Brokers selling personal lines insurance for big-ticket items could be in for a temporary flag in business if consumer confidence among Canadians continues to wane.
According to the Conference Board of Canada’s index of consumer confidence, positivity among the country’s residents fell 11.4 points in February to 95.6 points—a sharp decline seen most significantly in British Columbia, Ontario and Atlantic Canada.
Alberta hit a record low index score of 54.7 points, and only residents of Quebec showed no change in consumer confidence.
Overall, 23 per cent of survey respondents said they were financially worse off than they were six months ago (an increase from 20 per cent in January).
Most concerning to insurance brokers, nearly 43 per cent of Canadians said now was a good time to make a major purchase—an increase from 38.8 per cent in January.
That negative outlook could mean a corresponding drop in new business, as brokers have fewer clients purchasing big-ticket items like cars, homes or recreation vehicles.
And in certain provinces, brokers may not be able to look for quick relief. The downturn in Alberta’s index began six months ago and shows no signs of slowing down, as oil contracts continue to trade below $50 in New York and threaten the job market.
Overall, The Conference Board of Canada attributes the country’s continuing financial malaise to the struggle of paying off holiday shopping, the Bank of Canada’s January cut in interest rates, higher grocery prices and the closing of Target stores across the country.
Bad winter weather also kept consumers indoors and pessimistic about their personal finances.
All told, 16.5 per cent of Canadians said they believed they’d be even worse off financially in another 6 months, up from 14.3 per cent in January.
