What’s on Dec? | Episode 11 | 2024 Executive Outlook – Part 2

Canadian Underwriter recently asked the country’s top insurance leaders how this year will be different than 2023. A common theme we heard was that 2024 will likely look similar in terms of inflation and interest rates, hard insurance markets and the rising auto theft problem.

In our second of two Executive Outlook podcasts, Wawanesa’s Anna McCrindell, Insurance Bureau of Canada’s Celyeste Power and BOXX Insurance’s Neal Jardine give their take on the New Year.

Hear what they have to say about recruitment and retention, industry collaboration and whether 2024 will be the year of the ‘whole-of-society’ approach to some of the problems ailing the insurance industry in Canada.

Audio transcript

Intro: You’re listening to What’s On Dec?, the Canadian Underwriter podcast, focusing on the hottest topics in the P&C community, featuring insights, analysis, and interviews with subject matter experts throughout the year.

Pete Tessier:

Hey, everyone. Welcome to another episode of What’s On Dec?, the Canadian Underwriter podcast. I’m Pete Tessier. I’m here with Curt Wyatt, and we’re doing Part 2 of our 2024 Executive Outlook and we’ve got some great guests today, and we’re going to talk a little bit about what the future holds.

So before we get into other stuff, first of all, you should know we have Celyeste Power, the president and CEO of IBC Canada. We also have Anna McCrindell, who is the senior vice president and chief operating officer – East for Wawanesa. And also joining them is Neal Jardine, who is the global cyber risk intelligence and claims officer for BOXX Insurance. Great collection of people.

Curt Wyatt:

Hey Pete, it’s Curt here. Speaking of introducing individuals, let’s introduce our sponsor Taycon Risk. The MGA that specializes in niche markets, hard to place or unusual complex commercial risks. They turn hard risks into smart coverage the old-fashioned way, they underwrite it.

Pete Tessier:

Curt, there’s some great stuff coming out today, and we’re running with the same kind of questions for the guests as we did in episode one, and I think it’s going to be a fantastic perspective of taking another national company with Wawanesa and also the oversight and 30,000-foot view we get from Insurance Bureau of Canada. But also bringing someone in who focused solely on cyber, probably the most emerging risk vector right now and one of the hardest to understand and underwrite.

Curt Wyatt:

Absolutely. Pete, I think it’s exciting that we get to take the same questions from the previous episode and ask different individuals from our industry and get their perspective of what’s happening. We’re looking forward into 2024. We’re doing a little bit of reflection on what happened in 2023.

So hey, let’s dive into the questions and get this show rolling. Hey, we have Celyeste online here from IBC, and we’re going to ask the question number one, and then we’re going to follow it up with Anna and Neal. So Celyeste, how do you expect 2024 could be different for the industry than, say, 2023 has been? And what is your basis for saying that?

Celyeste Power:

I think there are really three relatively new forces at work that are affecting and reshaping our industry. First of all, same as 2023, but I do think we’re going to continue to see our changing climate, more dangerous weather events growing in frequency and severity. I think that these are going to get worse, not better, and that, unfortunately, we’re going to keep seeing that trend into 2024 and beyond. The second is there is a growing trend towards sweeping regulation, new taxation, and government intervention in our industry.

We saw the Alberta government commit to seeing the rate freeze expire at the end of the year. But it’s now been replaced with a cap, and that is very similar to what we saw California do, and now people in California are struggling to even find insurance. So we’re seeing that growing trend toward those sweeping regulations. And then, of course, third, and I think we’re going to see much more of this in 2024, is technological progress.

So we started to talk about autonomous vehicles a long time ago, and we’re not quite at the reality of having autonomous family cars. But now AI has joined the mainstream conversation, and I think this is going to have a very large impact on the way we do business, on the way we price products, on the way technology influences our industry. And so I think those three forces are continuing to work its way in, and we’re going to see more of that impact in 2024.

Anna McCrindell:

What I would say for 2024, I think the issues are going to remain the same, but that they’re just going to be more challenging. And when I say the issues I’m really thinking about, when I think about the top three: climate, economic uncertainty, and talent. Those three, for sure, stand out and, I think, more challenging.

Neal Jardine:

In the cyber sector, there’s definitely more awareness around cyber insurance. I think I read a stat recently – only around 20% of businesses globally have cyber insurance. So we’re definitely seeing more awareness around it, which is then increasing people asking brokers for the product. The product is therefore becoming more robust and providing better protections. That’s certainly one aspect.

I want to mention as well, we’re going to see AI come in on the claims side. So not only will you see more awareness around it, we’re also going to see more sophisticated attacks, and those attacks are going to be using artificial intelligence to target humans because humans are always the weakest link when it comes to a cyberattack.

Pete Tessier:

Anna, maybe you can lead off with number two here. Will the industry make headway in 2024 when it comes to recruitment and retention because this has been such a huge challenge for so long, it seems?

Anna McCrindell:

I would say I’m really pleased with how we’ve been doing in terms of being able to recruit top talent to our organization, especially in Ontario and in commercial. So that’s pretty isolated but so critical: talent, bringing people to our industry. But two other important initiatives that we’ve been launching because of that would be cohort training. We’ve done this both in commercial, underwriting and claims, but the importance of really building programs that enable us to accelerate, attract people into building a really rewarding career.

And so we’ve now graduated a few cohorts where we continue to evolve it, but we think this is really important. I started out in this industry in a training program, and it was, I think it was really good. It set me up well, so it’s so important that we invest in that. And then, the third piece. We launched Wawanesa University, which is a combination of online resources, disciplines. Basically, people can go there to really start building careers in whatever aspect of our industry that they are most interested in. So that need to really invest in career building, training, really critical to set us up for success.

Pete Tessier:

Celyeste, what are your thoughts when it comes to recruitment?

Celyeste Power:

So overall, I think that our industry has a really good important story to tell about the work we do. I often tell people what I do for work and I often see a little look in their eye when I talk about insurance. And I understand that we have had some challenges over time, but I really don’t think that that’s a look that we deserve. And I think that we, as an industry, need to start telling our story. We might not be able to change the way people feel about insurance, but I do think we can change the way people think about insurance.

We are there for Canadians on their worst days. We rebuild communities. We are critical to the economy, and we do a lot of innovative, interesting things. I think the more we start telling our story, the more we get those stories out there, the better it will be for recruitment and retention in this industry. I think when a lot of people think about insurance, they think about distribution, they think about sales, and they think about actuaries, and those are two critical components. But we have many, many more jobs than that, and it’s really trying to get the light out on those things.

The Insurance Institute of Canada is doing a fantastic job on this, and we are here with Insurance Bureau of Canada to support. And I think, at IBC, I would really like to try to echo those really positive stories, that positive impact that the industry makes. And so I think that we’re going to see continued improvement in terms of retention and recruitment in the insurance industry in 2024.

Pete Tessier:

Neal, how does recruitment and retention factor in the cyber area where it’s a little more specialized on that specific risk vector and some of the expertise that is needed?

Neal Jardine:

Oh, we’re excited for cyber growing. Cyber is a very new line in terms of insurance in general, right? Fire and property have been around for a long time, but cyber’s relatively new. So, actually, a lot of the folks that we bring into the BOXX come fresh from areas that aren’t in insurance.

So we actually look at local colleges. We look at other computer or tech firms. And after talking to individuals about what cyber insurance is, what our goal is of protecting the world from cyberattacks, predicting them, and so on, we actually get a lot of folks who are excited to come into the industry. So we think that recruitment for cyber is certainly going up next year. I know that we’re expanding, we’ll be adding additional folks.

As an industry as a whole, I love the cyber… Sorry, I love cyber. I also like the insurance world a lot. So I would say that I know a few people have joined the insurance industry mostly because they’ve either chatted with me or I’ve tried to help them to get them into it.

Curt Wyatt:

Hey Neal, let’s dive into industry collaboration. What do you expect the collaboration to change, to what extent should we maybe see more collaboration, if it’s even possible, going forward in 2024?

Neal Jardine:

Collaboration within the industry really needs to start at the government level. Cyber is a threat that all of us face on a daily basis. If you think about the number of text messages you get on your phone pretending to be the CRA, or the number of phishing emails you get or spam calls, every single one of those is a cyberattack against an individual. And then, if you think on a commercial side as well, every single phishing email is an attempt by an attacker to get into a system.

I think when it comes to collaboration, what we need to do is have the government kind of step up, and even if we brought back some of those commercials on TV that talk about cyber awareness. Celyeste Power might mention this, you’ve asked about cyber, but the IBC has done a big campaign on cyber awareness, which I think is fantastic. I think we need more of that. The other part within the industry is in terms of just collaboration awareness.

So making clients more aware of the product and how the product protects them because, often, a lot of us think that cyber is just data breaches or our information being stolen. They don’t realize that its often and most popular attack is invoicing fraud and social engineering, which accounts for the majority of attacks that we see.

Curt Wyatt:

Anna, share your thoughts on collaboration and how you see the world of Wawanesa changing in 2024.

Anna McCrindell:

Well, first, I want to say we are fundamentally a people business, and it’s about people working together to solve problems, and I’m so proud of how much work has been done in the industry to collaborate on big topics, big issues, and really bring them to the forefront. I think of the IBC and all of us who are members really helping to support some of these initiatives that are getting airtime with government. And I think the opportunity to continue that is absolutely critical.

We think about Équité and the issue around theft, fraud, and it’s not just an insurance industry issue. It involves other sectors of our economy. I think insurance, we have done such a great job collaborating. Momentum is there, but we need to continue because it’s not just… I think it’s about collaboration with other sectors as well, and we’ve got to continue to push that forward because the big issues keep coming up. I don’t think it’s going to end, but it’s about how do we keep that momentum so that we can create solutions.

Curt Wyatt:

Celyeste, collaboration’s a big topic when it comes to associations. How do you see this evolving as you move forward?

Celyeste Power:

I think we absolutely have to, and I think that we are doing a better job of that. For example, right now, we’re working on a project with the brokers association. It’s being led out of IBAO but with the regulators on educating consumers and Canadians about natural catastrophe risk. And it’s critical that we come together as an industry and understand what each of our roles are to make sure that the customer, at the end of the day, is getting what they need to move forward.

So I think we will see more of that, of course, within the confines of competition law, but I do think we’ll see more of that moving forward. And I think as long as every player in the insurance ecosystem keeps the customer at the centre of everything that they’re doing and thinking about, well, we’ve got a lot of alignment because we are all focused on the customer. So I think we’ll see more of that, and I think we’ll be successful in it.

Pete Tessier:

Celyeste, when it comes to whole-of-society solutions, what are the things that you and IBC are thinking about when you’re looking for impact and improvement?

Celyeste Power:

Absolutely. I’m a big fan of the whole-of-society approach because, at the end of the day, when you think about the Canadian that we’re all looking to do our best for, the customer, there’s so many different pieces that go in to making that experience the best outcome for the customer. If we take climate change, just as an example, we have been saying that we need a whole-of-society approach on making sure Canadians can find affordable insurance for their properties and making sure that we’re adapting to our changing climate.

We’ve been saying this now for, I think, 10 to 12 years. And now we are seeing a national adaptation strategy from the government that puts metrics around who needs to be doing what and what investments need to be made so that Canadians can be living in resilient communities that are able to deal with our current climate and our future climate and making sure that they can continue to access that insurance. The same thing goes for the National Flood Insurance Program. Federal government committed to stand up a National Flood Insurance Program earlier this year.

We’re hoping to see it stood up in the next two years. That isn’t just industry on its own doing something; that isn’t just one government doing something. This will be the federal government, provincial governments, the insurance industry, brokers and agents, all working together to make sure that we have a sustainable flood insurance market that Canadians, regardless of their risk level, can act on there. And then just from a final point, auto theft is another great example of this, where you need a collaborative approach. Insurers have been out educating the public, putting in anti-theft tracking devices, getting prevention methods out there.

I feel we are doing our part in the epidemic of auto theft, but we need law enforcement support. We need federal government leadership. We need provincial government leadership. We need the car manufacturers to step up and look at their standards. And so, without a whole-of-society approach on an issue like auto theft, we won’t solve the whole problem. So I do think it’s critical. I think we have great momentum in some of these areas, and people see themselves playing a role to better it. And so I think 2024, we’re going to start reaping some of the rewards from that work, climate especially, and also on auto theft.

Pete Tessier:

Neal, how does whole-of-society affect things when you look at it from your position in the cyber world with BOXX?

Neal Jardine:

I think the whole-of-society approach is, it’s really about making folks aware that there are easy and simple steps that they can take to keep themselves cyber secure. You know, it’s having longer passwords. It’s having multifactor authentication in place. So I think there’s definitely an area for us to have a whole-of-society approach around cyber, and I think that’s going to develop more and more as cyber risk and cyberattacks become more prevalent.

I would like to say that it’s going to advance faster than the attack vectors that we see clients experiencing, but I think that’s where insurance can come in and fill the gap, right? While clients are learning about how to become better secure and more secure to prevent cyberattacks, insurance will step in and provide that buffer zone to make sure that our economy and individuals don’t suffer losses while we get to a whole-of-society holistic cybersecurity approach.

Pete Tessier:

Anna, we’re going to let you wrap up with this. What’s your take, and where does Wawanesa sit with whole-of-society solutions and coming together for that kind of big-picture look?

Anna McCrindell:

I love this question because it really speaks to the heart of the why. Why do we do this? And it really is about community and people helping people, and I think that that’s not changed over the years. What has changed is the focus, and we launched Climate Champions, Wawanesa Climate Champions Initiative, which is providing $2 million towards helping those at the front line of helping us withstand and prevent and adapt to climate change. And with that, we have this one program, and this one’s super exciting.

It’s a collaboration, and it’s called Community Wildfire Prevention Grants. And working together in partnership with the Institute of Catastrophic Loss Reduction, ICLR, and FireSmart, we’re providing grants to communities, and I’ll just… A few examples. In B.C., we worked with a property owners association to purchase a rapid deployment sprinkler system that could help them protect the community against wildfire.

In Manitoba, in the Interlake region, we worked with two local fire departments to help property owners and businesses create clearance around homes and businesses so that they can prevent the wildfire risk. So really, helping communities do this work, I think, we’ve started to do this. I think there’s a real sense of urgency around the need to do more and really help because it’s a big issue. We’ve got to adapt to this weather that is just becoming more frequent, more severe. How do we prevent and withstand the new reality of what’s happening?

Pete Tessier:

Curt, quick chance to sort of summarize everything we’ve heard from two episodes here, and I think it’s refreshing to understand and know that there’s a lot of sight going on. There’s a lot of insight towards the issues that are affecting the insurance industry right now and that these top executives are thinking about them and, in some cases, have meaningful action plans to go out and deal with them.

Curt Wyatt:

Oh, for sure. I was really impressed by the answers, that you say, Pete. The fact that they’re action items, that they’re putting this onto their top members of their teams to make sure retention, make sure recruitment, the whole-of-society topics that we cover. It’s amazing to hear how, as an industry, we’re tackling these major topics, like the idea that there needs to be more discussion.

We need to be more inclusive about solving problems. And I think the industry has done a great job over the years of working collectively. There’s competition, no question. But that being said, you can have competition and have friendly competition where people benefit by hearing messages and learning from each other and pushing that out to solve problems.

Pete Tessier:

That’s a great summary. And I think one thing, maybe a caveat too, is we always have to remember that insurance takes time to make things change, and that’s not always how everyone wants things to happen. There’s a lot at stake here. You make critical errors in some of the adjustments you do in this industry, it can be very costly.

And it’s a very different world looking at things as a product manufacturer rather than a product distributor, depending where you sit in the industry. And while I’m optimistic from what we’ve heard, it’s going to take some time. There’s a lot of entities that move independently that have to come together to solve a lot of these challenges. But the fact that the right people seem to be thinking along the same lines is a refreshing change, and it leaves me to be a little bit optimistic about where we could finish 2024.

Curt Wyatt:

Yeah, for sure. Your summary of saying,you make these changes, and the effect it could have, the way it could take on risk to change the industry in a sense that it’s something it wasn’t prepared to do, and having BOXX on is a good example of that because of the fact that they’re looking at a risk that’s completely new and making it better for the consumer.

So, all the way through the interviews, you heard that whether it’s Wawanesa who’s been around for 130-odd years. I can’t even remember. Or whether it’s one of our associations who helps all of the groups kind of compete and work together like IBC does. I just think that it was a great mix of three people who each have a discipline within what they do, and it’s the perfect way to end out 2024, or 2023, and go into 2024.

Outro: Thanks for listening to What’s On Dec?, the Canadian Underwriter podcast.