The latest report from global professional services firm Aon has found that the Canadian insurance market appears to be stabilizing despite post-pandemic uncertainty, and that insurers are preparing themselves for future growth and profitability.
According to the “2021 Canadian Insurance Market Report,” many of 2020’s challenges continued well into 2021 – namely, poor underwriting performance and the unclear impact of COVID-19 on the industry. Meanwhile, the risks of social unrest and social inflation are also on the rise, Aon said.
While challenges remain for the industry, Aon highlighted a number of positive signs that the Canadian insurance market is undergoing a transition. COVID-19 vaccinations should restore relative economic stability, the firm said, while new capacity is likely to enter the insurance market in the second half of 2021 through insurer start-ups, reinsurance capacity, and shifting insurer appetite.
Aon also stated that the pandemic environment made insurers take a more rigorous approach to underwriting, helping them manage through an uncertain period while investing in innovation to strengthen (or even reinvent) their business for the long-term.
Key findings of the report include:
“Looking forward, as the world emerges from the impact of the pandemic, it is crucial that industry players take a proactive stance to address the opportunities and challenges that the next few years will bring,” said Aon chief broking officer for Canada Russell Quilley.
Quilley added that insurers will have to work on starting early on the renewal process, positioning programs, and preparing for strategic changes for when the market turns – things Aon can help with through its suite of industry expertise, data & analytics and risk finance solutions.