This article was produced in partnership with CNA Canada.
Desmond Devoy, of Insurance Business Canada, sat down with Mike Travis, underwriting specialist, CNA Canada, about the challenges facing Canada’s roofing industry, and where green roofs fit in the future.
Inflation, lingering supply chain issues, a lack of skilled labour, and a potential recession, are reasons for concern for Canada’s roofing industry, according to a commercial insurance roofing expert.
However, the field is resilient and new technologies could make it easier to place bids, get a birds’ eye view without risking human capital, and be more environmentally sensitive.
That was the verdict of Mike Travis, an underwriting specialist with CNA Canada, who pointed to Canada’s roofing sector, which he estimates has seen meaningful compound annual growth over the past five years of between two and three per cent.
However, with higher interest rates, Travis is concerned about a possible economic slowdown, and even a mild recession, which could impact industrial, commercial, and institutional (ICI) roofing activity; with contractors deferring or cancelling bids or contracts, or delaying expanding or building facilities, and the roofs that go with it.
Uncertainty over raw material prices, as well as skilled labour shortages and even intermittent supply chain disruptions, will also have an impact on the roofing segment.
But every business needs to look beyond immediate short-term tactics for long-term survival. For example, that could mean expanding beyond traditional roofing methods towards offering green, environmentally-friendly roofing solutions.
Another change that roofing companies may need to examine to stay competitive and differentiate their offering, is value-added services such as: audits, reviews, warranties, after market services, etc.
Heading into 2024, Travis said he hopes roofing company ownership is focusing on fine tuning their mission, vision, and strategies for 2024 and beyond. Owners need to contemplate what they want their business to look like in five years and build a strategic roadmap to take them there.
“I can’t write those plans for them,” he joked. “But I think there should be a renewed focus on this roadmap that includes: growth and profitability expectations; product and service improvements; leveraging competitive advantages by maximizing strengths and limiting weaknesses.”
Travis spent five years as a broker himself, with a firm that specialized in construction, with an emphasis on the ICI roofing space.
“They had it right where they went beyond just being a broker,” he said. “The differentiating factor was going beyond just being an advocate for our clients.” While that is a key role, it can also mean that the broker must also take on the role of an ad-hoc risk manager to their clients, and continuously monitor their risk profiles.
But a company’s risks are not static. Travis would like to see roofing companies monitor and review their risks and insurance needs more than just once a year at renewal time.
“I think there has to be a deeper dive into new and emerging risks. Touch points between brokers and clients need to be more frequent throughout the course of the year to make sure that nothing’s changed within the organization to better manage their risks,” he said. “The picture that’s presented to insurers can change throughout the course of a year.”
He gave the example of a company that uses more traditional methods of roofing – built up roofing systems utilizing hot asphalt - used by generations of roofers. If throughout the course of the year, the company decides to shift gears and moves into torch-down modified bitumen systems, where they weren’t doing it before, that changes the risk profile substantially and could impact the coverage being provided, Travis pointed out.
“We like to know if the business is planning to move in a new direction,” he said, to adequately assess the exposures ahead of time - like what new equipment will be needed, and what training, policies and procedures, and safety provisions are in place.
In the past number of years more products have become available to roofers should they decide to transition away from more traditional, higher-risk work methods, into less hazardous cold-applied systems.
Another challenge noted by Travis is the coming wave of company owners who are reaching retirement age and looking to come down off the roof and hand the safety harnesses over to the next generation. But then this brings to the forefront other, broader strategic issues, such as succession and business perpetuation planning, wills, or the potential sale or winding down of the company.
As such, the roofing industry faces a problem that other trades may not necessarily face.
Travis echoed the comments of Darcy Beites, president of the Ontario Roofing Contractors Association in a recent article in the OIRCA news where he stated that: “While just about every construction trade is going to report that there is a shortage of skilled workers, the ICI roofing industry’s situation is perhaps most bleak. Let’s face it: roofing is not a glamourous trade when compared to others such as electricians and carpenters.”
“So what is the industry going to do to attract new talent?” he asked. Steps are being taken through various provincial and national trade and roofing associations, he said, but it will take time to bear fruit.
While there has also been some reluctance to change in the industry, there are some exciting developments in technology and work systems as the perception of roofs is changing against the backdrop of climate change concerns. In addition to improvements in drone and thermal imaging technology, there’s been a shift in the industry that moves beyond the utilitarian (providing protection against the elements, insulation, supporting rooftop machinery) to sustainable solutions (solar photovoltaic, green, rainwater retention/detention, and reflective roofs) that contribute to the reduction of greenhouse gas emissions, partly in response to changing laws and bylaws for new construction projects in urban areas.
“This will ultimately augur to the industry’s and society’s benefit,” he said.
CNA Canada’s proactive approach facilitates partnering with their contracted broker partners to visit clients and advise them on best practises and work methods, along with how they might view their overall risk profile. These risk control visits can identify key exposures for all coverage areas and help an insured manage these risks. Furthermore, it provides CNA Canada the chance to suggest improvements, and help them review the coverages and limits against premium charges and the overall cost of risk.
Travis said that dealing with insurance administration is not a priority for most roofers, but he stressed that as an industry, “it is incumbent upon us to bring some of these issues forward with our brokers and, clients to say, ‘these are the things you should be thinking about and we can help you with solutions - and a lot of these consultative services are free.” That is why it is important for commercial roofing businesses to maintain communication with their brokers and insurers to review their risk profile throughout the year.