of the country may not work here.

Vacant home market “unfair”

Vacant homes are too often being insured at unfair rates, and the sector needs to evolve, says one retail broker. According to Brody Stonehouse, general manager at AC&D Insurance in North Vancouver, BC, the market for vacant building insurance from MGAs is “inflexible” and needs to change. Stonehouse believes MGAs too often quote standard fees, regardless of the location or quality of a vacant building.

“The market is generally quite inflexible,” he says. “My thinking is a lot of times vacant properties are charged too much because they’re not assessed properly.”

Vertical close to sealing deal

Vertical Underwriting Managers (VUM) is close to securing capacity for its first deal, sources close to the matter said. In a statement, Ascot said that VUM – the first organic cell on its MGA platform Ethos Specialty Insurance Services – would focus on core lines of business, such as property, casualty, specialty lines, professional liability and insurtech.

Ascot also said that VUM will underwrite both standard and specialty P&C business “as well as targeting underserved market segments.”

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UPFRONT

CYBER UPDATE NEWS BRIEFS Cyber a huge shipping risk

Disruptive technology, the untested waters of the Arctic, and piracy – these are some of the top shipping risks Lloyd’s has drawn attention to in a recent release. The threat of a cyberattack that can sink ships was one of the leading issues Lloyd’s highlighted.

What sounds like something out of science fiction is now a real threat that shipping companies have to plan for.

“It’s the new piracy, and it is generating a lot of heat and noise at the moment, but very little light,” said Lloyd’s Market Association marine and aviation manager Neil Roberts.

UPS to offer cyber product

UPS Capital, a subsidiary of UPS, has launched a cyber liability product for small and mid-sized businesses. The product includes coverage for security-breach response, cyber extortion, income and digital-asset restoration. It also covers third party consequences such as litigation, fines and investigation.

“As companies become increasingly digital, there are more opportunities for attacks,” said UPS Capital president Mark Robinson. “And nearly two thirds of cyberattacks are perpetrated on small and mediumsized businesses, putting them at the forefront of the activity.” One cyberattack can cost a mid-sized business between $84,000 and $148,000, according to UPS Capital.

Reinsurers have cyber worries

Cyber risk is a top concern for reinsurers, according to a new report from PwC. PwC’s new analysis has ranked the most serious concerns for the reinsurance space. Cyber risk topped the list, followed by worries that the industry is unprepared for weather

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changes – a departure from previous studies that pointed to regulatory issues. Cyber risk is now a systemic concern for insurers, reinsurers and clients, the Royal Gazette reported.

However, PwC found that many businesses are aware of cyber risk but remain unwilling to buy cyber insurance because of restrictive coverage and limits.

More to cyber than hacking External cyber threats are not the only things your clients should be worried about

‘Silent cyber’ exposure to grow

A survey conducted by Willis Re has found that around half of all industry practitioners believe the risk of “silent cyber” exposure will grow over the coming year. Silent cyber exposure refers to “potential cyber-related losses due to silent coverage from insurance policies not specifically designed to cover cyber risk.” One hypothetical example is a cyberattack on an industrial plant’s control system that leads to a boiler explosion, causing property damage and business interruption.

Another example would be a malware that causes an elevator to fall, resulting in casualties.

Equifax hit by breach

Credit-reporting company Equifax recently announced that it had suffered a “cybersecurity incident” that could impact as many as 143 million US consumers. Criminal hackers apparently accessed names, Social Security numbers, birth dates, addresses, and, in some instances, driver’s licences. The hackers also accessed credit card numbers for more than 200,000 people and “documents with personal identifying information” for about 182,000 people. According to Equifax, criminals exploited a “website application vulnerability” to gain access to files. The company said the unauthorized access continued from mid-May through July.

Cyber insurance is often purchased by business owners looking to financially protect their organizations against the risk of hacking. With high-profile cyberattacks, such as WannaCry and Petya, still fresh in everyone’s minds, it is no surprise that most of those who purchase cyber insurance do so in preparation for the next major malware or data breach.

However, there is more to cyber insurance than just offering a payout for the damage caused by hackers. Sometimes an organization’s cyber risk might come from within. The carelessness of one employee is all it takes to expose sensitive data to the public.

Accidental data breaches can occur even after seemingly innocuous actions.

Employees clicking on a link provided by a dubious phishing email; improper disposal of sensitive files; or even sharing company information with friends – all these things can expose an organization. According to the Beazley Breach Insights report, accidental data breaches account for close to one third of all cyber incidents.

“Sometimes the breach comes from employees who just don’t know the right way to protect data,” said Beazley Breach Response Services Group leader Katherine Keefe. “While there are criminals behind ransomware attacks, it’s often a lack of awareness among employees that opens the door for the criminals to come walking through.”

There are ways to reduce the risk of accidental data breaches, however, as Keefe

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pointed out. “A company can have the best security systems and yet still be vulnerable to the ever-changing threat landscape from a criminal perspective,” she said.

“But that doesn’t mean you should throw in the towel. There is a lot companies can do with their very own employees, using risk management tools and education campaigns to reduce the threat level from the inside of the company.”

And just like any risk, Keefe explained that accidental data breaches can be approached with a proper plan in place – something that brokers can help the companies they work with to put in place as

“Sometimes the breach comes from employees who don’t know the right way to protect data” part of a more rounded service.

“Companies need to have a breach response plan in place so that everybody knows what to do and who to turn to for help in the event of a suspected data breach,” Keefe said.

“They need to think about things like which departments will be impacted, which privacy lawyer will guide the company through the complex legal ramifications, and what forensic teams will help in the result of an IT systems compromise.”

Q&A

Graham Haigh Vice president, business development THE WAWANESA MUTUAL INSURANCE COMPANY

Making a technological transition Tell us about Wawanesa’s cyber insurance line.

Years in the industry 23 (started career in 1994) Career highlight Receiving the 2014 Volunteer of Distinction Award – BC from the Insurance Institute of British Columbia in recognition of 14 years of work with the Institute.

Wawanesa offers a suite of first party and third party cyber insurance for small and medium-sized businesses. Ultimately, our coverage helps businesses respond to a data breach or cyberattack.

Coverage ranges from expenses related to responding to a data breach, including notification of government when required, to the cost of restoring computer systems and data recovery due to a ‘computer attack’ such as hacking, malware, etc. Within our first party coverage we also offer a variety of extensions, such as the cost of a forensic IT, legal and public relations consultation.

Our third party coverage protects against lawsuits either filed due to a data breach that exposes personal information or an alleged system security failure or weakness. Both our cyber insurance products provide access to a website with a wealth of information, including risk management tools, self-assessments, the latest news on cyber threats, and other resources that help customers understand their risks and establish an action plan.

Cyber liability is relatively new to the marketplace. What are some of the challenges associated with it?

Just that this is still new territory in the insurance world. Industry and consumer knowledge, as well as loss data, is developing.

Cyber risk is continuously and rapidly evolving as well, making it a challenging area to manage. Within this landscape, from a broker perspective, there is a lot to learn. Furthermore, small to medium sized businesses are just beginning to understand their need to be protected. Cyber threats are the new norm of the digital space, but it’s part of the new frontier of insurance.

Any advice for brokers adapting to the cyber market?

Education is important, especially during these early days of research and product innovation. Attend seminars and stay on top of news related to cybersecurity and liability.

Of course, it’s also important to fully understand the products you’re representing. Wawanesa offers brokers training, including educational seminars that provide Continuing Education credits.

For our current cyber insurance offerings, Data Compromise and CyberOne®, our business development representatives give an introductory course on the importance of coverage of this nature. Brokers can also seek guidance from underwriters or leverage the help of an MGA. They can often help the retail broker who has a customer with a greater amount of exposure and requires a more specialized offering. They often have in-house underwriting experts and access to additional cyber underwriting information.

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20/09/2017 6:54:35 AM

UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email iba@keymedia.com

Transforming the world as we know it The Internet of Things has the potential to transform insurance from a grudge purchase to the consumer’s best friend, writes Mark Evans WITH THE evolution of machine learning and artificial intelligence, we’re moving from a world focused on products enabled by the Internet of Things [IoT] to a world of IoT-enabled smart cities, households and lives.

It’s estimated that by 2020 there will be more than 50 billion connected devices worldwide.

To thrive in the coming decade, most organizations need to be prepared for the rise of connected devices. In the insurance industry, never has it been more important to reassess our traditional offerings in order to remain relevant. The IoT offers an unrivalled opportunity that insurers can’t afford to ignore.

Let’s face it – nobody really wants to buy insurance. It’s a purchase made begrudgingly, and one that’s certainly not helped by a clunky, often time-consuming path to purchase.

Today’s consumers want digital interaction.

They want personalized shopping experiences.

The problem lies in the fact that, unlike a consumer’s favourite brand, which they might actively opt in to hear from with the latest news and discounts, typically people only want to hear from an insurer when they need them to solve a problem – and even then, they want to be speaking to them for the shortest amount of time possible. So there’s still very much a ‘what’s in it for me’ attitude when it comes to sharing data with insurers.

The solution is to offer something valuable in exchange for data that goes beyond traditional expectations. Apps that use GPS

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technology to track car journeys and score the user’s driving ability appeal to young drivers – all the more if they can earn points based on their overall personal performance, as with the app Shotgun. These points can then be used to unlock rewards that this demographic values, such as Starbucks vouchers.

Health insurers are giving customers free fitness trackers and offering lower premiums or

can help insurers to prepare customers for upcoming incidents, thus reducing damage and, in some cases, removing the need for policy payouts. Using telematics, we can offer coaching for poor decisions behind the wheel and prevent customers from needing to make claims.

As these technologies are adopted more widely, there’s no doubt that before too long the number of accidents on our roads will plummet. While this is a good thing for society, it also fundamentally changes the premise of insurance from the process of restitution to the service of prevention.

Insurers are going to need to be even stronger agents of change in order to remain relevant. One example: Fleetlights, a prototype service providing drones to light the way for travellers on unlit roads. The technology behind it is controlled via a bespoke app, meaning a user can use their phone to order a drone to light the path for the duration of their journey. This can combat the threat that comes with darker autumn nights – serious pedestrian casualty incidents peak in November at a rate that’s 42% higher than the average low in August.

There is no doubt that the IoT will completely transform the way customers

Interacting with consumers and collecting first-party data from their devices allows for much more frequent, personalized contact other benefits for meeting daily exercise goals.

We have already seen this with companies like Vitality Health, which was one of the first insurance companies to offer policies based on data gathered directly from policyholders via wearables.

Interacting with consumers and collecting first-party data from their devices allows for much more frequent, personalized contact with customers. Better yet, it gives customers more control over their premiums, affording them superior service.

The IoT also gives us the opportunity to provide a proactive service and assume the role of consultants. IoT-based analytics can be used to predict future events, such as boiler breakdowns or major weather patterns, which

interact with their insurance providers and vice versa; never has there been a better chance to understand consumers through their personal devices and be proactive in meeting their personal expectations and needs. For insurers quick to adopt a customer-centric approach, IoT devices will allow for deeper, longer-lasting relationships with consumers.

Those that don’t will risk extinction when hyper-connectivity means customers may no longer need traditional services at all.

Mark Evans is the marketing director of Direct Line Group, responsible for several household brands, including Direct Line, Churchill and Green Flag, and one of the highest-spending advertisers in the UK.

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20/09/2017 6:55:30 AM

PEOPLE

INDUSTRY ICON

TAKING THE LEAD Ivan Gonzalez talks about becoming North American CEO of Swiss Re Corporate Solutions and why his business unit remains steadfastly focused on growth and innovation

IT’S BEEN just over 12 months since Ivan Gonzalez became Swiss Re Corporate Solutions’ CEO for North America. He took the reins of the North American business at a challenging time for the industry, characterized by a continued downward trend in commercial insurance rates and a persistent low-interest-rate environment, which, along with a fiercely competitive climate, have tested carriers’ ability to make profits and generate shareholder returns.

“It’s a very challenging time, for sure,” Gonzalez says. “At the same time, it’s one that is very stimulating because I think it tests your abilities as a leader and manager.

I also really endorse the idea that you don’t let a soft market go to waste. You need to take advantage of the current challenging environment to make decisions and position your company for future market conditions that will be more attractive. We need to make sure that we’re ready to capitalize.”

A Colombian national, Gonzalez joined Swiss Re 17 years ago and has undertaken roles in Switzerland, the US and Brazil. He was appointed CEO of Latin America for Swiss Re Corporate Solutions in 2011, and under his leadership the business achieved exponential, high-quality growth.

The Swiss Re Group established its Corporate Solutions business in 2010. Today,

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it’s one of the top players in the excess layer market in North America.

“Naturally, the fact that we have become such a prominent player in the excess layer market means that we need to find other avenues for growth,” Gonzalez says. “We’re now trying to move from the excess layer market and complement our offering with the next segment, which is the primary lead market.”

in Canada,” he says. “That segmentation is very important to us.”

Standing out In addition to the reputation of the global Swiss Re brand, its impressive financial strength and its capacity, Gonzalez singles out claims commitment as a key distinguishing attribute of Corporate Solutions.

“We have made a conscious decision to be

“You don’t let a soft market go to waste.

You need to take advantage of the current challenging environment to make decisions and position your company for future market conditions that will be more attractive” Gonzalez’s mandate is to determine how Corporate Solutions can expand its primary lead presence in the US and Canada.

“In order to do that, I’m focused on the segmentation of our business – making sure that in the US we have a good product offering and service quality for each segment: excess layers, primary lead, excess and surplus, MGAs, or the East, Central, or West regions … and that we have a fully dedicated operation

very transparent and clear with our clients about what they should expect in the event of a claim,” he says. “We are determined to be recognized as the number-one company in terms of claims processing quality and have consistently received top industry honours in this category.”

Gonzalez cites innovation as another integral differentiating feature.

“I think the industry talks a lot about

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PROFILE Name: Ivan Gonzalez Company: Swiss Re Corporate Solutions Title: CEO, North America Based in: New York City Years in the industry: 18 Fast fact: Gonzalez holds a master’s degree in business and international affairs from Columbia University

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PEOPLE

INDUSTRY ICON

innovation, but at the end of the day, when you look at the amount of capital that it’s invested in research and development, I think that Swiss Re is – by a very large margin – the company that invests the most in [R&D],” he says. “Through the Swiss Re Institute, we pride ourselves on being at the forefront of innovation within the industry, and I think the industry recognizes that.”

Gonzalez says the Swiss Re Group is fully cognizant of the current insurtech landscape and the potential for disruption to different parts of the insurance value chain.

“We spend a lot of time trying to understand how we can leverage some of the different ideas that are coming up on

clients, and we also partner with a number of third party insurtech firms. For the cyber segment in particular, we have a partnership with IBM.” However, Gonzalez also stresses the need to be conscious of the white noise in insurtech.

“We really want to distinguish what is hype and what is reality,” he says.

The way forward Now beginning his second year as North American CEO, Gonzalez says his focus for the next 12 months will include examining the efficiency of Corporate Solutions’ operations.

“How do we go to market?” he says. “How do we process the information and requests

“We spend a lot of time trying to understand how we can leverage some of the different ideas that are coming up on the technology side and apply that to our business model” the technology side and apply that to our business model,” he says, adding that the goal is to find technologies that will make Corporate Solutions more efficient, more effective and more sustainable in terms of its ability to offer solutions that address clients’ risk management needs on a consistent basis.

“The whole digitalization of our business and the ability to leverage electronic broker platforms is definitely something that we are focused on at this point in time,” he says.

Gonzalez also believes the fact that Corporate Solutions is only seven years old gives it an advantage on the tech front.

“We don’t have the legacy systems that a lot of our competitors have,” he says. “Big data is something that we can definitely leverage from our underwriting, and you see a lot of that in our innovative risk solutions segment.

We do a lot of tailor-made solutions for our

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from our clients and brokers? It needs to be significantly enhanced because the market conditions are such that cost becomes one of the key variables for you to manage the cycle. [Also,] making sure that … when the market turns, we’re in a better position than our competitors.

“Point number two,” he continues, “is making sure that … we’re also focused on innovation and the ability to work with our clients to address [increasingly sophisticated] risk management needs … and making sure that we can develop the products they need.”

Clients can rest easy, though – Gonzalez is confident that Corporate Solutions isn’t going anywhere.

“We will not be subject to the volatility of a number of our competitors,” he says. “We really are here to stay.”

SWISS RE CORPORATE SOLUTIONS AT A GLANCE

FOUNDATIONS One of three business units of the Swiss Re Group, which is currently the world’s second-largest reinsurer

PREMIUMS Earned net premiums of $3.5bn in 2016

PRESENCE Has more than 50 offices around the world in over 20 countries

PRODUCTS Offers more than 40 insurance products, with a focus on customized solutions

STRENGTH Swiss Re Group’s ratings include AA- (Very Strong) from Standard & Poor’s, Aa3 (Excellent) from Moody’s, and A+ (Superior) from A.M. Best

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UNITED STATES 1800 Industrial Blvd Colleyville, TX 76034 UNITED STATES 817.488.6359 1800 Industrial Blvd Colleyville, TX 76034 817.488.6359

CANADA 2001 Sheppard Ave E, Ste 810 TorontoCANADA Ontario M2J 4Z8 23 www.insurancebusiness.ca 416.492.4411 2001 Sheppard Ave E, Ste 810 Toronto Ontario M2J 4Z8 416.492.4411 20/09/2017 7:13:28 AM

SPECIAL PROMOTIONAL FEATURE

LIABILITY WAIVERS

When good times go bad In this special guest article, Jeff Smith from Markel Canada takes us through the challenging and increasingly complex world of waivers of liability

IF YOU’VE ever been involved in a car accident, even a minor fender-bender, it’s always an unexpected event that can send those involved into a state of shock. After the reality of the accident sets in and you’ve confirmed no one has been injured, the first question that often comes to mind is, “who is to blame?”

Now, take that minor car accident and put it in the context of a go-kart racetrack where willing participants are travelling as fast as possible. Suppose an accident occurs during the race where one participant cuts into the lane of another. In that context, who is to blame? Is it the organizer of the race? The owner of the racetrack? The owner of the go-kart? The participant who cut into the lane of the other participant? Perhaps. Or is the risk associated with an accident during a go-kart race an inherent part of the activity that participants should knowingly accept if they wish to take part?

The legal concept of knowingly accepting a risk is a common law doctrine called the assumption of risk. It is based on the principle that someone who knowingly participates in a dangerous activity assumes the risks that are inherent to that activity.

While this concept is easily understood, the reality is that most people don’t expect bad things to happen to them, and when injuries arise from an inherently risky activity, hindsight tends to blur one’s understanding of the risk they had assumed.

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It is for this reason that it was important to develop a waiver of liability that explicitly outlines the risks of the activity being contemplated, documents the participants’ assumption of those risks as well as their agreement to waive their legal right to sue for damages in the event of a loss.

Waivers have become a key risk management tool for sports and recreational providers and are equally important to insurers of sports and recreational liability. This area of insurance forms one of the many sector specializations that Markel has undertaken to write in Canada and has become even more important in light of the completion of the firm’s acquisition of Allsport Insurance Marketing in March 2017.

As a result, Markel has a vested interest in how the courts are interpreting and upholding waiver of liability forms.

There are some key aspects of both the content and the presentation of the waiver that must be considered in order to increase the likelihood that a court will uphold a waiver as a defence to a potential claim.

The first consideration is to clearly identify the document being signed as a waiver form. Including “waiver language” within an enrolment sheet, marketing material or perhaps the invoice to pay for the activity that is being contemplated, will significantly weaken the effectiveness of the waiver.

Bringing attention to the document itself is important and, moreover, the participant must clearly understand that signing the document

will waive their rights to sue.

An effective waiver should clearly identify the risks associated with the activity. While the description does not need to list every single possible outcome, it must highlight the range of potential hazards in order to give the participant a realistic sense of the risks. It is also important to identify “negligence” as a risk associated with the activity and to specifically identify the potentially negligent parties that are being protected by the waiver. In addition to the negligence of the operator, this may also include employees, agents of the operator and other participants involved in the activity.

The operator of the activity must also allow sufficient time for the participant to review and consider the terms of the waiver. This should also be done prior to accepting payment so that there is no pressure on the participant to sign.

No matter how well worded a waiver might be, a court will be reluctant to uphold the terms if

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The assumption of risk is based on the principle that someone who knowingly participates in a dangerous activity assumes the risks that are inherent to that activity evidence suggests they weren’t provided with sufficient time to read the document or if the terms were only brought out after they paid for the activity.

Waivers are continuing to evolve as paper documents get phased out. As a result, many operators are utilizing electronic waivers that are completed either online or at kiosks on location.

Markel recently defended a case on behalf of our insured that involved an electronic waiver.

In Quilichini v Wilson’s Greenhouse (2017), our insured, Wilson’s, operated Velocity Raceway Ltd, which is an entertainment park with a go-kart facility. The plaintiff alleged the go-kart he was operating malfunctioned, causing him to crash into the concrete barrier with resulting injury. As a paying participant, the plaintiff was required to proceed through the park’s kiosk system and execute an electronic waiver.

This kiosk required the plaintiff to click

through a series of electronic pages outlining the terms of the waiver. The plaintiff was also photographed and required to click “I agree” before being allowed to participate.

After retrieving the waiver information from the insured, Markel elected to bring a summary judgment application to seek an order dismissing the claim based on the terms of the waiver. The judge ruled that the plaintiff agreed to the terms and conditions set forth in the e-Waiver and dismissed the plaintiff ’s claim.

While the trend of upholding waivers has generally been positive in recent time, there were two Ontario Superior Court decisions that presented a significant challenge to the validity of waiver of liability forms. In Schnarr v Blue Mountain Resorts Limited (2017) and Woodhouse v Snow Valley (2017), the respective plaintiffs were injured while skiing.

In both cases the plaintiffs executed waivers that contemplated all claims “due to any cause whatsoever, including negligence, breach of contract or breach of any statutory or other duty of care, including any duty of care owed under the Occupiers’ Liability Act.” The waivers addressed the potential liability of the ski hill not just as an occupier of the premises but also as a supplier of services, which triggers duties under the Consumer Protection Act (CPA). While the ski hills are able to contract out of their obligations under the Occupiers’ Liability Act (OLA), the CPA has specific provisions that preclude a supplier of services from contracting out of its duty to provide services of a reasonably acceptable quality.

While Markel is not directly involved in the Schnarr and Woodhouse cases, given the significant impact these decisions will have on our clients, Markel (along with a number of other organizations) will be putting forward arguments to represent the interests of sports and recreational service providers through the intervention process that is allowed in Court of Appeal cases.

Clearly the protection of consumers is at the heart of these cases and this must not be overlooked. However, so too is the ability for organizations to provide activities that have become a fundamental aspect of both the culture and economy of Canada.

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FEATURES

CATASTROPHE RESPONSE

Adjusting to a market need Kyle Winston from Catastrophe Response Group talks to IBC about the important role of CAT adjusters in the current market

IBC: Why, in the current market, is the role of CAT adjusters so crucial?

IBC: What is your approach to education and training?

Kyle Winston: There are myriad reasons. We have cyclical weather systems and storms that run in cycles of 15 or 20 years, and we happen to be in a period of higher intensity. Within the Canadian and US marketplace, we don’t have adjusters who are really specialized in being able to go out into the field, to assess damage, write reports and turn things around in a quick fashion like they used to.

That opened the door for us to come in as a dedicated CAT adjusting firm that specialized in going out and assessing damages, seeing how they apply to an individual policy, and then trying to settle it in the field or within a very short time cycle.

KW: We have invested a lot of money in our training programs and actually have an educational arm of our company called AIA, the Academy of Insurance Adjusting. We put on courses for a lot of the insurance markets out there. Our courses are credentialled by FSCO and AIC, and we are trying to push the educational side of practical, in-field use. How do you take the book knowledge of what you’ve learnt from your test and apply that to realworld interactions with customers?

On the CAT side, we do a lot of training in damage recognition, which helps adjusters identify how damage relates to a policy or claim. For example, a lot of people think that if there is a storm and a few shingles come off the roof, the whole roof should be replaced, but many policies don’t allow for that.

IBC: There has been a steady decline in qualified field adjusters in the last decade. Why has this happened?

KW: It’s a two-pronged answer. The biggest reason was that, rightly or wrongly, insurance claims aren’t sexy. As a result, we don’t have a younger generation who are interested in becoming claims adjusters, because they don’t know what it entails. When I was growing up, I chose to go into insurance, and most people would joke that I’d fallen into the industry.

Young people don’t know how fun and exciting it can be.

Also, as an industry, a lot of companies have stepped back from their training and educational programs. You used to have companies who would spend big dollars on training and teaching, but in the past five to 10 years there has been a serious decline.

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IBC: Can you tell me a little bit about why the Catastrophe Response Group was started? And what were some of your key aims?

KW: It was started by my father and me because, in Canada, we saw that more insurance companies were relying on third parties who had vested interests in writing the reports. We saw an opportunity to tell those insurance companies that they were leaving a lot of indemnity dollars on the table and that the true wording and spirit of policies was not being fulfilled.

When we first started, the average turnaround on a file under the previous model was anywhere from 30 to 40 days.

We were able to shorten that to less than 18 days in the first year, and our cycle time has shortened drastically since then. We were able to demonstrate to insurance companies that bringing in skilled adjusters who could handle claims from start to finish would give them back the speed and efficiency to deliver a better level of customer care.

www.insurancebusiness.ca

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20/09/2017 6:56:56 AM

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20/09/2017 6:57:02 AM

SPECIAL REPORT

FIVE-STAR MGAs

FIVE-ST R

MGAs IBC unveils the MGAs that brokers feel stand out above the rest

FOR RETAIL brokers around the nation, MGAs perform the essential function of giving them the specialized skills and access they need to service their clients well. This year, more brokers than ever before rallied together to rate the performance of their MGA partners in Insurance Business Canada’s Brokers on MGAs survey. Using a scale of 1 (poor) to 10 (excellent), brokers rated their MGAs performance in 10 critical categories: Underwriting responsiveness/turnaround time Premium pricing Range of products Claims support Customer service Expertise (experience and knowledge in

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line of products) Compensation (commission, bonuses, profit share, etc) Overall relationship Technology and automation Marketing support Brokers also shared comments on how their MGA partners could improve their service in each of those key areas.

Overall, MGA performance improved greatly this year, with 27 MGAs scoring an 8 or higher in at least one category, earning them a five-star rating in recognition of their outstanding service to brokers. For the first time, the category of expertise (experience and knowledge in line of products) was added to our ratings queue, ultimately garnering the

most five-star MGAs this year. Other new categories – compensation, range of products, customer service and overall relationship – were also added this year to gain further perspectives from brokers on how their MGAs are performing. And while reputation was removed from our performance categories this year, it remained as a metric brokers could choose from in assessing which qualities they appreciated most in an MGA partner.

Although more brokers this year gained top marks – increasing from the 20 on the list last year – MGA performance throughout the range of categories experienced few changes, including just two MGAs earning five stars across the board – a noticeable drop from the six MGAs that made the All Star list in 2016.

www.insurancebusiness.ca

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WHAT ARE THE THREE MOST IMPORTANT THINGS YOU LOOK FOR IN AN MGA PARTNER?

HOW WELL DID MGAS PERFORM ON AVERAGE IN 10 KEY CATEGORIES ?

We asked brokers to select the top three most important qualities they look for in an MGA partner. Here is how they rated them:

Expertise (experience and knowledge in line of products)

8.75

Underwriting responsiveness/turnaround time

88.86%

Overall relationship

8.64 Premium pricing

67.61%

Customer service

8.40

Range of products

39.44%

Underwriting responsiveness/turnaround time

8.31

Claims support

32.14%

Range of products

8.29

Customer service

26.76% Premium pricing Expertise (experience and knowledge in line of products)

8.00

23.94% Technology and automation Compensation (commission, bonuses, profit share, etc)

7.78 7.30% Claims support

Reputation

7.71

5.89% Marketing support

Technology and automation

7.60

3.71% Compensation (commission, bonuses, profit share, etc)

Marketing support

2.69%

7.56

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SPECIAL REPORT

FIVE-STAR MGAs WHICH MGAs EARNED FIVE-STAR RATINGS? EXPERTISE (EXPERIENCE AND KNOWLEDGE IN LINE OF PRODUCTS)

MGA

PREMIUM PRICING

UNDERWRITING RESPONSIVENESS/ TURNAROUND TIME

RANGE OF PRODUCTS

TECHNOLOGY AND AUTOMATION

MARKETING SUPPORT

COMPENSATION

CUSTOMER SERVICE

OVERALL RELATIONSHIP

CLAIMS SUPPORT

ABEX Affiliated Brokers Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Beacon Underwriting Brownstone Insurance Group Burns & Wilcox Cambrian Special Risks Insurance Services Can-Sure Underwriting CFC Underwriting CHES Special Risk Chutter Underwriting Services ENCON GroupAssur GroupOne Insurance Services K&K Insurance Canada Milnco Insurance Morin Elliott Associés PAL Insurance Brokers Premier Canada South Western Group Special Risk Insurance Managers (SRIM) Sport & Fitness Insurance Canada SUM Insurance Totten Insurance Group Underwriting Contract Administrators Inc. (UCAI)

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www.insurancebusiness.ca

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Improving the customer experience will help our brokers grow.

Michael Shostak, SVP & Chief Marketing Officer, Economical Insurance

We did our homework. Today’s insurance consumers aren’t confident in their coverage and feel treated like a number. That’s why Economical is making it a priority to support our broker partners with simplified wordings, helpful blogs to share with customers, and business development and marketing opportunities to build customer relationships. Let’s change the way Canadians feel about insurance, together.

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

Economical Insurance includes the following companies: Economical Mutual Insurance Company, The Missisquoi Insurance Company, Perth Insurance Company, Waterloo Insurance Company, Family Insurance Solutions Inc., Sonnet Insurance Company, Petline Insurance Company. ©2017 Economical Insurance. All rights reserved. All Economical intellectual property, including but not limited to Economical® and related trademarks, names and logos are the property of Economical Mutual Insurance Company and/or its subsidiaries and/or affiliates and are registered and/or used in Canada. All www.insurancebusiness.ca other intellectual property is the property of their respective owners.

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SPECIAL REPORT

FIVE-STAR MGAs EXPERTISE (EXPERIENCE AND KNOWLEDGE IN LINE OF PRODUCTS) FIVE-STAR MGAs

FIVE-STAR MGAs MGA PERFORMANCE

MGA PERFORMANCE

ABEX Affiliated Brokers st Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Beacon Underwriting Burns & Wilcox Cambrian Special Risks Insurance Services Can-Sure Underwriting CFC Underwriting CHES Special Risk Chutter Underwriting Services ENCON GroupAssur GroupOne Insurance Services K&K Insurance Canada Milnco Insurance Morin Elliott Associés PAL Insurance Brokers Premier Canada South Western Group Special Risk Insurance Managers Sport & Fitness Insurance Canada SUM Insurance Totten Insurance Group Underwriting Contract Administrators Inc.

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MGAs excelled when it came to expertise in the lines of products they offered: 26 out of 27 MGAs earned a five-star mark in the area, making it MGAs’ best-performing category this year.

Although the majority of comments simply commended MGAs’ expertise as “good,” “excellent” or “very informative,” several brokers pointed to a lack of expertise, particularly among junior staff. “Effective training of junior underwriters by seasoned underwriter” was needed, one broker said. “Have more experienced and knowledgeable underwriters,” another recommended.

Training seemed to be the touchpoint for many respondents who believed their MGAs’ expertise would benefit from a greater willingness to learn and train in their various niches and market segments.

All in all, while MGAs seem to have ‘expertise’ well handled for the most part, brokers agreed that this now leaves the door open for MGAs to explore new markets and ventures in order to provide better services and expertise to their broker partners.

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OVERALL RELATIONSHIP

2

ABEX Affiliated Brokers nd Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Brownstone Insurance Group Burns & Wilcox Cambrian Special Risks Insurance Services Can-Sure Underwriting CFC Underwriting CHES Special Risk Chutter Underwriting Services ENCON GroupAssur GroupOne Insurance Services K&K Insurance Canada Milnco Insurance PAL Insurance Brokers South Western Group Special Risk Insurance Managers SUM Insurance Totten Insurance Group Underwriting Contract Administrators Inc.

Close behind expertise was overall relationship, for which 23 MGAs received a five-star rating this year. Brokers took the opportunity to analyze their MGAs’ entire performance and service over the past year when rating their partners in this category. MGAs’ overall positive results in the category show there is optimism that MGAs are serving brokers’ clients to their satisfaction – and beyond.

WHAT DO BROKERS WANT?

“Turnaround is key for underwriting response” While MGAs scored well when it came to overall service provided to brokers – one broker even said “the service cannot get any better” – most broker comments told a different story. One broker mentioned “personal visitations and regular product training” as factors that could improve their MGA relationship. “It would be great to develop a more personal relationship with underwriters,” another said.

Altogether, though, brokers are pleased with their MGA relationships, signalling a bright future for the MGA/retail channel relations.

www.insurancebusiness.ca

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20/09/2017 6:57:51 AM

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SPECIAL REPORT

FIVE-STAR MGAs CUSTOMER SERVICE

UNDERWRITING RESPONSIVENESS/ TURNAROUND TIME

FIVE-STAR MGAs MGA PERFORMANCE

3

ABEX Affiliated Brokers rd Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Burns & Wilcox Cambrian Special Risks Insurance Services CFC Underwriting CHES Special Risk Chutter Underwriting Services ENCON GroupAssur PAL Insurance Brokers South Western Group Special Risk Insurance Managers SUM Insurance Underwriting Contract Administrators Inc.

Although not the most important factor for brokers, this category received a relatively high score, at 8.40 out of 10, taking third place.

Numbers aside, it goes without saying that customer service is important and can sometimes be the deciding factor when MGAs’ performance in all other areas is similar.

Of the comments in this category, most had to do with claims support and underwriting responsiveness, and as previously mentioned, sometimes all brokers want is just to be kept informed. One broker gave their MGA a high rating because “they did respond and do their best for underwriting response, [even] knowing that their hands were WHAT DO BROKERS WANT?

“Pricing is really important right now. With the economic downturn, clients are extremely price sensitive at this time” tied.” Another broker said clients needed service that was better than usual “at a time of a claim, when the plan member needs to have the process explained a lot better and in simple (‘non-insurance’) terms, so they know how to get the required service.” And of course service is all about keeping the ‘personal touch,’ as one respondent explained: “Keep it simple. No automation. [It’s] nice to talk to a person that has a direct email and phone contact.”

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FIVE-STAR MGAs MGA PERFORMANCE

4

ABEX Affiliated Brokers th Anderson McTague & Associates Approved Surety & Casualty Inc. April Burns & Wilcox Cambrian Special Risks Insurance Services CFC Underwriting CHES Special Risk Chutter Underwriting Services ENCON GroupAssur PAL Insurance Brokers South Western Group Sport and Fitness Insurance Canada Special Risk Insurance Managers Underwriting Contract Administrators Inc.

As was the case last year, survey respondents rated underwriting responsiveness and turnaround time as the most important quality to look for in an MGA. While MGAs’ performance was still fairly satisfactory, with an overall score of 8.31 out of 10, they fell to fourth place in this category from second place last year.

Ultimately, it’s a race for all involved – the faster the better – and a number of brokers are quite content with the combination of “quick response time” and “good service.” However, many others are still kept waiting, with several describing the process as “slow” and “long.” What adds to brokers’ frustration is not knowing what to expect – when “turnaround time for requests is unpredictable” and “brutally inconsistent.” Brokers also expressed the need for email receipts, at the very least, just to set expectations right: “[It] depends on the underwriter; even a simple email response would be nice. Sometimes, I follow up four times without [receiving any] acknowledgement.”

A couple of readers surmised that this might be due to lack of manpower, and thus urged MGAs to “hire more people,” instead of showing “a reluctance to handle more complicated risks.” One broker suggested the slow response time may have been due the extent of authority the underwriter had: “Even small businesses take at least a few days to quote, and underwriter’s authority is very low. In many situations, [we] need longer waiting time for the underwriter to get further binding authority.”

Others observed that the delays tended to happen more with policy issuance – that although “quoting turnaround is not bad, policy issue can be very slow.”

www.insurancebusiness.ca

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20/09/2017 6:58:01 AM

ENCO

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BROKERS ON MGAs 2017

What makes an underwriter stand out in a crowd?

In today’s virtual sea of options, we believe “standing out” has a lot to do with relationships— the ones we have with you and those you have with your clients. Thinking outside the box, responding quickly and providing effective long-term solutions for your clients...

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SPECIAL REPORT

FIVE-STAR MGAs RANGE OF PRODUCTS

PREMIUM PRICING

FIVE-STAR MGAs

FIVE-STAR MGAs MGA PERFORMANCE

5

ABEX Affiliated Brokers Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Burns & Wilcox Cambrian Special Risk Insurance Services Can-Sure Underwriting CFC Underwriting CHES Special Risk ENCON GroupAssur Milnco Insurance PAL Insurance Brokers South Western Group Special Risk Insurance Managers Totten Insurance Group Underwriting Contract Administrators Inc.

th

After underwriting responsiveness and premium pricing, range of products came a distant third in terms of importance, with nearly 40% of respondents considering it among their top three considerations.

The overall response from brokers seems to have leaned towards the positive in this category. Altogether, MGAs earned a score of 8.29 out of 10 for range of products, making this their fifth-best-performing area.

Many brokers considered themselves ‘quite satisfied’ with the offerings, though they were always keen for MGAs to give more as well, whether WHAT DO BROKERS WANT?

“Cyber liability premiums should be greatly reduced” through “additional endorsements/coverage or just new products in general,” or “more niche products,” or by granting “better access to more markets.” There were also special mentions of certain product lines, such as commercial properties (“better option” and “more seamless integration”), builder’s risk/wrap-up, hospitality, and cyber. But generally brokers understand that improvements in range of products are more of a ‘good to have’ rather than a must at this point, as can be seen from these comments: “On the whole [it’s] good, but probably could improve in some of the more unusual risks,” “I’m quite satisfied, no one can write all lines of business,” and “All MGAs lack some products, due to the restrictions by their subscribing companies, and it takes time and know-how to change the subscribing company’s view.”

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MGA PERFORMANCE

6th

ABEX Affiliated Brokers Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. April Burns & Wilcox Cambrian Special Risk Insurance Services CFC Underwriting CHES Special Risk Chutter Underwriting Services GroupOne Insurance Services K&K Insurance Canada PAL Insurance Brokers South Western Group Special Risk Insurance Managers SUM Insurance Totten Insurance Group Underwriting Contract Administrators Inc.

In contrast to previous years, premium pricing has become the second most important factor for brokers in 2017, which seems to suggest that there must have been a significant change in the pricing trend.

However, in terms of performance, MGAs have definitely fallen back quite a bit in this category, dropping from third to sixth place. Still, they managed to score 8 out of 10 for premium pricing, even with the mixed reviews.

Responses seem to be 50/50 – brokers generally found the pricing competitive, but a good number of them also observed that their MGA partners’ premiums seemed to be higher than their competition and/or the standard in the markets, with some pinpointing certain lines or sectors as having higher rates, and others identifying increases due to the additional fees more than the actual premiums.

One broker pointed out that clients are still very price-sensitive, and “it’s hard to sell experience and reputation if the premium is 30% more” than others’. Thus, a couple of readers mentioned the key word ‘negotiate’, asking MGAs to exercise “more flexibility to negotiate” and to “negotiate better with markets when the client requests better pricing.” One respondent, however, was not sure if negotiability necessarily worked in their favour, saying that “sometimes there is too much negotiability in the pricing [which is] great if we are the broker, but not great if we are blocked by another broker … [and we] can’t guess how the rates compare.”

Another concern raised was that good and fair pricing can be rather short-lived, as one broker remarked, calling out MGAs for not thinking about the long term: “Premiums on new businesses are often better than what they’ll give existing customers – that’s not fair.”

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SPECIAL REPORT

FIVE-STAR MGAs TECHNOLOGY AND AUTOMATION

CLAIMS SUPPORT

FIVE-STAR MGAs

FIVE-STAR MGAs

Anderson McTague & Associates Approved Surety & Casualty Inc. Cambrian Special Risks Insurance Services CHES Special Risk GroupAssur GroupOne Insurance Services K&K Insurance Canada PAL Insurance Brokers South Western Group SUM Insurance

MGA PERFORMANCE

7

th

Even with all the talk about digital disruption, technology and automation remain at the low-priority end for brokers compared with other areas of importance, coming in second to last. But in terms of MGAs’ performance, technology and automation ranked in seventh place, higher than claims support, surprisingly. Ten MGAs received a five-star rating in automation, and many brokers were keen to commend their MGAs for use of “good technology,” for “getting better every day,” or for making “constant improvements in the last year.”

One noticeable trend among brokers’ responses, however, was that the websites and portals may be there, but they are not necessarily effective or optimized just yet, and thus overall MGA performance might not be at the desired level. Comments included: “The website is slow and the documents are not easy to print at the end of processing WHAT DO BROKERS WANT?

MGA PERFORMANCE

8th

ABEX Affiliated Brokers Anderson McTague & Associates Angus Miller Insurance Approved Surety & Casualty Inc. Cambrian Special Risk Insurance Services CHES Special Risk ENCON GroupAssur K&K Insurance Canada South Western Group Special Risk Insurance Managers Sport & Fitness Insurance Canada SUM Insurance Underwriting Contract Administrators Inc.

This year, the Brokers on MGAs survey wanted to truly hone in on the brokers who could accurately assess their MGAs’ claims support.

Brokers were asked if they had any claims experience at all with their MGAs, and if they said yes, then they were asked to rate their MGAs’ claims support. Compared with 2016, MGAs’ claims support dropped from fifth to eighth place, with just 14 MGAs earning five-star status.

Overall, the majority of the respondents who took the survey reported having no claims experience with their MGAs, while the ones who had experience offered mixed reviews, such as one broker who WHAT DO BROKERS WANT?

“Streamlining the renewal process “Give brokers more compensation is a great start” as we are doing more work in – have to wait for email with documents,” “The portal hardly ever your system” works [, we] end up sending in endorsements, etc,” “[We] can’t retrieve applications from the website,” and “I find the online portal could be updated to make it a bit more user friendly, but [at least] there is always someone available to help out.”

As one reader said, “in fairness, they have a new ‘system,’ which always causes delays in the beginning,” implying that it would be helpful if MGAs first got a good grasp of the new technology/automated process they wished to introduce before actually launching it.

Respondents also repeated requests for an online quotes option and better access for brokers, particularly for issuance of certificates.

Yet there are still a few brokers who prefer existing means of interaction, whether it’s “email quote requests” or “deal[ing] with the underwriter rather than rate online” which makes for good personal service.

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mentioned having “very good and sometimes not [so] good experience with claims for our clients.” Other respondents offered positive reviews, with a bit of advice for their MGAs: “Claims have been efficient, but there can always be more transparency,” one said, and “quick but not very customer interactive,” commented another.

Other brokers voiced frustration at how their claims were handled, stating that communication could be improved, and that the use of third party adjusters often resulted in poor communication and the lack of a timely response.

This was echoed by one broker who suggested that their MGA should work on “better communication with insured,” while offering brokers the “ability to write cheques in-house for claims rather than waiting for multiple insurers to agree.”

www.insurancebusiness.ca

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Underwriting. Optimized.

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20/09/2017 6:58:39 AM

SPECIAL REPORT

FIVE-STAR MGAs MARKETING SUPPORT

COMPENSATION (COMMISSION, BONUSES, PROFIT SHARE)

FIVE-STAR MGAs ABEX Affiliated Brokers Cambrian Special Risks Insurance Services CFC Underwriting CHES Special Risk PAL Insurance Brokers

MGA PERFORMANCE

9th

As always, marketing support is least important for brokers when choosing an MGA. MGA performance in this area was lacklustre, which might be par for the course, except that this category managed to outperform compensation (commissions). Still, five MGAs managed to earn five stars in marketing support.

For the most part, brokers were indifferent about their MGAs’ marketing support – saying they were either “not really worried about this” or “haven’t required it yet” for their business, though their MGA had offered. Others were simply “not sure” about this area, with many considering it as not applicable/not something they looked for in an MGA. Still, there are brokers who are content with the support they get from their MGAs in this area; at least a few said that just receiving regular emails about their products was good enough. A couple of others mentioned the need for sprucing up websites to help with marketing.

Those who had specific ideas about marketing support suggested that MGAs could organize seminars and webinars for underwriters, agents and clients to help them better understand the products available and possibly get an idea of how claims were managed.

WHAT DO BROKERS WANT?

“Recognize that most brokers will support their true insurers over MGAs but that the MGA has an important part to play in support of those relationships. Don’t get mad when you don’t always get the business” A couple of respondents suggested that MGAs might want to do more marketing for themselves instead: “Most people don’t know what an MGA is and that leads to some questions from clients, so altogether the MGA market should improve their public image,” and “[We] would like to see the underwriter attend some conferences to meet clients and prospects as this would help get [the MGA’s] name out in the market.”

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FIVE-STAR MGAs MGA PERFORMANCE

10th

ABEX Affiliated Brokers Angus Miller Insurance Approved Surety & Casualty Inc. Burns & Wilcox Cambrian Special Risk Insurance Services CFC Underwriting CHES Special Risk GroupOne Insurance Services South Western Group

“Brokers always want more commission” pretty much sums up the sentiment about this category. Though compensation is definitely not one of the most prioritized categories for brokers, in terms of performance it came in at last place, though that is not likely to be a surprise to anyone. One broker said their MGA was “no different than any other MGA [in that] compensation is lower.”

WHAT DO BROKERS WANT?

“Knowing the products a little more. Instead of saying no, they need to research and look outside the box” Nevertheless, others are beginning to feel that MGAs could do better in this area to draw in more business for themselves. “If commission can be 20% like standard markets, I am willing to place business with MGAs more often,” said one respondent. Other suggestions included having bonuses “on rentability and volume” and “allow[ing] broker to input commission so a fee can be avoided.” In effect, brokers want credit where it is due, as one said that giving higher commissions meant “recognizing the amount of work the broker does and should be compensated for.”

ALL-STAR MGAS These two MGAs gained top marks from brokers across the board, earning a five-star rating in each category: Cambrian Special Risks Insurance Services CHES Special Risk

www.insurancebusiness.ca

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20/09/2017 6:58:45 AM

Ins Bu

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BROKERS ON MGAs 2017

Be CYBERSURE New comprehensive Cyber & Data Breach insurance Coverage Features: • Breach of Personal Data (First and Third Party) • Breach Forensics, Investigation, Notification and Monitoring Costs • Business Interruption Losses from Network Security Failure / DOS Attacks • Hacker Damage to Systems and Programs or Data • Cyber Extortion • Third Party Privacy Infringement Claims • Electronic Social Engineering Theft and Phishing Scams • Breach of Canadian Anti-Spam Legislation (CASL) • Director’s and Officer’s Liability from Cyber Exposures

cyber@can-sure.com www.can-sure.com

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SPECIAL PROMOTIONAL FEATURE

MGAs

The value of MGAs in the modern market IBC sat down with three industry experts to find out what makes a good MGA

“WHEN YOU call us with a problem,” says David Cook, president of ENCON Group Inc., “it becomes our problem.”

It’s the kind of mantra that insurance professionals expect to hear. Yet while this is an industry wholly dedicated to meeting the needs of clients, the hard work and expertise of the managing general agent can so often go overlooked.

Needless to say, this is to overlook one of the most vital roles in the modern insurance market.

A good MGA’s unique cross-section of specialized expertise, industry experience and responsive flexibility marks them out as an essential insurance player. In a sense, Cook muses, the MGA is an overlooked strength in the industry.

“The insurance purchaser may not notice the service provided by the MGA,” Cook reflects, “but the brokers who deal with the MGAs are very aware of it. Often, clients don’t realize the value of an MGA until they’ve had a negative experience elsewhere, particularly with respect to a claim. Our central focus on providing good service has definitely been a key reason why clients renew year after year.”

ENCON’s managing director of claims and operations, Kate Harley, believes that

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responsiveness and accessibility are the key factors that differentiate a great MGA from an average one. When Harley asks brokers what they are looking for from an MGA, the same two things come up time after time: speed and expertise.

“I can think of a couple of situations where a client was on site and needed an answer really fast,” Harley says. “A quick

of the insurance industry is crucial for any MGA that wants to become a trusted and relatable resource to brokers and their clients. That extra level of knowledge enables the MGA to provide relevant education to brokers and their clients, with a view to making them better prepared in the event of a claim. “If we have someone with a construction or engineering

“Often clients don’t realise the value of an MGA until they’ve had a negative experience elsewhere, particularly with respect to a claim” response shows the client ‘when I need an answer, the MGA will be there for me.’”

Alongside speediness, there’s also the issue of expertise, described as “the foundation in specialty insurance” by Harley. She has witnessed firsthand the importance of hiring people who understand the needs of both brokers and clients.

Having real-world experience outside

background on the claims team – which we do – they can speak the language of those professionals in advance of a claim situation,” Cook says.

All of which raises an important issue – what is the best way to balance such in-depth analysis with the speedy responsiveness that the modern consumer demands?

“Clients expect quick responses, so it’s key to provide rapid turnaround answers,”

explains Stefanie McKay, ENCON’s chief underwriting officer. “But at the same time – in specialty lines – the need for expertise is also very important.”

The essential synergy, McKay surmises, all boils down to “longevity, stability and authority” – part of which comes in the form of established partnerships across a wide range of carriers. Such long-term partnerships form the backbone of an MGA’s business advantages, resulting in the difference between offering insurance that is a commodity versus insurance that is a specialized solution. The reality is

that if an MGA or broker is dealing with a single carrier, they are at the whims of that carrier. An MGA that creates its own programs supported by multiple carriers has much more control over the products they offer and what exposures can be covered, and they have more flexibility with their underwriting authority and claims adjudication.

That wide-ranging scope and ability to navigate the market can also provide the MGA with opportunities to collaborate with carriers on accounts that might be outside the normal underwriting box. “It

relates to the idea of dealing with someone who has broad local authority,” Cook says.

“It’s easier for an MGA to develop new programs or specialized programs when they can tap into already-established carrier relationships.”

By taking a problem-solving approach, an MGA that has strong relationships with a range of specialist carriers is also better positioned to provide customized solutions in response to broker and client needs. That helps brokers to differentiate themselves and boost their value proposition in what is an extremely competitive market.

Flexibility, of course, leads into perhaps the most vital aspect of industry success – the ability to look forward. Adaptability is a huge plus-point for MGAs in the midst of an ever-changing industry.

“Our role as an MGA is to partner with brokers and develop solutions in response to changes in the marketplace and environment,” says McKay. “Brokers look for an MGA that keeps pace. We all know that we’re facing rapid changes in technology and customer expectations. It’s important to understand those changes and offer a range of solutions and services.”

Demonstrating a high level of expertise and a successful track record in chosen markets are key elements that enable MGAs to gain broad local authority.

Quick decision making, flexibility to offer coverage options and the ability to craft customized solutions are the outcomes of earning that broad authority.

“We try to solve your problems quickly, we have the ability and expertise to help, and you’re dealing with someone who has decision-making authority rather than someone who has to pass it up the chain or to head office,” Cook says. “The broker should be able to rely on their MGA, knowing that their business is valued and that the MGA will react quickly, decisively, and with expertise.”

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20/09/2017 6:59:49 AM

SPECIAL PROMOTIONAL FEATURE

SPORTS AND FITNESS

Inside the sports and fitness space Jay Trothen tells IBC why working with a specialist insurer is crucial for brokers in the sports and fitness arena

“ONE OF the things we say to clients,” says Jay Trothen, president at Trothen & McConkey Insurance, “is that ‘if you’re having a baby, would you go to an obstetrician or your family doctor?’ And they all say ‘the obstetrician.’ So I say, ‘Why would you buy your insurance from a regular company, rather than one who deals exclusively in sports and fitness?’”

It’s a very good analogy. As the managers behind Sports & Fitness Insurance Canada (SFIC) since 1998, Trothen & McConkey have spent 20 years establishing SFIC as the industry leader. With a client base composed of 50% fitness and amateur teams and 50% beauty (“anything from small beauty salons upwards”), Trothen himself is a man with countless insights when it comes to questions

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regarding this uniquely specialist sector.

Questions like: what are some of the most common claims?

The answer: liability and medical. With liability, most claims are generally caused by a lack of supervision, which can lead to someone doing something they’re not supposed to be doing. Trothen gives the example of an individual who was helping to change the weights for somebody else to bench press, but he removed the weight from one end while the weight was still on the other. Unsurprisingly, the bar flipped up causing an injury to someone standing too close.

As for medical claims? “We cover laser hair removal and skin resurfacing, so we often see laser burns and associated injuries,” Trothen

says. “We’ve had a couple of interesting ones, especially with the aging population.

A customer booked a pedicure and the esthetician scraped too hard, causing an ulcerated foot which did not heal due to an underlying condition of diabetes. One client lost a toe as a result. So, there has to be a lot of care, prevention and education in this space.

That’s why helping to educate our brokers and their clients is one of our top priorities.”

It’s a form of education and prevention that is clearly in demand, especially with an increased fondness for litigation now sweeping the market, not to mention the ever-evolving complexities of the sector. Making sure that independent contractors, such as freelance stylists or guest gym instructors, are covered, for instance, as well as sharing knowledge to ensure smoother and safer operations is crucial for any insurance professional who wants to stand out in this space. The national sales network of over 1,500 brokers seems to agree –SFIC offers the best programs in these classes.

It’s that sort of expertise that is essential for anyone looking to make headway in the sector: expertise that can be shared with brokers, bolstering their knowledge of oftenimpenetrable specialist areas and creating a sense of expertise and trust with clients.

Trying to navigate the field without this wealth of experience, Trothen explains, would be a mistake.

“Other MGAs come in with policies that just aren’t as broad or comprehensive,” he says, “and because they are not knowledgeable in this class of the business, they may not have the same kind of longevity. We have lots of experience in this niche with the support of solid, strong markets. And it makes a difference.”

www.insurancebusiness.ca

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20/09/2017 7:01:55 AMAM 20/09/2017 5:38:02

FEATURES

BROKERAGE INSIGHT

Canadian proud BFL’s Barry Lorenzetti shares his perspectives on the challenges that Canadian brokerages face in today’s industry – and how to overcome them

IBC: How have BFL’s business models contributed to your firm’s success?

Barry Lorenzetti: This year marks our 30th anniversary in the business. Back in the day we put together a business model that has stood the test of time – and that has been the encouragement of employees to become shareholders, and through the years we have facilitated that path for them.

I know that one of the biggest assets of our firm is that we have been able to hold on to our employees because of this particular model. We feel that the biggest challenge in our industry today is that many companies fail at engaging their employees. I read an article recently by a president of one of our competitors in which he stated that the biggest challenge for our business was the engagement of employees. In order for our organization to continuously grow, and meet its challenging objectives, we must continue the push for enhancement of share value and the engagement of employees is crucial as they are the major contributors to our success.

IBC: Why is it important for brokerages to remain independent and Canadian-owned?

BL: In the last few years there have been many acquisitions of Canadian companies

by US companies in our industry. I find it rather sad that Canadian firms can’t find a Canadian broker to align with, even if it’s a

46

competitor. What that tells me is that these firms don’t have the right perpetuation plan, they don’t have the right business model, and they haven’t fully thought about what serves in the best interests of their shareholders and employees. In many of these firms, the shareholders have been in the business for many, many years and may be reluctant to give up shares, and that has effectively been their downfall. By not giving up shares, they haven’t created a succession plan. Eventually it gets to a point when they decide to sell because it serves in the best interests of employees, but I ask you, does it really? Wouldn’t it better if those employees had been given an opportunity of becoming shareholders and had a say in the destiny of their firms. Perhaps one option would be to keep the company independent?

IBC: What is a big challenge facing brokers today?

BL: I see many challenges ahead but two that come to mind from my perspective deals firstly with technology in our business

and the ongoing threat of insurers who are acquiring brokers and paying ridiculously high multiples in order to expand upon their distribution network.

More than ever technology will play an even greater role in our industry – so much so that I have often heard the phrase, we are entering a tech arms race.

The general consensus is that the winners in the tech arms race will be the firms that have a proven ability to adapt to tech advancements, synthesize client data, leverage software that streamlines back office support and invest in human capital to manage its investment.

In respect to my comment on insurers I know I am not alone in thinking that there could be a conflict of interest in these companies buying brokerages, who in turn sell the products of that particular insurer. Consumers should have access to all markets and all insurance companies.

What surprises me is that there has not been enough dialogue about this trend in our industry.

ABOUT BARRY LORENZETTI President, CEO and founder of BFL Canada, Barry Lorenzetti oversees the largest Canadian employee-owned commercial insurance brokerage. A dedicated philanthropist, Lorenzetti has supported many endeavours and causes through his foundation, the Barry F. Lorenzetti Foundation. In addition, Lorenzetti’s lifelong love of hockey has led to his involvement with Hockey Canada and his current role as Chair of the Hockey Canada Foundation.

www.insurancebusiness.ca

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20/09/2017 7:02:33 AM

FAST FACTS: BFL CANADA

Headquarters in Montreal

Founded in 1987

“As a company, we are committed to continuing our legacy for the next generation” IBC: What is one lesson you have learned over the years that you would like to share with other brokers?

BL: Henry Ford said it best: “Failure is simply the opportunity to begin again, this time more intelligently.” I have a failed a number of times, but I always remember how important it is to learn from those failures. One thing I have always done as a leader and entrepreneur has been to surround myself with people who are more

qualified and experienced than I am in certain disciplines.

BFL is an organization that prides itself on the number of leaders we have, and what is interesting is that all of these leaders share in this philosophy of surrounding themselves with people who compliment their talents. This team effort has certainly worked and is one of the many reasons why BFL has remained so successful throughout the years.

Offices in 12 cities and six provinces

Nearly 600 employees

98% client retention rate

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20/09/2017 7:02:40 AM

FEATURES

CYBER

Getting to grips with cyber insurance It’s the hot new area of insurance – but what do you really know about it?

DESPITE THE increasing number of claims, cyber is still one of the most underserved areas of the insurance industry.

‘Cyberattack’ has become a commonly used phrase by brokers to describe a data breach. However as cyberattacks are becoming more varied with a wider range of victims becoming targets, exactly what is

48

meant by this phrase and who is potentially at risk?

As most individuals and organizations store information electronically, more people are becoming prone to having their data compromised. In short, if you store any data electronically then you are at risk of a breach.

The need for cyber coverage arose during

the 1990s with the growth of internet businesses storing large amounts of sensitive data such as addresses, social security numbers and bank details. As the data grew, so did the need for securing it. Hackers seized this opportunity and were soon able to gain unauthorized entry to online databases.

A cybercrime is not just the illegal access

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of digital data but the corruption, publication, destruction and extortion of it – and as cyberattacks come in all sorts of shapes and sizes it can make a breach hard to recognize.

INSURR PROVIDERS COMPANY

PRODUCT

ABEX Affiliated Brokers Exchange Inc

Cyber Liability

AIG Insurance Company of Canada

CyberEdge®

Allianz Global Corporate & Specialty

Cyber Product

Identifying a cyber threat

APRIL Canada

Data and Cyber

As the term ‘cyber’ has become more recognizable in its own right, it has established a vocabulary all of its own.

A ‘data breach’ is when secure data is compromised by a hacker which could be stolen, corrupted, or sold to a third party.

‘Identity theft’ is when personal information, such as bank details or an address, is stolen or cloned, potentially resulting in theft of funds or fraud.

‘Phishing’ is a type of scam, usually via a spoof email, that attempts to trick people into disclosing personal information, such as addresses and banking details. This may result in data being wiped, corrupted or altered, such as passwords, log-in details or personal files.

A ‘virus’ is a commonly used term to describe the variety of malicious software used to infect networks and drives passed on through suspicious downloads and corrupted files, ie malware, adware, spyware, ransomware and trojan horses.

Aurora Underwriting Services Inc Beazley Canada Limited The Boiler Inspection and Insurance Company of Canada (HSB BI&I) (Munich RE Canada) Burns & Wilcox Canada Can-Sure Underwriting Ltd

Cyber, Privacy and Media Risks CyberPlus Platinum

CFC Underwriting

Cyber

Chubb Insurance Company of Canada

Cyber liability

DUAL Commercial Eagle Underwriting Group Inc

Frank Cowan Company Gore Mutual

Cyber Privacy protection (cyber) E&O and A&E – Cyber Security and Privacy Liability Extension and CyberPro (Ascent) Cyber Risk Padlock – Cyber and Data Threat Protection

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Cyber Liability

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Cyber / Privacy

Markel Canada Ltd

National Brokerage Services Inc / Brokerage Services de Courtage

Cyber Cyber, Privacy and Media Risks Faced by Companies in their Day-to-Day Operations Cyber Risks

Northbridge Insurance

Cyber Risk

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Pirbright Professions Inc

Cyber Liability

Large organizations and businesses are traditionally the primary targets of hackers.

As holders of large amounts of confidential information, all it takes is for one weak entry point to become vulnerable to cyber criminals.

However, while hackers mainly target large businesses, SMEs and even healthcare organizations have also become recent victims of cybercrime. Small businesses also hold large amounts of confidential data, and are less likely to spend money on security controls and encryption than a larger business – therefore making them easier to hack.

QBE

Cyber and Data Loss

Ridge Canada Cyber Solutions Inc.

Cyber (Network Security and Privacy Liability)

Risk-Can Underwriting Managers

CPM – Cyber, Privacy and Media Risks (Lloyd’s – CFC)

STARR Companies

Cyber and Terror Response

Strategic Underwriting Managers Inc

Professional Liability - Cyber, Privacy and Media Risks

The Sovereign General Insurance Company

Intellect – Cyber

Totten Insurance Group

Cyber and Privacy

Trans Canada Insurance Marketing

CyberTech+ (Travellers)

Travelers Canada

CyberRisk™ and Cyber+™

Trinity Underwriting Managers Ltd

Cyber / CASL

Trisura Guarantee Insurance Company

Comprehensive Technology and Cyber Liability

XL Catlin

Cyber

ENCON Group Inc

Moorgate Underwriting Managers

CyberOne® Cyber and Privacy CyberSure (Add On)

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FEATURES

CYBER

Once a breach has occurred it may cause a significant amount of damage to the credibility of the company concerned.

Confidence may be lost if companies cannot be trusted to encode and store data securely enough, resulting in a loss of business or further lawsuits. Hackers may also cause other damage such as impersonations in order to give out false or defamatory information to deliberately compromise the reputation of a company.

Protecting you and your client As new types of cyberattack occur every day, it is important for insurance companies to keep their policies relevant and up to date.

Many clients could miss out because not every eventuality has been considered or potential risks sufficiently covered when a new type of attack is reported.

Brokers also need to ensure that their clients are taking enough precautions in order to prevent a cyberattack.

Important questions to ask include: What sort of response is in place in the case of a data breach? Is the security software kept up to date? Are there large amounts of confidential information stored? What sort of back-up system is there and will it store the information using a separate server?

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Cyber can be divided into major components: first party coverage and third party coverage.

First party coverage is aimed at clients who want financial protection if their systems have been breached. Third party coverage concerns lawsuits from those who may sue a business or individual if they fail to store their data securely or if there are any communication liability issues.

The risk areas that are part of a typical policy include protection against a business interruption, financial loss and loss of earnings, privacy liability, first and third

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party notification costs, technology errors and omissions, multimedia liability and legal expenses.

Finding cyber products As one of the most underinsured risk areas, brokers across Canada are gradually realizing the potential of this still underserved area.

The number of cyber-related products has risen dramatically over the past several years, yet many brokers are still struggling to educate themselves on what is available, as well as how to cover their clients correctly.

Due to the rapid emergence of this risk area, research for what is currently available is more complex through traditional print directories or previous relationships with favourite insurance companies. As new products are created and updated all of the time, a solution is needed to source these new policies as quickly and efficiently as possible.

One such solution is Insurr, a new online resource for specialty insurance products. As an online directory this free-to-use website allows brokers to search for those unusual and hard-to-place risks. Announcing ‘cyber’ as its most popular search term, Insurr features over 260 individual cyber-related product listings.

With new products added on a daily basis, a live chat facility and instant updates to product listings, Insurr has quickly become the most up-to-date and comprehensive resource available for specialty insurance brokers. Placing a cyber risk for even the most under-educated broker is now as easy as a price comparison search on Google.

Featuring top-level details in a standardized format, Insurr is able to display a wide range of results instantly compared with what would previously have taken hours of research.

Brokers can sign-up to Insurr for free at www.insurr.com/ca for immediate access to the large number of specialty products, including cyber.

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20/09/2017 7:37:38 AM

FEATURES

CYBER

TOP CYBER BROKERS

IBC shines the spotlight on 15 brokerages that have found a competitive edge in today’s marketplace by insuring ever-evolving cyber risks IN RECENT years, cyber insurance has been the new frontier for insurance professionals, and coverage of cyber risks continues to evolve as businesses and brokers better understand the risks present in cyberspace.

With the emergence of cyber risks in the 21st century, the insurance industry has progressed to keep up with individuals’ and businesses’ need to protect sensitive information in the event of a cyber hack.

AON RISK SOLUTIONS OFFICES THROUGHOUT CANADA

The following 15 brokerages are leading the charge in the Canadian insurance industry’s fight against cyber breaches by offering their clients best-in-class service and protection against cyber threats.

BINKS INSURANCE BROKERS LIMITED OTTAWA, ON

Aon was the first broker in Canada to dedicate a department entirely to cyber, and has been leading that space ever since. The company has developed market-leading insurance policy wordings, created new cyber insurance products for large and mid-market clients and a specialized product offering for small business; it also extends diagnostic and response management services in cases of privacy breach.

Aon is at the forefront of education about cyber risks and insurance and holds seminars and speaks on the subject at various events.

Given the immense scale of Aon’s total business in various lines, the percentage of business derived from cyber may not seem as significant, yet the division still generates a large dollar amount and has a growth rate of 30–40% per year. Aon has also invested heavily in cyber risk prevention, particularly with the acquisition of Stroz Friedberg (leading experts in digital forensic, incident response and security science).

ERB AND ERB INSURANCE BROKERS KITCHENER, ON

One of the Waterloo region’s oldest operating businesses, having opened in 1919, Erb and Erb Insurance Brokers has maintained a history of being a ‘people-focused’ organization. Today, the brokerage employs more than 60 professionals, offering a wide range of general insurance and financial service products, including cyber liability. By tailoring cyber insurance for their clients’ needs, Erb and Erb offers coverage for unauthorized disclosure of personal client information, business interruption due to a network breach, and much more.

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Having recently celebrated 100 years as an Ottawa business, Binks Insurance Brokers offers a vast range of insurance products, such as programs for pet sitters, food banks, power sports dealers and more. President and CEO Harry Binks purchased the agency in 1980 from his mother and has since grown the firm to become one of the largest privately owned insurance brokerages in Eastern Ontario. Specializing in risk management for auto dealerships, manufacturers, contractors and property management firms, Binks Insurance Brokers also offers cyber insurance coverage for liability risks, cyber expenses and business interruption, cyber crime and more.

Apart from Binks Insurance Brokers, the group has four specialist firms: Millennium CreditRisk Management Limited (credit & political risk), Binks Life & HealthRisk Insurance Limited (life, disability & group), Globalex Ottawa (insurance for high-tech firms), and Binks Personal.

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Contact our SGI CANADA Business Development team today. We’re eager to help you grow, delivering insurance protection that matters to customers.

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20/09/2017 7:03:19 AM

FEATURES

CYBER HUB INTERNATIONAL INSURANCE BROKERS OFFICES ACROSS CANADA

HUB International is a leading North American insurance brokerage with cyber specialists across Canada, supported by a robust team of risk management professionals. HUB’s broad cyber offering includes coverage analysis, benchmarking, a dedicated breach coach, disaster response planning and much more, in order to help clients mitigate any losses.

Whether a client has opted to buy cyber coverage or not, they will always have the support of HUB’s cyber specialists and risk services team to assist them should an incident occur.

Vancouver-based Derek May is one of HUB’s leading cyber specialists in Canada, and he remains active within the cyber community.

May regularly educates on cyber threats and has presented across Canada to numerous industry groups, including live hacking demonstrations with one of HUB’s risk management professionals who are also certified ethical hackers. These live hacking demos show how easy it can be for a company or an individual to be compromised. “Although cyber insurance is a relatively new product, HUB has been a leader in engaging clients on the need for this important coverage for many years, and our cyber specialists have been actively involved in a number of cyber-related claims,” says May.

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FEATURES

CYBER CORNERSTONE INSURANCE BROKERS WOODBRIDGE, ON

KENNEDY INSURANCE BROKERS INC NORTH BAY, ON

For over 100 years, Kennedy Insurance Brokers has worked closely with the business community of North Bay and Northern Ontario to provide innovative insurance solutions.

“We have watched the Canadian economy evolve from its early beginnings to the technology-based environment it has become. Instead of delivering fire insurance plaques, we now talk about firewalls,” says Chris Bevan, partner at Kennedy Insurance Brokers.

“Our cyber team focuses on educating our clients across all industries. Any company dealing with critical assets such as personal data, intellectual property or proprietary corporate data, has a risk of a data breach. We believe every company has some exposure to cyber risk.

Cyber liability coverage is a complex, evolving product requiring ongoing communication and risk management. The solution that works today, may not work tomorrow.

No other coverage available today requires as much partnership with our clients. This strengthens our relationships and helps our clients mitigate potentially catastrophic losses to their business,” says Bevan.

DAN LAWRIE INSURANCE BROKERS HAMILTON, ON

Ranked in the top 5% of independent insurance brokers in Canada and a founding member of the Canadian Broker Network (canadianbrokernetwork.com), Dan Lawrie Insurance Brokers’ Knowledge Based Industries Team (KBIT) is a specialized group of experts who bring innovative cyber solutions to any size of business.

“No organization, regardless of size, is immune to the impact of cybercrime. As a result, cyber insurance has become an essential component of any risk management program. We have designed a proprietary Cyber Liability Solution that addresses all exposures, protects employees and evolves with the organization,” says Bob Lawrie, president.

“Our cyber experts not only bring comprehensive cyber solutions to clients, but have a specialized cyber claims response team,” says Lawrie.

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Cornerstone Insurance Brokers’ multiple lines and services include a Cyber, Privacy and Media Risks (CPM) Liability product, designed to provide comprehensive protection for companies’ day-to-day operations.

The policy allows for companies to tailor the coverage to the specific risks they face, which can range from first and third party privacy breach notification costs to crime cover such as phishing scams, wire fraud, and extortion, to losses resulting from reputational harm. The program also includes cover for cloud data, claims arising from intellectual property rights infringement and technology E&Os, as well as other costs related to crisis response.

ROGERS INSURANCE CALGARY, AB

A cyber attack is one of the most detrimental things that can happen to a business and can lead to reputational damage, fines, and even bankruptcy.

Most organizations are not aware or prepared for this eventuality. Rogers Insurance has responded to these new challenges by taking a proactive role in educating clients and making them aware of the risks and exposures of cyber threats.

Rogers Insurance has access to every major cyber carrier in Canada and features an in-house cyber program underwritten by Lloyds of London.

The firm understands that not all businesses are the same, thus, Roger’s customizes insurance policies to suit business needs by covering all aspects of cyber risks.

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20/09/2017 7:03:42 AM

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FEATURES

CYBER PL&B INSURANCE

MCCUAIG INSURANCE

EDMONTON, AB

MILTON, ON

PL&B Insurance provides professional and general liability coverage, as well as specialized cyber coverage, for the information and communications technology industry (ICT).

PL&B Insurance starts with a risk assessment template and identifies areas of risk that can be addressed with actions such as duplication, separation or contractual transfer. Some of PL&B’s clients have established a second location for real-time data backup, with facilities to accommodate staff, should a disaster occur in the primary location.

Risk management actions such as remote site duplication of data, transfer to a cloud-based provider, and disaster recovery plans can minimize or eliminate the need for some insurance coverage for direct damage. However, there remain many exposures that require specialized cover. This includes legal liability for loss of client data, loss of income, and damage to reputation, amongst other areas. PL&B Insurance maintains professional engineers on staff to ensure that the brokerage provides the required expert advice.

MARSH CANADA MONTREAL/TORONTO/VANCOUVER

A global leader in insurance broking and risk management, Marsh officially established in Canada in 1914, becoming the company’s first office outside the US. Now with offices in Montreal, Toronto and Vancouver, Marsh offers experts in every facet of risk and across industries to assist clients with their insurance and risk management needs.

Marsh’s cyber risk insurance practice has produced cyber risk modelling reports for more than 1,000 companies annually, and is able to assist clients in designing effective cyber risk management programs.

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McCuaig Insurance Brokers has been firmly rooted in and serving the Milton and GTA business community for over 105 years. A respected familybased business, McCuaig Insurance Brokers provides individualised service, crafting insurance offerings designed for their clients’ specific insurance needs.

McCuaig offers a broad suite of cyber breach insurance products, including third party insurance security and privacy liability, regulatory defence and penalties, ransomware/cyber extortion, legal services and much, much more.

“We offer ‘best in class’ insurance offerings including comprehensive cybersecurity breach insurance protection,” says Dan Sisolak, vice president at McCuaig Insurance Brokers. “We take the necessary steps and time in getting to know you with our in-depth consultations to analyze and understand your specific business insurance needs with the goal of selecting a tailored comprehensive insurance coverage package that is a perfect fit for your unique business insurance needs.”

MCLEAN HALLMARK INSURANCE GROUP TORONTO, ON

In late 2016 Hallmark Insurance Group was acquired by Moore-McLean Insurance Group as part of an expansion strategy within the greater Toronto Area, including Markham, Mississauga and Kingston. The new Group now provides a wide range of services to over 5,000 organizational and 10,000 personal clients.

The company has been attuned to a continuing widespread underinsurance of many Ontario companies when it comes to cyber liability, finding that despite cyber insurance having been around for over 25 years, the uptake only began within the last 10 years. The company offers cyber liability insurance, which includes first party and third party coverages, the latter inclusive of litigation and regulatory response, credit monitoring, media liability, and the usual notification costs and crisis management.

www.insurancebusiness.ca

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INTEGRO (CANADA) LTD

MULTIRISK INSURANCE BROKERS & FINANCIAL GROUP

MONTREAL, QC

TORONTO, ON

Integro prides itself on providing complex risk management and in-depth, personalized analysis that is necessary to understand the subtle differences between the various products on the market, and how these nuances align with the exposures faced by clients.

Integro’s international and collaborative structure allows its brokers to be informed on the latest legal and risk developments from across the world.

Working together as a unified, global team enables the people at Integro to create innovative coverage solutions and deliver exceptional results.

Led by president Bhupender Singh, Multirisk Insurance Brokers & Financial Group serves the Toronto, Mississauga, Brampton, Markham, Scarborough and Vaughan areas.

Providing insurance solutions for individuals and businesses, Multirisk offers cyber liability insurance options to clients, recognizing the risks of security breaches in the 21st century.

In addition to offering a standard cyber risk insurance policy, Multirisk also provides options for extortion liability insurance, malicious actions of employees and professional liability insurance, which can take care of issues associated with security breaches.

PARK INSURANCE BURNABY, BC

With more than 60 years of experience, British Columbia-based Park Insurance has remained family owned since the Fitzpatrick family purchased the

business in 1965. With home, auto, business and other insurance products in its portfolio of offerings, Park Insurance also provides cyber coverage, protecting clients from losses, including violation of privacy laws, social media-related risks, disruption of e-commerce services and more.

Personal Trainers • Yoga Instructors • Swim Instructors Pilates Instructors • Coaches • Group Fitness Instructors Hairstylists • Nail Technicians • Estheticians Make Up (Temporary) Artists

COVERAGE OPTIONS: PROFESSIONAL LIABILITY • ABUSE COVERAGE TENANTS LEGAL LIABILITY AND MORE

1054 Adelaide St. N. London On N5Y 2N1 TF: 888.346.6602 Fax: 519.439.8865 info@sportsfitnesscanada.com

WWW.SPORTSFITNESSCANADA.COM

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PEOPLE

CAREER PATH

PEOPLE PERSON

Her path has taken her through various areas of business and countries, but for Kristin Coulombe it’s all about the people An early experience working at a local youth counselling centre as part of a school co-op left its mark on young Kristin Coulombe.

“I really liked the whole concept of helping people find employment; helping them go from a negative position in life to a positive position.”

1999

“The joy they felt, the gratification we got prompted me to look into HR as a career”

DISCOVERS HR

2003

JOINS THE BAY A co-op placement with another marquee Canadian brand, Hudson’s Bay Company, became Coulombe’s first full-time HR job, offering her a vastly different experience.

“HBC had 40,000 employees. Because of the large company size and scope across all provinces, they had niche HR roles.

Being exposed to all the different roles and aspects of the HR profession gave me an idea of the different avenues I could take.”

2007

ADAPTS TO CONSTANT CHANGE Coulombe’s time at TUI was characterized by constant change and new acquisitions.

“There was a lot of change; people were constantly moving between companies and from country to country. It was very fluid in nature. I’d deal with Florida in the morning, LA in the afternoon and Belleville in the evening. I would get a call to get on a flight the next day to support a business on an HR topic because they didn’t have local HR support.”

2017 STRIVES FOR DISTINCTION After her experience at a large organization, Coulombe found working for a smaller one meant negotiating different dynamics, but a recent move to acquire businesses under JDIMI’s parent company Navacord reminded her of her travel company past. JDIMI made the Top Employer list in 2015 and was shortlisted in 2016.

“We strive to make every year count.”

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2002 SNAGS AN INTERNSHIP Coulombe’s part-time job at Maple Leaf Sports & Entertainment provided her with her first real exposure to HR when she won an internship near the end of her college course. Key to her role was assisting with the yearly mass recruitment for the winter season.

“It was insanely busy. The brand made it easy to attract candidates. It gave me a good understanding of how important brand recognition is in the corporate world. Everyone was excited to be there.”

2005 JUMPS INTO TRAVEL Coulombe decided she needed to join a smaller company in order to shine. The proactive approach of cold-calling dynamic-sounding companies brought her to Signature Vacations slightly before the company was purchased

by British company TUI Travel, which went on to purchase multiple small- and medium-sized travel companies around the world.

“They needed HR support as Canadian employment legislation is very different from British; they decided to utilize our HR team as they bought other companies in Canada.”

2012

MOVES INTO INSURANCE A desire to make an impact led to Coulombe’s move to insurance – that and a neighbour in the business who she shared a glass of wine with one evening, who later provided an introduction to Jones DesLauriers Insurance Management.

“The company was in growth mode, with many different initiatives that needed HR to play a key role. It was a very attractive opportunity for me to create and build HR as JDIMI grew.”

www.insurancebusiness.ca

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CA W

AVOID NASTY SURPRISES

PEOPLE

CAREER PATH

When it comes to cyber risk our specialist insurance policies leave no stone unturned.

For organizations that rely on technology, cyber threats can emerge in many ways. For some the consequences can be devastating.

Our cyber product covers the liability which may arise, together with the policyholders own losses. And all in one affordable price.

So you and your clients can rely on Markel 100% – without a shadow of doubt.

www.markelinternational.ca/cybercover

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PEOPLE

THE CHOICE IS YOURS WITH

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MAGAZINE-EMAG

WEBSITE-ENEWSLETTER-MULTIMEDIA

Insurance Business Canada magazine features a series of industry reports recognizing the achievements of key individuals and businesses as well as providing the latest in business best practice. Access every emag from our website or download on your iPad from the iTunes store for access anywhere, anytime.

Insurance Business Canada has an online industry hub committed to delivering the latest industry news, opinion and analysis for today’s sophisticated insurance professional.

Subscribe to the exclusive e-newsletter and get up-to-theminute insurance news delivered to your inbox daily.

FOR MORE INFORMATION, VISIT INSURANCEBUSINESS.CA

www.insurancebusiness.ca

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MPAMAG.COM PEOPLE

OTHER LIFE

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

BRAD

LEADING THE DANCE 28

number of years Prévost has been dancing (teaching for 12)

144

number of pieces she has choreographed as a dance teacher

3

age of the youngest student Prévost has ever taught

No matter what kind of day Julie Prévost is having, she just dances through it TIMMINS INSURANCE broker Julie Prévost discovered a passion for dance early in life, when as a four-year-old she attended her cousin’s dance recital, fell in love with tap dancing and begged her parents for lessons.

This was to be the start of more than 15 years

studying dance, including jazz, contemporary and hip hop, before the owner of the dance studio suggested Prévost become a dance teacher herself.

In the 12 years since then, teaching youngsters has come to mean as much to her as dance itself.

“Seeing the progress of your students is very rewarding,” Prévost says. “Seeing the accomplishments of the competitive teams when they start winning awards is overwhelming.”

Competition is a big part of Prévost’s life over the spring months, when back-to-back weekends are packed with dance competitions, from Thursday to Sunday. But the rewards are well worth it.

“Thirteen of the competitive students qualified to go to the nationals last year,” Prévost says. “To be able to share your passion for dance with the students on a personal level is very special.”

www.insurancebusiness.ca

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FEATURES

EXPERT ADVICE inform risks and pricing. Flood mapping tools provided by vendors and industry supporters have come a long way in a short time; and the information continues to be updated.

To support our customers’ efforts, we also incorporate home loss mitigation discounts into our pricing to ensure they benefit from actions taken in their homes to mitigate loss.

Our work isn’t done yet

Changing weather calls for better products

Now it’s time to incorporate lessons learned, and shift our focus to improving these products to address changing weather patterns. There’s more information available every day, and as insurers we must commit to enhancing our models and our focus to help better assess, underwrite and price flood risks. This means continuing to invest in flood mapping and geocoding technology to refine our zoning and premiums. Through the use of new data sources and increased capabilities, we can ensure sustainable product solutions are continuously coming into the marketplace.

We also recognize the important role we can play in encouraging governments to take action, through thought leadership and active dialogue with key stakeholders. Investing in technology to better design customized coverage is just one of the ways we can make a difference in influencing national policies and regulations.

Education is at the core

From a business perspective, we know that the GIVEN GLOBAL climate change and the escalation of severe weather incidents such as floods, water-related damage has become a prevalent issue for many home and business owners in Canada. While governments are allocating more and more resources to water infrastructure to mitigate risks, we have a responsibility as insurers to help drive these efforts forward.

clients clear, easy-to-understand and affordable comprehensive coverage for damage caused by both freshwater flooding and sewer back-up.

We continue to see gains in the number of customers purchasing Waterproof Coverage™ rather than coverage for sewer back-up. In Ontario, the new business purchase rate for our flood coverage has been around 75% this year.

Technology and trends Clear and comprehensive flood coverage Up until a couple of years ago, water damage from flooding caused by a storm was not covered in a regular home policy, despite the growing number of floods across the country. In response to this mounting risk and the gap in coverage, RSA launched a product endorsement nationally in November 2015. Waterproof Coverage™ was designed to offer our brokers’ home insurance

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While developing our coverage, sources of modelling and mapping data were just being communicated to the market. Our work was facilitated by location data, in addition to greater flexibility for sewer-back-up options as a result of an ‘a la carte’ approach to the coverage.

Flood zones are created using a combination of industry loss and company loss experience and flood data from vendors that provide the required geocodes and probabilistic modelling tools to

more educated customers are when it comes to flood risks, the better they will understand the need for flood coverage. That’s why the insurance industry has a duty to equip brokers with the right tools and resources to increase their clients’ awareness of the importance of overland flood coverage. Brokers are seen as trusted advisors on risk management and mitigation, so it’s important to work with them to gather customer feedback, and in turn educate them about new coverages available for their specific needs.

RSA’s Waterproof Coverage™ page (rsabroker. ca/water) on our Climate-Smart site remains our most visited web page since its launch. The educational video, statistics and product information help deepen the understanding of the risks associated with flooding, and of the importance of having a comprehensive policy.

For more information on the importance of flood coverage, visit www.rsabroker.ca/water.

www.insurancebusiness.ca

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Free Flood Sensors for all!

(Well, almost all.)

Climate change continues to make flooding a growing concern across Canada. We want to help your customers reduce the risk of costly water damage and have come up with a cool and innovative way of doing this. And it’s free.

We’re partnering with global smart home automation leader FIBARO to provide flood sensors to select new personal property and business customers. Small, sleek and powerful, these award-winning devices use cutting-edge technology to alert your customers of floods and leaks in their home or business. The sensors can also detect threatening changes in temperature, offering an extra layer of protection against fire and frozen pipes.

CONTACT YOUR BUSINESS DEVELOPMENT MANAGER TO FIND OUT MORE ABOUT THIS GREAT OFFER.

“Its versatility and reliable design make it one of the best water sensors for homes at risk of flooding.”

- CNET

goremutual.ca

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PARTNER WITH THE CHAMPIONS Jimmy Walker 2016 PGA Champion

Webb Simpson 2012 U.S. Open Champion

Behind every great achievement is a great team. In specialty insurance, one group has paired unrivaled expertise and drive to become the clear leader in commercial, professional and personal solutions—Team Burns & Wilcox. Making the hard‑to‑place easy.

Burns & Wilcox, the leader in specialty insurance.

burnsandwilcox.ca

Commercial | Professional | Personal | Cross Border | Binding | Risk Management Services

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