2024 Executive Outlook |Chris Sekine, Trisura
Chris Sekine, President, CEO, Trisura Guarantee Insurance Company
2024 will see the evolution of economic and financial trends emerging from the end of the global pandemic, creating an interesting dynamic between primary insurers and reinsurers.
And as this happens, the P&C industry is navigating a profound shift in the workplace.
Canada’s commercial P&C industry experienced strong performance through the uncertainty wrought by COVID-19, changing interest rates, inflation, and evolving approaches to work.
In certain lines, we observed hardening trends in pricing and terms as insurers, reinsurers and brokers navigated a world that felt different than the one we knew. This performance contrasts with several years of poor results in the industry only a few short years ago, which in part led to hard market trends.
The economy evolved quickly from a low interest rate environment to one of rapidly rising rates and tenuous highs as we combat inflation. Supply chain disruptions and talent management have amplified challenges affecting many Canadian businesses; the P&C industry is not immune. These challenges impact the cost of claims, expense ratios, and might influence underwriting profitability.
The P&C insurance industry risks margin compression and an uncertain medium-term outlook for sustainable returns. At the same time, recent industry results contributed to balance in the P&C market, with rate moderation in certain lines, as companies gain comfort with the underwriting environment.
Many P&C companies are navigating Fall reinsurance renewals. Reinsurers continue to focus on rising rates, lower ceding commissions and higher retentions — especially for those who have ceded a disproportionate amount of claims costs. It appears a gap is forming between the primary market and the reinsurance market, which might affect P&C profitability.
In 2024, it will be interesting to watch the market navigate balancing trends in the context of evolving reinsurance. We expect risk tolerance and risk management of businesses and insureds will evolve alongside these trends.
There is a noticeable rise in the number of people returning to the office. Fridays continue to have low attendance in the office, but Mondays are gaining traction. I expect companies will continue to offer flexible work arrangements, but it is important to remember our industry thrives on relationships. Every person I speak with acknowledges that virtual cannot replace face-to-face connections. Virtual meetings are a great tool but should supplement, not replace personal interactions.
