TV

Paul Lucas  00:00:10 

Hello, everyone, and welcome to today's webinar with Sovereign Insurance looking at what insurers will need to do to meet the growth and profitability goals in 2024. And of course, the important role that brokers will play in that. I'm Paul Lucas, Global Editor at Insurance Business. And I'll be your host today as we look to gain a strong understanding of insurance growth and profitability goals and explore the mutually beneficial opportunities for both carriers and partners and ultimately, the benefits to clients to of course, now before we begin in earnest a few housekeeping notes to run through. If you need any technical support during this webinar, please use the q&a box as we have a team on hand to help you with any issues that's down at the bottom of your zoom screens. We would also love to hear your feedback on the poll questions, so be sure to participate when prompted. And last but not least, this webinar recording will be made available to all attendees after the event. So if you have any distractions during the live feed, don't worry, you will get another opportunity to watch it back. At the end of the presentation. There will also be a question and answer session. So be sure to type any questions you have into the q&a box. Also at the bottom of your zoom screen. Remember, the more feedback we get the more we know about the issues you're facing and the opportunities that you're looking for. So please engage with us today using that q&a function, and we can point you in the right direction. Anyway, back to the subject matter at hand. There are of course many variables that impact an insurers ability to meet their profitability and growth targets, sovereign insurance and partner RDA insurance, we'll look at what insurers need to focus on to meet those 2024 goals and the critical role that partnerships play in that this webinar covers insights into insurers growth and profitability targets an overview of the most pressing challenges and strategies and how to navigate them and opportunities to foster mutual partnerships between brokers and carriers designed to maximize outcomes for clients to take us there. We've got a fantastic team made up of Kyle Meadus, Senior Commercial Underwriting Manager at Sovereign Insurance. Krista McNaughton-Brown, who is also a Senior Commercial Underwriting Manager at Sovereign Insurance. Andrew Micieli, he is a Commercial Lines Manager at RDA Insurance. And Audra Butt, Commercial Auto Manager at Sovereign Insurance. So let's get started everybody. And let's start with an overview of growth and profitability goals. Guess we need to find out why carriers are poised to grow. Kyle, I'll start with you.  

Kyle Meadus  00:02:47 

Yeah, perfect. You know, insurers are already had great profitability over the last few years. I mean, it's been well publicized and the Canadian underwriter places like that. I mean, we've seen amazing results. Pretty much since, you know, coming out of COVID. I mean, COVID been with us now probably, you know, four years. But realistically, I mean, insurers really, you know, seen profitability come out of that. I mean, the economy, inflation, inflation really has had an impact on insurance and the premiums and effects of that. I mean, we've almost come out of a hard mark. Right. Like, I mean, you know, we look back to 2023. You know, there's been, you know, pockets of where, you know, it's still very, very hard. But, you know, we have been softening, you know, ultimately, there is no really new new business out there when I mean by like new businesses, that the economy isn't really producing new ventures. So, you know, one of my famous sayings is, is that, you know, your, your new business was someone else's renewal. So it's very important for insurance companies, I think, as we focus on '24, is that, you know, retention is, you know, keeping what you have we built up a great portfolio, you know, it's profitable, as you can see in the results. And, you know, it's now our job to keep it and grow. And I think that is ultimately what our focus would be in 2024. 

Andrew Micieli  00:04:04 

100% And, again, from the brokers perspective, I think, right now, maybe not all carriers are going to be in a position to be able to grow, right. Obviously, it's, as Kyle said, we're coming off of a hard market. And well, I, I want to say we're completely soft is a transitioning and softening market. So I'm certain that there's a lot of carriers are going to be revisiting their their strategies and their plans and realizing, hey, in 2024, unlike 23, 20 to 21, and frankly, during the hard market, we can't execute on our plan in the same manner because there's competition Shouldn't have profitability, the industry has improved, and there's more capacity. So right now I think the carriers that are most poised to grow are the ones that are kind of relying in the more traditional underwriting style of doing business, it's it's comes down to taking a look at each risk, underwriting it don't go by guidelines, and really leveraging the relationships you have with your broker partners in order to have a mutual win. 

Paul Lucas  00:05:29 

Looks like you've told us which type of carriers we can expect to grow. But I'd really like to find out how much they're going to grow and what the pace of that growth is going to look like. So what are insurers growth and profitability targets going to look like? Krista? Let's bring you into the conversation. 

Krista McNaughton-Brown  00:05:45 

Yeah, as Kyle and Andrew mentioned, the industry is it's still in a period of profitability. So kind of coming off those periods of profitability. Insurers are looking to capitalize on that, they're going to be more focused on growth. The typical goal when insurers to write more business, then you lose through the attrition of your book. So I would say most markets will be looking for retention in the mid to high 80s. And with that, you need to replace that 10 to 15% attrition, and then, and then some so perhaps like another 810 12 points more, you're gonna get through that through like rate changes, exposure changes, including inflation. And then obviously, by putting new business on the books. With that growth, also, you want to make sure that you're growing profitably and when looking at profitability, profitability, what's going to make the greatest impact on your profitability is your underwriting results. So when comparing, look, looking at top insurance companies, you're not going to see a great difference in expenses as an overall percentage of your operations. Everyone's looking to gain efficiencies. Everyone has an expense awareness mindset. They're looking to reduce those expense factors. But again, the greatest impact is going to be your underwriting results. So it's more important to ever to really focus on that profitability in the underwriting profitability. through underwriting excellence, underwriting discipline, the industry, it's it's facing unprecedented volatility and uncertainty. So you really need to keep your finger on the pulse in the market and have a sound strategy focused on that underwriting excellence. 

Audra Butt  00:07:20 

Yeah, and with that, we also need to make sure that we know our exposures that were writing because if you don't know your account, you can't price it correctly, either. It's going to be hard to find the balance between prop buildings growth as well, even though we're positioned to grow it's how do we make sure that we're staying profitable at the same time? 

Kyle Meadus  00:07:45 

Paul, I'll tell you, you know, everybody wants double digit growth, maybe your own portfolio micro call, everybody wants to double digit growth, that'd be great. You know, but you just doesn't come just overnight, by chance, you actually have to have a plan. And I mean, a plan to execute to, you know, to give to your staff, how, and and Krista mentioned, you know, it just a lot of things that will go into, you know, those growth numbers. But, you know, I think over the last, you know, a few years insurance companies have seen double digit growth has been a lot of factors of why that is happening. But, you know, for us to continue that that type of growth trajectory, and ultimately, there has to be a, you know, a good plan in place. 

Andrew Micieli  00:08:30 

Yeah, absolutely. And just from the broker perspective, right, obviously, we want to grow as well. So, so long as you know, the underwriting sharp and the rates are commensurate with exposure. It's in the brokers benefit to have the premium base expanding at the end of the day. So that's just the two cents on that. 

Paul Lucas  00:08:49 

All right, any, any more sense to add on on premium growth and so on and how much you're expecting this year? Any anybody else with anything to add? All right, we'll flick the conversation. Oh, go ahead. Now, you're all good. You're all good. It came through. Okay. So all right. Well, we'll flip forward. And I will move on to to a poll question now, if you don't mind. So hopefully, we'll be able to bring that up on your screen. Yep. There it is. Hopefully, you've all got that in front of you now. So the poll question is which industry segment Do you think presents the greatest opportunity for growth? And you're given several options there manufacturing, construction and contracting, contracting, I should say, wholesale and warehousing, transportation and auto or something else? We're not allowed to vote. But hopefully, you are all pressing those votes now. So yeah, please get those votes in. We'll give you a few moments to do that. And then yeah, we will hopefully, get the results in front of us and we will give the panelists an opportunity to see how your votes came in. Oh, there we go. So the votes were Slightly overwhelming, I suppose you could say for construction and contracting, it's got 50% of the vote. It's followed by transportation auto at 19% manufacturing making up 15%. So what do we think of those poll results? Everybody? 

Kyle Meadus  00:10:13 

No surprise. 

Krista McNaughton-Brown  00:10:18 

No surprise at all. 

Andrew Micieli  00:10:21 

That's about what's expected. And kind of, to what Kyle's point if I, if I may kind of go off on a tangent here. So if we're looking at construction and contracting, especially, especially in sort of the civil work, the infrastructure work, anything that's really either 3P or government jobs or bids, those will continue to kind of cycle through. I I'm sort of cautiously optimistic in terms of the residential development, with everything else that's going on. Obviously, we need more homes, with rates, affordability. And well, yes, labor materials. So that supply constraint has come down, there is still strain. And we're seeing that in the claims side. But sort of speaking more generally, in terms of from the broker perspective, again, which industry segments prove that sort of the best opportunity to greatest targets, I'm not going to sort of narrow it down to a specific class, whether it's manufacturing, construction and contracting, transportation, or whatever it may be. I think it's the classes that are a little bit tougher, and more TIG technical risk managers, Bruce managed pieces of business that kind of got the short end of the stick over the hard market, they had a disproportionate amount of rate applied to their, their coverage, compared to another sort of more vanilla medium hazard type of risk. Over the hard market rates went up and the capacity was not available, right. So when you had a carrier that was willing to write a tougher piece of business, they kind of were able to exact their pound of flesh now that it's opening up. And this kind of goes back to the first I said about the traditional underwriting and knowing your brokers, you can have that conversation, people are actually engaged and looking to write those tougher pieces of business because, hey, the rates are high enough now that we can apply our underwriting excellence to Krista's point, and just sound underwriting practices, knowing the risks and have a better result as opposed to, again over the hard market, just having carrier say take it or leave it. This is, let's say it's plastics. Well, it's a plastics carrier, we're getting a higher rate. Nobody else is going to fill the line. So we're getting it. We as brokers weren't necessarily able to engage in that in the same way over the hard market. Right? If there's a capacity crunch already in a specific segment, odds are there's not enough carriers to replace and then take over that. So now that the market is opening up and people are receptive to having those conversations and actually doing the underwriting. We're now able to sort of hunt so to speak, we're able to hunt the these businesses that over the last few years would have been very difficult to win. 

Paul Lucas  00:13:04 

What do you want to add to Andrew's points? 

Kyle Meadus  00:13:08 

I think he covered a couple of white well for the current landscape of the marketplace. 

Paul Lucas  00:13:15 

And any thoughts on any of these particular sectors from any of you? Obviously, construction took the lead overwhelmingly, but any thoughts on any of the others? 

Audra Butt  00:13:26 

I think there's still room to grow in the transportation space. You're seeing new carriers come in, but you're also seeing carriers combined together. So I can see that industry is starting to grow as well. 

Andrew Micieli  00:13:40 

Yeah. And to that end, it's kind of part and parcel to the warehousing, and logistics side of it. I was reading somewhere in the last few weeks that industrial vacancies and especially warehouse vacancies in Ontario. It's there at all time lows over the last couple of years. There's a demand for that. I'm sure any any town across Canada, frankly, there's probably an Amazon warehouse that over the over the pandemic from 2020 Onward, you probably saw a couple of those pop out. And that's not just because it was a good opportunity for that. There was a need for the warehousing space to support their logistical operations. Right. So, transportation logistics, that's only going to increase as as we develop. 

Paul Lucas  00:14:27 

Okay, any thoughts on anything? Well, what if we missed manufacturing perhaps? 

Kyle Meadus  00:14:34 

Yeah, I think manufacturing is you know, it doesn't surprise me it's not on the top of the list. It's, you know, it's a focus in I mean, there's a lot of great manufacturing in Canada, we do produce a lot of a good majority is export. Right. And so, you know, we're seeing, you know, especially in the economy that we live today and what is impacting is that the manufacturing is is really focused I'm going to start with the board. So you know, and that is real, that has impact with our dollar in a lot of other things. But manufacturing is still a very key segment of what is required. And it does very well for insurance companies. 

Paul Lucas  00:15:20 

Take the opportunity to thank a Mr. Anonymous attendee who has filed in our first question of the day, and it's obviously linked to what we're talking about right now. They're throwing up the question of medical, legal dental professions. What about what about those areas? 

Andrew Micieli  00:15:36 

So I can I can, I can touch on a bit of that. Just kind of internally, we were seeing if we're talking medical, I know paramedics, for example, wherever this anonymous attendee is, yes, to your point, there are a lot of professions that, you know, there's a shortage of skill gap in Canada, I will say brain drain, but a little bit of that has gone on, especially over the last four years. But our population has been growing, there's going to be the need for more dental professionals, more lawyers, more paramedics, more doctors, across the board. So yes, absolutely. That is a focus how that impacts the actual insurance market, in terms of something tangible, statistically significant growth in those sector segments remains to be seen, it wouldn't surprise me, but I'm not sure if my friends at Sovereign have anything different to add to that. 

Kyle Meadus  00:16:28 

Not too much. It's not really the space that I work in every day. So you know, but we do at sovereign, we do have a professional lines department. Right. So, you know, there's always opportunity with every different, you know, type of line, E&O D&O, you know, those types are so, absolutely, I mean, we're always open for conversation. And as as, as things evolve, and the world continues to evolve, you know, that creates opportunity. And you know, and I think we're always willing to have those conversations with our broker partners. 

Paul Lucas  00:17:13 

So that's a good reminder, as well, for everybody who's who's watching that that q&a box is available. So if you do have questions for our panelists throughout this discussion, please enter them. I'll be checking it throughout the discussion. So maybe I'll throw one at them while we're talking. But like, so we will have a session to throw questions at them at the end as well. So some of them will be stored up for later. So let's move on to to the next part of my questions, which is to talk about the key takeaways and trends that you're seeing to date. And, of course, now we've sort of wrapped up q1 of 2024. Audra, what are you seeing?  

Audra Butt  00:17:50 

Competition is really strong out there in the marketplace. I think as underwriters, we need to look at our renewals and make sure you know, as if it's a piece of new business, are we pricing ourselves? Can we come down? Can we do assets rates, we really need to pay attention to our own book, making sure we get sustainable premium. The industry is famous for cutting rates, and then two, three years down the road now we got to start taking large rate increases. And from a brokers perspective, I'm pretty sure that's really hard to get that message to clients who don't want to see those rate increases. Relationships, that's so key these days, pick up the phone and have a conversation, find out what the expectations are for renewals. what the opportunity is for a piece of the business come that's coming in the door, looking for solutions for our clients, and not just saying, Yeah, can't do it. Is there a way that we can do it? And just, you know, reminding ourselves vehicles are back on the road, people are back into offices and workplaces? And yeah, the claims are going to start to happen. And we're going to start seeing, you know, our loss ratios start to climb up. 

Andrew Micieli  00:19:11 

Yeah, absolutely. Absolutely. I will say sort of, again, from the brokers perspective, it's a noticeable difference. Like it's quite the stark contrast from even two quarters ago. You know, throughout 2023, the market was improving. And we saw we saw some pockets of softening but nothing, certainly nothing robust or something tangible enough to say, hey, it's it's a softening market full blown. But we are you're seeing people follow up, there's more competition to the point. That's what Audra said before and more focused on new business. So when we are in years past, especially when, you know, the hard market really kicked off and COVID Laundry found its way into the world. There wasn't much of a desire to write new business in fact, It was like grasping at straws at times kind of begging for terms. Now we have great business and the profitability or the the exposures on the account, or the risk haven't changed. But what's changed is the market itself, we have, instead of maybe one carrier, possibly taking a look at it, we have multiple carriers, wanting to quote it and underwriters are picking up the phone. And they're asking, hey, what can we do to win this business? If not this one? Is there anything else coming down the pipe, which is amazing from the brokers perspective, right? We are always trying to seek out the best terms and the most cost efficient way possible for our clients. It's much easier to do that. And you can do that way more effectively when there's more than one sort of dance partner, so to speak. 

Krista McNaughton-Brown  00:20:44 

Yeah, and to Audra and Andrew's points, we're definitely seeing increased competition already in q1, the markets are starting to heat up a bit in in pockets. So we just need to make sure that we're being consistent and kind of not falling into that little rabbit hole of chasing premiums to the bottom, just for them to be increased, again, as Audrey mentioned in a year or two. So you need that healthy competition, but there needs to be consistency for sustainable profitability. So knowing when to walk away when it no longer makes sense. 

Andrew Micieli  00:21:13 

And I think to that point, Krista, like that, that comes down to the relationship, right? You'll never, maybe I'm speaking for too many brokers, but I'm sure any reasonable broker, if you give them a call, and give them a heads up and say, Hey, I know it's profitable, but we have our mandates, you know, we have reinsurance, whatever it may be, we have our internal guidelines, we just can't get to where you need. That's not a problem. But again, it comes down to the relationship. Are you communicating that 90 days before the renewal? Or is it a week before saying, hey, we'll give you a couple of weeks extension, and that's it. And to that end, we are seeing, you know, there's more of a focus on new business. So sometimes the renewals are, I don't want to say they're an afterthought, but they don't necessarily get all the attention that they deserve. But even within that comes down to the relationship with your broker partners, having the conversation ahead of time saying, can we get this Is this the one that, hey, we don't, we can't apply any rate is this one, we need to take a look at reducing, and just really knowing your broker partner and trusting that your broker partner knows their client. 

Kyle Meadus  00:22:23 

The final thought that I'll add here is that, you know, there's new markets coming to Canadian marketplace, you know, every day, you know, there's more capacity than there was, you know, 12 months ago, two years ago. And to Andrew's point, that's why you're seeing more, you know, opportunity to place risks with other carriers to address point, you know, there's more transportation players in the marketplace that weren't there before. So that helps the insurer that helps the broker define where you know, they can, they can place a risk, and ultimately, you know, it, what has to happen and, and this is what you know, I say that, you know, my team is that you need to have your finger on the pulse of the of the market, if you're not, if you have no idea what's going on your your renewals gone, you have no opportunity, right new business. So talk to your brokers talk to, you know, talk to your peers really see what's going on in the marketplace. And that is that's key, maybe read articles and figure out that you know, where the market is going, and the market is shifting fairly quickly. 

Paul Lucas  00:23:35 

Excellent stuff. I'm going to move forward in just a moment. But before I get there, I just want to issue a reminder again, to everybody watching q&a boxes available down at the bottom of your screen, it's currently empty. So we need some questions to be filed in let's put these people on the spot, everybody, I promise, I promise, I will keep your name quiet, I won't share who you are. So feel free to put them very much in the spotlight. We welcome it here. But anyway, let's talk about how carriers and indeed their partners as well can can actually achieve their goals. Are there any key focus areas for carriers in 2024 in terms of supporting that sort of stable, profitable growth that they all want? Kyle, what do you think?  

Kyle Meadus  00:24:17 

You know, it's, it's gonna be very simple, right? But it's, you know, I say this a lot. It's very basic, it's, it's picking up the phone, it's getting back to the basics, creating the relationships that you know, are so important to build. And, you know, you know, insurance market has really changed and how we communicate with our brokers. I mean, there's you know, there's huge and I talked to brokers all the time they hate the phone view and the property brokers on here that say, Hey, we do hate it. But you know, it's this is where I'm gonna give it you know, a shameless plug to Sabra i We don't have phone queues here. You want to call you call or unready to call them directly, you know, and that is and that's how we want to build this mod You know, I say this all the time are a nice addition to ensure who T. Like if you have an important risks that you want to discuss, pick up the phone, talk to an underwriter. Right. And it will be the same underwriter if you hang up the phone and call back. I mean, that's so that's so important in how we build the relationship, the fundamentals and the trust, you know, and it will go back to you know, how we started that in, you know, 2023. And moving into this year, you know, we started with a product called Sovereign secure, right, where we updated our wordings, give it a fresh look, and ultimately, you know, really tailored a product that will benefit the insurance, and really help the broker, you know, identify where their exposures are, right. So if you had a manufacturer, say, we talked about manufacturing today, you know, what, what will happen areas, you'll have tailored coverages, or you know, to that, to that IBC code, and really kind of, you know, indentify, where their exposures are, that's important in the marketplace, that's important when you're really identifying, you know, how to move an account from one market to the next. And for brokers, they don't want to just move it for price, you know, that price is important, but coverages because ultimately when that loss occurs, and no one is responding, and you can't get a hold of claims, or you can't get a hold of an underwriter or say, Hi, this is where, you know, that's our opportunity to shine. And, you know, in the promises that we've made on paper really should come to true. So this is just some thoughts of, you know, going back to the fundamentals. 

Krista McNaughton-Brown  00:26:46 

Yeah, as Kyle mentioned, it is really important to have those basics down. And another focus area is really upholding that that underwriting excellence, so making sure you have a clearly defined appetite, a disciplined underwriting strategy and the capabilities to support that. So your tools and processes, claims and risk engineering. Ultimately, the insurers ability to kind of select in pricing and tailor that risk has has a direct impact on their ability to grow profitably, our high performing underwriters, they they have a greater understanding of the risk exposures. They know what's going on in the marketplace. They're curious, they're inquisitive, they pay attention to emerging and changing risks. And that's part of our sovereign strategy. Like as Kyle mentioned, we're a niche insurer, we focus on specific target segments. And we've developed the right products and expertise for those segments. So the cornerstone of that underwriting excellence is really being able to, to have that portfolio management view, being able to adequately price a risk and knowing when to walk away or monitor word salts to kind of adjust your pricing as necessarily, really having that clearly defined risk selection criteria, knowing when to optimize your capacity, when to take more of a disciplined underwriting approach and having the coverage designed to to respond to the client's needs. So really having that, that expertise, monitoring and making small changes, and just being agile is really going to make a difference. 

Audra Butt  00:28:17 

And to what Krista and Kyle was saying as well, like our underwriters actually think outside the box, they just, they'll find a tailored solution for the client. I've heard it so many times on the PNC side, I'm quite impressed with what they do. We've got a lot of experience underwriters, so you can have a great product. But if you don't have an underwriter that understands the, the operations and they don't give the service to the broker that makes a big difference as well. No ways to remove the stickiness with the client and find that coverage and the best coverage in terms you can. And as Carl said, but partnership with your brokers is the biggest thing, having those open and honest conversations in a timely manner. Like Andrew said earlier is the biggest thing that we can do for our clients and our brokers.  

Andrew Micieli  00:29:14 

Yeah, and just to kind of echo what everybody's saying it from my perspective, really is gonna come down to the relationship and knowledge and knowledge ability underwriters and carriers they need to know who their brokers are the types of business they produce and the types of business that they specialize in, right. And likewise, when we're working with a certain carrier, we hope that a there's consistency, but even more than that, there's an understanding of the risk itself. So this is how it may sound one way on paper or it may be labeled under certain operation that isn't desirable, but do they actually understand the core exposures? Is there a way to find a solution? We're more likely from the broker perspective to do business with somebody that is is genuinely trying to find a solution get the mutual win, as opposed to people or carriers that try to exact their pound of flesh and get exactly what they need. And if they can't, it's a no, right. It's a two way street. And I think, traditionally speaking, and when I joined the industry, there was a lot more of the focus on the relationship. mutual growth, mutual respect, quite frankly. And that kind of went away during the the hard market during COVID, as people got disconnected. So going forward through 2024, and we started seeing it last year as well. It's more of an effort, more of an emphasis to get out. So your brokers talk about what they have coming up with the pipeline, talk about what pain points there, you may be having a good year, but is there anything you could be doing better? And likewise, if we have carriers coming to your office, say, Hey, we're having a good year, but we need the apps in a more timely basis. Yeah, 100%, as management, we're going to take that back to our staff, because they're doing us a solid, they're great to work with, we don't want to make their jobs any more difficult than they need to be. Let's get them what they need. And we can move on to the next risk. 

Paul Lucas  00:31:08 

All right, excellent stuff. You've all been very positive so far. So I'm gonna throw some negatives at you in a minute, I want to find out some challenges. But before we get there, just a quick reminder, again, to everybody watching, do fill out the q&a box at the bottom of your screen, we're going to have a question and answer session in about 10 minutes or 15 minutes from now. So I will pose the questions that are in the at the end as part of that setup. So I see one or two questions have already come in. So that's great. But yeah, let's, let's move on to our next poll question. Like I said, it's going to look at the challenges and opportunities in the market. So which of the following challenges do you think impacts growth and profitability goals the most, you have the following options, increased market competition, Netcat, large losses, talent, shortage, automation, transactional processes, and inflation, economic factors get your votes in now, again, we're not allowed to vote so we are reliant on you. Let's see what you all think out there, I wonder if this is an obvious choice like the previous one, we shall find out a few more moments to get your votes in. 

Paul Lucas  00:32:23 

And I think everybody's had just about long enough to click their screens. And all of this one, this one is much more mixed. More interesting, perhaps, than the first full question. So talent shortage has come out on top with 32% of the votes. That's followed by increased market competition with 26%. But there's a pretty good spread the votes for everything he has 16% for automation, 16% for inflation, 11% for Netcat and large losses. So yeah, quite a quite a fair mix. So let's go to the panel, then what challenges are carriers facing in in achieving their profitability goals from, from your perspective, and I'd love to get your comments on some of these poll outcomes as well. 

Krista McNaughton-Brown  00:33:04 

Well, I'm gonna start, I'm gonna keep on the positivity train, because well, it's not necessarily a challenge, it definitely is an opportunity. So the industry is becoming more automated and transactional, you know, everybody's trying to gain efficiencies. Again, we talked about phone queues, there's more portals, there's more risk trying to fit into those box type underwriting, the more commodity type risks. So unfortunately, with with that, you're you're losing that, that human element and underwriters are used losing that develop the ability to kind of develop their underwriting experience, and also to be able to use their discretion. So while other carriers are kind of moving more towards for instructional processes we are to where we're looking to gain efficiencies in our operations through technology and processes. But we're still really focused on building strong personal relationships with our key brokers and our key accounts as well. So that kind of high touch personal, really consistent communication still very important to us. So at the end of the day, you're gonna hear this repeatedly, we've said it many times on the call already, it's a relationship business. So you need to build those trusting relationships with your partners with your underwriters with your clients, risk engineering, really anybody that can kind of add value to your day. So while a quote queue can be more efficient, and it's good for certain types of accounts, what we're hearing from our partners is they want to be able to just pick up the phone and contact their underwriter, they want to have a conversation, they want to tell the insurance story. And you'd be amazed what a story can do to really, to give that underwriter a comfort level with a risk. Maybe there's some claims. Maybe there's a story to the reason why it's being marketed. And that goes both ways too. So from the underwriting side to you need to tell your story. What do you bring to the table? Why are you Do the right fit for this risk. Again, I guess some of the drawbacks of being more transactional. With that reduced personnel. With the reduced personalization, you also run the risk of kind of, like oversimplification. And that lack of flexibility, which could lead to kind of overlooking specific coverage needs, or failing to kind of assess the risk adequately. So that could have significant consequences. 

Audra Butt  00:35:28 

I agree with everything, you're saying, Krista. You know, and it's being automated, you're not getting an experience on the writer, it's going to the morgue, small commodity business, the relationship is not there, because you're just kidding. Everything in tilt computer, you know, was sovereign, if an underwriter quoted you business and bounded last year with you, that's going to be who your underwriter is going to be on the renewal, it's not going to be another section of the company where you know what areas just as new business one does renewals, it's consistent underwriter on it, so they know the account, they can have that conversation. You know, there's always opportunities with the brokers to, like you said, gaps in coverage, but also cross selling opportunities and writing accounts on an account basis. So, you know, maybe P&C is a little high in the auto can come down a little bit more to round up the account. So there's a lot of things that having a person to talk to is better than having something that's just automated. 

Kyle Meadus  00:36:36 

Now, Paul, correct me if I'm wrong, but you said talent acquisition was number one. It wasn't date number one. Yeah. Well, there you go. So that's probably, you know, other people, I think, are feeling the pain out in the industry and in glad it came out in a fall because it is a challenge in the insurance industry. You know, I again, you know, I don't want to pick on COVID. But let's but this has been something, you know, from the work from home model, everything that has been transitioning, it's hard for it to, you know, bring in staff and find people with experience, I always say all the time, you know, that 20 year old experience 100 or 20 years experience underwriters, like a unicorn, you know, it just doesn't exist anymore, where's all the people go? But, you know, your real realistically, I mean, you know, it's really important for us to, you know, keep our staff engaged, you know, in really market ourselves as an industry that, you know, it's a great career, you know, if there's growth, I saw an ad today, it says insurance career, you know, unlimited growth, and it's true, all right, you know, when I decided to, you know, go to college, I went to college for an insurance program, but I've made a career out of it. And, you know, but I don't think we do enough to, you know, get out there and really promoted, and there's different aspects than just being claims or underwriting or a broker. I mean, there's, there's many aspects of an insurance company, it marketing, HR, you know, there's, there's so much more that we can, you know, we can say that we can do, and get people to really start thinking as insurance as a career, and, and there's, you know, a length of a good career there for, for people. So, as we as we continue to wanting to develop, I mean, talent acquisition, I think, is really hindering you know, the market today, you know, we have a lot of submissions coming through the door bones to pick up every like that, but if we don't have people to do it, then, you know, the everything that we've talked about today isn't going to happen. Right, you know, we're not going to have the growth that you know, that the companies you know, envisions because if you don't have staff to, you know, issue the renewals or write new business or communicate with brokers or settle claims, then, you know, it sheds a different light on on the plan. So, talent acquisition is should be and I'm glad the poll said it is the number one challenge in the insurance industry today. 

Andrew Micieli  00:39:12 

Yeah, I'm gonna chime in here. Sorry if it's a bit of a rant, but I actually think that the the talent shortage and the automation are kind of part and parcel. So, I think, carriers at the high level management level, I think they did a good job of understanding that there was a forthcoming talent shortage in industry. That wasn't news. I think that's been consistent over even the last 25 years. Obviously, it got a little expedited over the pandemic. But with that being said, it almost seems that because there's a shortage and because there's not enough experienced underwriters, they're kind of taking the the controls or taking the reins away from their frontline underwriting staff, through things like automation and some of these more transactional processes where You know, the underwriter is not digging into the risk ground up. And to Krista's point. Yeah, that's great for certain segments of commercial business. Absolutely. And I can't I can't contest that. However, my concern sort of, not even throughout 2024, but over the next sort of three, five, even 10 years, it's, we have underwriters that are put into these roles that they're expected to execute the plan. It's very transactional. And they're not given the leeway to actually make their own underwriting decisions, for better or for worse, frankly. But that's how you that's how you learn, you learn by doing. Obviously, as much, it was much easier prior to the pandemic, when you had those, not 20. Year Kyle, we had 3040, true by the new and underwriter that was working at the company for 50 years. So it was much easier to pass down that knowledge. So now that sort of that generation or those underwriters have left, how do we do it? I think the industry, that's one of the biggest challenges. It's not only a talent shortage, it's getting more into the industry and making sure that once the talent does come into the industry, ensuring that they're able to grow, and you're giving them all the resources available, or any of the ones that they require, frankly, to, in order for them to take that next step and become more competent. That's just my two cents of what I've been seeing so far. I will also say from the brokers perspective, so it's great carriers we guys want, we want you guys to be profitable. We don't want you guys to grow. Hopefully it's because of us. But from the brokers perspective, how are we going to be successful without, you know, just chasing prices down? Right, that's the other side of this. It's great for carriers to grow. We can move business from one carrier to another. That's awesome. But if the price is going down, again, brokers get paid on commission. So how do we 

Paul Lucas  00:42:02 

Might just have a slight sound issue with either Andrew? Well, pause for a second see if we can bring you back. If not, we will. 

Paul Lucas  00:42:11 

We will we will move on. And while you fix the technical issue. 

Andrew Micieli  00:42:15 

Yeah, fix. Quick Fix. It's quick fair. I'm not sure where I cut off on my on my rant there. But where I was going with that was brokers, we don't want to be racing to the bottom. Again, frankly, I don't think that's good for the health of the industry. And we don't want to present, you know, a 40% reduction in rate this year only to give them a 25% rate increase next year. That's not good for anybody. So I think it's, there's more of an emphasis that yes, price still matters. But understand your client understanding the underwriters and putting it with the carrier that's going to give that risk or that account the attention and the understanding that it deserves. 

Paul Lucas  00:42:56 

All right, any more thoughts on the challenges and the opportunities because you know, what's next is the dreaded q&a section. So you might want to try and drag this out before before I put you on the spot. Any more thoughts on this? Anybody before we move on? 

Krista McNaughton-Brown  00:43:12 

I just wanted to say to Andrew's point, it's so important to nurture that talent, whether that's underwriting or on the broker side, make sure that they're exposed to different situations and they're able to, to develop and grow and be able to use their underwriting discount or their discretion in the future as they develop that experience. So. 

Andrew Micieli  00:43:32 

Yeah, I am not to talk about myself, but I started in industry on the underwriting side. I won't name names, but the VP at the time, he said you're not a real underwriter till you have your first million dollar loss. And he said, he said that, obviously tongue in cheek, but what he was trying to do was, it's not an issue that you make, that it has a loss. Young underwriters, like very junior, they, I know when I entered the industry, I thought I could not write something that would have a loss, because that would reflect poorly on me. It's really about and again, what that DEP was saying was empowering the underwriters. It's okay, if there's a loss. But it's important that was the risk something that we wanted to be targeted. Did you underwrite it properly? Did you understand what you're insuring? If that's all yes, then that's what insurance is here for at the end of the day. 

Krista McNaughton-Brown  00:44:26 

That's such a good point. Because that is that's our value proposition. We're here to pay losses, you're gonna see losses, but are you making the right decisions when you're looking at those risks is really important. 

Paul Lucas  00:44:39 

All right, any more thoughts from anybody before we move into the q&a session? 

Kyle Meadus  00:44:44 

I think bring on the questions, Paul. 

Paul Lucas  00:44:47 

All right. Well, you are I've got to say I almost applaud you all because you've got remarkable time and we've got exactly 15 minutes to go, which is which is what we planned out for the q&a session today. And there's been a few questions that have come in already and I See some more being added as we speak. So just a reminder to everybody watching q&a box is down at the bottom of your screen, please get your questions in, there's plenty of time to throw them our way. So let's have a look at what we've got here. I'm going to start with one that I've saved from earlier, which is very relevant in terms of the fact that we've talked a lot about the importance of partnerships today, of course, how can underwriters work with claims to ensure that properly estimating claims liabilities and pricing accordingly? Is the question Who wants to take that one? 

Andrew Micieli  00:45:41 

I'll leave it to the Sovereign there. 

Krista McNaughton-Brown  00:45:45 

As with your broker partners, it's so important to have that dialogue and build those relationships with your claims team. They're such a great resource when you're you're looking at different risks. And and it's yeah, it's just so important to develop that relationship. Sorry, I lost my train of thought. 

Kyle Meadus  00:46:07 

No, I always tell. I don't hear from claims a lot. Unless there is a true true issue. And and on the underwriting side, you know, we allow claims to do what they need to do and settle the loss. You know, we can provide any insight on interpretation of how we determine the boarding would settle things like that we're absolutely always in communication, we want to have we want to know what's going on with the boss. You know, it how do we underwrite it later to prevent? And that's why I say Andrew, made a point of, you know, the million dollar loss? Well, it, you know, you have to learn from it. And I think from you know, communication with claims, reading the large loss reports and such, it's really important that we learn from our losses, and how we can, you know, identify them in the future and how, you know, we can minimize the loss from happening again. 

Audra Butt  00:47:08 

And I'm keeping a close relationship with our claims department as well. And if you think something is really reserved, low, have that conversation and say, Well, I've seen that vehicle go for this price, or, you know, did you take into consideration the increase for deadly material, stuff like that having those conversations is the best thing that we can do as underwriters with our claims. 

Paul Lucas  00:47:36 

Alright, I'll move on to the next question, which is actually specifically aimed at you, Andrew. So you're very much on the spot for this one. And from a brokers perspective, other than a competitive product and pricing, which are obviously important, what can ensure as an underwriters do to grow profitably with the point is 

Andrew Micieli  00:47:58 

Absolutely not just getting what they can do. So again, not to not to beat the drum again. But it's, it comes down to relationship, right? Understanding what the pain points are, where sort of the productions coming from helping expand the knowledge base of the brokerage staff. That is a very, very big component that kind of went away over the pandemic. But we're starting to see more of more more continued learning Lunch and Learns are fantastic. And the reason I say that is if brokerages and I do think, generally speaking, price, we made brokerages still do struggle to an extent to get that technical knowledge to our staff, especially when compared to the carrier side. So with that in mind, if we have an insurer that's supportive, they're giving us the resources, they're helping us learn. It's just a better result on both sides of the of the aisle, quite frankly. But it comes down to relationship. As a broker, we want to know that when we have a piece of quality business, that's a long standing client, we want to know that we're going to put it with somewhere that's going to, again, treat the account properly, and give it the attention it deserves. And from the carrier perspective is understanding who's submitting that risk. If it's something that, you know, they have 1000 accounts of, yeah, they're probably going to be the experts. In fact, they may be more of an expert in that specific segment than some of the underwriters trusting their knowledge, trusting what they're saying. Yep. At the end of the day insurance, one of the things that differentiates the insurance contract from just a standard one is that most good faith it's having, it's relying on utmost good faith and trusting that what they're saying and what they're telling you about the risk is correct. And just going from there, and quite frankly, it's it. It's relationship relationship relationship at the end of the day. 

Paul Lucas  00:49:56 

Now that one was aimed at Andrew, Was anybody got anything to add on that question? Looks like you've answered it perfectly well, Kyle, now you're coming in?  

Kyle Meadus  00:50:05 

Well, I was just gonna say we'd like to I mean it, we want to partner with the broker, right? They even on, you know, where I where I kind of think is he is I mean they own the relationship, right. But we can partner with them with, you know, risk engineering, and really develop a relationship that starts at the grassroots with the insurer, they see the insurer, they see the broker working hand in hand, I think that's key. And especially, you know, when you're going out and getting a new client, and really wanting them to understand what they do, because, you know, I'll take it back to manufacturing, you know, there's not one manufacturer that you know, are the same, right, they might manufacture the same product, but how they do it is different, and what's the you know, so it's really important that we work with our broker partners, and really build up that policy from the from the beginning. 

Paul Lucas  00:51:00 

So just to remind to everybody watching, we can't do this part without use of get those questions in in the q&a box at the bottom of your screen. I have one in front of me now. But if you get your question in you will be next. So how is inflation impacted claims costs is our next question, how significantly has this impacted profitability and growth as well, who would like to take this one? 

Audra Butt  00:51:23 

I think from an auto perspective, we seen during COVID that use vehicles went up high in price, compared to what you were getting pre COVID. So you could buy an older vehicle pre COVID For I'm going to say 4000. And now, during COVID, they were going for 678 1000 because of the shortage for vehicles. So I think inflation with regards to parts, it's a big thing now because most of the new vehicles have cameras and electronic devices. So hint to a bumper that used to cost maybe $5,000 is now costing 15 20,000. Because of all the electronics inside that bumper. I've heard from P&C underwriters, the cost of lumber actually, I get back lumber to fix my deck in my back yard and the cost is atrocious, I remember when you could get a piece of lumber late for nothing. And now it's like you want my firstborn child. Unbelievable for the past. 

Kyle Meadus  00:52:29 

You know, I'll piggyback on the auto you know, and you lose your vehicle, or you just get in a car accident, you lose your vehicle. But you know, what you need is a replacement vehicle for why your vehicles getting repaired. And you know, I read a stat where it said, you know, rental costs are up 67% pre pandemic. And that is just you know, how long do you need a rental for is, you know, before the rental shop can actually start before the body shop can actually fix your vehicle is it? You know, so the 15 days, 30 days, 45 days, 60 days? I mean, it this is an increased cost that wasn't there four or five years ago? And you know, so that just goes back into you know, we need more money in the pot, you know, and it's a good, it's very simple, right? And that's where I think you're going to start seeing a lot a shift in insurance pricing is that, you know, as the market is trending softer, there's no doubt about it. But there is areas that are either just getting pushed with claims costs, and that's going to have to come from somewhere. 

Paul Lucas  00:53:41 

And I, we had another question come in. But again, a reminder, I think we should be able to squeeze you in if you do have a question. So please get it in the q&a box. But I think Andrew, I think you probably covered some of this earlier, but I'll put it to you. It's a little bit of a lengthy question. But it says underwriters, juggle juggling, adequacy, loss control, risk management with pricing and coverage and pennant competitiveness with our peers. So how do brokers manage these same factors in the face of competition from from brokers who promised the prospects better terms and pricing than the current incumbent broker? Andrew, I guess you're probably the demand to answer. 

Andrew Micieli  00:54:17 

Yeah, for sure. So again, there's obviously the relationship with the carrier, but also the relationship with your client. So we'll start from there, knowing your client knowing how likely they are to look elsewhere. We had I was speaking with one of our producers a few weeks ago, and he said this client for about 30 some odd years a little bit more than that. And basically, very early on, he said to him, I can't lose you. And he said, Well, what do you mean? He said, Well, I It's not that I can't it's I shouldn't and the client was puzzled. He said, you're happy with the service, right? Yep. I understand you. I come out see you. I understand you're operating shins and the coverage is good, right? Absolutely. And the price is okay. Yes. So what am I losing by so having that understanding of where you stand with your client, which clients are, you know a little bit more under the gun a little bit more price sensitive. And applying expertise now in terms of how other brokers who are promising better pricing at the end of the day, the material facts of the material facts. So, on a like for like basis, it shouldn't be materially different in terms of pricing and coverage compared to what our terms are as long as the you as the incumbent are doing their job. And to Kyle's point, it's not only the underwriters that need to keep a pulse on the market, it's also us, as brokers, I've seen building rates, what I thought was good not be adequate, through 2020 through 2021. And then last year, it's starting to come down to Kyle's point. So understanding where this risk stands, if you're competitive, you should be fairly sheltered now in terms of the inflation, that is more of a tougher conversation, especially earlier on over the pandemic and the hard market. Clients are starting to come around to it, but they were reluctant to accept that, hey, my price is going up. More than I expected. You said it's 10% rate. But why am I paying 20%? More? Well, it sir, it's because or ma'am. It's because you're building now cost 50% more to build, they need to increase the limit. Another way to say it. And how we've often communicated is forbid your building burns down, something comes through and it's totaled, you have to rebuild ground up? Can you rebuild it for 1,000,002 million, 5 million, whatever it is savvy and knowledgeable clients. They often when you phrase it to them like that, they realize, oh, maybe this limit is a little bit better. So now when now when you have another broker that's maybe saying, I'm going to quote something, or I need to give you better pricing, and they're using a limit from two years ago, which is no longer adequate. The clients already understanding that, hey, I need more coverage than this. This is not adequate. Can you get me a price that matches this coverage? 

Paul Lucas  00:57:18 

All right, excellent answer. I'm just going to squeeze in one more, we have only got two minutes left. So a very brief answer would be appreciated to this one to whoever wants to take it. But very simple. I will say very simple. It's a very big question, what direction do you see the market taking this year? And what impact will it have for carriers and brokers who wants to take that one? 

Andrew Micieli  00:57:40 

I'll just say one word soft. It's getting it's getting softer. It's again, going back to it. Just understanding your risk, understanding where it slots in in terms of what's available in the market, and ensuring that you're always seeking out the best terms for the most competitive price for your clients. That's how we kind of defend ourselves shelter, ensure continued success. Any other thoughts? 

Kyle Meadus  00:58:07 

There is a downward pressure. And that absolutely, if you want to use the word soft, it's a lot softer than it was six months ago. It's Latin in 12 months ago, you know, underwriters are really feeling the pressure of you know, just retaining their own accounts. Right. And I can speak for slavery, I can speak for a lot of other insurance insurers. So a it's where it ends up 12 months from now who will see what we'll see. But ultimately, the market is changing on a day to day basis. 

Paul Lucas  00:58:43 

All right, well, a soft market but some pretty solid answers. I'm sure you will agree. Thanks for everybody who participated. That is all we have time for today. Huge thanks, of course, to you for watching and for your participation in both the polls and the questions. Remember, if you missed any of today's recording, it will be available to download via the insurance business Canada website. In the meantime, thanks again to Krista, Audra, Kyle and Andrew, and of course two sovereign insurance on behalf of Insurance Business. Take care, stay safe. We hope to see you all again soon.  

Andrew Micieli  00:59:20 

Thdank you.  

Krista McNaughton-Brown  00:59:21 

Thank you.  

Audra Butt  00:59:23 

Thank you