Broker Perspective: 'The more you know about the oil business, the better'
Broker Perspective: 'The more you know about the oil business, the better' | Insurance Business
Canada is one of the largest oil producers in the world. In 2017, Canada’s oil industry produced more than 3.8 million barrels of oil per day, according to the Canadian Association of Petroleum Producers.
Insuring oil field business requires special knowledge – something found in abundance at Elevate Insurance Brokers of Grande Prairie, Alberta. Insurance Business caught up with account executive Bobby Forster to find out more about insurance broking in the oil-heavy province.
It seems like a lot of the oil companies here are running quite a tight ship right now. They’re doing things a little differently and cutting back on some operations until the future becomes a little clearer.
Oil producers have found ways to operate more efficiently. With the cost of oil around $60 per barrel, we have seen that it can still be profitable. As a commodity, the local area seems to be optimistic for growth. This has been, and will continue to be, a driving factor for existing and new projects.
How is new technology impacting the oil industry?
I will start by saying I am no technology expert. Having said that, I do believe new technology has made the industry a lot safer. On the transportation side, we now have programs that track drivers with GPS tracking, so you can see where they’re at, how fast or slow they’re going, if they’re wearing their seatbelt, how long they have been sitting at one location and all sorts of other things.
It’s making the oil transportation industry much safer and it’s making drivers more accountable because they’re being watched by their superiors very closely. It’s also making supervisors and owners more accountable in the sense that they’re monitoring it so closely that they’re able to identify safety concerns and issues long before they used to. I think the oil transportation industry is the safest it has ever been, in part thanks to new technology.
How do you expect the oil industry to change in the next few years? And how might that impact insurers and brokers?
Oil companies are, and continue to become, more prominent on their risk management strategies and techniques. We are seeing higher liability limits requested to offset risk. I believe there’s a fine line on remaining profitable as a contractor or service company while maintaining industry standard insurance requirements set forth in the Master Service Agreements.
What advice do you have for insurance brokers servicing the oil industry?
Don’t be afraid to reach out to experts in the industry to increase your knowledge base and understanding of different operations. I’ve seen it before and I’m sure I’ll see it again where other brokers are guessing on information and coverages. The last thing a client wants to hear is that they’re not covered because you didn’t have the correct information or the right understanding of what exactly they did for day-to-day operations. The clients you speak with will always know more about the equipment and job they’re doing than you, so allow them to relay that information to you. The more you know the better.