Brokers and insurers both said natcats and climate change will be the second biggest issue heading into 2023, according to a Canadian Underwriter survey last month. But one group is more vocal about climate change than the other, one CEO observed.
“Climate change and impact isn’t something that I personally hear a lot about from brokers. I think that’s going to change in the future,” Jason Storah, CEO of Aviva Canada told Canadian Underwriter.
“I think it’s going to be one of those topics that brokers are demanding more information from their insurers on and having more dialogue with their customers about.”
It’s worth noting brokers will be on the front lines of communicating with clients as natcats increase in frequency and severity from climate change, Storah observed.
“Brokers have great human connections with their customers,” he said. “They’re the frontline workers in terms of educating, contacting, ensuring customers have the right coverages. [They] understand the coverage differences between insurance companies.
“Insurers have a whole range of means of communicating to brokers and to customers. But really, it’s for brokers to then disseminate and simplify a lot of that language for customers to help them understand what it means for them.”
This is especially pressing as many consumers may be underinsured for their risks, particularly amid a recession which cuts into consumers’ personal income, Storah noted.
“One of the things I worry about is underinsurance, and that’s not just climate-related,” he said. “We know that in recessions, when people are cutting back on their expenses and their budgets, some people — and some businesses — look at insurance as a line item and they reduce it.
“I think that’s really problematic, and we see the consequences of that, not just in climate-related or weather-related claims, but in any kind of claim if people are underinsured.”
Storah made his comments when asked what products insurers wish their brokers were selling more of to mitigate the impact of climate-related perils.
“I don’t think it’s about selling more of any particular product. It really is just about making sure that brokers have that dialogue with their customers to ensure that they are getting the right level of coverage that’s appropriate for their needs.”
And this communication should happen as much during the renewal process as it does during client onboarding.
“The two times for insurance companies and brokers to have this dialogue with their customers is when they’re taking the new business information, or they’re going through the renewal information,” said Storah, “[and] if we’re all really honest with ourselves about renewal, sometimes the renewal can be a light touch.
“I think it’s really important to not just let that renewal pass by without having a meaningful touchpoint.”
Feature image by iStock.com/CHUYN