2020 brought drastic change to our world and, in turn, drastic change to the insurance industry.

The COVID-19 pandemic is just one factor that has attributed to rising insurance costs across the country. Climate change, technology and the pandemic have all played a role in the increasing probability of disaster which increases insurance rates. 2020 has shown us that disaster appears to be endless. 

Although very complex, we will try to put it simply. Insurance rates are determined based upon the probability of an accident happening – a flood, for example. If the insurance industry is unable to accurately predict the probability of a flood or if floods are increasing in frequency, rates rise.

COVID-19 Pandemic

The insurance industry tries to prepare for disasters by accurately assessing and modeling the risks of things like hurricanes and floods, but pandemics have no time or geographical restraints. The timeframe and magnitude of highly contagious pandemics are virtually unpredictable which puts strain on the industry. 

The COVID-19 pandemic has exposed the vulnerability of businesses everywhere, and while the market for pandemic insurance is clearly needed, the insurance industry is also going through a learning curve.

Early on in the COVID-19 pandemic, some businesses realized that general commercial insurance policies and business interruption insurance policies do not cover against business interruption or supply chain issues due to pandemics.

Canadianunderwriter.ca asks a question that is likely on a lot of business owner’s minds: “Will COVID-19 cause Canada’s property and casualty insurance industry to start introducing pandemic business interruption coverage?” The answer is “don’t count on it.”

The size and scale of each pandemic is impossible to gauge. This means it is impossible to create a blanket coverage for businesses who are looking for coverage to protect them in the future.

Although this may sound grim, you are not alone and as your Insurance Broker, we are there for you.


Organizations that have been able to, have adopted technologies that have allowed them to keep their businesses running while social distancing. Many companies have transitioned to cloud servers and applications that allow their employees to work from home.

Online applications are replacing face-to-face meetings, online shopping has risen exponentially, concerts are being streamed via Facebook and exercise classes are being held virtually.

To put it simply, the world has shifted tremendously from in-person to virtual and cyber security has never been more important. The pandemic has opened the opportunity for hackers to compromise your business security.  According to insurancebusinessmag.com: “Throughout the pandemic, there has been an uptick in phishing scams – a fraudulent email intended to have the victim either wire funds directly or open a URL/attachment that installs malicious software on the victim’s computer.”

There are solutions to protect you, your business and your employees against cyber crimes. You can read more about cyber security here.

Climate Change

Extreme weather events like fires, floods and tornados are on the rise in Canada and around the world. Organizations are under pressure to manage these risks and the potential financial fallout of such a catastrophe.

Acute weather events like the 2013 Calgary flooding and the 2016 Fort McMurray wildfires cannot be stopped. In fact, as the climate changes, there’s a greater possibility of severe events coming about with more frequency.

The big question is, who is responsible for the financial burden of these weather events? Currently, there is not a clear answer. Insurancebusinessmag.com suggests that perhaps there is some way that the insurance industry could work with the government to come up with some creative ways of covering off the most egregious and acute events. You can read the full article on insurancebusinessmag.com here.

Your insurance rates are determined based upon the likelihood of a claim being filed. If the insurance industry is unable to accurately predict claims, or pandemics, floods and cyber attacks, for example, insurance rates will and have increased.

In this article, we have just skimmed the surface of changes the insurance industry is going through. We hope that we have given you the insight you need to start thinking about how these world events have impacted your insurance coverages. You might begin to understand why your insurance rates have been increasing in the previous months. As your Insurance Broker, we will continue advocating on your behalf. We will continue to be the industry expert and provide you with the information you need.

The world has changed – this is not something that you don’t already know. We want to make sure that you, as a buyer of insurance, knows what this means for you and your pocket book. Your insurance policies are unique based upon your unique needs. There is not a one-size-fits-all approach but these factors are driving insurance costs up.