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McDougall Insurance’s Kelly McKinney tells IBC what has been key to his brokerage’s success and what the insurance industry should keep its eye on in the future.
IBC: How has McDougall Insurance perpetuated growth over the past 72 years?
Kelly McKinney: McDougall Insurance started in 1946, and over the years, we’ve had a few opportunities to purchase other brokerages. In the past 20 years, we have probably purchased 25 brokerages, with the notion that it does us no good to buy another brokerage unless we can grow it. Our target is to grow 7% to 10% organically every year, so we find great brokerages that are well run and profitable, and we help them grow.
In addition, we operate in small towns in Eastern Ontario. It would be very efficient for us to have one head office in a big urban centre, but instead we have 32 little offices spread around. It’s important to us to be in these towns where we know and understand our clients. We’ve been very successful in small towns, and we think that has been a big part of our success.
IBC: Can you share a story about how McDougall Insurance developed one of its specializations?
KM: We have insured municipalities since day one, and there’s an interesting story behind this: In one municipality, as is often the case in small towns, the city decided it was easier to share the policies with the 10 different brokers in town; one broker did the auto, one did the D&O, and it was all mixed. Lorne McDougall, our founder, went to the city and told them that it wasn’t in their best interest to do this. He proposed that the city should instead have all its policies with one broker, where everything would be covered with no gaps. He also proposed that McDougall Insurance would do the policies for the city while sharing commission with all the other brokers through the brokers’ association. Now, 70 years later, we still have that account, and we insure municipalities all across our area.
IBC: What do you find to be the biggest challenge for brokers today?
KM: The biggest challenge right now is that the world is changing very fast, and as you watch it change and try to stay ahead of it, the change has come before you realize what’s happening. So, trying to stay ahead of technology and potential investments can be a challenge because right now there are a lot of shiny things that can be distracting.
We see a lot of brokers and companies distracted by all the different things that are out there, so it’s important to think hard about the changes that are happening. You have to think: Are we missing the boat on something? Or are we doing the right thing by sticking to our knitting?
IBC: What trend are you keeping a close eye on?
KM: A lot of people think about Google or Amazon and what they can do to disrupt the industry, but I think there are other businesses that we never thought of that could also disrupt the industry. One example, from InsureTech Connect 2018, is Credit Karma. We would traditionally never look at them as a competitor, but their president spoke at the conference and explained how they are able to get an insurance quote with zero clicks – while the rest of the industry is trying to get clicks down from 50 to 10 for quotes, Credit Karma is doing it with zero.
They have your name, address, credit scores, background, and they also purchase third-party data that is readily accessible that has car information and claims history. All they have to do is ask a user if they are interested in a car insurance quote, and if they say yes, with one click, they feed it to the customer. It’s stuff like that that makes me nervous – someone you didn’t know was a competitor that is driving in the inside lane.
