“Challenging” is the way professional services firm Aon classifies automobile insurance in this country.
With everything from rate increases to legislative changes in provinces like British Columbia and Alberta, profitability concerns continue for most automobile insurers, Aon said in a new report.
Some insurers have withdrawn from this market and capacity is generally sufficient. “However,” says the report, “finding appetite for primary limits sufficient to satisfy umbrella insurers can be challenging – driven largely by reinsurance constraints.”
On top of that, underwriters are sticking to underwriting guidelines and looking closely at organizations' safety standards and procedures.
Still, Aon says that looking ahead, it forecasts a stable market with pricing “modestly challenged,” but with rigorous underwriting and risk selection expected to continue.
More restrictions possible when it comes to ransomware claims
Cyber risk coverage is another challenging area. Insurers are seeing more frequent and severe ransomware claims coming in, and there could be more coverage restrictions in this area, driving up rates and creating a tighter underwriting environment, said Aon.
Rates are expected to rise 30 per cent or more with ongoing across-the-board adjustments and insurers significantly reducing their capacity on any one particular risk. “Rigorous technical underwriting and a focus on risk control activities continues, driven primarily by ransomware exposure,” said Aon.
Looking ahead, Aon is forecasting a challenging year for insurers offering cyber coverage.