INTRODUCTION TO RISK November 2015

Transcription

1 INTRODUCTION TO RISK November 2015

2 Wendy Fletcher National Property & Casualty Leader, Small Medium Enterprises Teresa Lahey Underwriting Consultant, Small Medium Enterprises

3 AGENDA Importance of a SME Introduction to Insurance Risk Management Emerging Risk Do SME s need insurance? Where to go for insurance November 2015

4 Importance of an SME SME Small Medium Enterprise 99.9% of the 1.1 million businesses in Canada are SME s. SME s are defined in the following ways: Micro (1 4 employees) Small (5 99 employees) Medium ( employees) It s estimated that, micro and small businesses employ over 7.7 million individuals in Canada. Micro & Small represents 98.2% of businesses. *All data provided by Statistics Canada 4

5 Importance of an SME Making a BIGImpact on the Insurance Industry! SME Businesses are targeted by most insurers Companies compete to win the business of a SME customer Trying to find ways to caterto your fast pace environment Focusing on building good customer relationships and experiences Providing products that serve more benefit Providing perksto make you feel like a value customer A buyers market Did you know In any given year a study showed that only 6% of SME operations will switch there insurance provider. 5

6 Insurance What do we have to offer? Protection Removing the thought of what if Spending your time focusing on growth not rebuilding Financial Security Indemnity The principle of indemnity operates to place the Insured in the same financial position after a loss as that enjoyed immediately before the loss. 6

7 Insurance How it works $1,500 Policy Premium X 50 years = $75,000 As a result of a fire I have lost everything I have worked so hard for Premium of many to pay for the losses of a few $500,000 Value 7

8 Risk Management Insurerscan help you to identify the risks you face in running your business, and will provide financial protection against unexpected setbacks. Managing your risks well can make it easier to obtain insurance, but it also makes good business sense. Risk management involves an assessment of the risks your business faces, followed by the development of ways to either eliminate or control the risks to prevent setbacks from happening. 8

9 Risk Management 1. Identify 4. Implement & Monitor Risk Management 2. Evaluate 3. Risk Control A hazard is something (e.g. an object or activity) that can cause adverse effects. A risk is the likelihood that a hazard will actually cause its adverse effects, together with a measure of the effect. 9

10 Emerging Risk Emerging Risk Not traditional losses for example a fire or theft Developing Risks in today s society PotentialFuture Risks Extreme weather events Driverless Cars 10

11 Emerging Risk Cyber Crime data breach in which the firm's customers or employees personal information is exposed or stolen. Not widely accepted as a form of coverage by the industry A breach may occur by - A stolen laptop or USB key - Computer virus - A computer hacker - Hard copy of sensitive No matter the size of your operation you may still be a target! 11

12 Do SMEs Need Insurance? A number of SME s don t hold any business insurance. This might be because: I am too busy and just don t know where to start Mainly felt it wasn t necessary for their business; or were aware of the need but felt too busy to get around to it or were unsure where to start; or if they worked from home they thought it was covered by their household insurance. 12

13 Do SMEs Need Insurance? Insurance is a legal requirement for the following: Workers Compensation (WSIB) If you are an employer of a certain type of operation eg. Construction you are legally obliged to have WSIB to cover the cost of compensating employees who are injured orbecome ill through work. Commercial Auto If your business uses vehicles you are legally obliged to havecommercial auto insurance 13

14 Do SMEs Need Insurance? Other types of business insurance are optional: Commercial Property Commercial property insurance covers the cost of repairing or rebuilding your business premises, or replacing your stock or equipment Crime Covers you for theft to your business or your customers by an employee Business Interruption Business interruption insurance can protect your business from unforeseen circumstances that may result in loss of income 14

15 Do SMEs Need Insurance? Liability Insurance Commercial General Liability in Canada can provide protection against a number of items. Premises Liability Operational Liability 15

16 Do SMEs Need Insurance? Products Liability Completed Operations Professional Liability (Errors & Omissions) 16

17 Where to go for Insurance Brokersgo between insurance companies and their customers (individuals or businesses), advising people on the most suitable product for their needs, getting the best deal for them and arranging their cover. Underwritersassess risks and decide whether to accept applications for insurance cover, and on what terms with the aim of minimising losses for their company. 17

18 Where to go for Insurance Business insurance is usually sold as a package, combining a number of different policies under one premium. The types of policies you need, and the cost of your premium, will be based on a number of factors including: the nature of your business Your annual revenue the number of people you employ your insurance claims history 18

19 Questions? 19