After several years of hard work and heavy investment into its transformation, Gore Mutual Insurance Company (Gore Mutual) is poised for a period of strong financial performance, according to its CEO.
The company unveiled its 2022 full-year financial results late last month, reporting strong growth as it completed the foundational phase of its transformation.
The ambitious plan called “Next Horizon” aimed to completely modernize the Canadian mutual. The first phase included new operating models, technology, and talent for the organization.
Gore Mutual reported gross written premiums grew nearly 14% at $670 million in 2022. Non-adjusted combined operating ratio (COR) was at 102.8%; adjusted to account for more than $32 million in transformation investments, COR was at 97%.
CEO Andy Taylor (pictured) said next year’s financial results should look different as the bulk of technology spending has been completed in the past year.
“That’s why 2023 is an exciting year for us,” he told Insurance Business. “Over the last three years, we put an unprecedented amount of investment into the business by design for that transformation.
“We're excited to be finished with that phase of heavy investment. We plan to significantly improve the profitability of the business in the coming years, reduce our combined ratio by at least five points, and fully realize the benefits of the investments that we've made.
“We are positioned and built for success in the years to come. We anticipate growing to a billion dollars on our way to our ultimate goal of becoming a top-ten national insurer.”
Taylor also noted several headwinds that Gore Mutual and the insurance industry at large faces this year. Climate change, inflation, and the lingering impacts of COVID-19 are among top concerns.
“We’re putting a lot of rate sophistication across our book to address some of the inflationary pressures we’re in,” said Taylor.
“We’re also concerned with some of the trends around frequencies returning to pre-pandemic levels, particularly in the auto lines. We’re taking proactive steps across all our lines of business to ensure that we’re rate-adequate.”
Natural catastrophes are also a trend Gore Mutual, like the rest of the insurance industry, is trying to navigate through this year.
It had minimal exposure to Hurricane Fiona, which made landfall in the Atlantic region in September 2022. But the deadly derecho storm in the provinces of Ontario and Quebec last May created significant cat loss for the insurer.
“[The derecho] is a good example of the type of challenges that the industry is facing. We’re seeing historic cat losses almost on annual basis now. On average, weather-related events are four times more catastrophic than what they were a decade ago,” Taylor said.
Gore Mutual will tap into a range of strategies to combat nat cat losses, including data and analytics, pricing sophistication, and diversifying its business to reduce risk concentration.
“Today, we're still predominantly a regional business. Our North star of expanding to becoming a national insurer is based on creating a more diversified business model to withstand some of the challenges that we're seeing, particularly around climate,” Taylor said.
In its announcement, Gore Mutual said that it had achieved strong growth and remained resilient despite geopolitical risk, inflationary pressures, and severe weather events in 2022.
“Not only have we completely rebuilt the business over the last three years, but we've also grown the business,” Taylor said.
Gore Mutual credits its success to the “tremendous support” it received from its broker partners when it embarked on its transformation. The operational rewards the company is reaping will strengthen its broker partnerships, Taylor hopes.
“I don't think we initially anticipated that much support during the transformation. But we've now built a platform that is highly scalable and automated, which allows us to grow with and support our national and regional broker partnerships,” he said.
More than 90% of Gore Mutual’s personal lines are automated, which helps create a better customer and broker experience while making the business scalable, according to Taylor. Brokers should look forward to continued support as Gore Mutual grows.
“We are dedicated to the broker network,” he said. “Obviously, I'm biased, but I think we're the most exciting brand in the industry right now.”
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