b'INSURANCEO ver the past year, owners of construction companiesOn the surface, the end buyer seemed to benefit. Buying have likely seen their insurance rates rise, premiumsinsurance was cheap and easy. Competition meant your rates and deductibles increase, their coverage reduced andlikely did not go up even with the rate of inflation. Traditionally, the overall process of renewing insurance programsinsurers made money from both their investments and under-become more difficult and time-consuming. writing. As safe investments returned at lower and lower rates, The insurance industry is currently in the portion of theunderwriting at a profit became more critical. As a consumer, insurance market cycle called a hard market. Your insurancewhy would you care if your insurance did not increase at least broker or agent has likely explained thewith the rate of inflation? Insurance cycleasinsurerslosinglotsofmoneycompaniesarebigmulti-national overthepastnumberofyearsandinstitutions, they know what they are needing to charge more for the risks thatAs a consumer, whydoing.Ordothey?Inreality,once they assume from the buying public. Thisunderwriting profit left the industry, isasimplisticexplanationofamuchtheindustryhadtocorrectthe broader issue for the industry. would you care ifmarket cycle and start charging more Afterthefinancialcrisisin2008,itfor insurance.wassafetoassumethatthereshouldyour insurance didof It is safe to suggest that readers have been a correction in the insurance this article have raised the cost of industryastheworldslargestinsur- their services over the past decade by ance company, and several other firms,not increase at leastat least the rate of inflation. Some of would have gone bankrupt without a U.S.our clients have said, rather specifi-government bailoutthe exact oppositewith the rate ofcally, that if they had not raised their occurred.Asinterestratesdeclinedtopricing over time they would be out historiclowsaroundtheworld,capitalofbusiness.Costofconducting floodedintotheinsurancemarket,inflation? business naturally goes up over time, looking for a safe investment that wouldwhich means that if a company wants returnatareasonablerate.Theinsur- toenjoythesameprofitmarginor ance industry became flush with capital,an improvement year over year, the looking to be deployed into the market- cost of services rendered or capital place. This caused historic competitiondeployed would also increase to the for business amongst insurance compa- end user or purchaser.nies. Rates went down, multiple insurersIn the insurance industry, the exact wouldbidonrisksunder- opposite has occurred, where cutting each other, coverageprofitbecame broadenedandtraditionaldependent,in underwriting of risk osten- part,oninvest-sibly disappeared. mentincomerather Bothwell-Accurate has enjoyed 90 successful years in business and now employs over 500 professionals to meet all your waterproofing, architectural metal and roofing project requirements. With a management team that represents some ofthemostexperiencedprofessionalsintheindustry,andmorethan60,000 completedprojects,weareoneofCanadasoldestandmostexperienced construction firms. We proudly service our growing roster of industrial, commercial and institutional clients proving innovative, superior installations in the lower mainland and interior of British Columbia and across Ontario.604-282-7960bcestimating@bothwell-accurate.combothwell-accurate.comwww.rcabc.org l17'