The Ontario Broker October 2013

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THE ONTARIO BROKER

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

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s tion s

Why brokers need to lead the Telematics Revolution 02 president’s message 04 hr strategies 06 art of conversation 08 ceo corner 10 csio update

12 the telematics revolution 14 in the community 16 Building a better brokerage

17 e&o corner 18 legal briefs 19 ribo elections 20 awards of excellence 22 community view

President’s Message The Official Publication of the Insurance Brokers Association of Ontario (IBAO)

Time Flies!

Published by

Editor Angela Stelmakowich astelmakowich@canadianunderwriter.ca 416-510-6793 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 / October 2013

Debbie Thompson, CAIB, CRM President IBAO It’s hard to believe that my term as your president is coming to an end. It feels like I just started to deliver my message, and now it’s time to embrace a new theme to be delivered by incoming president Chris Floyd — who I am proud to also call a friend — at this year’s up­coming 93rd Annual Convention.

I would like to take this time to reflect on the past year and where I see brokers leading as a distribution channel.

I actually wrote this article while in beautiful St. John’s, Newfoundland, where I had been attending the Insurance Brokers Association of Canada’s annual meeting. Not far away is Cape Spear — where Canada begins or ends, depending on how you see it.

It was clear to me as we connected with brokers from across our great country that no matter where you are from — be that big city or small town — as insurance brokers, we have common goals, and that is

to be an advocate on behalf of the consumer.

It is also essential that our government knows we have the best interests of the consumer (their constituents) in mind when it comes to the distribution of insurance. Forging relationships with our local MPPs or MPs is important to ensure our voice is heard. It shows our strength!

Our BIP (broker identity) is a powerful brand. It has been 25 years since the brand was introduced to our industry, and we get to celebrate its power throughout our country.

The magenta tide, as Bob Kimball (past president of IBAC) so aptly described it, is synonymous with the rise, and sometimes fall, of the challenges we face.

More often though, it represents the opportunities we have to showcase who we are as a brand by delivering an experience that connects with the consumer and our stakeholders.

TOOLS TO SUCCEED In Ontario, your association has been leading in technology through various ways to provide members with the tools and resources needed to ensure you can deliver an experience that is second to none. E-docs is live with four major broker management system (BMS) vendors, which shows not only that insurance companies are willing to work with us, but also that they understand the importance of delivering a solution to their distribution channel (you) as opposed to building proprietary ones.

This development was a real opportunity to drive

real cost efficiencies into our offices, and to reach even further with more robust projects, such as the IBAC Data Exchange. This was — and will continue to be — a win for our channel.

IBAO’s mobile app was another win. No doubt, the app will continue to be a tool that will enhance the customer experience as we now embrace the new world of telematics (usage-based insurance).

As per our announcement in September, Independent Broker Resources Inc. (IBRI) will partner with one of the leading providers of insurance technology, Quindell Portfolio PLC, to introduce ground-breaking telematics technology to the Canadian marketplace. This provides brokers an exciting opportunity to lead in a solution that delivers another choice for the consumer.

Telematics is a leadingedge technology that is rapidly expanding throughout the world, and we believe that 10% to 30% of all Canadian auto insurance policies will transition to being telematics-based.

So why wouldn’t our distribution channel lead this “magenta tide,” especially when we are the ones best-equipped to ensure that consumer interests are protected… it’s what we do best.

Over the next few months, you will hear more from IBAO about the delivery of an additional solution that will provide us, as brokers, with yet another great opportunity to lead. I encourage you to embrace this leadingedge technology and to

continue to educate yourselves as it becomes more in demand.

Times are changing, and we have to be ready for the change.

CEMENTING CONNECTIONS Finally, we had an opportunity to increase educational offerings not just in Ontario, but also to share with our sister associations what we know about how consumerbuying habits have changed in this 21st century.

Connecting with the 21st-century consumer is paramount to our channel in understanding why today’s consumer demands more and how, as leaders, we can deliver. It means we have to open our minds to the idea that conversations are moving online — and that means we have to move

our customer service teams online as well.

Brokers must be able to capture all opportunities presented to us, while at the same time, ensuring that our advice-based service continues to be available and just as strong as it has always been. Being accessible in all avenues will allow us to be responsive to the needs of the consumer of today.

Not responding is a response — but it is a response that says, “We don’t care.” Let’s all take the time to be responsive and understand today’s consumer.

This next year gives us an amazing opportunity to continue our leadership. I believe that we have been Leading the Way with Our Vision, Our Brand, Our

members of IBAO’s executive team, board and staff — all of whom share the same passion and direction.

Thank you!

Strength, and I feel very honoured to have been part of this association, to have represented our members this past year, and to have worked side by side with

President’s Schedule:

CEO’s Schedule:

November 7 TIC Black Tie

November 9 IBAC BIP Meeting

November 7 RIBO AGM

November 12 Board Orientation

November 12-13 Board Orientation/Board Meeting

November 12-13 Board Orientation/ Board Meeting

November 13 Executive Dinner Meeting, GCNA

November 13 Executive Dinner Meeting, GCNA

November 14 Executive Meeting

November 14 Executive Meeting

November 14 Executive Lunch Meeting, Dominion November 20 Peterborough Affiliate Meeting

IBAO would like to thank all our sponsors . . .

MAGENTA SPONSORS

platinum SPONSOR

GOLD SPONSORS

SILVER SPONSORS BMO Bank of Montreal Northbridge Insurance WINMAR Gore Mutual Insurance

BRONZE SPONSORS Totten Group Burns & Wilcox Canada Wawanesa Insurance Pembridge Insurance Company First Insurance Canada

FRIENDS Zurich Canada WineryPak Insurance Bureau of Canada Industrial Alliance Benefits Coordinators BCI Inc. Elliott Special Risks

DAS Canada Canadian Litigation Council Applied Systems MEDIA SPONSORS Canadian Underwriter Magazine Ci — Top Broker Magazine

October 2013 / The Ontario Broker

03

Trevor Carruthers Associate ENGAGE HR

Social Setting Whether we like it, dislike it, participate in it regularly, or choose to ignore it, social media is a powerful force for both communication and change that is here to stay.

Social media has altered the way that employees, employers and customers interact, both in their personal and professional lives — although the jury is still out on the positive and negative aspects of its use.

Websites that began offering innovative ways to connect with friends have morphed into vehicles of business opportunities for increasing marketing presence, doing customer research, delivering sales messages, cultivating client leads, and even conveying individual capabilities to potential employers.

The potential outcomes and uses are too vast to list, but consider these helpful tips for the appropriate use of social media from both a personal and professional view. This has quickly become a hot-button issue, and I believe it will only continue to grow in importance as the use of social media continues to evolve.

Often, individuals or businesses use social media as a tool to brand themselves, including with regard to the following: who they are, what they have done or accomplished, what they like and where they work, as well as possibly for voicing support for a variety of causes.

When leveraged correctly, this can have a potentially positive impact in creating a solid personal and professional brand.

Alternatively, associating ourselves with certain entities or causes whose actions or behaviours are not aligned with the values of your own organization can 04

potentially negatively impact your brand — and subsequently that of your em­­ployer. To avoid potential “brand blunders,” below are some common ground rules when using social media in a successful and positive fashion: 1. Disclose who you are and what your relationship is — Whether you are using your personal accounts on behalf of the organization, or are an authorized user of the organization’s social media account, it is important to identify who you are, and what your relationship is to the organization you are representing.

This includes iden­tify­ing your real name, that you are employed by a specific brokerage, and your role at the brokerage.

When representing the brokerage in an official capacity, be sure to speak about your area of expertise. Whether it is under­writing, sales, personal or commercial insurance products, focusing your communications on an area of specific expertise will allow you to leverage the greatest amount of credibility with readers, and subsequently, will likely have a greater impact on your message.

An individual’s online presence is far from private, and often it is easy to find out if an individual is associated with a specific employer. If you are not officially representing the brokerage while using social media, be sure to make clear that the views expressed are entirely your own, and are not necessarily those of your employer. As a best practice, consider including a disclaimer in your profile, or alternatively, include it in any messages/ communications you may post.

2. Protect your privacy and that of the brokerage — Everything you say/post/ contribute when using social media should be considered “on the record” material, with little or no expectation of privacy. As such, it is important to respect the confidentiality and/or legal guidelines outlined by your employer.

Specifically, this includes not sharing any of the brokerage’s proprietary information. Further, this discretion extends to your personal use of social media where you may, unwisely, vent frustrations about co-workers or your employer.

With varying levels of privacy control on posted material, assume that any content you contribute referencing a

person or organization can, and will, be read by them.

If you are feeling unsure about whether or not it is appropriate to post specific material — hold off and discuss it with your manager or principal first.

As mentioned previously, anything you may write/post/contribute is ultimately your responsibility, and the consequences of posting carelessly can impact far more than just yourself.

3. Utilize good judgment in generating content — It is easy for the lines between “professional” and “private” to be blurred when using social media. Perceptions that you may share as your own can reflect on your employer as a result of any known association with them. As such, it is important to be selective about sharing value-additive content. Focus should be placed on uploading information that will bring a positive impact to those who may follow you. Sharing for the sake of sharing does not equate to value or improved perceptions of you or your brokerage.

Further, social media has changed the landscape for consumers to share feedback. They now have the opportunity to provide feedback through the use of “comments”, “re-tweets” or “sharing,” leaving the brokerage with much less control over how a message is managed.

It is important for such feedback to be taken constructively, and dealt with in a timely and appropriate manner. This does not mean negative “posts” are deleted, but instead that they are used as an op­­ por­tunity to address the concern politely, and expeditiously. Not every comment requires a response, and employees are encouraged to utilize common sense about whether or not replying to a comment will add incremental value to the “conversation.” Be selective about how and when you respond to customer feedback — both positive and negative.

Should you have any questions about developing a tailored social media policy for your brokerage, or any other HR Policy, we invite you to take advantage of your complimentary one-hour IBAO Member benefit this month by reaching out to the ENGAGE Advantage Helpdesk at 905/ 306-8111, Ext. 240. Please also follow us on Twitter at @ENGAGE_HR or e-mail me directly at trevor@engagehr.com.

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HR Strategies

The Ontario Broker / October 2013

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ART OF CONVERSATION person who does run a business is mandatory for anyone wanting to be a success.

Stuart Knight President Stuart Knight Productions

Embodying the Entrepreneur Is being an entrepreneur all that it’s cracked up to be? People always say to me at the end of my speeches that they want to be an entrepreneur just like me.

In those moments, I often think, “Are you sure?”

I have been a full-time entrepreneur for 20 years and I like to believe that I am pretty good at it. I have won some awards, and I have been able to reach some pretty special milestones.

Over the past 20 years, I have also learned that it does not matter whether or not you choose to become an entrepreneur. Rather, it is about whether you choose to think like an entrepreneur.

This represents the difference between getting acceptable results and reaching exhilarating goals.

Let’s face it, running a business is not for everyone. However, thinking like a

Plan to excel Below are five lessons I have learned as an entrepreneur, and they are lessons that I encourage you to apply to your life if you want to excel at what you do.

• Find a Mentor — Choose someone who exemplifies the kind of person you want to become. Ask that person to have a one-hour phone call with you once a month. Have 10 questions prepared for every phone meeting that you have with your mentor. Every successful person on the planet has a coach. Will you be the exception to that rule?

• Take Risk — Make a daring phone call once a week, throw some money behind an idea, ask for something you deserve, move to a new city or town. I went $250,000 in debt before the age of 30 to build my company. Today, those loans are paid off and I have never looked back.

Take a risk and trust me when I say, you can handle more than you think.

• Be Creative — When I wrote my first musical, I could not find a theatre in Toronto that would take me on. Instead of giving up on my idea, though, I rented a big loft and built a theatre and invited sold-out crowds to join me in my living room each week for four years. Get creative in finding solutions. There is always a solution. Can you find it?

• Think Big — How many stories do you have to hear of ordinary people doing

Excuses are the things people use when they are too afraid of doing something. You are better than that. extraordinary things before you start believing it? Start anywhere, because “anywhere” is still somewhere and it will lead you everywhere.

• Avoid Excuses — For every excuse you can think of for why you cannot do something, I can find 50 people who could have used the same excuse and did not. Excuses are the things people use when they are too afraid of doing something. You are better than that.

In order for a person to be a successful entrepreneur, that individual must follow these five lessons. However, it does not matter whether you want to run your own business, be the best mother in the world or be the greatest broker in the city. Apply the mindset of an entrepreneur to any com­ponent of your life and you will always be your own boss no matter who you work for.

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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CEO Corner

Alister Campbell CEO The Guarantee Company of North America

Difference Makers This article is not about Ontario auto.

If it were, I would almost certainly say recent events are proof-positive that 30 years of over-regulation and mismanagement of the auto insurance product have taught Ontario governments little.

I would acknowledge there are many unknowns around the most recent government interventions — that no one knows what the impact on insurer results will be from the mandated rate reductions, or what the efficacy, timing and true impact of promised product reforms will be, or what measures will be put in place to further reduce fraud in the system.

In fact, I would probably say, there is only one thing we know for sure regarding the proposed changes: brokers are already finding growth a challenge in the current environment, even before the mandated rate reductions. We can be absolutely sure that the latest “reforms” will put further downward pressure on brokerage revenues and make growth that much more challenging to achieve.

This is where I want to start my article.

Threats to the independent broker distribution channel are many and manifest. As I have written and stated publicly many times over the years, there remains a significant opportunity for brokers who successfully position themselves as “trusted advisors” in both personal and commercial lines.

Recently, I have been challenged by the argument that the sheer scale of bank competitors, the growing size of insurer-owned brokerages, as well as the scope and scale of the “new nationals” and “mega-regional” brokers is making it 08

The Ontario Broker / October 2013

simply impossible for the “little guy” to compete, and win.

So what is the “little guy” to do?

Specialize.

When I ask brokers to describe what differentiates their businesses from other local and/or regional competitors, the vast majority proudly answer, “our service.” The problem is that it is the same answer all other local and or/regional competitors in the same trading territory give! An undifferentiated value proposition is, in fact, no proposition at all.

Let’s consider a few non-industry examples of “small” specialty players who have proven themselves capable of competing with, and even beating, larger generalist players through differentiation.

• lululemon — higher confidence levels and potentially improved lifestyles for product wearers, as well as their own retail locations; • Kashi — an implied health/organic benefit has forced the company onto the Loblaws cereal shelf despite the leverage of General Foods; • Starbucks — quality and customer experience; and • Porter Airlines — targeting business commuters with convenience, service and comfort.

In each case, a start-up driven by an entrepreneurial vision has been able to achieve measurable, wealth-creating success in markets that appeared saturated or dominated by major players.

In each case, the success was based on focusing on a niche and creating a compelling value proposition targeted at the unique needs of a customer sub-set. In each case, efforts to copy the proposition by the established players have not been able to re-claim market share.

I believe these examples can provide both lessons to learn from and inspiration to draw confidence from regarding the future of the independent broker channel.

Let’s bring it back to a local broker, who believes customer service is what distinguishes that business in the market.

My point is not that “service” cannot be a potentially differentiating strategic element, but rather that in personal lines, I have not yet seen a case where a local independent broker is marketing the unique ability to provide “service”

in a specialized way.

What do I mean by that? I wonder what would happen if, for example, a broker advertised itself as “your local home insurance expert.” Residential rates are climbing and in many cases, home premiums are now equal to or greater than auto premiums.

Residential applications ask many more questions than auto — and the product is much harder to sell direct. Even more significant, perhaps, is that the asset (the client’s home) is usually way more important to the customer.

In other words, residential is a great business for a “trusted advisor.” As such, brokers who set themselves apart in this segment first may gain a real advantage.

Easier said than done, right? All you entrepreneurs are way better at this sort of thing than a “company man” like me.

However, some ways a broker might start specializing in this area would be to host seminars on issues that impact home­owners, such as how to install sewer backup valves to reduce risk. Or providing personalized counsel on topics such as how to improve credit scores and, in turn, help reduce their premiums.

In commercial lines, specialization is just as powerful a tool. Every study I have seen on this subject confirms the number one attribute a customer looks for when selecting a commercial lines broker is… “someone who understands my business.”

Even if you are a smaller generalist broker, it is necessary to find ways to build a specialty practice or two, or partner with specialist underwriters to leverage your deep community-based relationships in joint sales initiatives.

The broker channel is fighting against some large-scale “machines” like banks.

The Guarantee’s 141-year-old Canadian brand is also up against machine underwriters many times our size. I believe your winning strategy is the same as ours.

For us, specialization enables true customer knowledge that can yield real underwriting insight; for you, specialization enables brokers to grow and sustain your customer base by becoming a “trusted advisor” — customers who will ensure sustainable growth whatever the short-term revenue pressures the latest Ontario auto reforms will create.

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CSIO Update

Pranab Pandey Manager of Standards & Business Process Improvement CSIO

TLS Provides TLC for Client Data Brokers communicate a significant amount of confidential information on behalf of clients to insurance companies, but there are security risks associated with sending this information in an unencrypted manner via regular e-mail.

E-mail can be an acceptable medium for transferring such sensitive client information only when it is enabled with Transport Layer Security (TLS).

Aaron Sargeant, IT supervisor at Darling Insurance in Peterborough, Ontario, made it a priority to have TLS implemented at the brokerage after learning about its strong security features.

“CSIO has done a good job of raising the awareness flag on TLS, which got us to consider implementing it,” says Sargeant. “Now every piece of e-mail leaving Darl­ing Insurance is encrypted, so the main benefit is obviously the protection of client information.”

The brokerage implemented TLS for its e-mail communications this past July.

TLS is recognized across multiple industries as the best low-cost, e-mail security solution for businesses. It protects e-mails sent over the Internet by encrypting them, making them very difficult to intercept and to decode. Most insurance

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companies in the Canadian property and casualty industry already have TLS fully enabled on their e-mail servers.

There are many benefits to implementing TLS, including ensuring that your brokerage complies with privacy legislation, such as the Personal Information Protection and Electronic Documents Act (PIPEDA), which states the following: “Personal information shall be protected by security safeguards appropriate to the sensitivity of the information.”

TLS can certainly be considered one of these safeguards. “Implementation of e-mail security with TLS is an important step for any brokerage to take to be compliant with PIPEDA,” affirms Sargeant.

TLS can help brokers stay within their own broker management systems (BMSs) more often when completing policies for customers. “Because of TLS, we don’t have to use company portals as much, which tend to be cumbersome for customer service representatives (CSRs) to launch and navigate,” says Sargeant.

“It’s so much faster to attach a pdf to an encrypted e-mail and fire it off to the company. It can take five to 10 minutes to do a simple change in a company portal, whereas the same change in our BMS would take maybe three minutes. So, CSRs are able to complete a higher volume of work in a day and that means a higher level of efficiency,” he adds.

TLS can even be used as a marketing tool for brokerages. Once implemented, brokers can promote TLS during their sales process to communicate that they have secure e-mail and take data security very seriously. “Most of our large commercial clients have TLS implemented already and when dealing with such clients, it’s great that we can now boast that we’re encrypting any of the e-mails going back and forth between us and these companies,” Sargeant notes.

There is a very low implementation cost associated with TLS — digital certificates must be purchased, which tend to range in cost between $45 and $200 per year. Contact your IT support company and ask them about implementing TLS in your organization.

To learn more about the benefits of TLS, as well as for technical advice on implementation, visit www.csio.com.

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Can Brokers Lead the Telematics Revolution?

Colin Simpson CEO IBRI Can brokers lead the telematics revolution? The answer is a resounding, “Yes.” Perhaps a different question to be asked is the following: Should brokers lead the telematics revolution?

As we all know, the Canadian insurance market is somewhat fragmented and geographically diverse. Throw in to that mix the different regulatory and market models that exist across the country and it is no wonder that bringing innovative products, like telematics, to Canada can be a challenge. That said, the value proposition of the broker network is very clear: Through a broker, a consumer can obtain the best value insurance products

and service in the country. Through a broker, consumers can obtain personalized support and advice that will protect them and their families. A broker is the only insurance distribution intermediary in the country that has access to multiple insurance companies from which consumers can choose the best product and service to suit their individual needs and lifestyles.

One challenge of today’s broker business model is to significantly increase the frequency of connection that a broker has with its customers, the consumer.

The greater the frequency of connection with consumers, the greater potential there is to create and show value.

If telematics continues to be introduced in to the marketplace in the manner with which it is evolving today — that is, without the benefit of broker intervention — then insurance companies will erode the broker value proposition and make the ability for you, the broker, to connect with your customers significantly more difficult.

Take some time and think about it — really think about it. What you decide to

do next could determine the future of your role within the broker network.

In this developing model…

• the insurance company provides a telematics insurance product direct to a consumer; • if the company distributes its products through the broker network, it will credit the broker with that “sale” (all reasonable so far); • the insurance company collects the consumer’s data from a black box inserted in his or her car to affect rating variables to make the product attractive to that consumer; and • as the consumer drives, the data is collected and picked up by the insurance company, which will influence the consumer’s premium accordingly (how this will actually be affected is still under regulatory review and subject to debate).

For all this to work, the insurance company will be required to communicate to consumers on a regular basis with respect to how those consumers are driving and how the driving behaviour of each person is impacting the telematics insurance product.

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The Ontario Broker / October 2013

In this model…

• Does the broker communicate with the consumer? No, the insurance company does.

• Does the broker interact with the consumer in a meaningful manner (being able to interpret the impact of driving behaviour on the insurance product)? No, the insurance company does.

• Does the broker have the ability to facilitate consent changes to the access to the consumers’ data? No, the existing consumer consent is under the control of the insurance company.

• Does the use of a telematics product in this manner strengthen the broker brand? No, it significantly weakens it.

If telematics continues to be introduced in to the Canadian market in the manner it is being introduced today, brokers will see their consumer value proposition eroded, and their ability to communicate meaningfully with customers significantly damaged.

Given that the most likely users of telematics products are also the very future generations of the broker model — this should concern us all.

Should brokers lead the Telematics revolution? Absolutely. Can brokers lead the Telematics revolution? Yes. Can brokers do this alone? The answer lies within IBAO’s Mission Statement: The IBAO has committed to… driving

collaboration between members, consumers and other stakeholders resulting in innovative solutions for the betterment of the industry. The key is collaboration.

For those attending this year’s IBAO Convention, you will already be wellaware that your association has agreed to invest heavily in developing a solution that will squarely place the broker network at the forefront of the Telematics revolution across Canada.

The IBAO solution, through its wholly owned subsidiary Independent Broker Resources Inc. (IBRI), directly supports the position of the Ontario regulator, as stated in its October 3, 2013 bulletin, which is to ensure consumers interests are upfront and foremost.

The model being implemented by IBRI will deliver the following: • a framework that, from the onset, places and keeps the consumer and consumer choice upfront and foremost; • value-added products and services beyond the insurance policy that promote the individual broker brand; • multiple opportunities (and the tools) to connect and communicate with your telematics customers on a regular basis; and • the ability for brokers to provide personalized support and advice on which telematics products are most suitable for their customers.

In line with the mission statement, IBAO’s solution also enables collaboration within the industry. Specifically, it provides insurance companies with the following: • the opportunity to support their chosen distribution networks; • the opportunity and tools to enable the growth of insurance partner brand recognition; • the opportunity to develop, implement and distribute their own value telematics product; and • the provision of a framework that clearly supports and facilitates compliance with the considerations and requirements of the Ontario regulator.

The IBAO/IBRI solution will give you, the broker, the opportunity to not only prevent the erosion of your consumer value proposition, but also place you back in to the driving seat of telematics.

What do you need to do to engage?

Attending the Closed Members Meeting at Convention is a good first start.

Following Convention, we will be hosting sessions across the province and getting into greater detail as to how this project will roll out and what you will need to do to be part of the solution.

The investment has been committed — and your commitment to participate will ensure that as an association, we continue to be the industry leader that drives collaboration to implement innovative solutions.

October 2013 / The Ontario Broker

13

ESR ad

In the Community

Norah Black Marketing Coordinator IBAO

Future Assist Fall means back to school and back to the rink for the little guys.

Once again, IBAO has partnered with the Ontario Minor Hockey Association (OMHA) and Northern Ontario Hockey Association (NOHA) for another season of our Goalie Assist Program. Equipment for aspiring goalie legends is making its way to brokerages across the province — more

Dorchester Insurance Brokers Ltd. and the Dorchester Minor Hockey Association join forces to support the local team. than 60 minor hockey associations and a hundred brokerages applied to participate, with a number of them making their own donations. This year will see

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The Ontario Broker / October 2013

65 goalie kits donated to our young superstars.

The IBAO Goalie Assist Program supports children with hopes and dreams of becoming goalies, who perhaps might otherwise not have the opportunity. The program supports our brokers’ commitment to community and the people within it by encouraging youth to be active and to take on new challenges. It also goes full circle — children who get involved in sports often grow up to be community leaders, acknowledging their roots and giving back to those around them.

Brokers are leaders rooted in the values of community — sharing risk and mitigating personal liability in times of misfortune.

“We are so proud to support the OMHA and NOHA and sponsor this great initiative once again,” says IBAO CEO Randy Carroll. “Brokers are connected to the people in their communities, and this donation is just a small example of the great work being done every day to give back.”

But nothing sums it up quite like Dan Wickson, president of L.D. Dermody Insurance Brokers (1982) Inc. in Markham: “I had the privilege of delivering the goalie equipment last night.

There’s nothing more rewarding than seeing the smile on young players’ faces when they put on the new equipment.

Thank you to the IBAO for heading up this program. It really is a good thing.”

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Building a Better Brokerage

Lorie J. Guthrie Phair Principal LePhair Associates Ltd.

The Importance of a Sales Coach Coaching has become a very hot topic in business today and rightly so. Talent is recognized as one of, if not the, most significant assets of a business.

Generally, one-to-one coaching is more commonly directed at the leadership ranks; surprisingly, less so at sales teams.

Let’s consider the evolution of today’s brokerage. Traditionally, it was simply the quality of the producer alone that determined success. Brokerages were very dependent on a few key producers who were responsible for virtually every facet of the sale, including generating the lead through any and all means, closing the sale and then servicing the client with or without the assistance of a customer service representative or account manager. To grow or improve, brokerages would simply hire new producers who generally operated independently.

Business has changed significantly, and today’s brokerage needs to profession­

alize the sales process. In addition to planned and documented sales processes, sales technologies and customer relationship management systems, strong sales leadership and clear value propositions, we need to cultivate professional sales talent. This begins with ensuring an appropriate fit to the role in question, including an aptitude for sales combined with effective onboarding, consistent training and a dedicated sales coach.

The sales coach role is an important one and it is different than the sales manager role — although one person can do both. Most sales managers focus on helping producers win specific opportunities, employing the idea of “missing the opportunity” to consistently motivate and develop the producer long term to achieve top performance.

Getting sales coaching right begins with the realization that sales coaching is not the same as other forms of coaching.

A great sales coach knows sales well enough to give advice, is willing to give direct advice, knows how to give advice and knows when to give advice and when to let people work out their own solutions.

Further, a consistent connection between coach and producer can be very motivating. Meetings with agendas on a set schedule designed to address sales opportunities as well as actions and commitments can make a significant difference to the producer’s success.

RAIN Group reports that successful sales coaches play five key roles: 1. Define — Help a seller define his or her goals as well as the path to his or her personal new reality, the personal state

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The Ontario Broker / October 2013

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that person most desires. Compensation is a motivating factor for many salespeople, but in most cases, it is only part of a whole.

2. Execute — A coach helps a seller build and execute action plans, optimizing time efficiency and focus. In sales, habits are prevalent, powerful determinants of success. Effective sales coaches understand how habits work, which habits drive sales success and how to help people change habits to help them sell more.

3. Advise — Coaches give advice as appropriate to maximize sales wins.

While we do learn from our mistakes, the stakes are often too high to practise in live sales situations. Sellers usually need advice and ideas to create an opportunity, move a sale forward and win. And, they usually need it now to avoid losing the opportunity.

4. Develop — A coach works to develop a seller’s knowledge, skills and attributes to improve performance. A coach should constantly assess a seller’s needs for development, helping him or her understand current capabilities and potential, encouraging that person to take ownership of his or her own development destiny.

5. Motivate — Coaches motivate a seller to find and sustain his or her highest level of energy and action over the long term, challenging and encouraging that person to take ownership of his or her own success. Great coaches make it their business to understand how to motivate people and apply motivation principles to their teams.

Some brokerages also have internal mentors to support new producers. This is different than the more formal role of a coach, though both can be effective.

Mentors tend to be more facilitators or teachers supporting the producer’s individual growth and providing more of a sounding board; the coach is far more job-focused and performance-oriented, strategically assessing and monitoring the individual’s progress and providing focused advice on a regular basis.

LePhair Associates Ltd. is a training and consulting practice specializing in the insurance industry. The practice provides expertise to help companies put the right person in the right job, provide the means to determine how engaged the workforce is and provide a process to coach, train, manage and motivate people to greater success and productivity.

E&O Corner

Hugh Fardy Senior Vice President The CG&B Group

Do You Know Where Your Staff Are? Recently, the Registered Insurance Brokers of Ontario (RIBO) issued a notice to principal and deputy principal brokers regarding websites and how they relate to Section 15 of Ontario Regulation 991.

Section 15(1)(6) notes that “misconduct” means, among other things, “holding oneself out or advertising by means of advertisements, cards, circulars, letterheads, signs or other methods, or carrying on business in any other manner than the name in which the individual or the corporation or partnership of which the individual is the designated representative is registered.”

The notice was a reminder of the res­ponsibility to make sure that all advertising by the firm or individuals in any manner, including websites and social media, was compliant with RIBO regulations.

Any time a name other than the registered brokerage’s name is being used, it must be registered as a trade style name with the Ontario government, added to both errors and omissions and fidelity bond polices, then reported to RIBO. It is a little concerning that we receive so many requests to add to policies names that management (principals) are discovering! Individuals are often on their own venturing into this space.

It is very important that management be kept aware of what staff members are doing, especially when they are representing the firm. In most cases, there should be at least some vetting of

the individual’s efforts by management, if not detailed guidance.

Not only is it important for principals to ensure compliance with RIBO regulations, but there are also several concerns revolving around coverage under their E&O policies.

Having an established corporate website, properly named and created, added to the E&O policy will usually be a straightforward item. Occasionally, the function of a website may require more information and underwriting. It is not always as easy with those sites or social network facilities of individual brokers.

The site itself will likely not meet the definition of named insured in the policy, and often the activity falls outside that of an individual representing the firm. An accurate portrayal of the individual as a representative of the firm is a must.

In many cases, the site has an identifier that is not a legal person or entity,

which presents a no-coverage issue under a policy. Again, here is a point for a clear presentation to clients regarding who is who and who works for whom.

An underwriting concern centres on the control of these sites by the named insured. It is imperative that there be both knowledge and understanding of operations, and ongoing monitoring of all sites related to the firm and its employees.

The brokerage needs to be in full control of all its representations. If individuals are going to operate sites, they must do so in conjunction and agreement with the named insured.

Proper management of such sites will allow for easy compliance with member regulations and make confirming appropriate insurance coverage an easier task.

In any field, the use of new tools must come with training and guidance.

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17

Legal Briefs

Ian H. Gold Founding Partner Thomas Gold Pettingill LLP

Take Notice of Obligations The 2013 decision, Peel Law Association v.

Royal & Sun Alliance Insurance Company of Canada and Jones Brown Insurance Brokers & Consultants, confirmed that a broker has no duty to ferret out a policyholder’s potential insurance claims.

Any claims submitted to the broker must be forwarded to the insurer, noted the decision by Ontario’s Superior Court of Justice. However, the broker’s duties only arise after the insured has made it clear that he or she wishes to submit a claim.

The majority of professional liability policies provide coverage on a “claims made and reported” basis — meaning that an insurer’s “duty to defend” is only triggered if a claim is made and reported to the insurer within a specified time period. Breaching the notice provision can lead to a forfeiture of coverage.

Given the severe consequences for failing to provide notice of a claim, brokers — who are often the party pro­viding notice — might wonder about their obligations upon learning of cir­cumstances of a potential claim.

Must the broker investigate these circumstances, or even encourage the insured to submit a claim? The court addressed this issue in the Peel Law Association case.

The Peel Law Association (PLA) operates a library and lounge at a courthouse in Brampton, Ontario. Access to the library is restricted to lawyers and articling students. On one occasion, the law librarian requested that two black men in the library produce identification to prove their status as lawyers.

The lawyers brought applications against PLA at the Human Rights Tribunal of Ontario, alleging that the librarian’s

Justice Donohue concluded that Jones Brown was in no position to determine whether or not a claim should be submitted; it was the insured that had the necessary facts to determine whether or not to make a claim.

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The Ontario Broker / October 2013

request was based on racial profiling.

Although the claim was made against PLA in 2008, notice was not submitted to the insurer until 2010. PLA retained its own counsel to defend the litigation and paid almost $120,000 in legal expenses during the litigation. Its insurer, Royal & Sun Alliance (RSA), denied the claim on the basis that the policy’s notice provision had been breached.

PLA brought an application for coverage in which it argued, among other things, that the broker, Jones Brown Insurance Brokers & Consultants, was negligent for failing to submit a claim on PLA’s behalf.

PLA’s argument was that a broker should be required to inform itself as to an insured’s potential claims, even if no claim has been submitted. PLA had sent Jones Brown some information that hinted at the human rights applications.

Specifically, PLA had referred to the litigation on a renewal application and in the notes to its financial statements.

PLA admitted, though, that it did not at any time intend to submit a claim. In essence, it was expecting Jones Brown to either advise it of potential coverage for a claim, encourage the PLA to make a claim, or to convert its ambiguous references to ongoing litigation into an insurance claim.

In her decision, Justice Meredith Donohue confirmed that Jones Brown complied with its duties and had no obligation to make further enquiries.

Justice Donohue concluded that Jones Brown was in no position to determine whether or not a claim should be sub­mitted; it was the insured that had the necessary facts to determine whether or not to make a claim.

Justice Donohue might have been comforted by the fact that Jones Brown called PLA at one point to ask about the incidents and was advised that the claim “was not an insurance issue.”

The upshot of the decision is that, while brokers have certain obligations to make inquiries while procuring in­surance, there is no duty to make inquiries about potential claims. It is the insured who has the responsibility to submit claims to either the broker or the insurer.

2013-2014 RIBO ELECTION IBAO would like to introduce to you its members who are seeking a position on the Registered Insurance Brokers of Ontario (RIBO) Council.

In alphabetical order, here are your nominees:

Patty Crawford (incumbent) Crawford & Danyluk Insurance Brokers Limited

Norma Hitchlock (incumbent) Marsh Insurance Limited

Glenn Woolfrey Pedestal Insurance Brokers Inc.

In line with the RIBO Election By-Law, John Gelston, as the sole nominee from a firm with more than 20 brokers, is therefore automatically deemed to have been elected to RIBO Council from that electoral category.

John Gelston HUB International HKMB Limited

October 2013 / The Ontario Broker

19

For the past five years, IBAO has saluted its outstanding members for the work they do in the industry and their respective communities.

During the Gala on the final night of Convention, we will announce the winners.

By award category, here are the finalists.

2 0 1 3

Broker of the year Jeff Ives Ives Insurance Brokers Ltd. Essex

Will Marshall, CIP Will Marshall Insurance Brokers Ltd. Barrie

Linda Papadopoulos, BSc, CIP, CCIB, CRM Pearson Dunn Insurance Inc. Stoney Creek

Young Broker of the year Joshua Barbosa, CIP Erb & Erb Insurance Brokers Ltd. Kitchener

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The Ontario Broker / October 2013

Jaroslaw Florek Condotta Merrett & Co. Insurance Brokers Inc. Hamilton

Scott Sleightholm, H.B. Comm, CAIB Smith Petrie Carr & Scott Insurance Brokers Ltd. Ottawa

Awards of Excellence Finalists BROKERAGE of the year Cornerstone Insurance Brokers Ltd. Wendy DaSilva, FCIP, CRM, CAIB, Peter DaSilva, Hons BBA, FCIP, MBA Woodbridge

Donovan Insurance Brokers Inc. Kevin Donovan, CIP, CCIB Waterloo

Insurance Brokers Association of Durham President: Gillian Van Kempen, BA(Hons), FCIP, CRM, CAIB Ajax

Insurance Brokers Association of Peterborough President: Melody Mireault, B.A. Peterborough

W.B. White Insurance Ltd. Amanda May, CIP Oshawa

AFFILIATE achievement Insurance Brokers Association of Waterloo Region President: Melissa Snyder, CIP, CAIB, CRM Waterloo

October 2013 / The Ontario Broker

21

Community View Show Time

Safety First

Paul C. Armstrong Insurance Brokers Inc. held an awareness day event in Georgetown at the Main Street Classic Car Show.

The Grey Bruce Insurance Brokers Association was presented with the 2013 Fire Safety Award from the Ontario Fire Marshall’s office on June 12, 2013.

Left to right: Fire Marshal Ted Wieclawek; Michael Craig, accepting for Grey Bruce Insurance Brokers Association; Fire Chief Mike Molloy, Meaford and District Fire Department; and Daniel Langlois, Chair of the Fire Safety Awards Standing Committee.

Left to right: Samantha Armstrong Rogers, Amanda Armstrong Rogers, The Bipper, Jody Armstrong Jackson and Alex Jackson.

Bundling Up Southland Insurance has teamed up with IBAO, providing 40 magenta blankets to Windsor Street Help/Unit 7 Homeless Shelter in early September. The organization is run by and for persons who are or have been homeless. The warming donation was made during the 6th annual LaSalle Vipers Home Opener Party, which featured live music, free food and giveaways to kick off the hockey team’s season.

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The Ontario Broker / October 2013

Right to left: Jocelyn Levesque and Christine Wilson.

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IBAO School of Insurance EDUCATION FOR BROKERS BY BROKERS

Fall/Winter Offerings CUSTOMER SERVICE FOR THE INSURANCE PROFESSIONAL Send your top CSR or Personal Lines Manager on a three-day getaway to master the art of interaction.

Reward top talent. Better your brokerage.

EDUCATION

FUN FACTOR

Date

Location

Cost

RIBO Accreditation

Relationship Management Selling & Negotiation Public Relations Operations CSIP National Certificate

Aladdin - World Premiere Bier Markt - Over 150 beers from 30 countries Second City - Home of Comedy Steamwhistle Brewery - Toronto’s #1 brewery Verona Ristorante - Italian at its best

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November 12-15, 2013 $1,750 (accommodation, dining, seminars, materials and entertainment)

16.5 Hours

**Register your top CSR or Personal Lines Manager for a chance to win next year’s retreat FREE**

BEYOND BEST IN CLASS A dynamic development program leading brokerages through a four-month makeover.

Because we see it over and over again... traditional business models in need of transformation.

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Changing Business Models Rising Competition Technology’s Dominance The Changing Landscape of Consumer Expectations OUR TRANSFORMING WORLD

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Redefine our Business Differentiate Revolutionize Traditional Business Models Understand the Power of Collaboration EVOLVE

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$5,500 (includes five one-day seminars, learning sessions and materials)

16.5 Hours

DEVELOPING A LEADERSHIP MINDSET Boost business by improving the leadership skills of high-performing employees. If you want to invest in your people... THIS IS FOR YOU.

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Strengths, weaknesses and opportunities Anticipate industry trends and consequences Contribute to brokerage objectives and direction Create an action plan to achieve career goals BECOME AN EFFECTIVE LEADER

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Part 1 December 10-11, 2013 Part 2 April 15-16, 2014

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Contact the IBAO School of Insurance at 416.488.7422 or 1.800.268.8845.

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