The insurance industry is facing the challenges a hard market set has for them for a few reasons. Not sure what a hard market is? Economical.com explains that a hard market is “a period of time when there is a high demand for insurance, but a lower supply of coverage available.”

Basically, this means insurance companies are setting higher standards when issuing new policies, reducing the number of new policies they sell, and re-evaluating the premiums they charge to policyholders.

Experts at a Canadian Underwriter webinar suggested COVID-19 has played a role in this adjustment, but insurers are becoming more particular in the approach they are taking towards certain segments within the commercial market.

The panellists on the webinar were asked how this hard market period compared to those in the past. Steven Phillips, COO of Sovereign Insurance stated that insurance companies have to now think about seeing the market as sub-segments rather than taking a blanketed approach to it. Phillips further shared he feels underwriters should rely on data and analytics as well as their experience and judgment where the commercial space is concerned.

Sarah Robson, President and CEO of Marsh Canada shared her thoughts on another webinar Canadian Underwriter hosted entitled Brokerage Executive Outlook that agreed with those of Phillips from the previously mentioned webinar. Robson stated that underwriters are looking to data and analytics but should also be transparent with their clients about why the insurer is turning down certain risks during a hard market period like this. She feels this would also help policyholders better understand why it will be more difficult to find coverage for their risks with other insurers.

Experts also believe that shifting away from a blanketed approach to rate increases to a focus on looking at the market as sub-segments is a way to the reduce loss insurance brokers could experience during this hard market period. With the COVID-19 pandemic adding to this hard market, underwriters are looking to different information than during previous periods.

Richard Grant, CEO of Trisura Guarantee Insurance Company said that underwriters are looking at more data and more discussions are happening between themselves and brokers. Grant feels that this has added a layer of complexity to this situation, but it also allows for underwriters to have the data they need from brokers to assess taking risks and give policy terms better with the requirements COVID-19 has added.

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