Canadian Underwriter

Category: Ask the Experts

Will AI disrupt our industry?

Sarah Suschkov,
Chief Underwriting Officer (CUO)

Three years after its launch, ChatGPT is a household name. Artificial Intelligence (AI) is as common a topic at the dinner table as it is in the boardroom, and we are all figuring out how to use this revolutionary technology.

If you’re “AI-curious” like me, you’re probably experimenting with ChatGPT or its rivals to see firsthand where AI excels and where it falls short. Large language models like ChatGPT aren’t designed for accuracy; they are built for creation. Naturally, they excel at helping to reword emails or suggest travel itineraries but often get it wrong when asked for precision or nuance (warning: they confidently provide incorrect information!).

At Trinity, we talk about using them to brainstorm by asking questions on unusual risks or to improve marketing documents. Many companies are looking at AI-driven underwriting solutions for workflow automation and increased efficiency. But this raises the questions: what is AI’s true role in underwriting, and what implications does that have for the industry as a whole?

When the internet emerged, with search engines and Wikipedia, it democratized access to information. Anyone can find answers (almost) instantly, so differentiation no longer comes from who knows more, but from who does more with that information. AI is similar in that it changes differentiators for companies and individuals alike, and levels the playing field again.

Now, anyone can write a university-level essay or ask what niches generate the best ROI in the next 12 months. Anyone can use it to collaborate on a marketing strategy or email wording with just a few prompts. It is how we use it that differentiates us in the end.

Let’s pretend for a minute that insurers automate a substantial part of the underwriting pathway, and that the AI models are reasonably accurate. Every model has access to similar information and therefore produces similar underwriting results, so products commoditize quickly. Speed and price become table stakes. At first, loss ratios improve but then level off as margins shrink due to competition in the market. SME client behaviour shifts to direct buying. Brokers find it harder to add value. AI cannot build goodwill, so insurance could become another click-to-buy commodity, extremely transactional.

Before we start building bunkers, consider what makes this industry unique. Insurance is, and always has been, a relationship business, and AI can’t do that. AI can’t read the room, can’t recognize when a client’s hesitation hides a deeper concern, or sense what tones signal opportunity.

AI enhances underwriting and pushes us toward smarter decision-making. But it doesn’t replace judgment, intuition, or the uniquely human ability to connect.

So, will AI replace us all? No. But if used properly, it changes how we underwrite and redefines what makes us valuable ultimately bringing differentiation back to what this industry is all about – building trust in each other.

November 10, 2025
How can brokers help combat auto insurance fraud?
Andrew Hobson, Manager, Special Investigations Unit, Echelon Insurance

Auto insurance fraud is a persistent and costly issue that affects everyone, including insurers, policyholders, and the broader industry. Fraudulent claims raise premiums across the board, strain insurer and law enforcement resources, and can erode customer confidence. In Canada, fraud is estimated to cost policyholders $1 billion annually, according to the Insurance Bureau of Canada. While the number is staggering, they also highlight an opportunity for brokers to provide crucial support in combatting fraud.

Brokers are often the first point of contact for customers, which uniquely positions them to detect suspicious activity early, educate policyholders, and help prevent fraud before it escalates.

What is insurance fraud?

Insurance fraud involves any deliberate deception for financial or personal gain. It can include lying on an application, exaggerating damages, or even staging entire collisions. Fraud may be committed by individuals or as part of large-scale, organized crime rings.

Types of insurance fraud

Fraud generally falls into two categories:

Opportunistic fraud: Often spontaneous, such as claiming pre-existing vehicle damage after a real accident or inflating repair costs.

Premeditated fraud: Planned and may involve multiple parties staging collisions or creating fake documentation.

Regardless of type, all fraud increases costs and undermines public trust.

Common auto insurance fraud tactics

Today’s fraudsters use a range of tactics ranging in complexity, including, but not limited to:

Staged collisions: carefully choreographed crashes involving complicit parties.

Rate evasion: Misrepresenting details (e.g., where a car is kept) when obtaining insurance quotes to secure lower premiums.

Identity theft: Using stolen names or driver’s licenses to initiate or cash in on policies.

Vehicle theft and VIN manipulation

Vehicle-related fraud continues to grow in complexity, with organized crime groups using increasingly sophisticated tactics to profit from stolen vehicles. One common method is VIN cloning, where a stolen vehicle is assigned the VIN of a similar, legally registered car to mask its identity. Another is re-VINing, which involves swapping the VIN with one from a salvaged or junked vehicle. In some cases, fraudsters go a step further by creating entirely fictitious VINs that don’t correspond to any real vehicle. These vehicles may be sold to unsuspecting buyers, used to file false insurance claims, or exported overseas. Brokers who understand these tactics are better positioned to detect red flags early and help protect their customers.

What actions can brokers take to mitigate auto insurance fraud?

Brokers play a key role in the fight against auto insurance fraud, acting as trusted advisors as well as risk spotters. Brokers are often the first to hear about suspicious losses or unusual documentation. By asking the right questions, verifying information, and reporting inconsistencies early, brokers can prevent fraudulent claims from progressing. Equally important is educating customers about what constitutes fraud and its consequences, not only for insurers but for honest drivers who bear the financial burden.

In addition to taking a diligent approach when quoting and supporting customers during the claim submission process, there are several proactive strategies brokers can leverage to prevent auto insurance fraud, including, but not limited to:

Request complete documentation: Photos, bills of sale, registration, and identification.

Verify vehicle information: Use manufacturer tools or recall databases to validate VINs.

Ask follow-up questions: If something feels off, don’t hesitate to dig deeper.

Stay informed: Be aware of new scams and trends in your region.

Collaborate: Work closely with underwriters, loss prevention teams, SIUs, and industry groups like the Équité Association.

Fraud prevention is a shared responsibility. By staying alert, asking the right questions, and leveraging available resources, brokers can play a key role in protecting both their customers and the industry as a whole.

Copyright © 2025 Echelon Insurance. All rights reserved. This article is provided by Echelon Insurance (“we”) for general information purposes to help brokers and their customers understand auto insurance fraud classifications and the important role brokers play in insurance fraud prevention. While we endeavour to be accurate and up to date, this information is provided “as is” and we cannot guarantee it is complete or that implementing the recommended loss prevention measures will have the desired results. 

® Registered trademark of Echelon Insurance.
November 3, 2025
What steps help commercial auto insurers spot and stop driver fraud?
Darrell Parsons,
CEO

Commercial auto fraud often conjures images of staged accidents or organized theft rings. But the more routine problem that’s costing insurers millions sits at the driver level — falsified abstracts, undisclosed convictions, expired endorsements, and ineligible drivers who slip through weak driver screening processes.

“These gaps can quietly erode underwriting integrity, drive up exposure, or trigger costly denied claims,” explains Darrell Parsons, CEO of ISB Global Services, a leading insurtech provider in Canada. “That’s why fraud at the driver level is one of the most overlooked, yet preventable, risks facing commercial auto insurers today.”

The problem is only growing. Claim fraud investigations surged 76% in 2024, with auto-related cases making up two-thirds.

“Fraud prevention has to start before the loss ever happens,” Parsons says. “With continuous, real-time visibility into driver data, commercial auto insurers can spot high-risk drivers early, price risks more accurately, and make proactive decisions that protect both their portfolios and their clients.”

The true cost of fraud

Fraudulent or inaccurate driver information at binding leads to mispriced risks, inflated losses, and reputational damage. And when bad data slips through, insurers are left paying inflated claims and legal fees, and carrying compliance risk.

“The problem is compounded by how driver data is still collected and monitored,” says Michael Thompson, Chief Commercial Officer at ISB. “Manual processing slows turnaround and leaves room for errors and inconsistencies. Relying on drivers to submit their own abstracts invites tampering. And if checks are done only at renewal, you’ll miss red flags that can surface midterm, like licence suspensions or new convictions.”

That leaves underwriters making decisions on flawed information, he adds. “By the time the truth comes out, it’s often in the middle of a claim, when it’s already too late. Every fraudulent record that makes it into a policy chips away at underwriting integrity.”

That’s why stronger, standardized driver vetting practices are so critical, Parsons emphasizes. “Best practices supported by real-time driver data and continuous screening give commercial auto insurers a fighting chance to keep bad data, and bad actors, out of the system, cut fraud losses, and protect both their book and their clients,” he says.

Best practices to prevent driver fraud

ISB suggests commercial auto insurers can strengthen their defences against driver-level fraud by embedding these best practices into their underwriting workflows:

Verify at the source: Always pull abstracts from ministry feeds, never from driver-submitted documents that can be tampered with.

Widen the lens: Screen official sources beyond the current jurisdiction, including where a driver has lived or worked. For example, commercial fleets with cross-border exposure — for example, nuclear verdicts — require broad checks across multiple databases both in Canada and south of the border.

Look deeper than the abstract: Pair real-time ministry-sourced abstracts with criminal background checks and even social media screening. These could reveal risks like fraud, theft, improper behaviour, or even organized crime involvement in, for example, cargo theft, that a clean abstract won’t.

Adopt a regular screening cadence: Risks like suspensions and convictions can happen any time. Continuous screening helps catch them before they turn into claims.

Automate for consistency: In commercial auto, complex underwriting rules are vulnerable to bias and human error. Automated adjudication applies the same thresholds every time, producing consistent, defensible results.

Build compliance into the process: Time-stamped, traceable records strengthen audit-readiness and claims defensibility.

Leverage scale: Advanced driver screening tools like Red Flag Alerts surface behavioural patterns across thousands of drivers in minutes, freeing up underwriters to focus on exceptions — not paperwork.

The ROI of prevention

ISB’s Red Flag Alerts platform is designed to close the gaps that allow driver fraud to slip through. The system pulls driver record abstracts directly from transportation ministries, RCMP, and police databases in Canada, and 3,600 counties across the U.S., creating a trusted, broad data source that can’t be manipulated.

The tool then continuously screens and automatically configures each record to an insurer’s compliance thresholds, delivering real-time pass/alert driver scorecards that highlight red flags on suspended licences, improper classifications, missing endorsements, and both major and minor convictions. Every check is time-stamped, traceable, and audit-ready, so insurers have a defensible record to indicate compliance rules were followed.

By harnessing automation and AI, underwriters can move beyond manual inefficiencies to consistent, fraud-resistant workflows.

“It’s not just about gaining efficiency, speed, and scale. It’s about protecting the integrity of decisions and shutting down fraud before it ever makes its way into a policy,” says Parsons.

See how Red Flag Alerts can help your team today.
October 27, 2025
How can brokers help fleet operators build stronger fleet safety programs?
Olivier Bernier,
Director, Quebec Long-Haul Trucking and Commercial Automobile,
Echelon Insurance

Fleet safety is no longer just a regulatory requirement, it’s a business imperative. As commercial drivers face increasingly complex challenges while on the road, operators are under increasing pressure to improve safety performance across their fleets. A robust safety program can help prevent collisions and protect employees, contributing to an improved overall safety score, which, in turn, can lead to lower insurance premiums and general cost savings.

For brokers, supporting fleet operators in building or strengthening their fleet safety efforts is an opportunity to provide additional value to their customers. Understanding the key elements of an effective safety program, and how tools like telematics can support it, can help brokers reinforce their position as trusted partners in risk management.

What factors contribute to an effective fleet safety program?

A comprehensive fleet safety program goes beyond having a written policy. It should be fully integrated into daily operations and include the following components:

Clear safety policies outlining expectations around speeding, distracted driving, seatbelt use, and vehicle maintenance

Thorough driver screening and onboarding, including abstract checks, defensive driving training, and structured orientations

Driver selection and progressive route planning, assigning newer or junior drivers to shorter, local routes until they are ready and fully trained to handle longer-haul or higher-risk routes

Ongoing training and coaching to reinforce safe habits and correct unsafe behaviours over time

Incident reviews to analyze collisions and near misses, identify root causes, and prevent recurrence

These programs should be reviewed, updated, and enforced consistently across an organization. Fleets that invest in proper driver development, from onboarding through coaching, reduce risk exposure and build a safer, more resilient operation.

Leveraging telematics to reinforce safety

Telematics is an important component of any modern fleet safety program. These systems capture real-time and historical data on vehicle and driver behaviour, such as speeding, harsh braking, rapid acceleration, and idling. This data helps fleet managers monitor risk, identify trends, and coach drivers more effectively.

However, the benefits of telematics go beyond coaching. Many systems offer driver scorecards, in-cab alerts, and automated safety reports that make it easier to track performance and intervene early. In the event of an incident, telematics data provides clear, time-stamped evidence that can support claims handling and investigations.

Additionally, telematics can support broader operational efficiencies. Fleets can optimize fuel consumption, reduce unnecessary idling, and plan routes more efficiently, all of which contribute to cost savings. Fewer accidents also mean fewer deductible expenses, less downtime, and lower repair and replacement costs.

For businesses already using telematics for route planning or vehicle maintenance, integrating safety metrics into their daily operations is the next logical step. For brokers, encouraging operators to see telematics as both a safety and cost management tool, not just a logistical one, can help them strengthen safety performance and unlock additional insurance value.

Some insurers offer telematics-based programs, pricing incentives, or loss control support for clients who share this data. Brokers who understand these offerings can assist their customers in making more informed decisions about their coverage.

How can brokers support fleet operators?

Brokers are uniquely positioned to support customers in strengthening their safety programs. They don’t need to be safety consultants, but they can play an important role in initiating the conversation and connecting customers to resources.

This could include, but is not limited to:

Reviewing whether a customer has an up-to-date fleet safety policy

Recommending structured onboarding and driver coaching practices

Sharing risk control materials or case studies

Encouraging the use of telematics for benefits beyond logistics

Brokers can also act as liaisons between customers and insurers’ loss prevention teams, helping customers demonstrate their commitment to safety during underwriting discussions.

Fleets that prioritize safety often see the impact across their entire operation, not just in fewer claims but in improved fuel efficiency, reduced maintenance costs, and stronger bottom-line performance. Brokers who help customers build these programs position themselves as partners in the long-term success of fleet operators.

Copyright © 2025 Echelon Insurance. All rights reserved. This guide is provided by Echelon Insurance (“we”) for general information purposes to help Brokers and their commercial customers understand how they may enhance their fleet safety program and loss prevention. While we endeavour to be accurate and up to date, this information is provided “as is” and we cannot guarantee it is complete or that implementing the recommended loss prevention measures will have the desired results.

® Registered trademark of Echelon Insurance.
October 20, 2025
How does advanced driver screening help commercial auto insurers curb cargo theft?

Michael Thompson, CCO, ISB Global Services

Organized cargo theft from commercial trucks is surging across North America. It’s an underestimated yet preventable risk now hitting insurers as hard as the commercial fleets they cover.

In Q1, 2024 alone, reported cargo theft jumped 46% year over year, with losses in stolen goods reaching nearly $214 million. Thieves increasingly target high-value loads such as copper (up 61% in the first half of 2025), electronics, and pharmaceuticals.

At the same time, Canada’s insurers are seeing commercial auto claims grow faster than the number of vehicles on the road, with commercial fleets lacking rigorous driver vetting practices especially exposed, according to the Insurance Bureau of Canada.

“The implications for commercial auto insurers are hard to ignore,” says Darrell Parsons, CEO of ISB Global Services, a leading insurtech provider in Canada. “Commercial fleets with weaker driver screening practices are more exposed to theft, liability, and reputational harm. And when insider threats are part of the equation, as they are in most theft cases, driver eligibility becomes a frontline measure of risk adherence.”

As theft risks escalate and underwriting tightens, sophisticated driver screening technology that instantly flags high-risk drivers, like ISB’s Red Flag Alerts, is giving underwriters the ability to prevent costly losses before a policy is written or renewed, adds Parsons.

Proactive prevention

“Over 80% of cargo theft cases have insider help from drivers,” says Michael Thompson, Chief Commercial Officer at ISB. “It’s one of the most underestimated risks in commercial auto — and one of the most preventable,” he adds.

Too often, insurers rely on manual processes or driver-submitted abstracts that can be forged, leaving them with data that’s incomplete, outdated, and unreliable.

“This weakens underwriting and leaves commercial fleets exposed,” Thompson notes. “When you’re making decisions on bad data, you’re taking on risks you could’ve avoided.”

To stay ahead of risk, underwriters need a complete, current, and trustworthy picture of every driver before coverage is bound.

Advanced platforms like ISB’s Red Flag Alerts automate the collection and analysis of ministry-sourced driver abstracts while layering in comprehensive background checks and instant flags that give underwriters a broader perspective and actionable insights from the start.

“It’s not just about efficiency,” Thompson says. “It’s about screening deeper and continuously, so risks are caught long before a single abstract or renewal check would.”

For example, an abstract might show if a driver has a DUI, but it won’t flag a history of fraud or theft. That’s where criminal background checks and even social media screening matter, he adds. “A driver can look perfect on paper and still pose a serious risk. When you can screen that thoroughly for under $50 through ISB’s platform, the real liability is skipping that level of due diligence,” Thompson says.

“Things can also change midterm. Suspensions and convictions can happen any time. If you screen only at renewal, you’re going to miss them,” he adds. “Continuous, automated driver screening stops bad actors from slipping through the cracks, not just at binding but throughout the policy term.”

Smarter screening at scale

ISB’s Red Flag Alerts platform is designed to process thousands of driver records in minutes, flagging non-compliant, high-risk drivers in real time. With data sourced directly from transportation ministries, RCMP and police in Canada — plus 3,600 counties across the U.S. — results are reliable, broad and tamper-proof.

The raw data is then run through an automated engine against the insurer’s compliance thresholds, immediately surfacing red flags like suspended licences, missing endorsements, improper classifications, and both major and minor convictions. The result is an automated pass/alert driver scorecard giving underwriters faster, more reliable visibility into the drivers that pose risk.

“This flips the workload,” Parsons says. “Instead of drowning in paperwork, underwriters can focus where it counts: keeping ineligible drivers off the road.”

Identity assurance is another key safeguard. “It’s not enough that the abstract looks clean,” Parsons adds. “The wrong driver can still show up to haul a high-value load. Our system also matches government-issued ID to the vetted applicant, ensuring every record ties to the right driver.”

Compliant drivers, safer roads

Stronger driver selection improves risk profiles, reduces theft claims, and ultimately supports more sustainable loss ratios. Continuous screening also builds robust compliance, safer commercial fleets, and stronger defensibility.

“But nobody can solve cargo theft alone,” Parsons notes. “It takes collaboration across insurers, brokers, commercial fleets, and partners. When underwriters make advanced driver vetting a priority, they’re not just protecting their own book, they screen bad actors out of the system before they become a claim. Removing that threat from the start ultimately helps build safer roads for everyone.”

See how Red Flag Alerts can help your team today.

October 14, 2025
Is cyber risk just a big business concern — or a big threat to small firms too?

Rhea Turchinetz,
Head of Canada Underwriting
– Beazley Digital

Cyber threats are no longer just a big business problem. Small and medium-sized enterprises (SMEs) are increasingly in the crosshairs of cyber criminals and the risks are growing more complex by the day.

Vulnerable connections

One of the most significant shifts in the cyber threat landscape is the rise of third-party risk. Many SMEs depend on external IT providers, software vendors, and service partners to keep their operations running smoothly. But when one of those providers is compromised, the consequences can cascade across interconnected supply chains, pulling your business into the fallout. Recent cyber incidents involving school software platforms and auto dealership systems have shown how a single breach can disrupt hundreds of businesses simultaneously, underscoring the urgent need for robust vendor risk management.

Random ransomware

When it comes to ransomware, there’s no clear pattern or method of approach, with attacks becoming more unpredictable, and AI helping to make cyber criminals’ attacks more effective and efficient.

Despite this, many companies still believe they’re ready. Our research shows 80% of executives of SMEs based in Canada feel confident in their cyber preparedness, up from 64% in 2024. But our claims data tells a different story. The most common cause of claims? Phishing attacks, where an employee inadvertently clicks on a malicious link. It’s a simple mistake, but one that can have serious consequences.

Vital support

SMEs often lack the internal resources to manage cyber incidents, making comprehensive risk management support essential. Without expert support, a cyber incident can be devastating, potentially leading to bankruptcy for cash strapped businesses and overwhelmed management teams.

In Canada, 27% of executives are planning to explore insurance options this year that include risk and crisis management services, a clear signal that cyber protection is evolving. These enhanced policies go beyond covering first- and third-party financial losses; they help address the full spectrum of cyber risk. To build a resilient cybersecurity ecosystem, cyber insurance should offer SMEs access to expert incident response teams and cybersecurity specialists. This support helps businesses stay ahead of emerging threats, prepare effectively, and, if an incident occurs, minimise disruption and recover swiftly.

Complex regulatory web

Another challenge SMEs face is navigating regulatory differences across regions. Even SMEs with a relatively local footprint may handle data that is subject to differing international regulatory requirements – as companies serving customers in the US, UK, the EU and Asia will face a patchwork of rules from each jurisdiction. And keeping abreast of the latest regulations can be hard. Making managing international, cross-border cyber security difficult without expert help, and risky, as costly fines are likely for firms not compliant with local regulations.

Preparation is paramount

Strong cybersecurity and risk management can deter many threats, especially since most cyber criminals seek the path of least resistance. But recent headlines have made one thing clear: no business is impenetrable. Companies of all sizes must shift their mindset from reactive panic to proactive preparation. A well-rehearsed business continuity plan, paired with cyber insurance that includes access to incident response teams and cybersecurity experts, is now essential in today’s digital and interconnected world.

October 8, 2025
How can smarter driver data help insurers manage nuclear verdicts?

Darrell Parsons, CEO, ISB Global Services

Commercial auto remains one of the hardest lines to underwrite in Canada. The sector is juggling higher claims severity, tighter compliance standards, cross-border uncertainty , and persistent driver shortages, all while underwriters need to make faster decisions and protect profitability. The growing risk of U.S. nuclear verdicts for Canadian trucks operating stateside raises the stakes even further.

As underwriting grows more selective, the question is how to avoid taking on the wrong risks, especially at the driver level, says Darrell Parsons, CEO of ISB Global Services, a leading insurtech provider in Canada.

“The answer is simple: better data drives better decisions,” he explains.

Sophisticated driver screening tools like ISB’s Red Flag Alerts put automated driver data and real-time risk insights in underwriters’ hands. With a single click, underwriters can identify high-risk drivers early, make faster, more confident decisions, and reduce the chance of costly claims, explains Parsons.

The rising cost of risk
Across Canada, commercial auto claims frequency is rising faster than the number of vehicles on the road, an imbalance that’s flowing directly into pricing pressure. Rate increases for commercial vehicles, including trucks, continue to climb, driven by higher accident rates, limited driver training, cargo complexity, and cross-border exposure.

“U.S. nuclear verdicts, where jury awards exceed US$10 million, are becoming more common in trucking liability cases against Canadian fleets getting into accidents south of the border,” explains Michael Thompson, Chief Commercial Officer at ISB.

“The prospect of eight-figure judgments is reshaping underwriting discipline. Documentation, eligibility, and auditability at the driver level now sit at the centre of risk selection, pricing, and portfolio protection.”

The gaps in driver screening

“On the commercial insurance side, too, many applications are still processed manually, and staffing shortages only compound the problem,” says Thompson. “When people are racing to keep up, errors can creep in, turnaround times get slower, and key details get missed.”

Relying on driver-submitted records is another weak spot for insurers. “We often hear of fleets or brokers asking drivers to provide their own abstracts to save a few dollars,” says Parsons. “With today’s tools, it’s easy to alter those documents. If the source isn’t trusted and current, you’re making decisions on bad information.”

“Screening drivers once a year just doesn’t cut it anymore,” Thompson adds. This leaves underwriters blind to red flags — like a suspended licence or a criminal conviction for speeding — that signal high-risk and non-compliant drivers. “If you only check at renewal, you’ll miss everything that changes during the term, and that increases the chances of coverage disputes and inflated settlements,” Thompson explains.

“Commercial auto rules can be really complex, and when different people apply them in different ways, you end up with gaps and inconsistencies,” he adds. “Automating that process ensures every rule is applied the same way, every time — removing bias and error. That’s exactly what underwriters need when they’re binding complex risks.”

The need for early detection
These gaps can quickly turn into bad risks, slower decisions, and bigger losses for insurers. “But when you’ve got the right data, you can underwrite faster and smarter —and with greater confidence,” Parsons says.

ISB’s Red Flag Alerts uses advanced automation, machine learning, and AI to tackle underwriting pain points quickly and intelligently. The system sources tamper-proof driver abstract data directly from transport ministries, converts it into structured data, and runs it through an adjudication engine matched to each carrier’s tolerance thresholds.

The result is immediate visibility into which drivers meet compliance standards and which don’t, says Thompson. Red Flag Alerts provides an automated driver scorecard with a simple pass or alert, based on real-time official records.

Automation also delivers scale. “You can process tens of thousands of records in minutes and go straight to the exceptions,” adds Parsons. “That means when an underwriter starts their day, they’re looking at which drivers are out of compliance and why — not spending hours digging through documents.”

Just as important, Red Flag Alerts strengthens compliance by creating audit-ready, digital time-stamped evidence that’s invaluable if a claim escalates to litigation. “One of the biggest risks in nuclear verdict cases is a gap in documentation that lawyers can exploit,” Thompson says. “When you can show traceable proof that compliance rules were followed, you’ve got your strongest defence.”

Prevention and performance

Smarter driver screening pays off on multiple fronts. First is loss avoidance: removing ineligible or high-risk drivers reduces both frequency and severity, including the kinds of losses that can escalate into costly litigation. Second is speed with accuracy: automation supports faster quote-to-bind without sacrificing diligence, which is critical when fleets are competing for scarce drivers. Third is defensibility: consistent, documented rule application and direct-from-source data strengthen an insurer’s position if a claim is contested.

“The goal is twofold,” says Parsons. “Improve underwriter productivity, and keep bad actors out before they get in. If you only discover the problem at the claim stage, you’re already too late. Ultimately, it’s also about insurers’ responsibility to help clients mitigate risk and create safer roads. When fleets know they’ll be checked continuously, driver behaviour improves. Over time, you’ll see healthier books, more compliant fleets, and stronger results for everyone.”

September 29, 2025
Precision or Peril: How is AI reshaping personalised medicine?

Dana Choudry, Underwriter – Miscellaneous Medical & Life Sciences, Specialty Risks

In the age of digital transformation, healthcare is undergoing a seismic shift from generalised treatment to precision care. Artificial Intelligence (AI) is at the heart of this evolution, enabling medicine to be tailored to the individual. But while the potential is enormous, so are the risks.

One size fits all – outdated and costly

Traditional medicine often relies on standardised treatment plans. But what works for one patient may be ineffective or even harmful for another, and the old trial and error approach can delay recovery and drive up costs for healthcare providers and patients.

AI is changing that. By analysing genetic data, AI can predict how a person is likely to respond to specific drugs. This is especially valuable in fields like oncology, cardiology, and psychiatry, where treatment outcomes can vary widely. The result? Fewer adverse reactions, more effective therapies, and better patient outcomes.

Our Digital Health and Wellness survey undertaken in 2024^[1] results underscores this shift to the use of AI with 92% of Canadian healthcare companies surveyed planning to increase their use of generative AI, and 85% focusing on AI for diagnosis and treatment.

Beyond DNA

Personalised medicine is evolving – it’s not just about genetics anymore.

AI is harnessing data from wearables to reveal insights into diet, exercise habits, and environmental exposures, building a 360-degree view of individual health. It’s analysing electronic health records, lab results, and imaging to create dynamic, real-time health profiles that help clinicians move from reactive treatment to proactive prevention.

For patients, this means more tailored care. For public health systems, it means smarter resource allocation and reduced strain.

AI is also sharpening diagnostic accuracy in radiology and lab testing by detecting patterns and anomalies that might escape the human eye. It’s enabling personalised chronic disease management – like diabetes and heart disease – through remote monitoring and predictive analytics. And it’s even mapping the gut microbiome to customise nutrition and supplements for optimal metabolic health.

Innovation = risk

The possibilities aren’t just expanding, they’re accelerating. But so too are the risks.

AI in healthcare creates some serious concerns. Patients must be able to trust that their data is secure and used ethically, especially given the deeply sensitive nature of health information. Privacy and consent aren’t just technical issues, they’re foundational to patient confidence.

And healthcare data is a prime target for cyber criminals, who seek to steal, sell, or use it as leverage for extortion. And while AI has a role in defence, it also enables offensive capabilities — and has been used to extract highly sensitive data.

It’s therefore unsurprising that our Digital Health and Wellness research revealed that 37% of healthcare practitioners surveyed in Canada ranked cyber risk as a top risk.

Algorithmic bias is also a growing concern in healthcare AI. When systems are trained on non-diverse datasets, they risk delivering unequal care across gender, race, and age groups, leading to misdiagnoses or ineffective treatments for underrepresented populations. This isn’t just a theoretical issue: our survey found that 79% of Canadian firms are concerned about bias in AI.

New risk landscape

Healthcare organisations are now facing a new type of risk, one that cuts across cyber threats, operational resilience, board-level accountability, and ethical responsibility. This is where insurance can step in. As AI becomes more embedded in clinical decision-making, the need for specialised coverage grows.

For healthcare organisations, the challenge is to harness the power of AI responsibly and to manage the risks it creates responsibly.

For the insurance industry, the opportunity lies in helping our healthcare clients to navigate this new frontier, understand the full spectrum of risk, and ensure that they have appropriate and suitably tailored insurance protection in place.

[1] https://www.beazley.com/en-001/news-and-events/spotlight-on-digital-health-wellness-2024/methodology—spotlight-on-digital-health-and-wellness-2024/

September 22, 2025
Beyond the Breach: Are businesses prepared for cyber risk – from Day 1 to Day 600+?
Denis Panariti,
Regional Manager – International Financial Lines,
Canada,
Specialty Risks

The breach may be behind you, but are the cyber consequences truly over?

The recent wave of cyber attacks have made global headlines, highlighting the growing reality of cyber risk in today’s hyper-connected world. Every business, regardless of size, sector or location, is now on the front line, facing increasingly sophisticated and persistent threats from hackers.

Despite this, our recent Risk & Resilience report showed that 80% of Canada-based leaders feel prepared to deal with the evolving cyber threat, up from 64% in 2024². It is this potential misjudgement in the level of preparedness that is driving insufficient investment into cyber security and leading to underinsurance and gaps in cover. While large organisations may have the financial resilience to absorb losses relating to an incident, underinsurance can be catastrophic for small and medium-sized businesses.

Questions raised

As businesses across the world are learning the potential cost, perhaps the real challenge comes not in the immediate aftermath of a cyber attack but when shareholders demand answers to:

How did the threat actors get in?

What due diligence was in place and how quickly was the breach identified?

How was the breach handled and how was it remediated?

What contingency plans did you have in place?

Why has the share price been so negatively impacted?

In this environment, executives need to be proactive in ensuring that they have the capabilities, insurance and resilience to manage throughout the potentially long lifecycle of a cyber attack. Which could move from mobilising an effective disaster response on Day 1 to working through the legal minefield of shareholder and regulatory scrutiny that could see them in court on Day 600+.

Full spectrum approach

To protect themselves, businesses of all sizes should focus on building an ecosystem of cybersecurity, with end to end risk management support and insurance coverage. This encompasses, pre-emptive, ‘always on’ cyber security services that consistently scans and protects them from new and emerging threats, reactive incident response expertise that ensures they can get back up and running quickly and adaptive post attack support to ensure the business makes the right recovery and learns the lessons. All of this needs to be backed up by meaningful insurance cover so that a business is fully protected for the worst impacts of a cyber attack.

Crucially company boards must be able to demonstrate not only that they handled the impact of the attack well, but that they had invested time, money and process in preparing their firm ahead of any attack. This will stand them in good stead if they become subject to a long drawn out legal or regulatory process that puts their decision making in the spotlight.

Company boards must increasingly treat cybersecurity as a core governance issue – not merely an IT concern. This means going beyond investing in technical defences to ensuring cybersecurity is firmly embedded in boardroom discussions and that insurance cover that truly reflects the evolving nature and scale of cyber threats is secured.

² R&R Methodology
September 8, 2025
Are your clients ready for today’s equipment breakdown risks?

Allen Babista, Senior Manager, National Distribution, Equipment Breakdown, Sovereign Insurance

Ten years ago, most businesses thought of equipment breakdown insurance in terms of boilers and busted belts. Today, the risks are more complex — and far more critical to operations.

“Businesses are more automated, more reliant on digital systems, and increasingly exposed to frequent unpredictable weather events like extreme heat, cold and humidity, that can impact their equipment,” explains Allen Babista, Senior Manager, National Distribution, Equipment Breakdown, with Sovereign Insurance.

The equipment itself has evolved. A single sensor or piece of circuitry can now bring an entire machine — or an entire operation — to a halt. And with inflation pushing up repair and replacement costs, the stakes have never been higher.

Emerging risks and overlooked gaps 

In this new environment, businesses can’t afford to make traditional assumptions about equipment breakdown. “The conversation used to be about mechanical breakdowns or fire,” Babista explains. “Now we’re seeing failures in smart components, sensors, hybrid systems, and HVAC units — the kinds of risks that weren’t even on the radar five or 10 years ago.”

Too often, he says, these risks are underestimated. “Equipment breakdown is sometimes treated like an afterthought. Clients don’t realize that losses from these types of failures usually aren’t covered by standard commercial property policies — and the impacts can be major.”

In fact, climate-related claims are revealing just how vulnerable businesses have become. Heat waves and longer operating seasons strain HVAC systems. Extended cold snaps test machinery not designed for prolonged downtime. And the ripple effects, which can include costly business interruption, are often overlooked until it’s too late.

From hardware to networks: what brokers should ask

Babista encourages brokers to help clients think beyond physical machines. “Most equipment today is connected, whether to a cloud system, a network, or a remote sensor,” he says. “Ask clients, ‘What happens if your equipment needs to run longer due to a changing climate? What if it doesn’t start up after months of dormancy?’”

Equally important, brokers should review whether clients have the right business interruption coverage. “That’s their revenue stream,” Babista points out. “If the

equipment fails, they need to make sure they can still make ends meet and recover quickly.”

Supporting smarter protection

Sovereign takes a tailored approach to equipment breakdown coverage, offering broad protection that includes mechanical, electrical, and electronic failures.

“Whether it’s production machinery or small devices, we work with our broker partners to understand what the client’s actual equipment exposure is, and how best to protect it,” he says.

Its dedicated underwriters, jurisdictional inspections, and in-house risk engineering teams help Sovereign identify and manage exposures before they lead to a costly claim. That prevention-first model is a key part of Sovereign’s value proposition. “Our goal is to take the worry off the client’s plate so they can focus on running their business,” Babista says.

Start with relevance, not hard sell

When brokers dig deeper and reframe equipment breakdown as a critical part of risk strategy, not just an add-on, they help clients build real resilience.

However, it can be challenging to bring these insights to clients who may not see equipment breakdown as a priority, Babista says.

“Real-life examples go a long way. If a broker can say, ‘Here’s a claim that happened to a similar business and here’s how it could’ve been prevented,’ it opens the door to a value-driven conversation,” he says.

Sovereign can support brokers with such examples and provide expert engineering insights and tailored risk advice. “Being informed is the best way to be proactive, and we’re here to help brokers do just that. Because protecting businesses today isn’t just about replacing what’s broken, it’s about anticipating what can go wrong, preventing unnecessary downtime, and keeping operations running when the unexpected hits,” Babista says. “It’s not just about the equipment. It’s about everything that depends on it.”

WATCH: Sovereign Insurance’s expert provides top risk management tips to guide your next client conversation on equipment breakdown

July 7, 2025