2024 Executive Outlook |Bernard McNulty, Allianz Commercial

Bernard McNulty, Chief Agent, Canada, Allianz Commercial

Many challenges our industry faced in 2023 will continue to be headwinds in 2024. These include climate change/natural catastrophes, cybercrime and inflation.

The industry’s talent shortage will also continue to be a challenge in 2024. Companies must continue to encourage staff to be innovative, source talent from a variety of sectors, and be more diligent about developing and mentoring internal talent. We are addressing the talent gap in a timely, creative way: we have found great talent at engineering and other consulting firms, from the Canadian military and from our corporate teams all over the world. We are seeing more applicants from the broking community looking to diversify their insurance skills or simply looking for a change.

Many companies will continue their transformational journeys in 2024. These include launching and integrating more advanced platforms to capture better data, reduce costs, drive better insights to improve profitability and better manage how we deploy capacity. This transformation extends to realigning teams and structure to break down barriers inhibiting the very best teamwork and collaboration. It also includes driving robust diversity and inclusivity initiatives.

The biggest challenge our industry will face in 2024 is rising claim costs that could outpace the rate increases we have been obtaining the past three years. Direct inflation, social inflation, lingering supply chain issues and disturbing trends such as rampant auto theft in Canada are all contributing to this concern. Companies will need to lean on their claims technical experts and their vendor management teams now more than ever. Sourcing, pricing, vendor expertise, proactive litigation management and other focus areas will be critical in 2024. The most effective resolution of a claim includes early accurate evaluation, tight management through the cycle, and a quick settlement. Insurers will need to part ways with vendors that do not support that approach.

More commercial clients will consider parametric solutions in 2024. Insurers are consistently adding bench strength for these solutions and are offering more innovative products. Finally, Alberta’s Captive Insurance Companies Act will create even more opportunity for sophisticated clients to either model and establish a captive insurance solution in Alberta, or repatriate an existing captive from Bermuda, the Cayman Islands or other jurisdictions.