Saul Arias: Thank you very much, Roger. I'm excited to be here in, Music City, USA.
Roger Cervo: Music city USA. Yeah, we're hoping to make some music over the next couple days here. I got to ask this all before we get into the market, and we're going to we're going to talk a bit about the Canadian region, the market in general. You came to Willis. Why? Willis and why Willis construction.
Saul Arias: Why Willis construction? That's, It's a great question. Willis has always been an excellent construction broker. But traditionally, we have not penetrated the Canadian market very well for various reasons. The new CRB or, P&C leadership that we have, the Willis, the has been at Willis for the past couple of years. I think they have a great vision. The specialization strategy that we are following, will allow us, I'm convinced, will allow us to really bring up the Willis construction brand in Canada to what it should be, what it to always be.
Roger Cervo : That's a good answer. So, we're nearing the fourth quarter, but as we pass the turn at the halfway point, the market softens. I don't know that it's a race to the bottom at this point. I would characterize it as a predatory soft market, meaning all of those disciplines that we learned in the hard market in terms of loss control, good risk management, claims control, or good claims histories. There's a predatory behaviour towards those clients. And so, it's here. It's not a race to the bottom. Fill your shekels into the into the treasure trove. It's more of a selective type of soft market in my opinion. But I'd like to know from your perspective, what are you seeing? How are you characterizing it and how are you dealing with the broking team in Canada in terms of engagement of the market and dealing with the market that has changed or is in the process of continual change?
Saul Arias: You know, I think the market right now that we all agree that it's, that we're in a softening market, I should say not not really a soft market. I think at this point we are living in to, to a stage where we have, healthy equilibrium between insurers and brokers. In, in 2017, 2018, like being a broker was very, very easy. You will get the terms and conditions there easily.
Roger Cervo : Reductions came easily.
Saul Arias: Yeah. I mean, the reductions came easily over capacity. And then, by 2023, it was the opposite where being an underwriter was really easy. They would be controls. The capacity was not there. So every underwriter got a piece of, of, of of any large, placement. Now I think as, as I said, we are getting to, to the point where both brokers and insurance have to actually work together, together for the client. A race to the bottom is not sell to anybody. Not even not for clients, especially in construction, where you have now projects that are, seven, eight, nine year construction periods. Those, those large and long construction projects are actually longer than the insurance cycle has. Yeah. Yeah. So it doesn't it doesn't help anybody. If, if you get time, the, get to a certain mentality because once you, you need to extend the project for a year or so, the extension could be almost as expensive as, the original placement. Right. So, in, in terms of,
Roger Cervo: Strategy, which what's your strategy in the market with the team?
Saul Aris: Yeah. It's, we have like a sort of 2 to 2 separate approaches. Casualty is way softer than the on property. Property and especially builders risk insurers are still demanding, technical information and lots of underwriting information, which I think is good, I think is good. I think the past five years have, for most. Yeah, yeah, yeah. For, for for discipline in providing, on the right information. I think that's healthy. Yes. I agree, and, on, on the casualty side, the, the market is, is getting softer, faster. So we'll, we'll see what the what other goals.
Roger Cervo: What about what about the movement in the on the underwriting side, I've seen traditionally brokers move. There's a movement cycle. It seems to me that there's been a lot of moving on the underwriting side, people in different places and and, you know, how are you managing that? In terms of people in new places with new targets, etc., and them knocking on your door, how are we being selective and being strategic in who we're dealing with and how we how we engage in the market? And it may be a loaded question, but no.
Saul Aris: No, no, no, it's a great question. The 2024 was the a record year for catastrophe losses in Canada. Yeah. In the in the property and casualty market. Even then, the combined ratio for commercial lines was 88%. Wow. So 88% on a on a heavy catastrophe, a catastrophe year. It's very healthy. It's very, very helpful for insurers. So we have seen, for example, access and score open in full blown, underwriting operations in Canada, where, these markets were underwriting Canadian business, both from, from their offices in the US. Yeah. So now so that so that tells me that,
Roger Cervo: There's a commitment.
Saul Aris: There's a comment that Canada and the other insurers see, see an opportunity, in, in, in the country, the. Insurance even with all the technologies that we have, including artificial intelligence insurance, it's still a people's business. Yeah. So. We we like to we like to follow the underwriter. Yeah. A good underwear is going to be good. In in every company, they, they're going to have different, boxes or different authority, but also on the women's side on the ladder. And so we have been very, very active in, in engaging with underwriters individually with on this movement that has, that is taking place.
Roger Cervo: And how are we implementing the use of our analytics in our broking business as well? I know we have a lot of the global apparel diagnostics and the total cost risk analysis that we have. Are we utilizing that data to try and really springboard us in this off market to gain better terms and conditions?
Saul Aris: Yes, definitely.
Roger Cervo : And is it a tool? Is it a tool or is it just.
Saul Aris: No, no, no, it's a tool that is embedded in our broking process. And we when you go to an on the where are you most as a broker, you must already have, preorder within the file. You got to know. You got to know. You got to know where the pain points are. And you, you have to, to be able to to negotiate, massage, massage the, the underwriters into. But not just maybe a maybe, maybe a poor choice of words, but.
Roger Cervo: You want them engage and.
Saul Aris: Engage and, you know, and, with respect, with catastrophe, a new build, a new project, the catastrophe exposure or, the catastrophe risk profile is better. It should be better than an existing asset. Yeah. Because the the new means and methods of construction regulations and design, hopefully preventing that. The new asset, to be over exposed to catastrophe. So that's something that that is speculative construction and, yeah, we need to.
Roger Cervo: Harness that information.
Saul Aris: Exactly. Yeah.
Roger Cervo: And utilize it as a tool to to, again, help our clients. We're about to wrap up here, but, what do you find is the most difficult part of your job right now? And where are you seeing, yourself in terms of managing that? So what's the toughest thing right now in the market with the market, and how are you managing that right now?
Saul Aris : The the toughest thing, which is, is the flip side of what we were talking about earlier, is keeping track with all the movements in the movement. Everybody happy? Yeah. So for me, everything's, events like this, like this are great. Yes. You you, you meet face to face with underwriters, you reconnect with old colleagues. I have reconnected.
Roger Cervo: Share stories, share information.
Saul Aris: And, and in terms of, in terms of more technical aspects, we you still have as a broker or as an industry, we still have some work to do on certain aspects like mass timber, for example.
Roger Cervo: Yeah. CO2.
Saul Aris: Mass timber, every, every, risk engineer agrees that it's noncombustible construction. It's better.
Roger Cervo: Than stick.
Saul Aris: Yeah, but but under that, that knowledge hasn't transferred to the underwriters. Yeah.
Roger Cervo: So clients have the same issue. They they they feel it is true. And they're not seeing, translating the terms. And that's a, that's a challenge.
Saul Aris: And, reaching that and, what are that much, what are the major prevention devices?
Roger Cervo: Oh, yeah. Leak detection.
Saul Aris: I that they took on a, automatically the patient and show them systems are another part of where I think that underwriters are not really giving clients, the benefit of the benefit of that. So, and these are just two examples or very specific issues that I think as an industry, we need to to work better.
Roger Cervo: I think with time, I think with time it'll iron itself out. Yeah, I think of cyber. And prior to the the minimum requirements needed in order to get a cyber, you know, MFA and things of that nature. It was the wild wild west, right? Yeah. And then it sort of settled down and said, you have to have these six or these eight things. And I think, I think that'll get there. But with emerging issues and emerging risks comes emerging solutions. Yeah. Right. And I think it'll all it'll all balance out eventually. But while you're doing it, you're trying to make those calls on your own and you're not seeing it connect. Exactly.
Saul Aris: I again mass timber , but it's a very interesting one because the, the, the, projects like the, of this type where, it started popping up around 2018 to 2019. So in the bird market. Yeah. So I think now it's a good opportunity to, to take advantage of this of market, between underwriters and clients and brokers. I don't know about, some of those issues.
Roger Cervo: Perfect. Well, I think that's a wrap here from the, 2025 construction conference in Nashville, Tennessee. We'll be checking in with you and, hope you enjoy. Cheers.
