Alberta Risk Advice by Cielito Villanueva

Sooner than later, the insurance market will harden as catastrophic losses increase and the resulting claims rise. Additionally, the increased competition throughout the past several years has driven premiums down; at some point, insurers will need to replenish their pool of funds from which to pay claims if they expect to stay out of the red. If new business is not enough to build a bigger pool, insurers will look to the next logical avenue: increasing premiums. When this will happen can only be speculated, but it is inevitable.

In spite of this seemingly negative news, you can look at this as an opportunity to “hedge” the future increase in premiums by investing the current savings you are getting in today’s soft market towards improving your risk management policies, towards a safer work environment, upgrading equipment such as a UL300 automatic fire-suppression system, or researching cost-effective methods of controlling loss. You should also look to solidify a relationship with an insurance company through a broker who will be in a better position to negotiate for you as the insurance company’s comfort level of your business improves with time and with your efforts in reducing loss. This also means playing ball and providing your broker with the information being requested by the insurance company. Your broker will commit to making insurance transparent to you, but it also means that you need to make your business transparent to the insurance company.

All in all, there are many things you can do to put yourself and your business in a better position when the hard market arrives. Talk to your broker about any concerns you may have and they may provide you with more details in preparing for the inevitable.

Cielito V