2024 Executive Outlook | Christian Hutchison, McDougall Insurance Brokers
Christian Hutchison, president, McDougall Insurance Brokers
Brokers will need to focus their attention in 2024 on managing client expectations and enhanced communication, while also responding to fast-moving market and capacity changes.
Brokerage mergers and acquisitions will continue at a rapid pace. Even though the economy continued to be volatile in 2023, with interest rates increasing, it didn’t slow down the number of deals. Time will tell, but it’s predicted interest rates may start to come down around the middle of 2024. Coupled with access to significant capital in the hands of consolidators, I fully expect the flood of deals to continue. Not surprisingly, brokerages are an incredible investment, and consolidators know that scale allows for continued investment in customers, employees, and enhanced insurance company partnerships.
Talent management will continue to be challenging for the P&C industry in 2024. It appears most businesses have settled into their current models — work from home, hybrid or in the office full-time. Due to a lack of new entrants to the industry, select insurance companies and brokerages will continue to buy talent from others, driving up the average costs per employee. Internal compensation reviews and offers will be key to employee retention.
Personal insurance in Ontario will be very challenging in 2024. In Ontario, insureds now have the option of removing direct compensation–property damage (DCPD) coverage from their auto policy. Brokerages must ensure insureds understand exactly what they are removing. Auto theft will continue to be a challenge and more markets will roll out coverage/surcharge and anti-theft options. Personal property will get more difficult in 2024 as insurance companies react to new weather patterns and natural events. Flood maps will be honed, and coverage will be restricted in specific areas. All the while, rates will continue to be in flux as the economy remains volatile and claims costs increase. Educating our insureds on these changes and pressures will be key to stickhandling personal lines in 2024.
Commercial insurance will be very similar to 2023, where we saw some softening in specific lines of business. Other lines should continue to be a challenge such as cyber, D&O and municipal. The issues around capacity will continue in 2024 and subscription policies will become more prevalent. Client communication will be key to managing expectations in this transitional commercial-lines market.
