The Ontario Broker July 2013

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THE ONTARIO BROKER

THE OFFICIAL PUBLICATION OF THE INSURANCE BROKERS ASSOCIATION OF ONTARIO (IBAO) JUly 2013

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02 ceo’s message 04 financial matters 05 art of conversation 06 territory update

07 hr strategies 10 e&o corner 11 pr strategies 12 government update

13 wellness matters 14 community view

Ceo’s Message The Official Publication of the Insurance Brokers Association of Ontario (IBAO) Published by

Editor Angela Stelmakowich astelmakowich@canadianunderwriter.ca 416-510-6793

Telematics Consumer Protection

Senior Publisher Steve Wilson steve@canadianunderwriter.ca 416-510-6800 Associate Publisher Paul Aquino paul@canadianunderwriter.ca Account Manager Michael Wells mike@canadianunderwriter.ca Account Manager Christine Giovis christine@canadianunderwriter.ca Account Manager Elliot Ford eford@canadianunderwriter.ca Art Direction Sue Williamson The Ontario Broker is published monthly by Canadian Underwriter magazine (www.canadianunderwriter.ca).

Canadian Underwriter’s Insurance Group of publications is part of Business Information Group (www.businessinformationgroup.ca), a subsidiary of Glacier Media Inc., a leading Canadian information company with interests in daily and community newspapers and business-to-business information services.

All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent.

The articles that appear in this publication represent the opinions of the authors and do not represent or embody any official position of, or statement by, IBAO; nor do they attempt to set forth definitive action standards or to provide legal advice.

Insurance Brokers Association of Ontario 1 Eglinton Avenue East, Suite 700 Toronto, Ontario M4P 3A1 Tel: (416) 488-7422 Fax: (416) 488-7526 Toll Free: (800) 268-8845 (888) ASK-IBAO www.ibao.org Annual subscription is $52 + tax.

To order email: contact@ibao.on.ca For information on submitting an article, contact Ashley Hunking Marketing Coordinator ahunking@ibao.on.ca

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The Ontario Broker / July 2013

Randy Carroll CEO IBAO At our regional road shows, we spent some time reviewing the telematics space and our views surrounding the impact that its use would have on insurance in the not so distant future.

We support the advent of telematics and feel that if done properly, telematics can be a win for the consumer and the broker alike.

The traditional manner in which insurance is provided to consumers may, in fact, be changing. The fundamental premise of insurance — that the larger population funds the claims of the few — needs to be balanced against the interests of the individual.

As data becomes more readily available, insurance companies will have greater capabilities to tailor products specific to individuals or groups of individuals.

How this information is

gathered, either through telematics or from other sources, raises questions about analytics and the predictive nature of data.

Consumers will be affected by these decisions — and it is imperative that their interests continue to be protected, as they are today using traditional methods.

WHAT IS TELEMATICS? Telematics in auto insurance — also referred to as usage-based insurance (UBI) — is the concept of directly monitoring a driver’s behaviour via some sort of telematics device (traditionally, this has been through use of a black box installed in the policyholder vehicle, but these days, can also potentially be via a smartphone app).

Telematics can be used to monitor drivers in a corporate fleet, provide post-accident information, and enable the insurer to base a premium on genuine risk factors, rather than relying on general factors, such as gender or age.

Variables monitored by the telematics device typically include distance, behaviour, speed, nature of road travelled, vehicle diagnostics and driving conditions, which, when combined, are in­­­tended to produce more accurate information on which to base insurance premiums.

CONSUMER PROTECTION IBAO’s Principles for Consumer Protection recognize that telematics can benefit the consumer. Only if the following conditions are

satisfied and incorporated by regulators and insurers will the consumer interest truly be protected: 1) Consumers have ownership of, as well as the right to control, data relating specifically to themselves, their families and their businesses.

• portablility of their collected data; • similar to medical records compiled by health providers and auto-plus and MVR reports, consumers must have timely access to this personal data so that it can be shared with other intermediaries or companies if a consumer so chooses; and • this, in our opinion, is vital to maintaining a competitive market.

2) Information must not be collected and used for any purpose other than that for which it was intended.

• it is important that we do not open another consent issue and that everyone is aware of what information is being collected and shared; and • only the data required to rate and underwrite needs to be shared.

3) Consumers have the right to choice, to qualified and objective advice, and to autonomous advocacy.

• Personal information used for risk assessment purposes should be conveyed in a common standard format to facilitate consumers’ control and understanding of their data. The consumer must be made aware that advice from those assum-

ing risk on behalf of the consumer — or by the manufacturers or distributors of devices gathering or monitoring risk information — is neither qualified nor impartial.

WHERE ARE WE NOW? Following IBAO’s regional road shows, we started to set up meetings with key stakeholders to discuss our concerns and to get a better understanding of where they stood on the telematics issue. Since then, we have met with MPPs representing each of the three major parties, regulators, Insurance Bureau of Canada, insurers and telematics providers.

To date, all of our dis­cussions have been positive and each of the stakeholders with whom we have met seems to agree with our concerns. That said, we are far from reaching the finish line.

As we continue raising awareness, we will have to also continue to work with all stakeholders until the consumer protection safeguards are satisfied.

And that will take time.

What is concerning, however, is that telematics offerings are already being made to the consumer without protections being in place. That is a dangerous place to be.

Here in Canada — as well as south of the border — privacy advocates are sounding alarm bells over a new device that can record the driving habits of Canadian motorists. Over

the past few months, we have seen states such as California turn into a battleground for technology: on one hand, tracking driving behaviour with the intent of lowering premiums is seen as positive; on the other, the technology is being rejected as an excessive intrusion.

As an industry, we are all competitive and we would agree that having a competitive marketplace in the insurance industry is where we want to be. But as an industry, we have to also be

mindful of the needs of our consumers so that they can be protected.

As noted previously, telematics can be a valuable tool if used properly — so let’s not mess this one up.

Note: This article is adapted from Insurance Brokers Association of Canada’s (IBAC) Telematics Principles paper, and Monitoring Your Own Behaviour: Guidance for Insurers on the Use of Telematics, Sue Mclean and Emma Muncey, Morrison Foester (June 21, 2013).

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July 2013 / The Ontario Broker

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Financial Matters

Tony Ngo Manager, Industry Programs BMO Bank of Montreal

Making Cents to Children Speak with any parent and most will agree that kids are insatiable money consumers.

For parents, this means that meeting the financial demands of raising children can require diverting funds from retirement savings, plans to get a sportier car or home renovations and, instead, putting them into education savings, a minivan or kids’ sports.

There is no doubt that children are “priceless” in what they bring to parents, but this does not exclude the responsibility parents have to teach children about money. Parents are critical influencers on money matters for children, leading to

gaining solid financial literacy as adults.

This is not to say parents need to hire tutors in advanced mathematics; just use everyday living for money lessons.

When shopping, take a few moments to highlight the cost of items and the logic of buying decisions to highlight comparable costs and the difference between needs and wants. Even at the point of purchase, you can explain that the card you use is not magical and the money comes from somewhere. Paying with cash on occasion can also help younger children visualize teachings.

Many experts agree that teaching kids about money should start as soon as they begin asking for things, generally by the age of five or six. To make these lessons effective, children need their own money.

As a guideline, a weekly allowance of $1 for each year of a child’s age is a good starting point (so your 10-year-old gets $10 a week). In addition, an allowance should not be contingent on other tasks (i.e., completing various chores) as the point is for the child to be able to accumulate money on which to make decisions.

Children should allocate their allowance between three labelled jars, with 40% allocated for spending, 40% for savings and 20% for sharing. Also, opening a bank account and getting his or her own debit card can help the child

grasp more elaborate money concepts.

Initially, kids can be required to pay for trivial items (“I want that bag of chips”), but as they age to take on responsibility for paying for things (field trips, movies, a new hockey stick). Most important, what they use their money for is their choice — although you can provide advice and allow them to make mistakes.

If they spend too much in the short term, and have to postpone a bigger item or event they have been saving for, let them learn from it. For charitable giving, let them choose causes that are important to them, and try to ensure that they appreciate how their donations are used.

If you do not feel adept at fulfilling financial training for your kids, there are lots of resources available for all ages. A quick internet search reveals sites such as richkidsmartkid.com, themoneybelt.ca, and bmo.com/smart­steps­for­parents.

Like all other parenting matters, children have an infinite ability to hear what we say, but a finite ability for it to sink in. So while you may not think your money lessons are getting through, persistency and consistency will ensure it does over time. One day when you hear, “I’ve saved a ton of money,” or “I’m not going to buy that because I really don’t need it,” you will know your children are on a path to becoming financially literate.

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art of conversation

Stuart Knight President Stuart Knight Productions

The One Percent Life I recently found myself enjoying a glass of wine and a nice meal with a friend, while sitting on a bustling patio in Toronto.

Our server was very friendly, outgoing and professional. Near the end of the meal, I noticed that she had a small tattoo of a clothing hanger on the inside of her wrist. Being the curious person that I am, I decided to ask about it.

She told us she had graduated from Humber College with a degree in business, with a fashion major. I asked her if she was looking for work in this field and she replied she was.

I gave her my card and told her to send me her resume and that I would send it to

a friend of mine who owns a large company in the fashion industry.

When she left the table, I leaned in close to my friend and whispered, “I’ll put $100 on it that she doesn’t e-mail me.” My friend asked why, and I explained that over 20 years as an entrepreneur, I have given my card to thousands of people offering to help them out. Less than one percent had ever followed up.

Let’s just say it was lucky I did not make that bet — this young woman proved me wrong and e-mailed me the next day. I was shocked, but true to my word, I put her in contact with my friend in the fashion industry.

Within two days of that e-mail, she was already having an interview with the company. There is a high likelihood she will get a job with this company, and knowing how successful the business is, I am confident it will change the course of her life. a little initiative It is amazing how far a little initiative will take you in life and even more amazing how few people take it.

Did you know that of the millions of people who watch videos on YouTube every day, only one percent of viewers actually upload videos? That means 99%

of those on YouTube consume, while the other one percent create.

I have to admit that after speaking to more than 1 million people, I have learned that these statistics represent the way most people approach their lives.

People constantly tell me that they want to make more money, increase the size of their business, have a better job, meet the person of their dreams or lose a little weight.

When I ask them what they are doing to make it happen, they often tell me they do not know where to start.

That’s when I tell them to start anywhere, because anywhere is a place and it will lead you everywhere.

I have learned that there is a big difference between those who take initiative and those who do not. Which one do you want to be? What kind of life do you want to have? What are you willing to do to make it happen?

There is a big difference between watching everyone else’s movies and making your own.

Stuart Knight is an acclaimed author and speaker who each year helps companies reach new levels of success by teaching them how to create powerful conversations with their customers, colleagues and clients. Learn more at www.stuartknightproductions.com.

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July 2013 / The Ontario Broker

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Territory Update members, a move that brings with it renewed enthusiasm and fresh ideas.

Associate members have been encouraged to join executive teams and affiliates are using the “war chest” of resources from our provincial association.

Brenda Duffy, CAIB Director IBAO Territory 12

Old Efforts and New Blood Territory 12, with its 292 broker members and 49 brokerage offices, covers a large geographic area, but has a smaller membership compared to larger urban areas. The territory’s three affiliates along the 401 corridor are Kingston and Area, Leeds and Grenville and Stormont Dundas.

From my seat as a board member of two of Territory 12’s affiliates, as well as being territory director, I can witness the passion of brokers leading the way!

Territory affiliates have organized education days, successful charity golf tournaments and other social events that foster good relationships with our insurers and other industry stakeholders.

Brokers from the territory are committed to generously giving back to their local communities with their involvement in Operation Red Nose, Crime Stoppers, Special Olympics, Relay for Life, OFSAA Track and Field and RIDE programs.

With some creativity, many of these events were made into IBAO Awareness Events. The Bipper is being used in ways that are touching and lend resonance to territory events and efforts. Consider that 100 Bipper blankets were given to cancer survivors at last year’s Relay for Life in Leeds Grenville, and at the OFSAA Track and Field event, medalists made sure they received their blankets!

Special thanks goes to affiliate presidents Todd Rozon of Stormont Dundas, Mary Rae Knapp of Leeds & Grenville and Jim Dorey of Kingston, as well as YBC team leader Dan Cook.

During the past year, affiliates have attracted some “under 50s” as board 06

The Ontario Broker / July 2013

MEMBERS WANTED A membership drive has been in full force in Kingston. Jim Dorey, president of the Kingston Insurance Brokers Association, is determined to have KIBA recognized in the local community by championing efforts to enhance broker awareness.

Anyone involved as a board member and executive at the affiliate level can appreciate the extent of extra volunteer hours necessary to coordinate and plan affiliate events. The Kingston executive has hired a part-time administrator to coordinate meeting schedules, event planning and website administration.

The AGM held in January was a huge success, resulting in a record turnout to hear the one and only Debbie Thompson.

As always, Debbie’s presentation was highly motivational and informative.

The upbeat address attracted four new volunteers as members on the board.

Of course, other efforts are also under way. A Political Action Committee has been established, the first action of which was a meeting with MPP John Gerritsen in April. The Annual Charity Golf tournament, held May 29, hopes to best the $2,500 raised last year for the 2012 Special Olympics. And the 2013 tournament is expected to draw record numbers of participants and sponsorships thanks to the hard work of the golf committee.

TEAM APPROACH I would also like to congratulate Mary Rae Knapp and the Leeds & Grenville Affiliate for their nomination for IBAO’s Affiliate of the Year award in 2012. Congratulations to the London affiliate for their well-deserved win. We do hope London is keeping its pencils sharp for this year!

Two new members joined the Leeds & Grenville IBAO board in November. With its passion and continued involvement in the community, L&G has made numerous donations to various charities.

For example, the Relay for Life team is currently preparing to wow participants

with its magenta attire and unbridled enthusiasm. Team leader Jackie Kirkey spoke at the last general meeting, and her passion for this cause is contagious.

I was able to participate with them as part of a RIDE program held over the festive season. Drivers were very pleased to be rewarded for their safe driving, although there were a couple of incidents where we did not reward the drivers.

With a view to enhancing member satisfaction, a survey was sent to members asking them about what they expect.

With 45% of members responding, they said that community involvement is the number one priority. Coming in a strong second was social functions to network with vendors and interact with peers.

The affiliate also lent support by providing a $2,000 donation and sponsoring two OSAID chapters to be able to attend the 2013 National Student Leadership Conference in May. COMMUNITY SUPPORT The Stormont Dundas affiliate is also used to lending a hand. As part of the affiliate’s very popular golf tournament, it has made large donations to Crime Stoppers over the years. At its annual Christmas party, all of the sponsors are honoured.

YBC team leader Dan Cook continues in his enthusiastic and charming way to encourage new members to join. Dan was a guest speaker in an OSAID workshop held at a local high school, spoke at the Kingston AGM and provides updates at all Leeds & Grenville general meetings.

Territory 12 has a good relationship with its MPPs and MPs. Members have attended fundraising events and participated in a United Way Hockey event with MPs and other celebrities. I would like to thank our elected representatives for their positive reception and letters of support related to Federal Privacy commission findings. Personally, I even received a letter from local MPP Steve Clark in which he thanked IBAO for this information.

With the current activity at Queen’s Park, our PAVS are keeping MPPs informed of the IBAO response to the government’s proposed plan to reduce auto insurance premiums. A big shout out to Randy Carroll, our CEO, for keeping us all current on activities at Queen’s Park.

hr Strategies

Courtney Kidd, BPAPM, MIRHR Associate ENGAGE HR

Investing in a Winning Strategy It is the topic of conversation around most brokerage offices: How do we compete? More correctly, how do we compete — and remain competitive over the long­er term — under current conditions?

Is it really about competing? Sure. The argument can be made that what most brokerages actually want to do is not just compete, but also to win. So how can brokerages win?

There are different tacks a diverse set of business professionals might take. Our response would be one word: talent.

Top talent has been, and always will be, central to the success of every company. While this statement may not shed light on whether or not talent has received the value it deserves, we would argue that talent is the key to remaining competitive over the longer term.

No other than Bill Gates, Mr. Technology himself, reinforced this sentiment at a recent conference when he stated: “In the long run, your human capital is your main base of competition.”

Those who fail to take notice of the mounting difficulty that companies, regardless of size, including brokerages, are having to discover, secure and retain top talent will falter in their efforts to remain relevant to their customers as new challenges and opportunities emerge.

So what are the challenges that are preventing brokerages from getting this right and winning within their markets?

SECURING TALENT Some of the complexity in securing top talent — which may, in turn, be creating

roadblocks to a brokerage fulfilling its 2013 strategic objectives — include the following: 1) Insufficient Resource Allocation: Brokerages do not have the time, or money to properly assess and engage top talent. Post-2008, organization budgets were cut, with short-sighted decisions downgrading the ability for some to now take advantage of longer-term opportunities because of a slow pace of reinvestment in talent and training. For Ontario brokerages, there has been an increase in the difficulty of sourcing and securing talent in a timely manner. A competitive solution will require a reinvestment or reallocation of resources to get the job done. As summer approaches, take the time and assess brokerage needs to ensure the right people are in the right seats.

2) Inability to offer “premium” compensation: For small- to mediumsize companies, the ability to pay and/or reward employees in a competitive fashion can often create strains. Brokerages need to question what their value proposition is to employees, other than monetary compensation. In the current context of increased competition from the banks and directs, companies and agencies, more than ever brokerages must communicate this message effectively to prospective external (and internal) talent.

For brokerages that have not yet strategically questioned their organizational culture, level of engagement and the extent of non-monetary incentives that they provide to their employee group, today is a good day to start.

3) Insufficient skills and knowledge in the talent that exists: The current labour market is experiencing a large disconnect between available talent (as indicated by the high percentage of unemployment), especially among youth, and the jobs that companies are looking to fill. This divide speaks to a societal disconnect that is currently being seen and demands that brokerages take a more proactive hand in attracting talent to the broker channel.

One perspective is that any solution must have an impact on talent prior to the stage of post-secondary selection.

The brokerage community in Ontario needs a strategy that is more holistic, innovative and focused on the longer

term. Opportunities to create new partnerships with local high schools and colleges to support co-operative education and other entry-level work placements will help to generate talent pools in insurance across Ontario communities.

CHANGING TIMES Times have most definitely changed, as skill sets have become less concrete and the preferences of next-generation talent differ from that of more tenured employees. The current generation of talent is demanding that more be offered in a work environment to secure and retain loyalty and effort, with the cost associated with “bad hires” and related turnover only increasing in its significance to a brokerage’s bottom line.

The recruitment effort comes at a cost, but the value generated from the discovery, selection and retention of the “right” type of talent creates the type of competitive advantage that secures profits year after year. Each recruitment strategy needs to strike a balance between dynamic and direct, while reaching beyond that to help generate the type of talent that brokerages, and more important, customers, want to see.

The good news for brokerages is that opportunities exist to impact the creation of new career pathways, and cost-effectively recruit and reward talent in ways that make sense for the business, while engendering trust and engagement among an employee group.

To discuss these opportunities further or to inquire about tailoring a recruitment strategy for your brokerage, we invite you to take advantage of your complimentary one-hour call this month by contacting the ENGAGE Advantage Helpdesk at 905/306-8111, Ext. 240.

We would be happy to provide a source of support as the busy summer season rolls on. Please also feel free to follow us on Twitter at @ENGAGE_HR.

Each recruitment strategy needs to strike a balance between dynamic and direct.

July 2013 / The Ontario Broker

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It takes some doing to get to a 75th anniversary.

But Stan Darling Insurance Inc. has done just that, a testament to generations of family care, community involvement and great customers. By Angela Stelmakowich

staying power Stephen Darling, co-owner along with his brother Jason of Stan Darling Insurance Inc. in Burk’s Falls, Ontario, likes to quip that five generations have been involved in the family business.

(Of course, that includes the bookkeeping stint by his great grandfather and the filing done by his young nephew).

At 75 years young, this family owned and operated brokerage, which bears their grandfather’s name, has definite staying power. The brokerage has been celebrating for a while, but staff, insurer partners and members of the community were to gather July 16 for an open house.

Not having the exact date that the brokerage opened, “I thought what I would do is just use my grandfather’s birthday,” Stephen says, adding that this year would have been his 102nd.

To mark its milestone — and to thank customers and partners — the brokerage

has been doing monthly draws for $75 Tim Hortons gift certificates, is contributing 75 Bipper blankets to the fire services in both Burk’s Falls and Sundridge and is giving away an iPad every quarter.

Researching things that happened 75 years ago in 1938, Stephen notes that the birth of Superman was among these, a theme he is picking up on as the celebrations unfold. “You normally see us as just the mild-mannered reporter just doing the work behind the scenes, but in an emergency, we’ll take off the glasses and race off to your protection,” he says.

HANDING DOWN Stan Darling ran the brokerage until, at age 61, federal politics called him to Ottawa as an MP representing Parry SoundMuskoka. Not knowing how long the job would last, he left the running of the brokerage to his sons, Peter and John.

The job lasted a while. “He stayed there until he was 82,” Stephen laughs.

“Somewhere in that 21-year period, my dad and uncle just kind of said, ‘We own the business now. They ran it for that period of time and when that was all taking place, my brother and I both started to work in the business,” he says. The two bought the brokerage about 10 years ago.

“We try to keep all of the good things from the old days,” Stephen says, including trying to hire people out of the community — those who live in, support and shop locally — as much as possible.

“The majority of our staff start with us and then retire,” Stephen says with a laugh. “We’ve got a great, long-standing relationship with the staff,” he says.

“We’re lucky to have them.”

Thinking locally has, in fact, afforded an opportunity for Stan Darling Insurance to grow. Citing the addition of two broker-

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The Ontario Broker / July 2013

Photography by Wendy MacCrimmon

super anniversary Stan Darling Insurance will celebrate its 75th anniversary at an open house on July 16, what would have been the founder’s 102nd birthday.

well-staffed “We’ve got a great, long-standing relationship with staff,” Stephen points out. “We’re lucky to have them,” he emphasizes.

ages — one in Bracebridge and one in Gravenhurst, both of which fall within his grandfather’s old riding — in January, Stephen says this is helping to expand his marketplace and stake in the independent broker channel.

“I’m of the opinion that the broker is always going to have a place here, that insurance is far too complicated a product that touches every facet of life to leave it to a 1-800 number or to just doing things online,” Stephen says.

Beyond being geographically close, the new brokerages are also similar with regard to demographics, the options that customers are seeking and customer expectations. Rather than having 10 insurance companies to quote through, there are now 17, Stephen says.

The hope is that savings from consolidating redundant services — for example separate computer servers — will allow some sort of web-based solution to be

generation after generation Stephen and his brother, Jason, worked at the brokerage for years before they themselves became owners about a decade ago.

growing presence This past January, two brokerages (one in Bracebridge and one in Gravenhurst) were acquired. Calling them a good fit, they have also opened up new markets.

pulled together for “clients who feel capable of it and want to be able to interact and make certain policy changes.”

With four offices, spread over that amount of premium dollars and customer base, “that sort of broker management offering makes sense,” Stephen says.

He says the brokerage is open to more expansion should the right opportunity present itself. “My grandfather threw quite an impressive shadow,” he says. “I would just like to equal his legacy.”

STAYING THE COURSE Stephen says a picture of his grandfather, when he was in his 30s, hangs on the wall of his Burk’s Falls office. “It looks over my desk at me each and every day that I come into work and I always try to keep that in my mind,” he says. “I want to make sure his enduring legacy is always being upheld.”

The idea is to get others in the family

fitting legacy Beyond upholding his grandfather’s legacy, Stephen hopes that in 75 years, there will be a Darling at the helm also looking forward to the next 75 years.

involved, thereby ensuring that the brokerage continues. “The best thing I can do to make sure another generation wants to take this on is to continue to build and grow and make this the most successful brokerage I’m capable of doing so it will sustain these changing markets,” he says.

“I’d like to make sure that a Darling is sitting here 75 years from now talking about our 150th year and trying to escape the shadow of Stan and Stephen,” he says.

Stephen has been working at the brokerage since he was about 13, receiving his licence a month after turning 18 and studying insurance for a time at George Brown College in Toronto.

“Insurance has been in my blood for this entire time. To be here and to see that [the brokerage is] bigger than it has ever been,” Stephen says, “I feel like I’m looking in at the fishbowl that’s my professional life and really can’t believe how lucky I am to be a part of it.”

July 2013 / The Ontario Broker

09

E&O Corner

Hugh Fardy Senior Vice President The CG&B Group

Procedures: Manual Becomes Automatic We often hear about the importance of consistency in business. Anyone who has run a business will say consistency breeds efficiency which, in turn, improves return.

These are all valid points for any firm.

However, when it comes to insurance brokers, the greater importance may be in relation to errors and omissions (E&O).

Standard procedures are today’s “second set of eyes.” Having a set of well-established procedures for all operations offers the ability to control and minimize exposures, namely by installing checks and balances, catching errors and ensuring proper completion of transactions. write it down There is an old saying: If it is not documented, it never happened. That applies to procedures as well. It is key to the strength of your procedures to have them well-documented in a procedures manual, one that is easily available to all staff and kept current as things change.

Changes in procedure will be a constant today, so there is a need to create tools to monitor and update those procedures.

There are many factors that will create a need to amend procedures, such as changes

in technology, brokerage growth, product changes and client communication.

The procedures manual should contain each major transaction and the necessary steps to complete them.

Workflows, as well, are to be included.

They are not only part of the procedure, but also all the procedure.

Procedures should be established for things such as overall note making, as well as client and insurer communication.

For example, all written communication needs to be properly cited and referenced with client or policy numbers.

Procedures for recording telephone conversations, especially important for cellphone use, and client meetings and claim events need to be included. Just how do we handle a client call about a claim or potential claim? What do we say? What do we not say? These are all important items with regard to consistency.

Issues such as information-gathering, how we use or do not use applications, and what we are doing to add protection for the broker in the absence of a signed application need to be addressed.

How are we controlling who is doing what? We need to make sure we do not have staff involved in accounts or coverages for which they are not prepared. peace of mind A strong procedures manual that staff members are following will create a consistency in “how things are done” at the brokerage, and that consistency can become an important piece of protection should you be facing an E&O allegation.

When someone says you made a mistake or did not do something you should have, it is a comfort to be able to respond: “Yes, we did things properly.

That is our standard procedure.”

If ever asked about how you deal with items on accounts, the procedures manual will hold the answer.

A by-product of a strong procedures manual is its use as a training tool. When there is new staff or a staff member is new to a position, the manual will train everyone in the exact same procedures.

So, a strong manual will eventually have everyone doings things the same way... automatically!

10

The Ontario Broker / July 2013

PR Strategies

Huw Williams President Impact Public Affairs

How to be a PR Star As a small business owner, you are constantly looking for ways to make your brokerage better. However, faced with the numerous tasks and often last-minute demands that come with managing a brokerage, an owner may not always have time to implement those brilliant ideas.

Public relations activities are an example of initiatives that often go by the wayside in a small brokerage setting, as most likely do not have a devoted public relations specialist, and the creation and implementation of these activities can seem daunting and foreign.

When implementing an aggressive PR strategy, it is always good to seek professional advice from a PR firm, especially in the case of resolving a PR crisis. a simple, effective plan It is possible to devise a simple plan that is easily followed. Here’s how: • Select someone from your organization who has displayed initiative and who has good writing skills. Appoint that person as your brokerage’s PR contact, making his or her job to seek out PR events that the brokerage can organize or take part in, as well as write press releases and contact the media. It should be stressed to the PR contact that although he or she should always be on the lookout for PR opportunities, these activities should only take up only a few hours of his or her time on a bi-weekly or monthly basis (unless you have the option of devoting more resources to these endeavours).

• Work with this person to devise a simple PR plan for a limited period of time (i.e., quarterly, six months or one year).

The plan, which should be no longer than a few pages, should include the following elements: G Long-term PR goals: What is your brokerage looking to get out of this? (e.g., raise awareness of the organization as a superior customer-service brokerage in the area, or increase the profile of the organization as a brokerage that gives back to the community); G PR activities: Jot down ideas for events that you would like to hold in the selected timeframe and identify when those events will take place.

Do not be overly ambitious at first.

It is better to pick fewer events and activities that you will actually do (e.g., a customer appreciation BBQ, a donation and cheque presentation to local charity, etc.); and G Execution: Identify your course of action for the above-mentioned events (i.e., plan logistics of the event, create a local media contact list, draft a press release, make media calls, take pictures at the event and look out for resulting media clippings, among other things).

• At the end of the specific timeframe, re-evaluate your plan to see what worked,

and what did not. Plan your next period accordingly, continuing to build your media contact list and your media clippings package, which should include the press that you have earned.

Do not make the mistake of delaying the creation of your brokerage’s PR plan because you will soon discover that it takes much less time than you would think. Plus, once you have done one, you can build on it in the future.

There are many benefits associated with PR, as it is largely a risk-free and low-cost proposition for your brokerage that could lead to thousands of dollars of earned media, and most important, can create widespread recognition of your brokerage by the community.

Do not hesitate to contact IBAO’s Public Relations Associate, Emily Reid, by e-mail at emily@impactcanada.com or by phone at 613/233-8906 for PR advice on your next event.

Huw Williams is president of Impact Public Affairs, an Ottawa-based public relations and government relations firm specializing in finding innovative strategic communications and advocacy solutions for large industry associations. Over the years, Impact has been recognized nationally and internationally for the effective and creative public affairs campaigns that it has created for its clients.

Do not be overly ambitious at first. It is better to pick fewer events and activities that you will actually do.

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July 2013 / The Ontario Broker

11

Government Update

Arthur Lofsky Government Relations Consultant IBAO

Ontario Budget 2013 Passes When the Ontario legislature rose in June 2013, it marked the end of a very significant and eventful period in provincial politics and for Insurance Brokers Association of Ontario (IBAO).

Not only did Ontarians witness the installation of its first female premier, Kathleen Wynne, and her new cabinet, but auto insurance figured highly in the political calculus to keep the minority government alive.

If one rewinds to December 2012, it seemed almost certain the next Ontario budget of the yet-to-be determined new premier would not survive, thereby triggering an election. However, Premier

Wynne, determined to govern, acceded in whole, or in part, to all of the NDP’s demands, as put forward by party leader Andrea Horwath as a condition for passage of the budget.

On May 2, the long-awaited budget of the new Wynne government was finally tabled. It contained a 15% premium reduction target over time in the legislation. It also included important measures to implement recommendations of the Auto Insurance Anti-Fraud Task Force, something that IBAO has been calling for for some time.

In addition to health clinic regulation, and expanding the Financial Services Commission of Ontario’s (FSCO) investigative and enforcement authority in the area of fraud prevention, the budget commits to begin work on the provincial oversight of towing and on the catastrophic impairment definition.

It also commits to a review of the dispute resolution system and measures already taken to eliminate the backlog.

In order to achieve the targeted reductions, the government has given the Superintendent of FSCO the power to compel insurers to re-file for lower rates once the reforms are implemented. This power will be prescribed by regulation at the superintendent’s discretion and will allow for prudential exemptions.

It appears the government has toned down the language, specifically saying that any reductions will have to be measured and implemented responsibly.

12

The Ontario Broker / July 2013

This means that no insurer will be forced to re-file for rates that would threaten solvency and prudential obligations.

IBAO’S RESPONSE IBAO welcomed the anti-fraud reforms as a central part of the plan to lower auto insurance premiums. The association has been advocating for these changes, and we are encouraged that the provincial government intends to move forward with these reforms.

Prior to the budget, IBAO had been emphasizing the desire for lower rates for customers, but that any changes had to be responsible and not arbitrary or unrealistic. This was the top message delivered to MPPs during IBAO 2013 Awareness Day on April 16.

Since the introduction of the Ontario budget, IBAO had been concerned with government messaging with respect to the 15% average rate reduction.

IBAO made its concerns known to the government and MPPs that expectations were being set too high. It appears the government has toned down the language, specifically saying that any reductions will have to be measured and implemented responsibly.

Another concern had to do with the actual passage of the budget legislation.

It contains the health clinic licensing framework and other measures to implement recommendations in the anti-fraud task force report.

IBAO made its views known that we strongly supported the passage of this legislation so that the government could get on with implementing the important cost-saving reforms it contained. Even more critical was our firm admonition that any attempts to require rates to be reduced within an unreasonable period of time would be irresponsible and would be strenuously opposed by IBAO. In the end, the budget did pass, allowing the Wynne government to survive another day. The crucial budget motion was passed on May 29 and the budget bill passed third reading June 11.

IBAO will now be turning to the government’s vital work of implementation, which promises to keep the industry quite active for the next couple of years.

Wellness Matters

Lorraine Dauphinais Director, Prevention and Training Solareh

Managing Stress on the Job Stress. It is a word heard virtually every day in the workplace. Working under pressure has become so commonplace that many of us now see stress as a fact of life that we cannot do anything about.

Not all stress is bad, of course. There is such a thing as positive stress. This is the kind of stress that helps us work well under pressure, finish a project on time and meet the demands of our clients.

Most often, however, we hear about negative stress that undermines our health and productivity. The good news is that by understanding the factors that cause stress, its effects can be minimized.

Furthermore, each person responds differently to stressful situations. As a result, it is important to pinpoint what triggers your stress so that you can do something about these triggers and the negative effects they can have.

TAKE CHARGE OF YOUR BEHAVIOUR Sometimes, you do not have any control over your stressors: situations such as a difficult boss, a lack of resources to help do your job properly, inefficient tools, and continual conflict are not always easy to manage since these things are not necessarily within your control.

You may not be able to change working conditions or other people’s attitudes, but you have full control over your reaction to these situations. For instance, if an inability to say “No” leaves you swamped with work, there is no point hoping that others will stop overloading you, or for you to constantly complain about your workload. It is up to you to set your

boundaries, make people aware of these boundaries, and stick to them.

Rather than creating additional stress by trying to change other people, it is better to focus your efforts on how you react to stress. It will be easier to modify your own attitudes and behaviours in these situations.

• Use your energy wisely: Another way to reduce stress is to use your energy when at its peak. If you have all kinds of energy in the morning, use that time to do the most difficult tasks requiring the most effort, and keep easier tasks for the end of the workday.

• Take frequent short breaks: When people are working under pressure, they often convince themselves that working non-stop will allow them to get more done. On the contrary, not taking breaks actually makes people less effective.

Breaks are essential to helping recharge our batteries, allowing us to be productive for more of the day. In other words, the

Diet has a direct impact on the physical effects of stress. time spent relaxing and clearing one’s head is an investment that will ultimately make a person more effective.

• Have good eating habits: Diet has a direct impact on the physical effects of stress. Make healthy, nutritious food choices, avoid eating while working, and most important, do not spend the lunch hour talking about work problems or conflicts.

Lorraine Dauphinais is director of prevention and training at Solareh, a national company that offers employee and manager assistance programs, return to health and work services, and wellness programming. For more infor­mation, contact Peter MacDonald, Account Executive, at 1-866-796-0812 or by e-mail at pmacdonald@solareh.com.

Exclusively Connect With Over 12,000 IBAO Member Licenced Insurance Brokers across Ontario Each Month

The Ontario Broker magazine provides insurance communicators with an exclusive and unmatched readership/reach within which to advertise and connect with brokers.

See all the digital editions at: www.ibao.org/news/the-ontario-broker For advertising information contact:

Steve Wilson: steve@canadianunderwriter.ca

Official Publication of the Insurance Brokers Association of Ontario (IBAO)

July 2013 / The Ontario Broker

13

Community View Kevin Warren Vice President, Operations Independent Broker Resources Inc.

Helping the Helpers

Left to right: Wayne Shipley, Kelly Morrow, Patty Crawford and Jim Mann Members of IBAO donated 50 magenta fleece blankets to the Middlesex Volunteer Fire Department, which provides assistance and emergency response in the rural areas of Delaware, Arva, Bryanston, Coldstream and Ilderton. Beyond the donated blankets provided to the department, more were given away at the 4th Annual Middlesex Health and Wellness Fair, held in early May.

STRATEGY EXECUTION INFLUENCE Leaders in helping associations take advocacy and communications to the next level.

CONTACT US 613 233 8906 www.impactcanada.com LOCATED IN OTTAWA

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TORONTO

MONTREAL

Independent Broker Resources Inc. (IBRI) welcomes Kevin Warren in the position of vice president of operations. Kevin will be responsible for developing, implementing and monitoring broker products and services strategies in the marketplace.

Primary among these initiatives will be ensuring that IBRI is recognized as an industry leader in the creation of premier products that address the current, emerging and future needs of brokers.

Kevin began his career in the insurance industry in 1994 as a fire underwriter for State Farm Insurance. He moved quickly to the sales distribution side as an agent, sales consultant and field executive responsible for expansion and success of brand new agents across Canada.

In 2010, Kevin joined Risk Management Services as senior vice president of operations. It was in this role that he gained extensive operational experience that led to profitable, sustainable growth for the organization.

Kevin’s passion is collaborating with teams to deliver value, results and operational excellence. His long-standing experience in the broker channel, along with his creativity and innovation, makes him a definite asset to the IBRI team.

Mina Cicconi Conference & Special Events Coordinator Insurance Brokers Association of Ontario Insurance Brokers Association of Ontario is pleased to welcome Mina Cicconi as its new conference and special events co­ordinator.

Mina’s responsibilities will include co­­ordinating and planning the IBAO Annual Convention, Awards of Excellence and annual and regional meetings, as well as assisting with large educationbased events.

Mina’s event planning career spans 13 years. A creative thinker with a background in customer service and fund­raising, her expertise lies in planning high-profile marquee corporate and charitable events, conferences, meetings, weddings and other social milestone occasions.

Mina recognizes that a great event is more than just logistics; it’s about creating a compelling experience that resonates with guests. Backed by her strong project management skills, she orchestrates events with a sophisticated understanding of current trends, further aided by her meticulous eye for detail and style.

In her spare time, Mina enjoys dis­covering new music, retail therapy, perfecting her baking techniques, riding her bike and oil painting.

The Ontario Broker / July 2013

FINAL_

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13-06-24 3:42 PM

IBAO School of Insurance EDUCATION FOR BROKERS BY BROKERS

Summer & Fall Education Offerings New Basic Broker Extended Preparation Course The Basic Broker program takes students through the “Fundamentals of Insurance” textbook and covers the requirements established by RIBO to successfully complete the Level I Licensing exam.

Combining the benefits of classroom facilitation and self-study, this course was structured specifically for individuals who are unable to complete two consecutive weeks of training and/or require additional time to study the content.

Dates

Fee

Time

Location

Week 1: August 12 – 16 Week 2: August 26 – 30

$600.00 (includes materials)

IBAO School of Insurance

8:30 a.m. – 4:00 p.m.

Upcoming Webinars

www.ibao.org/education

Personal Umbrella Liability The frequency and size of third party liability awards have increased dramatically in Canada over the last ten years, because your client’s life styles are changing. Learn how a Personal Liability Umbrella Policy can enhance your client’s third party liability protection in a comprehensive and cost effective manner. Gain a solid understanding of umbrella insurance and how it works.

Date

August 27, 2013

Check our website for 2013 education courses and programs ibao.org/register

Time

9:30 a.m. – 11:45 a.m.

As there are “… almost as many types of condos as there are kinds of people who want to live in them…”

Understand the difference between traditional condos; freehold condos and life leases. Participate in discussion on the appropriate insurance solutions for the owners/ occupiers and be equipped to provide accurate insurance advice to your condo clients.

Date

September 5, 2013

Time

9:30 a.m. – 11:45 a.m.

Understanding Residential Heating Systems Including Wood Heat

Understanding Residential Plumbing and Electrical Systems

Fuel types and heating appliances used by your clients have a direct bearing on their property insurance rates and eligibility. By attending this webinar you will increase your ability to perform front line underwriting duties and confidently explain the residential heating system insurance concerns to your brokerage clients.

Recommended for: Personal Lines, Account Executives and CSR’s

Houses are more than four walls and a roof, plumbing and electrical are critical components in a home’s composition. Some topics covered include: galvanized plumbing; aluminum, knob and tube wiring and 60 amp electrical panels. ‘Residential Plumbing and Electrical Systems’ will provide you with the knowledge needed to help your clients understand the risks associated with older wiring and plumbing systems.

Recommended for: Personal Lines, Account Executives and CSR’s

Date

September 18, 2013

Time

9:30 a.m. – 11:45 a.m.

Webinars Facilitated by Jo Anne Mitchell, CIP, Effective Training and Communications Plus

Webinar Fees* QUESTIONS? Contact the IBAO School of Insurance at 416-488-7422 or 1-800-268-8845.

Insurance Solutions for Condos & Life Lease Units

$125 per person $150 group rate for 2-3 people $175 group rate for 4-6 people $200 group rate for 7-9 people

Date

September 25, 2013

Time

9:30 a.m. – 11:45 a.m.

*Note: For group registrations, register one person using the appropriate group rate. Email the balance of the names to Tracey Blouin at tblouin@ibao.on.ca.