Briefing Note: Quebec

Quebec brokers are facing a hard commercial market, says Eric Manseau, executive director of RCCAQ, an association representing brokers in Quebec.

“Premium increases are a major issue for us in commercial. On average, I would say [rate increases of] between 15% and 20%. And in some cases, it can be 60%, even 80%, depending on the sector and region. So it’s a tough market.”

Since 2018, trucking businesses have been hit hard by rate hikes, “And then a lot of other sectors in 2019. [Especially] in our region apartment [buildings] that don’t have a sprinkler system, whether you’re in a suburb or in the woods.”

Premium increases are being driven by economic regulation, natural disasters, and insurer profitability challenges, he says. “Sometimes you need to have not one or two carriers, but six or seven carriers to get coverage for a client.”

Manseau doesn’t anticipate the situation will get any better over the next 12 months. “It’s not over yet. We have a correction. And even [during] COVID-19, carriers continue to ask for increased payments. Profitability is the main driver I think, and capitalization. If you don’t have the capital to meet needs, you have to [reduce] capacity.”

He says the province won’t know the true toll of COVID-19 on businesses for several months.

In the meantime, brokers face another threat in Quebec — direct writers. Brokers only have “around 35% of market share in personal lines, and commercial around 53%.”

All in all, the state of affairs in Quebec is putting a serious strain on brokers. “You have to work more to be sure your client will be covered. But they’re motivated. We don’t want to see businesses not able to pay premium, because if you don’t pay premium, you’re not going to be in business anymore.”