In the business world, competition is always the number one challenge. Unless you have an absolute monopoly over a particular industry segment or consumer base (which is pretty much unheard of), there’s always someone or something nipping at your heels and trying to win your business by any means necessary. It’s the nature of commercial enterprise.
For insurance brokers in Canada, the competition aspect creeps in through various channels. They’re competing against each other to win the favour of consumers and they’re competing against direct-to-consumer carriers and insurtechs that are cutting out intermediaries. Another group they’re competing against is the large property & casualty insurance carriers with direct distribution units, but this is where it gets a little fuzzy, because those carriers also happen to be the brokers’ biggest supporters.
Intact Insurance, RSA Canada, and Economical Insurance are three of the largest P&C insurers in Canada by direct premium written and market share. They’re all very outspoken about their “bullish support” for the broker channel – support made clear via the hundreds of millions of dollars they’ve invested into supporting intermediaries – but they also run direct-to-consumer units.
During an executive panel at the Atlantic Insurance Brokers Convention (AIBC) in Moncton, insurance leaders from Intact, RSA and Economical were put in the hot seat about their firms’ direct-to-consumer operations and their support for the broker channel.
Debbie Coull-Cicchini, executive vice president at Intact Insurance, said: “We have always been transparent at Intact Financial Corporation. We do have a direct arm, but we learn through that direct arm, and we take most of that learning into our work with the broker channel. It’s a challenging world out there, and the industry is changing massively on a digitization front. A lot of brokers I’ve spoken to in the last couple of years have made leaps and bounds [in terms of digitization], and we’re there to help you in any way can.
“Brokers are not created equally coast to coast. There are brokers who have different expertise and different skills. In some cases, they have the expertise and resources within their brokerage to create their own digitization, but, in other cases, brokers are asking for our assistance, and we’re happy to provide it. There’s always going to be concern about us having a direct arm, but we think we bring a lot of value to the broker channel. We spend hundreds of millions of dollars a year on technology for the broker channel, and we spend a significant amount on marketing as well. The broker channel is 80% of our business, it’s very important to us, and we’re very bullish on [our support] for it.”
Economical Insurance launched Sonnet Insurance in 2016 as an online home and auto insurance company. The launch elicited some disruption fears among brokers, especially those in personal lines, but Economical leadership remains persistent in its messaging around supporting the broker channel. Tom Reikman, senior vice president and chief distribution officer at Economical Insurance said the firm felt it was “very important to be able to provide a multi-channel solution” as consumer preferences evolve, and Economical Insurance strives to become a top five carrier in Canada.
Like Coull-Cicchini, he said Economical Insurance takes learnings from Sonnet and injects that into its investments for the broker channel. In fact, the insurer took its experiences from the creation and launch of Sonnet to craft Vyne, a platform that supports broker growth and communication with Economical Insurance.
Reikman commented: “A lot of our learnings from Sonnet have been incorporated into our Vyne delivery mechanism. We’ve shared a lot of the functionality and the technology capabilities. We’ve also spent a lot of time on consumer research, which is done on behalf of both Sonnet and Economical, and a lot of that work is permeated through to our product offerings – simplified wordings being a good example. There’s a lot of work that overlaps both companies.
“The way we look at it is – we want to meet the needs of as many Canadians as possible. Sonnet is a very small portion of our overall portfolio. Right now, it’s about 6%, and while we continue to see it grow, it’s not growing exponentially. It’s an individual business unit and it has to stand on its own. It’s also important that as Sonnet stands on its own, the broker channel continues to not only stand on its own, but it also continues to grow. The expectations on the broker channel for us are enormous. This is not small stuff. This is about growing market share, continuing to grow the Economical brand, and continuing to grow within the broker channel. It’s not about staying still.”
RSA Canada has been very open about being a multi-channel company for many years with its Johnson Unifund brand. This direct arm is a little different in that it’s very focused on a niche market, with about 70% of its premium focused in the affinity group space. During her time in the hot seat, Donna Ince, senior vice president of personal insurance at RSA Canada, said the firm has been very clear about keeping the two units separate.
“We are very committed to the broker channel,” she said. “We always have been, and we always will be. We put a lot of our investments in technology to support brokers and help them become more efficient. One of those investments was our RSA Pro tool for SME business. We built RSA Pro in 2017 using broker insight and broker feedback on how we could build the technology out to enable brokers to do business online with us in a faster, more effective way. We also launched our RSA Claims Point portal last year. That’s for brokers to be able to go online and get a claim moving very quickly within minutes. We’re very focused in on supporting the broker channel. We will continue to do that, and we will demonstrate that through our investment from a technology perspective.”
