Leaders across our industry have spent years talking about the future and what’s coming. It now feels like we’re living it.
Climate disasters are quickly growing in intensity and frequency. What we once described as a 100-year storm is clearly not the case anymore. Severe weather caused roughly $8 billion in insured damage in 2024, making it Canada’s costliest year on record. The reality is, it likely won’t be long before that record’s broken.
Rates will rise in the coming years to offset these costs. But as climate change continues to accelerate, accurately pricing for this will be increasingly challenging. Personal and commercial products will need to adapt, and we’re going to see more high-risk areas emerge that are simply deemed uninsurable.
On the business operations side, more brokerages will soon recognize artificial intelligence (AI) is crucial to their success; this shift is going to happen faster than many may be prepared for. We’re going to see large investments in this space – from both distributors and carriers – over the coming year. Forward-thinking companies are already positioning their systems, software and data to take advantage of the opportunities that AI presents.
Competition is heating up and brokerages are getting bigger and better. More large-scale companies with private equity backing are being run by very smart and experienced businesspeople. Small-town, brick-and-mortar brokerages have never had to compete against more sophisticated operators.
As AI and other technologies transform our industry, your size will impact how much you can invest in these changes. For smaller brokerages, it’s going to get harder to keep up, and missteps will have the potential to put you significantly behind.
Scale and access to capital will determine how efficiently brokerages can adapt to what’s happening now and everything that’s around the corner. You may have a top-notch team, but if you’re subscale, one mistake could put you on the sidelines for much of 2025. If your competitors can afford to take 100 swings for every one of yours, they don’t need to be more skilled than you – they’re simply going to get more opportunities to win, and that’s ultimately going to work in their favour.
