Turmoil in Ontario’s auto market and other top of mind issues for IBAO

Turmoil in Ontario’s auto market and other top of mind issues for IBAO | Insurance Business

Turmoil in Ontario’s auto market and other top of mind issues for IBAO

The Insurance Brokers Association of Ontario’s (IBAO) 98th annual convention was packed with celebrations of top achievers in the province, educational keynotes on topics ranging from cannabis legalization to driverless cars, and a dynamic CEO panel featuring industry titans, but it was also an opportunity for members to meet their incoming president, Jeff Gatcke.

In his address to membership, the broker, who works at Earl Shaw Insurance Brokers, touched on important themes impacting Ontario’s insurance industry.

“Our financial environment, currently one of low interest rates and easy access to capital, has made Ontario brokers the centre of many mergers and acquisitions. This is nothing new, and if I could read that hazy crystal ball I’d suggest mergers and acquisitions aren’t going to end anytime soon,” he said. “Many of our fellow brokers think we’re losing our independence as a channel. Some see insurance companies’ investment in our brokerages as our ultimate downfall. Our industry certainly looks quite different than it did five years ago, and I’m going to go out on a limb and say it will look quite different five years from now.”

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In conversation with Insurance Business at the IBAO convention, Gatcke and current IBAO president Colin Simpson outlined the other challenges bearing down on brokers in the province today, and how the association is helping to prepare insurance professionals for new and ongoing challenges.

“A lot of our issues in the marketplace right now are just about the market turmoil in Ontario auto, so we’ve been doing a lot of work with the various insurance companies, the regulators, and the different bodies that are impacted by this,” said Simpson. “[We need] to make sure we all have a full understanding of what the consequences are of some of the decisions that the rating ultimately delivers into the marketplace. We see the insurance companies not getting the rates that they’re looking for and it changes their work practices, which obviously knocks on to our members, so a lot of what we do is try and explain to our members what we’re doing about that.”

Recently, the association launched a new website, Get Rates Right that lets users submit a letter on necessary changes to auto insurance pricing in Ontario to their MPP.

“[It’s about] getting our members to get active politically and locally, and inform MPPs of the importance of changing the auto product for everyone’s betterment,” explained Gatcke.

The IBAO also continues its work on the data connectivity front. According to the association, the discussion focuses on a centralized data translation service that permits brokers and insurers to connect with existing data capabilities, facilitating real-time transactions – a solution that will in turn enable digital services for consumers. The IBAO is currently in Phase 3, which looks at the provability of the business case and the financial implications of the proposed solutions as well as if they match insurance companies’ expectations.

The education piece is likewise critical for IBAO, particularly as recreational cannabis was legalized in the province on October 17. The association’s Young Brokers Council took charge of the new e-learning courses on cannabis to prepare members for legalization.

“It’s really key to ensure that our brokers are as educated as they can be about the implications of the new laws that have been put in place and the practical implications for their policyholders,” said Simpson. “When this was actually coming through parliament, we understood there was going to be a large impact on our members because there’s a lot of education that takes place from a broker to a consumer.”

Added Gatcke, “With a new learning platform, [brokers] can start and stop, and continue that education whether they’re at home or the office. People are learning about it on their own time, which is great – it’s different, it’s new and it’s been successful.”

Coming up for 2019, IBAO will keep its focus on the data connectivity issue as well as advocacy.

“With the new Ford government and with a majority government, we need to be prepared and launching the website and getting our political action volunteers activated is really important,” said Gatcke. “We know that changes are going to come for the auto product – we just want to make sure that we’re top of mind and we can advocate on behalf of consumers.”

Maintaining the association’s leadership role in the industry is on the list as well.

“Sometimes it’s difficult for the industry to take a direction, but we’re in an ideal spot given our relationships between the consumers and insurance companies to try and steer some of the conversations, so from our members’ perspective, us being a leader in the industry to drive change is really key,” explained Simpson. “The whole environment is starting to shift. There’s a lot of interesting things, and we need to just make sure we’re abreast of the key issues for our members and trying to keep leading the discussions.”