In the face of continuing rate increases and coverage restrictions, commercial insurance buyers are expressing their frustration to the Ontario government. Some commercial insurance buyers are not able to find insurance coverage, particularly in the hospitality and health sectors.
Premier Ford twice warned insurers that it could fact possible regulation if it did not help commercial insurance buyers. Ford and his finance minister, Rod Phillips reached out to the larger insurance companies in conference calls to get action on these issues. Ford had slammed the insurance companies during a press conference last week when he urged them to take action to stop what he called “gouging” by some in the sector.
A group representing Canadian insurance companies say it is launching a team that will help small businesses find affordable coverage as rates rise because of the pandemic. The Insurance Bureau of Canada says the team will start its work next month by focusing on helping the hard-hit hospitality sector in Ontario and evaluate the needs and attempt to find appropriate coverage.
The general insurance industry is currently regulated in personal lines and is concerned with expansion of this regulation into commercial lines. Government involvement in commercial risk selection and pricing is of major concern, as it is a profitable line of business for most insurers.
Some feel that the insurance market is over reacting to the claims potential from hospitality and health sector due to the pandemic. Large premium increases and coverage reductions are not justified considering the exclusions in most policies for pandemic claims. However domestic insurers continue to seek price increases and coverage reductions in an effort to avoid potential unprofitability from this sector.
In opposition to this practice, there remains continued risk appetite and reasonable pricing for this class of business within the international markets such as Lloyds and other insurance syndicates. Brokers who have access to these markets are funneling business to them at the expense of domestic markets.