It has been an enormously challenging few months for small- and medium-sized enterprises (SMEs) across Canada. Following government mandates to prevent the spread of the coronavirus, many SMEs had to shut their doors temporarily or pivot their operations in adherence of strict social distancing guidelines. Lots of businesses were forced, due to economic strain, to furlough or layoff staff, and those SMEs who were fortunate enough to remain open through the height of the crisis have faced unprecedented challenges around customer and employee safety.
There’s light at the end of the tunnel, but it’s somewhat misty and distorted. While Canada is now reopening – to varying degrees and speeds depending on provincial government mandates – it remains uncertain what the ‘new normal’ might look like for Canadian SMEs once the public health crisis has receded. Will they return to business as usual, or will they have to find new ways of conducting business? Will they retain the delivery business they set up temporarily to start a new revenue stream amid the pandemic? Will they have to create a digital storefront to cater to customers who have grown accustomed to digital shopping?
These are all questions that no-one can answer right now because the uncertainty surrounding the coronavirus is still too great, but they’re certainly worth thinking about and planning for, according to Michael Whibley (pictured), Vice President, SME and National Programs at RSA Canada. To help SME clients through this period of great uncertainty, RSA Canada has exercised a COVID-19 strategy based on “empathy and flexibility,” providing relief measures as well as guidance to help SMEs mitigate any immediate and longer-term risks they face as a result of the pandemic.
Whibley explained: “Empathy and flexibility are critical right now because people have so much to worry about. If RSA Canada, with the help of our broker partners, can take some of the worry out of their day and show that we’re on their side, I think that would be a huge benefit. We understand that small business owners are in a vulnerable position, and they have a lot going on in their lives right now to keep their families safe and keep their businesses afloat. That’s why we need to be flexible and accommodating so that we can respond appropriately to SMEs as their needs change.”
In April, RSA Canada rolled out a series of relief measures to support its commercial insurance customers, which included the allowance of mid-term coverage adjustments, payment deferrals and premium adjustments for SMEs. The property & casualty insurer also adjusted its rating approach to support business owners, and provided flexible underwriting solutions to clients who pivoted their operations in response to the crisis. Furthermore, RSA Canada offers a wide range of public-facing tip sheets and advice on business critical topics like how to protect idle property and fleets via www.rsabroker.ca/coronavirus and the RSA Canada LinkedIn page.
“As gradual reopening progresses, we’re trying to get our risk control inspectors back on the road in a safe manner so that we can review what the new world looks like for our SME clients,” Whibley told Insurance Business. “It’s challenging because the situation is changing every day, but we’re focusing on that flexibility and working closely with our broker partners to learn from them what’s happening in our customers’ lives. As we’re learning, we’re making adjustments to our products, pricing and structure, and reinvesting in digital tools, such as RSA Pro™ and Claims Point, to try to support people through this time. Together with our broker partners, we’ve got to make insurance purchasing decisions as easy as possible for our SME customers.
“In addition to that, we’re also trying to help our broker partners. Alongside offering premium deferrals and coverage adjustments, we’ve also invested in our digital capabilities so that brokers can access coverage options outside of traditional working hours. If our broker partners get questions or quote requests from customers during non-traditional hours, they’re able to self-serve through our online portal so that they can get back to their clients as quickly as possible.”
As SMEs adapt to life in the context of COVID-19, they may find they have some new risk exposures to consider. For example, SMEs could face a higher risk of discrimination claims and employment practices liability lawsuits over the ways they manage staffing as well as employee and customer health and safety. In addition, any SME that has adopted new or greater digital capabilities for conducting business will have assumed cyber risk and might be in a position to buy a cyber insurance policy for the first time. But there’s a problem, which is that a lot of SMEs are cash-strapped because of the pandemic and they’re not in a position, either financially or mentally, to acquire more coverage. In fact, some are looking to shed coverage in order to save some money.
“While COVID-19 is obviously front and centre, and people are very concerned about how to respond, a lot of the losses that we’re seeing in the SME space right now are still traditional insurance losses. They’re the severe weather events like the recent hailstorm in Alberta, burst pipes and flooding, cyber hacks and data breaches - SMEs must remember that those exposures still exist,” Whibley commented. “I would advise SME clients who are concerned about cash flow to work with their broker and their underwriter to analyse their overall insurance portfolio and make sure they’re spending where they need to spend based on their primary exposures. It would be dangerous for someone who is already vulnerable coming out of COVID-19 to then have something like a burst water pipe completely derail their business because they didn’t have adequate coverage.”
All things considered, Whibley is “cautiously optimistic” about the future of the SME market in Canada. No doubt there will be changes, and it will likely take some time for their full impact to kick in. He added: “What I’ve noticed is how resilient and resourceful SMEs are. Canada is such a small, entrepreneurial country. Long-term, it’s a great place to be.”