How Lloyd's of London Affects Insurance Availability and Premiums in Canada

CapriCMW's Chief Broking Officer, David Edgar, explains the impact of Lloyd's of London on the insurance marketplace for businesses in Canada.
Categories: Business Insurance
Jun 2nd, 2022 | By: CapriCMW

What is Lloyd's of London?

“Although Lloyd’s obtains a license to operate as an insurance company in countries across the globe, Lloyd’s is actually a market, not an insurance company,” explains David Edgar, CapriCMW's Chief Broking Officer. “A lot of companies use Lloyd’s to access or distribute insurance in countries where they don’t have a very big presence or don’t have their own license. Lloyd’s license is used like a franchise and Lloyd’s will ensure the money is there to pay out insurance claims and that everyone is behaving properly.”

The Importance of Lloyd's in Canada

Lloyd’s has been providing insurance and reinsurance in Canada for almost 200 years – in particular, solutions for larger complex, hard-to-place risks as well as specialty insurance products. “The world – and Canada – depends on Lloyd’s for its specialist way of thinking,” says David.

Globally, Lloyd’s writes £35 billion in premiums, and CA$4 billion of that is written in Canada. That means Lloyd's is responsible for insuring approximately one third of complex risks in Canada.

In recent years, Lloyd’s financial performance has suffered, which has contributed to the hard market conditions that the Canadian insurance industry continues to face - increased underwriting scrutiny, new coverage limitations and higher deductibles. Under a hard market, you may find it harder to renew your policy, or, depending on your location or type of business, getting any kind of coverage may be difficult. “If Lloyd’s is writing a third of our complex business and they are uncompetitive, that has a direct impact on our entire market,” Edgar explains.

The Impact on Your Business

We may be seeing an upturn. Lloyd’s, alongside most insurance companies in Canada, posted positive financial results in 2021. Offerings have become more competitive, and relief appears to be in sight for insurance buyers.

There are, however, a few exceptions. Categories of insurance unlikely to see market softening include cyber insurance and management liability.  Businesses severely affected by the pandemic such as those in hospitality and long term care may still be up against a hard market. Additionally, severe weather and natural disasters such as floods, earthquakes and wildfires continue to drive up property insurance premiums.

The good news: as insurance capacity returns, the insurance limits that were unavailable for a period of time will be offered once again and harder, complex risks will become easier to write, David adds. Although inflation can still drive up premiums, increasing capacity in the marketplace stimulates competition – companies seeking to grow will be delivering more attractive packages for insurance customers, making it easier for businesses to get the coverage they need.

 This content is powered by the Canadian Broker Network.

CBN_logo-250.png

CapriCMW is a proud member of the Canadian Broker Network (CBN), an alliance of Canada’s leading independent insurance brokerages representing over 50 offices, 1,500 professionals and over $1 billion in premiums. Learn more at canadianbrokernetwork.com.

Recent Blog Posts

Business Insurance / Manufacturing, wood product, wood processing
Actual Cash Value or Replacement Cost: 9 Key Considerations

Insuring property on an actual cash value (ACV) basis could lead a manufacturing business to…

Mar 24th, 2023 | By: Will Downing
Personal Insurance / data breach, cybersecurity, cybercrime
How Safe is Your Password?

Cybercrime is more rampant than ever before - attacks are growing in sophistication year by year…

Mar 6th, 2023 | By: CapriCMW
Employee Benefits / pay transparency, pay equity
BC Government Introduces New Pay Transparency Legislation

If passed, the new legislation will require employers meeting a certain employee size threshold to…

Feb 24th, 2023 | By: CapriCMW
Search the Blog
photo-10.jpg

Confidence and Freedom

At CapriCMW, we provide personalized insurance and custom risk solutions to give you the confidence and freedom to focus on what matters to you. Talk to an Advisor or get a quote today.

Get a Quote    Or call 1-800-670-1877

Can’t find what you are looking for? Ask us!