Brett Boadway—Chief Operating Officer, IBAO
And now for some good news. The dust certainly hasn’t settled on Covid-19 from a healthcare or economic perspective. But hindsight on broker perseverance thus far, after a year full of challenges, could be the silver lining you’re looking for. Once again, Ontario’s broker channel proved its resiliency and held the line on insurance distribution market share in 2020 despite shifting public sentiment and loyalty as consumers fought their own pandemic-related pressures on the home front.
We recently commissioned a report from MSA Research assessing market share by distribution type. It’s based on insurers’ direct written premiums in Ontario, filtered by insurer distribution strategies. Results should be treated as estimates, as some insurers file their financial results as a single company despite distributing direct and through brokers (CAA Insurance is an example—this report features them as direct only). Some insurers with multiple distribution strategies file their financial results separately (Intact Insurance/Belair Direct is an example). And not all mutual insurers share their financial results with MSA and aren’t included in this report. These aside, broker market share based on direct written premiums has remained relatively steady this past year.
When you look at specific lines of business (Personal Property, Personal Auto, Commercial Auto), 2020 numbers are slightly lower than 2019. But total direct written premium lines indicate that overall, broker market share increased slightly last year. This suggests that some or all of the lines of business that aren’t included in MSA’s report (Commercial Property, Commercial Liability, Commercial Specialty like Surety, Marine, etc.) were higher in 2020 versus 2019 to balance the average. This makes overall broker market share in 2020 higher than the year prior.
“2020 was a solid year for Canada’s P&C insurance industry despite the headwinds and disruptions brought about by the pandemic,” said Joel Baker, CEO of MSA Research. “There were, however, stark differences between sectors. The personal/multi-line carriers including the top ones such as Intact, Desjardins, Aviva, Co-op and TD had strong results. Commercial writers had mixed results with some retreating and some advancing amid rising claims costs. We expect the hard commercial market will persist. Reinsurers, too, saw difficult results due to an active CAT season in 2020. It’s notable that in Ontario, brokers held the line on market share versus agency/direct writers when compared to 2019. This is a testament to the value brokers bring their clients in times of distress.”
Covid-19 may have increased consumers’ price sensitivity, but value remains a primary motivator to shop (or not shop) their insurance. Congratulations to Ontario Brokers who weren’t distracted by the storm and retained focus on service, convenience and availability—numbers have proved your efforts worthwhile.