Thriving in a hard market

Thriving in a hard market | Insurance Business Canada

Thriving in a hard market

The writing is on the wall: we have entered another hard market in Canada. This means that we are in the midst of falling investment returns, global large-loss events, increased frequency and severity of claims, and a tough regulatory environment.

As a result, we’re seeing less competition among carriers, reduced capacity and lower limits, more stringent underwriting criteria and, most important to the end customer, higher insurance premiums. Your clients likely have questions (and rightly so).

“The hard market is industry-wide and affects insurers, brokers and policyholders. On the broker front, this is particularly true when explaining market conditions to our customers,” notes Sal Bagazzoli, president of Acumen Insurance Group Inc. and RSA broker partner. Having been a broker since 1975, Bagazzoli has seen his fair share of hard market cycles and has some advice for brokers helping their customers during these tough times.

Preparing your customers for the hard market

It’s no surprise that customers are often taken aback by drastic premium increases that aren’t in line with inflation.

“As our brokerage has seen many hard markets, we tend to see similar types of reactions every time,” says Bagazzoli. “That’s why we do our best to explain to customers why exactly premiums are going up, describe market conditions, and quell any concerns they may have.”

As a result, brokers should be spending more time on renewals and new business during hard market cycles. “Since we’re aware of what’s coming down the pipe, we should be leveraging our roles as brokers to temper the market and find the most competitive rates for our customers. As brokers, we have that agency.”

RSA has committed to helping brokers through the hard market via constant communication with its broker network, particularly when it comes to illustrating the underlying factors and how brokers can prepare their customers for what’s to come.

“Webinars hosted by RSA have been incredibly beneficial to both myself and my staff when it comes to understanding the hard market, what makes this one different from previous ones, and how we can explain it to our customers,” says Bagazzoli. “Brokers benefit when insurers take a vested interest in keeping us informed so that we can get ahead of those tough conversations.”

RSA has also provided tip sheets for brokers and even tip sheets for customers that brokers can share.

The broker as a trusted advisor

“This is when your role as a trusted advisor really gets put to the test,” adds Bagazzoli. “During hard market cycles, brokers must invest the time necessary to become as familiar as possible with market conditions and be as informed as possible to really show their value. My main piece of advice to other brokers is that time, effort, and energy spent is ultimately an investment in the customer.”

To learn more about how RSA can help you and your customers navigate the hard market, visit