By IAN ROSS
Northern Ontario Business
Andrew Ryeland pulls no punches in offering a blunt assessment of how sky-rocketing premiums from insurers are hurting his guided ATV excursion company.
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Bear Claw Tours in Parry Sound is one of several tourism operators in the North affected by rising insurance costs, says owner Andrew Ryeland. |
"I've called them economic terrorists that need to be hunted down, just like any other terrorist that needs to be exposed, that needs to brought out in the open."
Ryeland has watched his premiums jump within a year from $4,800 to $14,000, despite having no claims or occurrences in the past three years he has been running his business. He offers half-day heritage tours to about 700 visitors a year on a private 60-kilometre trail network near Parry Sound.
His insurer elected not to renew his liability insurance policy, forcing him to look elsewhere and buy facility insurance.
He defrayed those increased operating costs by passing them on to the customer. "Either that or go out of business," he says.
Ryeland estimates he must make between seven and eight tours this year at $180 each just to cover the $1,400 in insurance per vehicle.
"It swayed my decision to grow my fleet or grow my business."
As project co-ordinator for ATV Ontario, a provincial marketing initiative to boost Ontario's billion-dollar ATV tourism industry, Ryeland says
insurance hikes pose a huge barrier of entry for others trying to break into the marketplace.
Angered and passionate about the subject, he is sharing advice and experiences with ATV club alliances in Elliot Lake, Mattawa, Cochrane, eastern Ontario and Georgian Bay.
Rising liability insurance costs are taking a toll on outdoor adventure and the emerging ecotourism operators in northeastern Ontario who have either seen their rates leap dramatically or have had their policies cancelled.
Critics of the hikes say the post- 9/11 hangover, combined with a bad year on the stock market, has caused insurers and their shareholders to demand the elimination of all elements of risk. That can only stand to harm a tourism sector that senior levels of government are encouraging to grow in resource-dependent regions like Northern Ontario.
Over the last two years, insurance rates in the outdoor adventure tourism business soared with stiff premium increases anywhere from 500 to 1,000 per cent in the worst case scenario, says Bill Talbot, a Parry Sound-based tourism marketing co-ordinator with Georgian Bay Country.
The hikes are not just directed at extreme sport operators, but have broadened out to include almost every kind of outdoor activity from skydiving to
bird-watching outings for seniors and the disabled.
Meredith Armstrong, a co-ordinator with Sudbury's Partners in Eco-Adventure Tourism, says many of her group's 38 operators, within the past
two years, have witnessed their insurance rates increase to the point where they either cannot afford it, or, if they are starting out in business, "have no idea where to even start looking for insurance."
In an industry traditionally chock full of independent-minded entrepreneurs, Armstrong says these vital issues underscore the need for an organized lobbying body to protect operators' interests.
"Definitely, working as a group is really important for the industry, especially in Northern Ontario, otherwise people often find themselves quite isolated," says Armstrong, who is dealing with two startup businesses that cannot find an insurer.
The uncertainty has thrown some micro-businesses into a state of limbo this summer, she says. Some have scaled back programming, or changed their focus, offering fewer program choices, but most have not yet reached the point of quitting. Most simply pass the cost increase onto their customers.
The outdoor adventure industry is exploring ways to cut insurance costs.
The Tourism Industry Association of Canada (TIAC) and the B.C.-based Tourism Action Society in the Kootenays (TASK) are teaming up to create their own insurance program.
They have recruited more than 500 tourism providers in the outdoor adventure and guiding sector by pooling their collective purchasing power in a co-operative to help deal with rising insurance costs.
A similar program is in place among 500 small adventure tourism operators in Quebec.
Margot Booth, a TIAC spokesperson, says it is not high-risk activities that are driving rates upward, but simply post-Sept. 11 issues.
The cyclical insurance market has resulted in many tourist operators across Canada either packing up and waiting for better times, placing expansion plans on hold, or operating without liability insurance.
TIAC's national call for proposals was distributed to insurance brokers in March and was shortlisted in May by the Ottawa-based private sector advocacy group.
Ryeland is not so sure a bigger buying group will result in any reduced costs, given the nature of today's profit-driven insurance market.
"When you become a big buying group, it doesn't necessarily mean you're going to get any breaks," he says. "It just means you paint a bigger target
on your back."
