In the wood products manufacturing sector, a traditional strategy to reduce insurance premiums might include increasing deductibles, reducing coverage, assuming more risk or driving up competitive pressure between insurance companies.
While these tactics can lower premiums in the short term, they do not necessarily improve your business’ resilience to loss.
Instead, work with a specialized Acera Insurance broker to adopt a collaborative, long-term strategy that enhances your company’s insurance profile and helps you secure more favourable terms, conditions and rates and broader coverages.
How wood product manufacturers can change insurance market perceptions
The assessment of your business from the perspective of insurance carriers will not change from year to year unless there is a specific cause.
Underwriters face constant pressure to attract new clients while retaining existing ones, a balancing act made more challenging in competitive markets. Their decisions are primarily influenced by:
- Property and liability exposures
- Historical loss data (frequency and severity)
- Industry loss trends
- Your company’s approach to risk management and documentation
Major insurers use their own loss statistics and industry data to assess risk. Companies that differentiate themselves by effectively managing risk can often take advantage of better rates.
Pitfalls of traditional insurance cost-cutting methods
Businesses will commonly reduce their insurance premiums by shouldering more risk themselves — increasing deductibles, reducing coverage or undervaluing their property (e.g., choosing actual cash value over replacement cost).
While these options may lower costs in the short term, they do not strengthen your business against potential losses, nor do they reinforce your position in the insurance market.
Over time, this approach can create gaps in your operational risk strategy, leaving your business exposed and making future renewals more challenging.
The critical role of risk management in reducing insurance premiums
In 2024, a single loss in the forest products industry exceeded $100 million. Underwriters have responded by placing more weight on risk management and are refusing to offer premium reductions or broader coverage without solid evidence of controls in place.
Our clients have successfully improved their market standing by adopting a robust risk management strategy. This not only helps you reduce your exposure but also allows you to determine exactly how much risk you’re willing to retain through financial modeling and scenario-based analysis. Demonstrating the effectiveness of these measures through data and documentation is key.
How wood product manufacturers can implement a risk management strategy
Your risk management plan should:
- Identify risks
- Analyze risks
- Determine appropriate risk controls
- Implement controls
- Monitor and continuously improving controls
At Acera Insurance, our expert advisors offer creative solutions that deliver immediate, tangible results. We will assess your current program, evaluate the rates and retentions, and review the coverage options.
Backed by decades of experience and specialized expertise in the wood product manufacturing industry, we can quickly identify short-term improvements while enhancing your company’s long-term risk profile.
Why wood product manufacturers should partner with an insurance broker
Many forestry companies are not receiving the professional guidance, advice and support they need, leaving them with insufficient coverage and vulnerable.
By partnering with an Acera Insurance broker who specializes in the forestry and wood product manufacturing industry, you can achieve short-term gains through optimal program structures and coverage choices while building a stronger, more resilient future.
Will Downing is a Client Executive, Commercial Insurance, and Partner with Acera Insurance. He brings specialized expertise serving clients of all sizes in forestry and wood product manufacturing across Canada.
Connect with Will:
250.869.6096 | [email protected]