The Co-operators’ Kathy Bardswick on priorities for 2012
Narrator: With growing weather-related disasters and claims, an unstable global economy and a demographic shift, the Canadian insurance industry has much to focus on. ILSTV asked Kathy Bardswick, President and CEO of The Co-operators Group, what her focus is for 2012.
Kathy Bardswick: From a P&C standpoint, we have said now for a number of years – we said it back in the 70s when we got into a tough time, we said it in the 80s in a tough time, we said it in the 90s when we got into a tough time: we have to focus on our core underwriting results. If your core underwriting is not performing the way it needs to be, then the rest of it is moot. No longer being able to depend on the investment climates and the investment returns that the industry has historically, up until perhaps the late 70s into the 80s, we just never really thought about underwriting profit. So that core underwriting performance has to be there. If that’s correct, and I believe it is, if that’s your starting point, how do you ensure strong, sustainable core underwriting performance? I think that’s when you have to turn your attention to what’s happening around us when it comes to climate. That’s why I think climate is so critical – more critical than all of the time and attention we’re giving to the economic climate, the investment climate, what’s happening in Europe. That’s all important stuff, no question it’s important stuff, but when I turn to my business, my core business, the most important issue for me is underwriting performance and the most influential factor there is, at this stage from a property and casualty standpoint, particularly property, is what’s happening in our communities with weather. It’s an obvious in my mind that that’s got to be front and centre for us.
Narrator: The Insurance Bureau of Canada estimates that insurance companies pay more in claims for flood damages than for fire and theft combined. But high water loss claims aren’t the only concern for The Co-operators. Kathy points to the beginning of 2012 as an example.
Kathy Bardswick: Take a look at what’s already happened this year to start the year off out in Alberta with wind. That wind corridor that hit with 130 kilometre an hour winds that were creating problems including fire losses – total loss fires, let alone the wind damage itself. It’s water, it’s wind, it’s fire. It’s the gamut.
Narrator: Amid mounting weather losses and an unpredictable climate, it could be easy to take a pessimistic look at the world. But from an insurance perspective, there may be some upsides to the negativity.
Kathy Bardswick: To flip it though – and I’ve said this so often internally to our people – you can look at this really negatively and all these red flags and doom and gloom that’s around us, but on the other hand, as an insurance industry, isn’t this a phenomenal opportunity for us to really entrench in the minds of the consumer and governments and all of our stakeholders how critically important the insurance industry is. Here’s an opportunity to continue to shine in terms of how critical a role we play and how we can bring solutions and help with the positive image that I would love to see us own more so than we do today in the minds of the consumer. How important it is that you have a strong insurance backbone in the economy and be able to help work through these issues. I see it as an opportunity. I say that internally: let’s not get too morose about this. Let’s make sure we keep in the forefront: this is why we exist. If we can’t solve these problems in concert with those who care and the communities that we’re serving, then why do we exist?
You may also be interested in: The Co-operators’ Kathy Bardswick on the role of co-operatives
