The future shape of Canada’s insurance landscape drew a response from Thom Young, who felt that the health of the independent channel and the unique regulatory Newfoundland market makes that province more the anomaly than the norm.
“I don't for a second believe that large brokerages will dominate any market in Canada for any length of time,” said Young. “We have seen nothing in the direct writing side to indicate that there is any movement to consolidation. The purchase of one direct writer by another doesn't change the competitive market place one iota except to give us one less competitor to deal with.”
East coast broker Michael Stack told Insurance Business the consolidation of brokerages in Newfoundland may be an indicator for what is in store for all of Canada, with perhaps 10 or a dozen large regional brokerages filling up the nation’s insurance space.
Young disagrees – going on to say that although Newfoundland may have a situation that favours consolidation, that province’s regulatory environment makes it unattractive for companies looking to expand throughout Canada.
“Where there is a lack of competition there is consolidation,” he pointed out. “So long as there remains a good mix of insurance companies who are wed to the independent broker distribution model the market will remain healthy.”
For the original story and Young’s full comment, you can click
here.
