Insurance Business Canada 4.01

A STRONG TEAM, OPERATIONALIZING A STRONG BALANCE SHEET. Property | Casualty | Executive & Professional Lines | Healthcare Professional Liability

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10/6/15 2:47 11/03/2016 10:33:28 PMPM

AVOID NASTY SURPRISES

When it comes to cyber risk our specialist insurance policies leave no stone unturned.

For organizations that rely on technology, cyber threats can emerge in many ways. For some the consequences can be devastating.

Our cyber product covers the liability which may arise, together with the policyholders own losses. And all in one affordable price.

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08/02/2016 16:33 12/03/2016 6:39:05 AM

UPFRONT

EDITORIAL

Appetite for disruption

T

he start of the year is always a time to take stock, and for the insurance sector, that means an assessment of risk exposure. The Global Risk Report from this year’s World Economic Forum in Davos, Switzerland, forecasts that the potential impacts from environmental disaster, interstate conflict and disruptive technology are multiplying faster than ever, and the interconnections between these risks are growing stronger. This is creating a dangerous synergy that could have profound implications for society and the global economy.

For the broker community, most risks deliver opportunity, but the third risk – disruptive technology – presents a very real threat to the channel.

At one of the first broker association meetings of the year, Doug Heaman, president of the Insurance Brokers Association of Ontario, warned that the Canadian broker channel is at risk of losing ground to the direct channel as consumer appetites and expectations change. Heaman warned brokers that they need to adapt to a constantly evolving – and increasingly digital – marketplace.

(Read more about this on page 14.)

For the broker community, most risks deliver opportunity, but disruptive technology presents a very real threat to the channel Disruption is happening industry-wide. Lemonade, an enigmatic New York start-up, recently won the backing of some of the biggest names in the industry as it looks to bring peer-to-peer insurance to the masses, harnessing the power of behavioural economics and the essence of the sharing economy. It’s a model that’s gaining ground worldwide, from Friendsurance in Germany to Guevara in the UK and INSPeer in France. Insurance is still largely seen as a necessary evil rather than a social good, but these bright young things aim to change that. (Find out more about P2P insurance on page 16.)

Brokers can be disruptive, too. This issue’s interview with Sherif Gemayel, the founder of tech-savvy Sharp Insurance (page 42), reveals that a bit of creativity and entrepreneurial spirit can help brokers forge a new path.

Perhaps, in the words of IBAO’s Heaman, “it’s time to ask yourself what your role as a broker is and how you’re going to compete in the evolving marketplace.”

www.insurancebusiness.ca MARCH/APRIL 2016 EDITORIAL Associate Editor Donald Horne Writers James Middleton Tim Garratt Paul Lucas Henry Preen Caitlin Bronson Olivia D’Orazio Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander

CONTRIBUTORS Matthew Pearn Samantha Wright

ART & PRODUCTION

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4

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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss

11/03/2016 11:17:46 PM

You can expect more at Trisura.

Find out more about our industry leading specialty insurance and surety solutions at www.trisura.com

a step above

Trisura Guarantee Insurance Company is a Canadian owned and operated Property and Casualty insurance company specializing in niche insurance and surety products. We are a proud supporter of the Insurance Broker’s Association of Canada.

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11/03/2016 11:13:16 PM

UPFRONT

STATISTICS

Industry game-changers

REGIONAL CUSTOMER EXPECTATIONS

As the P&C market continues to rapidly evolve, leaders at RSA Canada provide insights on key trends THERE ARE many changing dynamics affecting the P&C market. Customer expectations around technology, digital access to information and service, and speed of service create the need for insurers and brokers to adapt service models and improve value propositions.

Economic conditions are compounding these evolving expectations. The pressure of a recessed economy, growing household debt

and increasing unemployment are causing customers to more carefully consider their expenses, including insurance.

Now more than ever, customers need advice-based solutions to help them with their insurance decisions. Brokers will continue to play a significant role in guiding customers through their options to explain products in plain language and offer risk management expertise.

7.4%

Alberta unemployment rate as of January 2016 – the first time it has increased above the national average since the 1980s

21%

Percentage of Albertans who said they would look for information or consult a professional about financial insolvency or bankruptcy

544,200

$1.64

Canadians who received employment insurance benefits in November 2015

The average amount Canadians owe for every dollar they make

1 in 3

28%

Canadians feel rising interest rates could push them toward bankruptcy

41.4

The Bloomberg Nanos Canadian Confidence Index level in the Prairie provinces, the lowest level since the index began in 2008

of Canadians plan to take on more debt to pay household expenses in 2016 Sources: StatsCan, CTV News, MNP Debt

ADVICE-BASED INSURANCE SERVICE “Many customers are still looking for professionals to assist them in understanding the complexity of the insurance product they need to purchase,” says Dawn Anderson, RSA’s regional vice president of personal insurance for the Atlantic region. “Service will definitely be a game-changer this year to ensure customer loyalty is maintained.”

50%

of consumers who own insurance prefer to deal with a broker rather than purchase a policy online

50%

of consumers trust brokers to act in their best interest

SMES AND RISK MITIGATION “Small and mid-sized business owners may not look at insurance protection and risk mitigation as an essential expense,” says SME-Canada vice president Rosalind Staples-Simpson, “especially during the economic downturn we are currently experiencing where margins are tight.” But making these important investments can prevent serious consequences if something goes wrong, such as business interruption, criminal activity or a data breach.

Risks facing SMEs

Approximately three out of 10 SMEs have been affected by a criminal activity, including:

6

Network, broadband or computer issues

18%

Credit card or cheque fraud Employee misuse of assets

15%

Keeping up with new technology

Theft or burglary by non-employees

15%

Staff absenteeism

14%

Vandalism 0%

Source: Mintel

One out of every four SMEs identifies technology problems as a trigger for business disruption, in addition to:

5%

10%

Water-related damage to business property 15%

20%

25%

0%

23% 19% 12% 8% 5%

10%

15%

20%

25%

Source: RSA’s Small Business Analysis Research, 2014

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11/03/2016 10:23:08 PM

28%

Percentage of Atlantic Canadians who say they will never be debt-free

KEYS TO CUSTOMER RETENTION Help the customer think beyond price Create value-adds through advice and risk mitigation Offer a mobile experience to meet digital expectations

6 years

“The Quebec insurance market has been traditionally known as a leader in innovation, driven by the uniqueness of the auto product and associated low average premium. Due to the number of these lowmargin transactions, the Quebec market has needed to find process efficiencies at the company and broker level. This has spilled into the small commercial package business as well.”

Amount of time Atlantic Canadians expect it will take them to climb out of debt

“Atlantic Canadians are relatively satisfied with current available products, but with the pressure of growing household debt, they want confidence that pricing will be reasonable and stable. Consumers also have a growing demand for a convenient, personalized and efficient customer service experience”

Glen Bates, regional vice president, commercial insurance, Eastern region

Dawn Anderson, regional vice president, personal insurance, Atlantic region

“The landscape is changing in the Prairies due to the contracting economy and increasing unemployment. Educating clients on the importance of adequate coverage is key, as companies are now most vulnerable to bankruptcy, given inconsistent cash flow. Insurers need to be flexible to adapt to the cash-flow needs of customers” Mark Wyatt, trading director, global specialty lines, Western region Sources: MNP Debt, Bloomberg, StatsCan, AlbertaCanada.com

PERSONAL INSURANCE DISTRIBUTION DISRUPTION “The biggest game-changer in personal insurance is the changes we are seeing to the distribution channel,” says Tony Filice, vice president of personal insurance for the Ontario region. “Major players have announced and acted on their desire to start a direct distribution channel. Insurers should focus on building internal efficacy to make easier for our brokers to interact with us, so they can spend more time being the great advisors the public needs.”

Premium by channel Personal auto

Homeowners

20%

23%

48%

46%

27% 44%

32%

31%

29%

2003

2007

2011

4%

57%

Small commercial 5%

6%

23% 57%

77% 38%

38%

2003

2007

2011

Exclusive agent

23%

56%

39% Direct

19% 81%

THE DIGITAL REVOLUTION “Customer expectations are permeating across industries in that what customers are experiencing in one area of their life is becoming an expectation across all of their servicing and buying experiences,” says Shelley Toyota, vice president of personal insurance underwriting and propositions.

RSA is addressing these changing customer needs through two foundations:

Data analytics 77%

To understand customer behaviour patterns and needs

Digitalization 2003

2007

2011

Independent agent

To align the technologies efficiently, effectively and sustainably for the insurer, broker and client

Source: McKinsey & Co.

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11/03/2016 10:23:18 PM

UPFRONT

HEAD TO HEAD

Is Canada ready to embrace pet insurance?

Health insurance for furry friends has made a huge mark overseas – could 2016 be the year it takes hold in Canada?

Daryl Rawlings

Bill Skubovius

Randy Valpy

“We think the rise of pet insurance in Canada can be attributed to the quality of insurance products out there today.

Pet insurance didn’t get a good start in North America – it started similar to human health insurance, where medical care was dictated by benefit schedules and had caps and limits to claim payouts.

Today, companies like ours pay 90% of the veterinary bill – no matter how much it is – as we don’t have limits or caps. No longer do pet owners have to come up with the entire bill out of pocket.”

“The ability to increase our footprint in Canada is dependent upon a focused and concerted effort to broaden product awareness while continuously educating consumers on the benefits of insurance for their four-legged family members.

As new belief systems form in terms of how we value the family pet, we should expect to see accelerated growth in Canada to double-digit penetration rates between 5 and 10 years from now.

Though the UK market, which is very similar to Canada, has reached nearly 30% penetration versus 2% in Canada, they have had more time to mature.

With solid players now in the Canadian market, we are … poised for growth.”

“Having been in the pet insurance industry since 2001, I have watched the Canadian industry enjoy double-digit growth year-over-year.

That said, we will likely never see penetration rates similar to those in the UK for a variety of reasons. I do believe that we can see the current less than 2% penetration rate grow to reach 10% or 15%, but it will take a few more years.

Awareness is still our industry’s greatest challenge, and as more companies and brands enter the market, this will help bring greater awareness that pet insurance exists and the benefits of it.”

CEO Trupanion

Vice president PetPlan

CEO PetsPlus

PET INSURANCE AROUND THE GLOBE While the concept of pet insurance has been slow to catch on in the US and Canada, that’s hardly the case in other countries. England has 30% of its dogs insured, and Sweden is even higher at 50% – not to mention Norway at 14%, and France and Australia at 5%. So what’s the difference? For one thing, these countries have had good insurance products for pets from the beginning. They also don’t have the insurance stigma that exists in Canada and the US, where people are a little more skeptical about paying for insurance, preferring to avoid the middleman and pay the veterinarian directly.

8

www.insurancebusiness.ca

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11/03/2016 10:23:45 PM

customer customer satisfaction satisfaction BASED ON 81,000+ CLAIMS Rounded to the nearest per cent.

BASED ON 81,000+ CLAIMS Rounded to the nearest per cent.

We believe actions speak louder than words. Our customers agree.

Our knowledgeable and caring claims professionals are some of the best in the business, consistently earning kudos from 9 out of 10 customers in post-claim surveys.* Don’t just take our word for it. See what our customers have to say. economicalinsurance.com/stories

property

|

auto

|

business

Percentage based on 81,704 Economical claimant survey responses measuring customer satisfaction with claims services from January 2007 - December 2015. The Economical brand includes the following property and casualty insurance companies: Economical Mutual Insurance Company, Perth Insurance Company, Waterloo Insurance Company, The Missisquoi Insurance Company. ©2016 Economical Insurance. All rights reserved. All Economical intellectual property, including but not limited to Economical® and related trademarks, names and logos are the property of Economical Mutual Insurance Company and/or its subsidiaries and/or affiliates and are registered and/or used in Canada. All other intellectual property is the property of their respective owners.

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11/03/2016 10:23:50 PM

UPFRONT

NEWS ANALYSIS

Solving the talent shortage Captains of the insurance industry are calling on millennials to save the sector from a looming talent crisis

FEBRUARY MARKED the inaugural Insurance Careers Month, a grassroots movement aimed at attracting new blood to the industry. The industry currently employs around 2.5 million workers, and expects to see around 400,000 new job vacancies by 2020. However, the number of insurance professionals aged 55 and older has increased 74% in the past 10 years, and in North America alone, over the next three years, a quarter of the sector will have reached retirement age.

In short, the insurance industry is facing a looming talent crisis, prompting industry

their work cut out for them.

Duperreault, the CEO of Hamilton Insurance Group, who joined the industry more than 40 years ago as an actuarial trainee, is the first to admit that the industry has been lax about attracting younger workers.

“We haven’t done a good job in letting today’s generation know what a great career they can have in insurance,” he says.

“Today’s men and women don’t give insurance much thought. To them it’s boring and lacks purpose, and if they do consider it, it’s because of family members already in the

“We haven’t done a good job in letting today’s generation know what a great career they can have in insurance” Brian Duperreault, Hamilton Insurance Group icons Brian Duperreault, Inga Beale and Dan Glaser to appeal to the millennial generation for fresh skills. But with less than 5% of millennials expressing an interest in working in the industry, and current insurance and risk management graduates meeting only 10% to 15% of the need for new talent, these captains of industry have

10

industry. It’s not top of mind, driven by a passionate interest.”

Certainly, image perception is part of the problem. Insurance is considered an ‘old’ industry – but that view is far from accurate. According to Beale, CEO of Lloyd’s of London, today’s pace of change is 10 times faster than during the Industrial Revolution.

And the digital revolution taking place right now will have 300 times the impact that the Industrial Revolution did a century and a half ago.

“During my 30-year career in the insurance industry, I’ve seen the world transform at an unprecedented pace,” Beale says, adding that digital natives are living in a very different world than what the aging insurance industry is used to. “They’re multi-screening and adapting to new technologies that are quite foreign to someone like me.”

But McGavick, the CEO of XL Catlin, believes that the age – or, more specifically, the endurance – of the industry is something to be celebrated and highlighted as a key attractor.

www.insurancebusiness.ca

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11/03/2016 10:24:22 PM

THE TALENT CRISIS

25%

Of insurance industry employees will be nearing retirement by 2018

27%

Of insurance professionals are under the age of 35

1.3 years

Is the average tenure for a 20- to 24-year-old worker in the insurance industry Source: US Bureau of Labor Statistics, AARP and the NACE Recruiting Benchmarks Survey

“About half of today’s current insurance workforce will retire by 2030, and they’re not going to be replaced by technology” Mike McGavick, XL Catlin “This idea [of insurance] has endured,” he says. “It’s one of the oldest ideas still practiced in the economy. This industry is going to stay around, unlike many things that come and go in society, because the reality is that insurance performs this incredible social function of enabling people to pool their resources so that when someone in the group has something go wrong, it can be put right.”

McGavick adds that the rapid rate of change is forcing the industry to constantly evolve. “Our industry reflects everything that’s changing in society, and these new tools allow us to perform our work in new ways.

It makes this a highly creative industry,” he says, suggesting that technology should be embraced rather than feared, because the insurance sector will always have a critical dependency on human capital.

“The reality is that about half of today’s current insurance workforce will retire by 2030, and they’re not going to be replaced by technology, but they might be replaced by [people],” McGavick says. “There are 400,000 jobs in the sector that will need to be filled just in the next handful of years.”

While the march of progress delivers ever more powerful tools, it also brings more complex risks. As a society, how will we address climate change, cybersecurity and water scarcity? What about the implications linked to the rise of drones, biotechnology, nanotechnology, 3D printing and artificial intelligence?

Dan Glaser, president and CEO of Marsh & McLennan, says these risks and opportunities are intrinsically linked to insurance. “The core business of the industry is to enable economic growth, the taking of risk and innovation,” he says. “Thanks to the insurance industry, lives and livelihoods are rebuilt following loss, and our people and companies supply the products that enable businesses to function and innovate, communities to grow, and individuals to thrive.”

Duperreault adds that these tenets often make insurance the best job millennials have never heard of. “Sure, it can be a bit of a roller coaster,” he says. “But what a ride.”

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11/03/2016 10:24:28 PM

PRODUCTS

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Aviva

RBC General Insurance Company

Aviva’s Canadian arm will acquire RBC’s home and auto insurance business for £281 million. The deal provides Aviva Canada with an additional distribution channel to complement its 1,500 independent broker partners

AXA

Africa Internet Group

France’s largest insurer plans to invest €75 million in Africa Internet Group, the Nigerian owner of online businesses, including retailer Jumia, extending AXA’s product offering to customers on the world’s least developed continent

Lightyear Capital and PSP Investments

AIG Advisor Group

Private equity firm Lightyear and pension investment manager PSP are teaming up to purchase AIG’s independent brokerdealer network, one of the largest in the US

Morison Insurance Brokers of Hamilton

Tri-County Insurance

The purchase of the Waterford, Ont.-based brokerage marks the 16th acquisition for Morison in several years, and will expand the company’s presence westward in the province

Berkshire Hathaway boosts professional liability cover

Berkshire Hathaway Specialty Insurance has introduced miscellaneous professional liability insurance in Canada. The policy provides claimsmade coverage for professionals facing allegations of negligence, errors & omissions, misstatements, misleading statements, neglect, breach of duty and unintentional breach of contract. The policy includes supplemental payment coverages with no retention for pre-claim assistance, as well as reimbursement of loss of earnings and expenses for policyholder attendance at litigation and disciplinary proceedings.

Swiss Re looks to develop resilience insurance

Canadian insurers have appetite for expansion

The increased activity in mergers and acquisitions during 2015 looks set to continue for the near term – the vast majority of North American insurance companies say they’re planning an acquisition in the next three years.

According to Willis Towers Watson’s annual M&A report, 73% of insurance companies in Canada and the US are looking at acquisitions. Interestingly, 55% of those surveyed are also looking at divestment of operations; 24% are considering a joint venture and 3% a merger.

In many cases, hungry insurers are planning multiple transactions in the years ahead. At least 29% are considering one acquisition, while 40% are looking at two or three. Those not considering expansion cited economic volatility as the driving factor.

12

Swiss Re has teamed up with the Rockefeller Foundation and Veolia to develop an infrastructure recovery initiative designed to speed up a city’s economic recovery in the aftermath of catastrophic events. Brokered by the 100 Resilient Cities initiative, the partnership supports cities worldwide in climate change adaptation, disaster risk reduction, infrastructure enhancement and recovery.

By planning ahead, cities can not only strengthen the resistance of their vital infrastructure, but also limit economic interruption and begin to quickly repair damage without waiting for insurance assessments, payouts, and solicitations for repair proposals.

www.insurancebusiness.ca

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11/03/2016 10:25:15 PM

PEOPLE

PEOPLE Ridesharing insurance wins regulator approval in Ontario

Rideshare companies like Uber and Lyft scored a win in February when the Financial Services Commission of Ontario approved a first-of-its-kind coverage for drivers that carry paying passengers in their own vehicles.

Aviva Canada said the coverage, now available for Ontario drivers, is a simple addition to an Aviva-insured personal auto policy. Aviva plans to work with regulators across the country to make the solution available in other provinces in the coming months.

Calgary broker aims to make teen drivers safer

Calgary-based brokerage InsureMy has begun piloting New Drivers Intelligence, a program for young drivers that uses telematics to allow both parents and teens to track and monitor their driving behaviour, allowing for greater coaching opportunities between parents and new drivers.

The program will see a full launch across Alberta and Ontario in early 2016, delivering Canadian parents access to real-time driving data, direct from their vehicles, to help teens develop good driving habits.

Canadian brokers express interest in layoff insurance

An Edmonton-based brokerage that recently introduced layoff insurance to ensure that those out of work are still able to make mortgage payments reports that “demand has been brisk” for its product. Gordon McCallum, president of First Foundation Insurance, would not disclose detailed numbers, but said, “Unfortunately, there has been lots of demand from the public, which is an indication of the state of our economy at the moment.” According to Mortgage Professionals Canada, job loss is one of the most common reasons why people end up defaulting on their mortgage, making it the number-one cause of foreclosure.

NAME

LEAVING

JOINING

NEW POSITION

John Bowey

N/A

Economical Mutual Insurance Company

Chair of the board of directors

Steve Dobronyi

Echelon Financial Holdings

N/A

N/A

John Greene

Willis Towers Watson

N/A

N/A

Cynthia Koehler

Liberty Mutual

XL Catlin

Global practice leader for casualty claims

Luke Lichty

Chubb

AXIS Insurance

Assistant vice president, casualty

Douglas McIntyre

Echelon Financial Holdings

N/A

N/A

Paul Taylor

Insurance Brokers Association of Ontario

Mortgage Professionals Canada

CEO

AXIS appoints new assistant VP of casualty

AXIS Insurance has appointed Luke Lichty to the position of assistant vice president of casualty, where he’ll be in charge of leading and implementing the company’s underwriting and business development strategy, focusing on servicing existing casualty clients and growing this important book of business across Canada.

Prior to this role, Lichty served as a senior underwriter at Chubb, where he demonstrated a track record of innovative thinking and customer service.

Founder of Belleville brokerage passes away

David Mackay, the founder of Ontario-based Mackay Insurance, passed away in February at the age of 78.

Mackay got his start in the business in 1965, working for Henry Ward out of Sherbrooke, Que. In 1974, Mackay went out on his own and started a brokerage in Sawyerville, Que., which he eventually moved to Belleville, Ont., due to the political climate in Quebec. In the early days, Mackay had just 25 clients and worked out of the basement of his house. Today the company has more than 5,000 clients and employs 12 full-time staff.

www.insurancebusiness.ca

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11/03/2016 10:25:30 PM

UPFRONT

MGA UPDATE

Agents losing distribution ground IBAO president warns brokers that they need to react more quickly to changing consumer demands

“This is the new reality,” Heaman said.

“Change has happened, is happening and will continue to happen. Customers are asking for, and receiving, 24-hour service with access how they choose. Insurers are feeling the pressure to show growth and return on investment, and the broker channel has been slow to respond to changing consumer demands. It’s time to ask yourself what your role as a broker is and how you’re going to compete in the evolving marketplace.”

Choice is fundamentally appealing to consumers, added IBAO chairman Michael

“It’s time to ask yourself what your role as a broker is and how you’re going to compete ...”

The Canadian broker channel is at risk of losing ground to the direct channel as consumer appetites and expectations change, warns Insurance Brokers Association of Ontario [IBAO] president Doug Heaman, who says brokers need to adapt to a constantly evolving – and increasingly digital – marketplace.

Economical Insurance’s recent announcement that it plans to open a direct channel, along with Aviva’s acquisition of RBC’s insurance arm, suggest that insurers are increasingly looking at the direct channel, perhaps to the detriment of broker networks. Moreover, the head of e-commerce at AXA recently told

NEWS BRIEFS

Insurance Business Canada that he believes it’s only a matter of time before commercial insurance purchases move away from intermediaries and go direct.

Heaman acknowledged that there’s been broad concern about the move toward direct distribution throughout the broker community, but he encourages brokers to see the opportunity these changes bring.

In a conference call to IBAO members, Heaman said the market is fully immersed in an era of accessibility, and insurers are acting strategically, not just on the current landscape, but on their predictions for what’s to come.

Two BC companies unite to form new MGA

British Columbia’s Guardian Risk Managers and Chutter Personal Lines Underwriting Services [CPLUS] merged into a combined MGA in February. The new company, which will be known as Guardian Risk Managers, will be headquartered in Surrey, BC, and managed by David Lyons, vice president of personal lines, and Rick Feeney, vice president of commercial lines.

The combined teams will continue to offer the same Guardian and CPLUS insurance products and customer service that brokers currently have access to.

14

Brattman, and brokers who can figure out how to offer a range of choices to their clients will have the upper hand.

“Fifty per cent of consumers get their insurance through the broker channel,” Brattman said. “It’s a platform more appealing than single product offerings – we have the upper hand by offering choice.”

The trend of more choice for consumers is perfectly aligned with the broker value proposition, according to Heaman. “It’s time to get really clear on what that is for your brokerage – whether it’s a niche, digital or exceptional service play,” he said. “Brokers who approach their markets with a solid business plan will receive support.”

Specialty insurance is where the money is

Specialty insurance is the future, according to Pat Ryan, a 50-year industry veteran and founder of Ryan Specialty Group and Aon Corporation.

Ryan said he’s seen the industry evolve into many fragmented segments that have more capital available for the taking. “The money has always been in specialty,” Ryan said.

“It means you’re focused on a specific risk – a tougher risk to handle and insure. The industry has always rewarded innovation, and innovation tends to come from the specialty side of the business.”

www.insurancebusiness.ca

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11/03/2016 10:26:01 PM

Q&A

Nick Kidd

MGAs in Canada: today and tomorrow

CEO APRIL CANADA

Years in the industry 20 Fast fact April Canada caters exclusively to insurance brokers and offers a range of tailor-made products for both personal and commercial lines

How was 2015 for April Canada?

It was a fantastic year for April overall, where we took some really big steps towards achieving our longterm goals in Canada. We’ve hired some great people; launched some exciting new offers like commercial marine, manufacturing and short-term rentals; deepened our relationships with many of our fantastic broker partners across Canada; launched some online products; and improved our loss ratios in key lines.

There was no time to take a breath last year, and 2016 will be the same. We experienced strong growth across Canada, and I’m extremely proud of what our team has achieved. Of course, there’s always room for improvement ... and in listening to our many broker partners, we have put a number of key initiatives in plan to make 2016 an even better year for them.

Are MGAs becoming increasingly important in Canada?

In my opinion, MGAs play a critical role within the insurance ecosystem in Canada and will continue to do so in the coming years. Whether it’s about filling a gap in the domestic insurer landscape, or simply about providing a more personalized and efficient service on what could be seen as a more ‘standard’ product, there are lots of ways in which MGAs add value. As an industry, we like to put our clients into tidy little homogeneous boxes, but the reality is that all risks are not identical. The market needs solutions that will recognize the individuality of clients, and MGAs play a major role in this process.

Tanker insurers seek ways to cover Iranian oil

The International Group of Protection & Indemnity Clubs, the world’s largest pool of oil tanker reinsurers, is reportedly in talks with the US government to insure Iranian oil shipments. However, because the US still maintains several sanctions against Iran, it’s very difficult for insurers to offer coverage for Iranian oil shipments to Europe. There is also the issue of the American Club, which is involved in the International Group of Protection & Indemnity Club, restricting the entire pool because of US sanctions.

Where do you see the big opportunities for MGAs in 2016?

Cyber is often mentioned as the big emerging risk that’s changing the market, and I’m sure the solutions in this area will continue to evolve rapidly.

However, we also can’t ignore how changes in consumer behaviour can dramatically change the landscape of risk. The best example here is the sharing economy. Aviva made great headlines with their launch of a ridesharing product, and I’m sure this market will change dramatically in the next one to two years. The same applies to home-sharing and shortterm rentals. In 2015, we launched a home insurance product for people who sublet their property on homesharing platforms like Airbnb, which has been very successful to date. We’re going to continue to focus on developing products like these, which support clients based on the way they act today, rather than back in the days when most traditional insurance products were created.

What are the challenges for MGAs right now?

As you might imagine, compliance is becoming increasingly onerous. I would therefore say that behind the scenes, efficiency and economies of scale are going to be consuming the thoughts of many CEOs. At the same time, consumers and brokers are expecting and demanding certain standards of service. Innovation around how our services are delivered has not typically been the watchword of the MGA industry, and this needs to be a key area of change.

Aviva Canada appoints specialty MGA

Aviva Canada has appointed Leclerc Insurance and Financial Services as MGA in Quebec for its specialty personal lines business underwritten by Elite Insurance Company of Canada. As of April 1, Leclerc will be the official distributor of Aviva’s recreational insurance products, which cover motorcycles, snowmobiles, ATVs, mobile homes, RVs and trailers.

NautiMax will continue to manage Aviva’s watercraft program, which brokers will be able to access through their Leclerc contract, the company said.

BC independent agency joins large group

One of British Columbia’s leading full-service insurance agencies has become part of the Westland Insurance Group, one of the largest insurance providers in the province. Westland’s acquisition of Underwriters Insurance should give the company’s clients the benefits of greater scale while preserving the service that it has become known for, Westland says. Clients will be able to receive more responsive claims support as a result of the acquisition, and the company is also looking to bolster its product list.

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UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS Health trackers add weight to wallet Research firm Gartner forecasts that 274.6 million wearable electronics will be sold in 2016, an 18.4% increase from the 232 million units moved in 2015.

This explosive adoption has prompted Manulife Financial, in cooperation with Vitality Group, introduce a policy that encourages customers to wear a fitness device that tracks their physical activity, in exchange for discounts on their premiums and rewards at retail partners. Manulife Canada said that it’s not just physical activity that will earn points for consumers. They also can accumulate points by reporting that they got an annual physical checkup or a flu shot.

Google car on the verge of becoming legal Google’s self-driving cars might soon be given the same legal recognition as a human-driven car, according to a letter sent to the tech giant by the US National Highway Traffic Safety Administration [NHTSA]. Google’s self-driving car has no steering wheel nor pedals; rather, it is controlled by an intelligence called the self-driving system [SDS]. In seeking to make its vehicle road legal, Google had argued that the SDS should be considered the ‘driver’ since it is the one controlling the vehicle. The NHTSA concurred with Google’s assessment.

Brokers get support in moving to eSlips The adoption of eSlips as electronic proof of auto insurance, rather than the usual pink paper slips, has been recommended in a recent legal advisory report released by the Centre for Study of Insurance

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Operations [CSIO]. Currently, pink slips are used in Alberta, Ontario, the Maritimes, Nunavut, Yukon Territory and Northwest Territories. According to the CSIO, some of the benefits of using eSlips include substantial monetary savings on printing and mailing insurance documents, and keeping abreast of technologically oriented consumers.

‘Virtual insurance agent’ goes live A tech-powered startup from MIT is looking to disrupt the auto insurance sector – and brokers in particular – with an online marketplace that relies on robot recommendations to deliver quotes. Insurify is currently available in 30 US states and has partnered with 82 carriers in real-time, claiming more carriers than any other online platform for car insurance shopping.

Insurify uses predictive modelling and advanced analytics to simplify the shopping experience, facilitated by Evia, a ‘virtual insurance agent’ that delivers a quote after the customer texts a photo of their licence plate.

Intact Insurance targets commercial drone users

Intact Insurance has introduced unmanned aerial vehicle [UAV] coverage for its commercial lines customers. The product caters specifically to small and medium-sized businesses that currently use or plan to use drones to complement their business operations. “The number of businesses using drones is increasing due to improving technology, lower price points and expanded uses within commercial operations,” said Alain Lessard, senior VP of commercial lines for Intact. “We are confident this product will help address current and future market demand.”

P2P insurer makes Lemonade Major players are getting into the peer-to-peer insurance game by backing a new start-up An enigmatic New York start-up has won the backing of some of the biggest names in the industry as it looks to bring peer-topeer insurance to the masses. Lemonade had already set records in December when it emerged with US$13 million in backing from Aleph and Sequoia Capital; now Berkshire Hathaway’s National Indemnity, Everest, Hiscox, Munich, Transatlantic and XL Catlin have all agreed to reinsure the company. The backers also include two of the leading syndicates at Lloyd’s of London.

Due to launch in the first half of this year, Lemonade’s business model is not yet fully apparent, but the company is laying claim to being the first P2P insurance carrier, harnessing the power of behavioural economics and the essence of the sharing economy.

“Most Americans view insurance as a necessary evil rather than a social good, and that’s something we’d like to change,” says Lemonade CEO Daniel Schreiber. “As a Fintech insurance company, Lemonade is designing around the bureaucracy and conflict that haunt the industry, replacing them with technology and transparency.

What makes this exciting is that it requires reinventing the very structure and business model of insurance in ways not available to the legacy insurance carriers.”

Schreiber estimates that P&C insurance generates around $1 trillion in gross margins

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annually and is dependent on a highly centralized and opaque business architecture – the very kind that is most prone to disruption.

But despite the current hype around the sharing economy, P2P insurance isn’t a new concept. Friendsurance has been in Germany since 2010; more recent launches include Guevara in the UK and INSPeer in France.

Louis de Broglie, founder of INSPeer, says the industry is ripe for disruption because consumers find insurance expensive and lacking in transparency.

“What makes this exciting is that it requires reinventing the very structure and business model of insurance” “They don’t see the value in what they are paying for,” he says. “Insurance is not very social, although it is actually a social business. It’s not innovative. Although technology comes in, the products haven’t changed much.”

But where Lemonade appears (for now) to be planning to operate as a carrier, INSPeer acts as a broker. When users pay their premium, 60% goes to the insurance company, and 40% goes to a mutual pool of four to 16 people. The pool is used to pay deductibles on claims, but if money is left over at the end of the year, it goes back to the users.

“Our platform allows a user to share their insurance excess with peers,” de Broglie explains. “The difference with this is that there is no payment of premium; it is only the deductible that is paid – it’s a give-andtake model. In exchange, I will help to pay their deductible when they make a claim.

So the cover remains the same, and the contract is unchanged.”

Q&A

Jeremiah Tonn

The cyber threat in 2016

Senior underwriter, Management Solutions Group

Do small and medium-sized businesses appreciate cyber threat as much as their larger corporate counterparts?

ZURICH CANADA

Fast fact According to the World Economic Forum’s Global Risk Report 2016, businesses across all industries and of all sizes have been impacted by the increased complexity, novelty and persistence of cyber attacks

While larger companies may be better equipped to absorb the cost of some breaches and continue operating, a significant breach at a small to medium-sized enterprise [SME] could be financially crippling. SMEs are becoming more aware of the threats they face.

However, we are seeing that they are still struggling to understand the risks associated with cybersecurity issues, the full scope of their exposures and how best to protect themselves. Furthermore, the financial resources required for IT personnel to implement best-inclass security and privacy protocols are often limited, and many SMEs are forced to do the best they can with what they have.

Large companies that share confidential information with SMEs now often require that SMEs meet minimum security and privacy requirements and obtain security and privacy insurance prior to entering into a contract. One helpful resource for SMEs in Canada is the “Get Cyber Safe Guide For Small and Medium Businesses,” which was published by the Government of Canada and is available on its website.

Can you provide an insight into emerging cyber threats?

The cyber landscape is a dynamic environment of ever-changing technology, evolving threats and a legal environment that is in a constant state of flux. While new issues are constantly emerging, one of the more important topics as of late has been the interconnectedness of technology and physical things, which some refer to as the Internet of Things. In the past, remotely controlled items were primarily limited to corporate and industrial settings such as utility companies and manufacturing facilities. In today’s world, many everyday items can now be controlled over the Internet – from refrigerators, stoves and microwaves to light bulbs and doorbells.

Driverless cars are on the horizon, opening up new concerns about the safety and security of embedded software systems against malware and hacking. The risk management community continues to investigate the risks associated with the Internet of Things as this very important issue continues to evolve.

What would you say to brokers who are trying to properly understand cyber risk?

There are many resources that brokers can draw from, and in some cases, the amount of information to sort through can be overwhelming. Various organizations publish annual data breach or security and privacy reports, and I recommend choosing one or two from a reputable source and reviewing.

It is also helpful to review questions on cyber applications from different insurers to get an idea of the types of things insurers are looking for to help them assess an applicant’s security and privacy controls and procedures. And lastly, brokers can reach out to their local underwriter. Many insurers have access to helpful information and are open to sharing their knowledge.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email insurancebusiness@kmimedia.ca

The suicide question In light of new legislation permitting doctorassisted suicide, it’s time for insurers to reexamine accidental death policies, writes Matthew Pearn THIS PAST January, my social media networks were flooded with personal stories from friends and colleagues about their own struggles with depression, PTSD and overcoming the suicides of family members.

Albeit briefly, the attention of Canadians was captured by Bell Canada’s #LetsTalk mental health campaign.

Meanwhile, a national debate on end-oflife decisions has taken center stage as provincial and federal lawmakers tackle the thorny challenge of drafting right-to-die legislation. Suicide has been a topic of hot debate ever since the release of Carter v.

Canada last year, in which the Supreme Court of Canada struck down the criminal prohibition on “aiding or abetting a person in committing suicide.” Canadians now have a constitutional right to die – at least in the context of physician-assisted death.

As debate swirls around “doctor-assisted death,” and as people become more open about discussing their own mental health challenges, public sentiment on the topic of suicide appears to be changing.

From the general public’s viewpoint, insurers may be removed from this prickly debate. However, this cultural shift should be of particular interest to the life insurance industry – and specifically those insurers that issue accidental death and dismemberment [AD&D] insurance.

Recently, there have been some very helpful court judgments released that benefit those insurers who issue AD&D policies. While the zealousness and creativity of these insurers and their counsel in enforcing the terms of these

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policies is to be applauded, it seems timely to ask how this all looks to the general public, who are inevitably your customers.

In September 2015, the Ontario Superior Court of Justice handed an important victory to insurers issuing AD&D insurance policies.

The facts surrounding Peters v. Desjardin Financial Security Life Assurance Co. are sadly familiar. The deceased insured fell from a 12th-floor apartment and died. The court determined that the insured had a duty to prove that this was an accident and not a suicide. The court ruled in favour of the

plaintiffs for pursuing a ‘bad faith’ judgment against the insurer.

These developments make it intimidating for the beneficiaries of these insurance policies to pursue claims where suicide is in question, as proving that death was an accident is challenging. This ultimately makes the financial impact of a suspected suicide all the greater on Canadian families who may be coping with the loss of a breadwinner and parent.

As an insurance defence lawyer, I consider it my duty to ensure that my clients get the benefit of every exculpatory clause and exclusion under insurance policies. AD&D insurance policies may persist into the future with their terms and exclusions intact. However, a frank examination of the coverages offered appears to be warranted, lest insurers find themselves so far off-side of public sentiment as to offend their clientele.

While ultimately it is the actuaries and accountants who know best, the number of people who commit suicide as a consequence of suffering from a mental illness would seem to be small enough to build the expense of such claims into the cost of these policies without major impact to purchasers or insurers.

Changing these policies could be a positive

“Changing these policies could be a positive step towards taking the stigma out of depression” insurer, despite no suicide note being left and no evidence of a history of suicidal thought.

Another important victory for insurers comes from my home jurisdiction of New Brunswick. The facts leading up to MacPherson v. Clarica Life Insurance Co. are as follows: A physician drove his car onto the train tracks, parked there and was killed by an oncoming train. The insurers were ultimately successful in proving – based upon the physician’s retirement the day before, his financial stress and the fact that two of his life insurance policies were about to lapse – that on January 31, 2003, his intention was to drive onto the tracks to commit suicide.

The follow-up decision from earlier this year yielded a judgment of $85,000 against the

step towards taking the stigma out of depression, and perhaps may push more people to seek treatment instead of concealing their illnesses and ultimately committing suicide.

Inside our own workplaces, we are doubtless concerned about the mental health of our peers. In our homes, we are concerned with the mental health and well-being of our families. We should be equally concerned about our customers.

Matthew Pearn is an insurance defence lawyer for Foster & Company Lawyers & Advocates in New Brunswick. Before becoming a lawyer, Pearn worked as a journalist for the Canadian Broadcasting Corporation.

www.insurancebusiness.ca

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CONTINUING THE BERKSHIRE STORY Three executive leaders from Berkshire Hathaway Specialty Insurance discuss the insurer’s progress since its arrival in Canada last year JUST OVER a year ago, on January 28, 2015, Warren Buffett’s Berkshire Hathaway Specialty Insurance [BHSI] officially opened for business in Canada.

Responsible for establishing its Canadian operations in Toronto were three leaders: industry veterans Michael Densham, Darryl DeSouza and Scott Miller, who were appointed to head its executive and professional lines, casualty and property divisions, respectively.

Today, the three leaders are proud to call BHSI’s first year in Canada a success.

“We’re really happy with the foundation we’ve built,” Densham says, “and quite pleased with what we’ve been able to accomplish in a highly competitive market environment.”

The insurer had an advantage of sorts as a new market entrant, carrying the worldfamous and revered Berkshire Hathaway name, but its leadership team knew it was essential to make all the right moves from the get-go.

“It’s one thing having the company name, but you need the people to run the business,” Miller says. “One thing that’s really separated us – and we hear it all the time in the marketplace – is being able to attract some of the best talent in the industry. And that’s on every level, from underwriters to claim handlers and engineers.”

Densham concurs. “We continue to get feedback from our broker partners about the high-quality people we’ve hired – not just underwriting capabilities, but the quality

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of their character and the quality of their service levels.”

“Part of the success has also been that these individuals are building out the right products,” DeSouza adds, “and building out the right products as time goes on. And that’s another achievement we’ve been able to meet – rolling out products quickly enough within the first year in all lines.”

None of this is a surprise, since BHSI Canada is simply following in the footsteps

Professional product lines, at a pace the brokers and customers haven’t seen before,” he says.

In addition to the speed at which it’s been able to move, Miller says BHSI’s ability to provide unique product offerings is an attribute that differentiates the insurer from other players. “We can customize products for our customers, and we can sit down and listen to what they have to say and truly provide a product that meets

“One thing that’s really separated us – and we hear it all the time in the marketplace – is being able to attract some of the best talent in the industry” of its US operation, which, since inception on April 29, 2013, has been taking on the charge of building the finest property & casualty insurance company in the world. BHSI’s strategy from the start has been to expand into markets where the company can generate sustainable financial results and where it has deep expertise and knowledge to succeed.

Brokers on Berkshire Densham says the insurer has received a strong response from brokers about the number of products it has launched in its first year in Canada. “We’ve received a lot of positive feedback about our ability to provide solutions across the Executive and

their needs, which may not be traditionally offered in the marketplace.”

Brokers also have been impressed with the relationships BHSI has built in the Canadian market, Densham adds.

“Everyone wants you to prove yourself,” he says. “It didn’t take us very long to show our brokers and their clients what we really care about, and how we’re going to behave when it comes to a relationship-based approach.

Being reliable and following through on our promises has shown the brokers that that’s the way we’ll behave over the long term. As a result, brokers have been very open to putting us in front of more customers, holding events with customers and allowing senior execu-

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PROFILE Name: Michael Densham Company: Berkshire Hathaway Specialty Insurance Title: Vice president, executive and professional lines, Canada Fast fact: Before joining BHSI, Densham spent a decade with Chubb, most recently as vice president in its specialty insurance division

PROFILE Name: Scott Miller Company: Berkshire Hathaway Specialty Insurance Title: Vice president, property, Canada Fast fact: Miller joined BHSI from Berkshire Hathaway’s Gen Re arm, where he served as senior energy marketer and underwriter

PROFILE Name: Darryl DeSouza Company: Berkshire Hathaway Specialty Insurance Title: Vice president, casualty, Canada Fast fact: DeSouza arrived at BHSI after spending seven years at AIG, where he was an underwriting specialist www.insurancebusiness.ca

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PEOPLE

INDUSTRY ICON HIGHLIGHTS OF BHSI’S FIRST YEAR IN CANADA tives of their clients access to our senior executive team.

“The premium that the operation has been able to accumulate wouldn’t happen without our broker partners supporting us,” he adds.

“It’s something we don’t take for granted. ” But with the successes come challenges, and the power of incumbency is something that’s presented more of an obstacle for BHSI’s leaders in the business’s first year than they anticipated.

“If there’s something I underestimated,

was recently launched, our employment practices policy will be put into the market during the first half of 2016, and we’ll be putting a suite of products into the market focused on financial institutions now that we have hired our financial institutions practice leader.”

On the property front, Miller says, “our focus this year is going to be continued on the risk management accounts, targeting those customer accounts who we didn’t land last year, but ones where we’ve built a relationship

“We can customize products for our customers, and we can sit down and listen to what they have to say and truly provide a product that meets their needs, which may not be traditionally offered in the marketplace” it’s the power of the relationships,” Miller says. “The bond that exists between the broker, the customer and incumbent carrier is strong … it requires a lot of hard work for us to earn that business.”

But he also says that type of challenge is something BHSI welcomes. “We’re looking for customers who value the relationship. Seeing how that relationship may be demonstrated to our competitors actually makes us more interested in that customer. We’re then going to continue to knock on their doors. Over time, hopefully, they’ll eventually be ours.”

Next steps Looking ahead, what can Canadian brokers and their clients expect from BHSI? “From the executive and professional lines perspective, there’s more product coming down the pipeline,” Densham says. “It will round out the portfolio in the commercial space. Our miscellaneous professional form

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… we’re going to continue to build on that.”

The casualty side also will have new offerings in 2016. “We’re looking at introducing some new products,” DeSouza says, “including contractor professional liability products, a life sciences product and some interesting pollution endorsements that will allow us to provide gradual pollution liability coverage on a commercial general liability or umbrella policy with its own stand-alone limits tower.”

In addition to new products, BHSI Canada is looking to expand into different market segments in 2016. The team stands ready to deliver the trust, integrity and strength that is synonymous with the brand.

“We are committed to service excellence … providing solutions that make a difference for our customers and brokers,” Densham says.

“Keeping things simple and being responsive and doing business the right way is what the market can expect in 2016 and beyond.”

January 11, 2016

Introduces Professional First miscellaneous professional liability insurance in Canada

June 8, 2015

Launches Executive First fiduciary liability insurance in Canada

May 20, 2015

Appoints leader for Canadian liability claims operation

May 19, 2015

Launches crime protection policy and executive impersonation coverage endorsement for large public and private companies in Canada

April 2, 2015

Launches Executive First primary and side A DIC D&O liability policies in Canada

February 11, 2015 Appoints leader for Canadian property and energy claims

January 28, 2015

Announces expansion into Canada, opening an office in Toronto and appointing Densham, DeSouza and Miller to oversee operations

www.insurancebusiness.ca

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YOUNG & HAGGIS INSURANCE SERVICES

Location: Calgary, Alta.

Heads: Barry Young and Barbara Haggis Specialties: Personal home and auto, commercial, high-value homes, high-asset individuals; also write personal umbrella policies in Alberta

A family business in its third generation, Young & Haggis was started by Barbara Haggis’ grandfather in a Calgary basement. While they’ve come a long way from those humble beginnings, the family spirit continues – clients are greeted by the office Shih-Tzu, Bailey.

Placing on emphasis on continued employee education, this team knows and understands company manuals inside and out.

Streamlined processes allow Young & Haggis to service a list of satisfied, high-value clients with effortless agility. And with an average retention rate of 90%, their highly cultivated approach appears to be working.

Rather than relying solely on the cold, hard digitalization of the modern world, Young & Haggis’ traditional approach to client relations is blended with technology in the form of a custom, branded mobile app, Y&H Connect. This, coupled with an emphasis on continued employee development, makes for a paradoxical yet highly effective mixture of tradition and progressive thinking.

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FEATURES

COVER STORY: TOP BROKERAGES 2016 WILD ILLSLEY INSURANCE & FINANCIAL SERVICES Location: Dartmouth, NS Heads: Michael Wild and Andrew Illsley Specialties: Personal and commercial lines

Admittedly old-school in their approach, Wild Illsley works to build trusted relationships that clients appreciate. In a tireless effort to understand their clients’ needs, they provide each client with an exhaustive questionnaire before any dotted lines are signed. That’s due diligence taken to a whole new level, and their high retention rates suggest that clients are far from dissatisfied.

Throw in a partnership with financial behemoth Sun Life, and this shop can certainly expect substantial staying power.

BRYSON & ASSOCIATES INSURANCE BROKERS

Location: Ajax, Ont. Head: Tracy Makris Specialties: Personal lines, commercial and transportation

Strong values underpin this Ontario-based office of industry aficionados – principally, the old yet far from tired idiom of “treat people the way you want to be treated.” This isn’t limited to clients, however: Bryson & Associates’ culture and work environment has earned them a nod as a Great Place to Work from Great Places to Work Canada. In fact, the entire team is currently preparing for a top-to-bottom hike of the Grand Canyon as part of a health and wellness initiative.

Claiming that “we don’t just think outside the box – we replace the box,” Bryson puts a high priority on due diligence with policies such as a Second Set of Eyes Analysis and an internal claims review committee. They also emphasize employee expertise as a core strength, and are determined to hire the best as a means to deliver innovative solutions for unique and challenging insurance opportunities. Clients continually return for their intensive, exhaustively vetted strategies – and their reputation has certainly benefited as a result.

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www.insurancebusiness.ca

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IVES INSURANCE BROKERS

Location: Essex, Ont. Head: Jeff Ives Specialties: Transportation, construction, manufacturing, greenhouse, small business, personal lines

For Ives Insurance Brokers, expansion is quite simply a way of life. Aside from its Essex office, the company has extended its reach into Lasalle, Leamington, Amherstburg, Ayr and Edmonton, and has obtained licences in Michigan, Ohio, Indiana, Illinois and Florida. This everexpanding brokerage holds firm to the motto “The harder you work, the luckier you get.”

Diversifying into specialty segments has led to granular insights into a broad range of areas. Construction teams focus on construction; trucking teams focus on trucking. This strategy of ‘expert building’ has garnered the company a reputation of know-how across various business segments. Doing away with the jack-of-all-trades approach underlines Ives’ belief in Darwin’s old phrase, “adapt or die.” Throw in strict professional education requirements for all employees and inroads into digital solutions for clients, and it’s easy to imagine big things for this growing shop.

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FEATURES

COVER STORY: TOP BROKERAGES 2016 NEW WORLD INSURANCE

Location: Toronto, Ont. Head: Adam Keung Specialties: Personal and commercial lines

Creating harmony between cuttingedge customer service and traditional best practices, New World Insurance has put together different sort of shop that still provides substantive value to clients. Having won several awards for performance and customer service – including the RIBO Achievement Award – this team is constantly refining their approach and adding to their extensive list of product offerings.

ARC INSURANCE BROKERS Location: Edmonton, Alta.

Head: Jack Rao Specialties: Personal home and auto

Maintaining a strong company culture is at the heart of this young, dynamic team’s process. ARC has taken the old ‘clients first’ adage a step further by regularly referring clients to more relevant agencies when the demand is outside their scope.

This unconventional approach has earned ARC substantial industry relationships and a track record of repeat business, as well as a reputation for integrity.

ARC’s tight team hails from diverse backgrounds – from chemistry and computer science to financial services – and some arrived with no insurance experience whatsoever. Instead, ARC places an emphasis on hiring individuals with a high aptitude for problem-solving, communication and computer skills. This mixed bag of perspectives is integral to the firm’s culture of collaboration, and makes for unique insights when it comes to troubleshooting client problems.

EXCEL INSURANCE GROUP

Location: Loydminster, Alta.

Head: Doug Morrow Specialties: Property and liability, risk advisory, cross-border programs, regulatory compliance, surety & bonding, proprietary claims management

Self-described “insurance geeks and compliance nerds,” Excel Insurance Group’s sense of humour is a key value in dealing with clients. Adamant about not doing business the “stuffy traditional way,” they instead take an entrepreneurial approach to meeting client demand and daily business expectations. Big on the use of technology and unconventional problem-solving, Excel has garnered plenty of raves from clients for their lighthearted approach.

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Humour isn’t this brokerage’s only driving value, however – integrity, entrepreneurialism, independence and succession planning are the other cornerstones of Excel’s solid business.

These values are spread across their group of offices – as they put it, Excel Insurance Group “operates like a teaching hospital” for the network. Judging by the growth and success of this brokerage in the past year, it’s easy to say the prognosis is good.

www.insurancebusiness.ca

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FEATURES

COVER STORY: TOP BROKERAGES 2016

MOORE-MCLEAN INSURANCE GROUP

Location: Toronto, Ont. Head: Daryn McLean Specialties: Personal lines group and high net worth, commercial lines, new car dealers, local movers, commercial surety and hospitality

Finding areas of focus and then placing the right people to service them has brought success to this Toronto-based powerhouse. Not only has Moore-McLean built a sizeable presence in each segment, but they’ve also won several awards in each market stream they serve. That’s due in part to their Solutions Beyond Insurance program, which makes an effort to address all of their clients’ needs – not just insurance – and partner with other organizations to find solutions. This approach has led to solid relationships with what MooreMcLean calls their “four key stakeholders”: colleagues, customers, carriers and community. It has also led to substantial market share and innovative solutions such as the development of a one-of-kind online insurance product and a mobile app.

Moore-McLean also has developed what, by many accounts, is a fun and rewarding office culture. Perks include trips to the Caribbean, ping-pong and foosball tables, and the innovative Young Professionals Group. They’ve even partnered with Gravenhurst’s Saw City Brewing Company to brew and brand their own beer.

B&W INSURANCE BROKERS

Location: Langley, BC Head: Jan Stamnes Specialties: Transportation, personal lines

Focusing on a single specialization has paid dividends for this BC-based transportation shop. Cornering Vancouver’s trucking sector has set up B&W Insurance Brokers to adapt their business model across several locations, and they have since added personal lines to complement the transportation business. This granular approach has allowed them to grow to six locations across British Columbia – including two that offer ‘drive-thru insurance,’ a concept that was born when the company used a former takeout restaurant for office space.

B&W has relied on a variety of transport industry events and trade shows to cement their reputation for expertise in the segment. They also continually lobby insurance company partners for trucking-friendly policies to better address client demand. Add to that a culture of employee growth and development that has seen some employees remain with the company for three decades, and it’s safe to say that B&W is doing something right.

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FEATURES

COVER STORY: TOP BROKERAGES 2016 GESKA ASSURANCES & CONSEILS Location: Brossard, Que. Head: Gerald Charest Specialties: Commercial lines

Client protection is the watchword at Geska. Working collaboratively, the small team schedules daily chats about how best to meet this mandate in the present, as well as mitigate any future risk. Throw in an adamant belief that respect is the key to all client relations, and you have a recipe for solidified partnerships that appear to be growing over time.

Geska believes their recipe of commitment, know-how, integrity and respect allows them to form dynamic relationships with clients and offer innovative solutions to new customers. They’ve also hitched a ride on the tech bandwagon through the development of their own digital tools. Given all that, it’s no surprise that their client satisfaction rate is an impressive 93%.

ORACLE RMS INSURANCE RISK MANAGEMENT SERVICES

Location: Concord, Ont. Heads: Michael Di Nardo and John Ferraro Specialties: Construction, manufacturing, surety, transportation, personal lines

Sometimes striving to be better can lead to being different. Such is the case with Oracle RMS, where a determination to constantly improve and refine their processes has produced something different. Operating out of a retrofitted warehouse complete with state-ofthe-art modern furnishings, this young team expects their members to have a near encyclopedic knowledge of the industry.

Under the credo of “never lead behind the desk,” management has implemented and encouraged a style that may appear unique to some – they expect results from themselves as well as from their employees. Applying their expectations universally across the office has allowed Oracle RMS to quadruple in size in less than two years and build a portfolio of clients that would make any decades-old operation green with envy.

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HUBBARD INSURANCE GROUP

Location: Mississauga, Ont. Head: John Hubbard Specialties: Commercial lines, transportation, technology, manufacturing and construction, nonprofits, arts and hospitality

Hubbard Insurance Group has an amazingly diverse team with a wide variety of backgrounds, including a professional stage vocalist, a classically trained pianist, a private investigator and an African safari adventurer. In addition, team members have backgrounds in specific industry sectors, which gives them a true appreciation, understanding and knowledge of their clients’ businesses for a whole insurance approach. The Hubbard team functions as a risk management department for their clients, making their role larger than simply insurance and helping to ensure they are an indispensable business partner to their clients. Their ‘walls down’ approach fosters teamwork, collaboration and communication between employees and clients alike.

Open minds.

Understand Risk.

“Our Specialty Operations Team has the experience and ability to customize coverage. Whether it’s a professional liability program, or a challenging stand-alone risk, we enjoy the opportunity to find solutions. We realize that in today’s marketplace, business and professional exposure is increasingly unique, and often demands creative underwriting. I am confident that our team has the knowledge to assist with your specialty insurance needs. “ David Alexander AVP, Professional Liability Direct 416-826-5221 david.alexander@sovgen.com sovereigngeneral.com

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FEATURES

COVER STORY: TOP BROKERAGES 2016

MCDOUGALL INSURANCE & FINANCIAL Location: Toronto, Ont. Heads: Ross McDougall and Don Stanton Specialties: Personal and commercial lines

This band of commercial aficionados includes everything from experts in trucking fleet and tenant policy to dairy farm specialists. While catering to traditional clients, McDougall places a heavy emphasis on progressive tech, outfitting brokers with the latest and greatest tools to allow, for instance, clients to receive a quote with a simple scan of a driver’s licence.

Two words encompass McDougall’s core strategy: big and local. They are married to the idea that variety of product and heft in the marketplace makes for the best premiums and claims service for clients. Yet this global strategy has a local focus – all of the company’s 28 branches are located in Eastern Ontario.

CMW INSURANCE

Location: Vancouver, BC Head: Andrew Kemp Specialties: Commercial lines, specifically risk management

Employee-owned and uniquely independent, CMW Insurance’s roots in the BC business sector run deep, paying major dividends for their dedicated clients. The brokerage was originally founded as a corporate insurance shop, but they expanded their risk management capabilities by partnering with the world’s largest insurance brokerage to offer Global Ability in Canada. Today, CMW Insurance's diverse product offering and streamlined end-to-end process, cultivated over many years, have earned them long-standing partnerships that they take time to nurture.

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ROGERS INSURANCE

Location: Calgary, Alta.

Head: Lee Rogers Specialties: Personal lines, group home and auto, life and benefits, and all lines of commercial insurance from D7O and cyber to manufacturing and beyond

At Rogers Insurance, employee engagement is ensured via an extensive and progressive shareholder program that draws in the best young talent and places them in charge of client relationships that can last 10+ years – or their entire career cycle. This level of commitment, along with Rogers’ ownership of digital marketing and tech firms that are developing leading mobile apps, as well as strategic national partnerships, make this behemoth an all-round powerhouse.

Industrializing culture might sound like an oxymoron, but Rogers’ flat organizational structure and progressive employee programs make for happy, vested employees. Instead of your average cog-in-a-wheel mindset of larger organizations, they have put in place recognition, gainsharing and other programs to maintain engagement and loyalty and form a unique culture. For example, the Dream Program allows staff members to register a ‘dream,’ such as a trip of a lifetime or the chance to receive specialized medical equipment for a relative. Four employee ‘dreams’ are selected annually in front of a large staff event amidst applause and many wet eyes.

In other words, instead of simply droning on about culture, Rogers, as one source put it, “walks the talk.”

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FEATURES

COVER STORY: TOP BROKERAGES 2016

MITCHELL & WHALE INSURANCE BROKERS

Location: Whitby, Ont. Head: Adam Mitchell Specialties: Personal lines, commercial, event insurance

Customer feedback and long-standing relationships have been the bedrock of this generations-old shop. Launched way back in 1948 by patriarch Harold J. Mitchell, Mitchell & Whale’s traditional approach continues to evolve as they branch out into new, progressive product lines such as Uber insurance and event insurance. They also recently unveiled a streamlined digital marketing strategy.

And it’s clear that their new offerings are a hit with their clients – Mitchell & Whale boasts a 90% client retention rate and top-shelf customer service ratings year after year.

MCILROY INSURANCE BROKERS

Location: Huntsville, Ont. Head: Andrew Kemp Specialties: Commercial lines, specifically risk management

Declaring their mission as “one word ... local,” McIlroy Insurance Brokers work where they play: Muskoka. Understanding what makes their community tick is this team’s bread and butter, and a roster of satisfied cottage country clients is a testament to their success.

Understanding their market so deeply has advantages – namely, a distinct ear for client demands and expectations, and an ability to predict those expectations when structuring product lines. While they have taken a leap into the digital world with a mobile app, they still encourage locals to drop in for a coffee and chat.

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12/03/2016 7:41:40 AM

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FEATURES

COVER STORY: TOP BROKERAGES 2016

DON WOTHERSPOON & ASSOCIATES (VANCOUVER) LTD. Location: Surrey, BC Head: Troy Wotherspoon Specialties: Auto fleets, general auto, personal lines and small commercial

A focus on building solid client relationships is the bedrock of this Western shop, which takes the family business moniker to a whole new level. Owner Troy Wotherspoon’s father started the business; now his wife, two daughters and two NHL draftee sons are all involved.

Wotherspoon is all about streamlining procedures to improve client management and employee engagement. Open communication channels between producers and clients allow for full transparency and a hassle-free process, raising the level of client satisfaction.

They also pull back the digital curtain to maintain a more personal touch with clients, such as consistent phone calls and face-toface meetings. This allows Wotherspoon’s brokers to avoid the digital confusion that can result from an overemphasis on email and other electronic messaging. For this team of industry traditionalists, technology is a value-add – not a replacement for real-time client interaction and communication.

CALDWELL ROACH INSURANCE

Location: Elmsdale, NS Heads: Rod Jones and Greg Roach Specialties: Personal and commercial lines

In business since 1965, Caldwell Roach Insurance has been continually scoring quiet hits for years. Locally owned and deeply entrenched into their Nova Scotia community, the brokerage has relied on solid relationships with clients as a key to longevity, and they continue to strengthen their people-first approach. A tireless effort to meet the demands of their community has led Caldwell Roach to adopt diversified product offerings that are custom-tailored for their market.

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ISURE Location: Woodbridge, Ont. Head: Dario Battista Specialties: Online and customer experience

Tech start-up isure’s mission statement is to “embrace the omni-channel experience and seek out ways to engage clients on their own terms.” In other words, isure is unlike any other brokerage on this list in that they are focused primarily on organic digital growth – but like others, they also have a dogged determination to refine the quality of client services.

The firm’s president, Dario Battista, was inspired to create the start-up after witnessing the disruptive effects of technology while working in the travel industry. He drew parallels to the insurance industry and set out on a quest for change. Accordingly, the isure team has used social media and web tools to generate organic growth. Ratcheting up traction the hands-off way has allowed them to focus on customers in new ways and deliver an innovative approach to consumer interaction.

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FEATURES

COVER STORY: TOP BROKERAGES 2016 WYATT DOWLING INSURANCE

Location: Winnipeg, Man. Heads: Curtis and Debbie Wyatt Specialties: Personal lines, travel and home

A recent merger between Wyatt Nu Trend and Dowling Insurance marked the creation of one of Manitoba’s largest insurance brokers. Both powerhouses in their own right, the newly merged brokerage can now claim more than 100 years of industry experience. With 11 locations in the Winnipeg area alone, Wyatt Dowling emphasizes innovation and customized solutions for their diverse market.

HIGHCOURT PARTNERS

Location: Toronto, Ont. Head: Mark R. McKay Specialties: Commercial lines, personal lines, custom/specialized products

This metro Toronto-based professional risk advisory and international insurance brokerage touts an exhaustive and, some might say, unconventional list of product offerings. In addition to standard commercial and personal lines, Highcourt also delves into peripheral areas such as equine and agribusiness insurance. Casting such a wide net can be risky, but this brokerage is staffed with an expert team to back it up.

Committed to being unique and innovative, this privately owned shop also touts its own tech platform. Infusing progressive digital solutions into their service offering has been something of a crusade for Highcourt, and it has helped cement client relationships across a variety of sectors.

REITH & ASSOCIATES

Location: St. Thomas, Ont. Head: Dan Reith Specialties: Commercial and personal lines

This process-driven shop has a mission to achieve client prosperity – in fact, their unique client service process is titled ‘Mission to your Prosperity.’ This includes the ‘Advantage Discovery’ model, an exhaustively thorough approach to learning about clients’ needs. That clients-first model comes replete with fresh-baked cookies (served daily), a complimentary coffee bar, fruits and free Wi-Fi. These offerings, along with Reith & Associates’ cadre of service guarantees and commitment assurances, take customer commitment to a new level.

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BINKS PERSONAL INSURANCE Location: Ottawa, Ont. Head: Joseph Ha Specialties: Personal lines

This Ottawa-based independent firm boasts a tireless dedication to customized client solutions – so customized, in fact, that they even provide customers with bilingual staff to meet their specific market’s demands. A dedication to continued development has given the Binks staff an impressive in-depth knowledge base, something they pride themselves on. Thanks to their firmly established community roots and reputation for delivery, this shop will surely continue to claim market share.

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FEATURES

COVER STORY: TOP BROKERAGES 2016

INSURELINE BROKERS

Location: Port Coquitlam, BC Head: Aly Kanji Specialties: Home, condo and renter’s insurance

Reimagining the insurance-buying process, InsureLine Brokers’ young yet tech-savvy business model combines the tried-and-tested formula of conventional brick-and-mortar insurance transactions with online sales capabilities.

Increasing operating efficiency comes easily when you have your own proprietary client management system in place. That’s one advantage of infusing modern technology into the business, but it’s not the only one for this progressive shop. Using a variety of robust and rigorous training tools and coaching methods allows franchised locations to experience the same level of efficiency, and it provides clients with a consistent experience.

Franchising their proprietary technology helps InsureLine extend their reach across their current licensing sectors of BC and Alberta.

Once the rest of Canada opens up to this unique digital insurance platform, the potential could easily be described as limitless.

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DYCK INSURANCE

Location: Wetaskiwin, Alta.

Head: Robert Dyck Specialties: Personal and commercial lines

A laid-back approach to client services masks this Alberta-based brokerage’s eat-sleep-and-breathe attitude toward the z. Around since 1979, family-owned Dyck Insurance has built a business almost entirely on relationships.

Serving the remote regions of Yukon and Nunavut in addition to their home market of Alberta has allowed Dyck Insurance to expand their reach into largely underserviced terrain. All that remains for this traditionally run and progressively operated shop is diversification, which is precisely what they are committed to doing with an ever-expanding list of product offerings.

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FEATURES

COVER STORY: TOP BROKERAGES 2016

RAYNER AGENCIES

INSUREBC

A comfortable blend of client feedback initiatives and exhaustive product offerings have laid the groundwork for Rayner Agencies’ success. But this formula isn’t exactly new – this Saskatchewan brokerage has a history dating back to 1948. A family operation in the truest sense, the Wasylenkos took over the business in 1971 from another family, Lorne and Ruth Rayner, who first established the brokerage in the 1940s.

Thanks to established partnerships with global behemoths, Rayner Agencies become a go-to for their local community while adapting to the changing digital climate with a full list of online services.

After 25 years in the business, during which they managed to expand to 75 locations across the BC area, InsureBC shows no signs of stopping. This local giant is constantly refining product offerings to meet demand and keeping a constant eye on further expansion opportunities.

Managing a plethora of locations makes efficiency a way of life, and the team at InsureBC has answered the call. They meet the demand of throngs of clients dotted across the province through an intuitive ability to understand need.

Their steadily growing market share is testament to their efficiency.

Location: Saskatoon, Sask.

Head: Shawn Wasylenko Specialties: Personal, commercial, more vehicle and more.

MITCHELL SANDHAM INSURANCE BROKERS

Location: Toronto, Ont. Heads: Peter S. Mitchell, Ryan Mitchell and Aaron Nantais Specialties: Commercial, personal, financial services, group benefits and more

Five decades of tradition have not slowed the evolution of this Toronto operation, managed by a father-and-son duo. Currently in the process of transitioning their business into the brave new world of digital, their expansive and selfproclaimed innovative service offering can now be accessed online. They’ve also embraced online marketing tools such as social media and blogs as a way to foster relationships with clients. This increased convenience has driven both growth and client satisfaction.

BMT INSURANCE & FINANCIAL SERVICES Location: Mississauga, Ont. Head: Joel Bergeron Specialties: Personal and commercial lines

Thanks to its entrenched community roots and deep connections, BMT continues to be a trusted name in the rapidly growing Mississauga community. Annual policy and culture reviews keep the team in tune with economic climate changes, resulting in a high number of referrals. Diversification into financial services has increased revenues while expanding options for clients.

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Location: Vancouver, BC Head: Jack Meier Specialties: Home, business, car, travel, life, boat, claims

SOUND INSURANCE SERVICES Location: Toronto, Ont. Heads: Mark and Matthew Giardetti Specialties: Property, auto, commercial, group

Security is more than a mission statement for these risk management crusaders – it’s a way of life. With that in mind, Sound takes a custom approach to each proposal to ensure client needs are met. Long-standing partnerships with more than 40 carriers allow this familyowned brokerage to offer their clients a host of coverage across their many areas of specialization, which include school buses, garages and trucking fleets.

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SPECIAL PROMOTIONAL FEATURE

AVIATION INSURANCE

THE SKY’S THE LIMIT Flying a plane can be daunting at first, but experience counts for a lot.

The same is true of aviation insurance – but a little guidance can help give you wings AVIATION INSURANCE can be intimidating. Expensive equipment, unfamiliar legal requirements and regulations all make for a complex product. But with a helping hand from an experienced advisor, you could soon be tapping into one of the fastest-growing sectors in insurance.

Louise Blanchard, aviation manager at Cambrian Special Risks, knows a thing or two about the aviation market. By her own admission, she’s been in the industry a long time, which makes her experienced and well-connected. With a large aviation portfolio of her own, Blanchard came to run the aviation business at Cambrian Special Risks

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after the company realized that there was a need for an experienced underwriter with the time to walk new brokers through the steps of putting together an aviation policy, whether that’s face-to-face or via a RIBOaccredited aviation seminar or webinar.

“We guide the new broker with limited knowledge and experience in aviation insurance – for instance, a broker who may have a large contractor who has purchased a small aircraft so he can fly to his job sites,” Blanchard says. “The broker won’t want to refer the client to an aviation broker, who might then go after the rest of the account.

It’s very competitive out there. This way,

they can pick up the phone, and I’ll walk them through the process from start to finish so they can pick up cover for their client without anybody else tapping into it.”

The wisdom of experience Blanchard believes there is a huge market of small aircraft owners out there, which means an equally large market for insurance – and Cambrian Special Risks wants to hear from brokers who are interested in aviation and want to know how to get started. The MGA just celebrated its 10th anniversary, and Blanchard believes it’s the focus on education and knowledge that makes the company –

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that conversation with the pilot.”

There are also considerations like making sure pilots have completed their medical exams, that their licensing is current and that their endorsements for night flying are up-to-date. Hearing this from an experienced party can help boost confidence.

An untapped market

and its products, which are underwritten by Allianz – so attractive. Indeed, Cambrian was the only one of Insurance Business Canada’s Top 10 Brokerages to win five stars in every category.

“It’s about educating brokers on what to be aware of,” Blanchard says. “In the aviation world, there are things that you may not learn from reading about them, but from experience – things like talking to your clients about not overloading their aircraft.

We’ve seen claims denied both for liability and property due to overloading, and a lot of brokers don’t know to talk that language.

We train the brokers to make sure to have

Although Cambrian primarily insures smaller to medium risks, its aviation products are not just for private clients.

Blanchard also targets a lot of contractors who do work at aviation facilities, because their regular CGL policy normally would exclude work performed anywhere near an aviation runway or an airport.

“We sell a lot of little aviation premises liability policies for contractors,” she says. “We’re doing a lot of private aircraft, and a lot of premises aviation liability for our contractors. But we have written some small airlines and some small fleets of bush planes. We don’t have a limit on our capacity, so if we did have a broker who wanted to write a large airline, we could accommodate.”

Cambrian also has two programs for premises, or hangar, coverage – one via Intact and one via Allianz – allowing the MGA to write actual property for hangers, any spare parts and aviation liability.

“Then we expand from there,” Blanchard says. “Like if someone has someone else’s aircraft in their hangar, then we sell them hangar keeper’s liability. We cover every part of the business when it comes to aviation.”

Cambrian finds aviation a particularly attractive market because the private aircraft sector is always growing. There’s

“It’s about educating brokers on what to be aware of. In the aviation world, there are things that you may not learn from reading about them, but from experience” Louise Blanchard, Cambrian Special Risks

WHO NEEDS AVIATION INSURANCE? Commercial aircraft and fleets Private aircraft and helicopters Air taxis/charter and tourism services Light jets Business aviation (industrial aid/ executive charter) Airfields and fixed-base operators Commercial rotor-wing aircraft and fleets Medical and rescue services Clubs and flying schools Ground service providers Refuellers and repairers Component manufacturers Aerospace manufacturers Vintage aircraft and warbirds Charter service float operators Contractors Repair and service providers

always that businessman who travels a lot and finds it makes sense to get his own aircraft.

Aviation is a highly competitive sector, but it’s also one with plenty of new opportunities as new risks arise. Cambrian is seeing a lot happening with unmanned aerial vehicles [UAVs], but is being understandably cautious because the market doesn’t have a lot of claims experience.

However, Blanchard says, Cambrian aims to be better at writing UAV risk, because there’s no question that this is the way of the future.

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PEOPLE

PRODUCER PROFILE

STAYING SHARP As the founder of tech-savvy Sharp Insurance, Sherif Gemayel is disrupting the traditional insurance industry

WHEN SHERIF GEMAYEL’S family immigrated to Calgary from Egypt in the 1980s – so the story goes – his father went out to buy insurance and was so pleased with the experience that he declared, “I would love for my son to own an insurance brokerage one day.”

It turned out to be a self-fulfilling prophecy.

Today, Gemayel helms Sharp Insurance, one of Canada’s fastest-growing, most tech-savvy iinsurance brokerages, which is devouring market share that was supposedly getting gobbled up by the big direct insurers and reinventing the sad old story that the personal lines business is dead.

A rough start A self-described “career sales guy,” Gemayel started his first business when he was just 22 years old, setting up a chain of retail airport shops that rented portable DVD players to budget travellers. It was a great idea, but the business ultimately failed, and he lost half a million dollars of his parents’ money.

Among the many lessons this school of hard knocks dished out, “humility was the biggest one,” Gemayel says. “You think you are flying high, and in an instant, things can turn.”

Going bankrupt was a turning point in Gemayel’s fledgling career. “Having to start your life from scratch is never easy,” he says.

But soon he was back in business, this time selling natural gas compressors to big producers all over Alberta.

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“It was the most boring job I ever had,” he says. “The money was great, and it was definitely a cushy job, schmoozing with clients over breakfast, lunch and dinner – and coffees in between – but there was nothing exciting or challenging about it.”

One day, Gemayel was hanging out with a previous business partner who had become an insurance broker. “I asked him, ‘What do you guys do to drive business?’ And he told me, ‘We kind of sit around and wait for the phone to ring.’”

Gemayel’s inner salesman was appalled.

After he scooped his jaw up off the floor, he challenged his friend to conduct a little experiment. “I told him to pick any company in the phone book, and I’d get him an appointment,” Gemayel says.

His friend accepted the challenge, and Gemayel landed the appointment. It turned into the largest deal his friend had ever done.

It was then that Gemayel realized the insurance industry was fertile ground for someone with his special brand of confidence, creativity and drive. Four months later, he and his friend launched Sharp

Insurance with $5,000 and two policies in their own names.

“Both of us were pretty crazy, actually,” Gemayel says now.

On top of the world What began as a two-person start-up in 2009 is now the fastest-growing brokerage in Canada. Sharp’s 62 employees write $1 to $1.5 million in new personal lines business every month. Two spin-off companies are also growing like crazy, and Sharp’s minority interest partner, Rogers Insurance, is focused on diversifying the company’s portfolio into commercial lines.

Gemayel attributes much of his success to his willingness to embrace technology.

He hired a web designer and pushed a lot of business through Sharp’s website from the get-go, while concurrently developing Sharp Mobile, the first consumer-friendly mobile insurance app in Canada.

A year ago, Gemayel launched a whole new side business, licensing this app to other insurance brokers. He also recently acquired a digital marketing firm to help fellow

WHAT’S NEXT AT SHARP? “We are still growing at a phenomenal pace, and within the next five years, we will be one of the largest players in the personal lines space,” Gemayel predicts. “We have a few tricks up our sleeves, especially now that we have a lot of resources. We have a development team, a digital marketing team, and we are starting to create some new things I think will wow the insurance world. As Steve Jobs would say, ‘We are trying to put a ding in the insurance industry.’”

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BEYOND THE OFFICE Running three companies means that Sherif Gemayel’s life is ridiculously busy. But when he does have some rare downtime, this is how he fills it.

VOLUNTEERING “I am a very big believer in giving back, and I volunteer at my church a lot. Sharp also regularly sponsors a dinner for the homeless at the Calgary Drop-In and Rehab Centre. We want to make sure we remember that what we have are blessings, not rights.”

TRAVEL “My wife and I love to travel, whenever we can we get away for a couple days, to Banff or something.

I just took my kids to Egypt for the first time last year. And I celebrate Sharp’s successes by taking the entire staff on trips to exotic vacation spots like Mexico or the Bahamas each winter.”

“I enthusiastically believe that technology has evolved to a point where the cards are no longer in favour of the online giants” brokers sell their services.

“I enthusiastically believe that technology has evolved to a point where the cards are no longer in favour of the online giants,” Gemayel says. “The ball is not in the direct writer’s court. We have had a lot of success in the online world.”

Needless to say, Gemayel is a big believer in baptism by fire. His advantage over other brokerages, he says, is that he didn’t know

any better when he started out.

“If someone had told me at the time that I launched Sharp that the brokerage market was declining and most brokers were exiting out of personal lines, it might have been a different outcome,” he says. “I didn’t have that information. I just went with what I knew. I tell my staff all the time, we are not dictated by market conditions. We create our own destiny.”

GOLF “I love playing golf. I suck at it, but I love getting up and am trying to get better at it.”

FAMILY “Spending time with my family is the single most important thing to me. I am fortunate to have a wife who’s a rock. For the last six years or so, it’s almost like she’s been a single mom because of the hours I have to spend at work. She is behind me. Fortunately, now I can take more time with [my family].”

EGYPTIAN CUISINE “We eat a lot of kabobs. Another favourite of mine is a dish called koshari, consisting of rice with lentils, macaroni, and fried onions. It’s carbs over carbs over carbs. It’s pretty amazing!”

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SPECIAL PROMOTIONAL FEATURE

CYBER LIABILITY

Have you tried addon cyber coverage?

Clients are still hesitant to buy into full cyber liability policies, viewing them as superfluous and expensive, but carriers are making inroads through smaller add-ons to existing policies CYBER RISK is suffering from an image problem – it’s largely perceived as something that only happens to the big guys. Think of the names you’ve heard in the news: Anthem, Home Depot, Target, JPMorgan Chase, Ashley Madison – all big companies. But for every cybersecurity breach that makes the headlines, dozens more go unreported. And more worryingly, hundreds more go undetected.

Consider this: In the Ponemon Institute’s annual report on the cost of data breaches in different countries, the number of breached records per incident for Canadian companies ranged from 5,199 to 74,550, with an average of 20,456. Ponemon didn’t include organizations that had data breaches in excess of 100,000 because they are not representative of most breaches, and including them would have skewed the results. In that respect, the data breaches that do make the headlines (Anthem, Home Depot, Target, et al) tend to be more than a thousand times larger than average.

The study also found that the average per capita cost of a data breach is US$250, and the average total organizational cost to the company breached is US$5.32 million, yet

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these breaches didn’t even make the news.

According to the Insurance Institute of Canada, the majority of companies in Canada do not currently purchase cyber insurance.

What’s more, they estimate that global cyber insurance premiums are less than half of 1% of the estimated cost of cyber crime. In contrast, global auto insurance premiums exceed international estimates of vehicle collision damage.

Getting the message out Given that so many customers are still reluctant to buy cyber coverage, even in the face of compelling statistics like these, Markel Canada has taken an innovative approach.

“Unfortunately, insurance is still thought of as a commodity,” says Darlene Chin, assistant vice president of life sciences and information technology for Markel Canada, “and a lot of insureds don’t feel they have an exposure right now, and they are price-conscious.”

Although the company is jumping into the cyber liability market with plans to issue a stand-alone cyber policy, offering first-party and third-party covers, it is Markel’s cyber endorsement, which can be sold in conjunc-

tion with most Markel policies, that Chin sees as a solution to these barriers.

“If they don’t purchase our full cyber cover product, we feel that the endorsement is a good alternative,” she says. “It’s simple, cost-effective and supportive. It also provides a good introduction to educate the client on the exposures they could face. A lot of clients think that because they are not a tech company, they don’t need cyber insurance.”

But in today’s world, Chin points out, no company is immune from cyber risk.

“Every business has computers,” she says.

“They have vendor information, customer information, employee information, and all of their business is done via computer.”

Educating the client on the exposures they could face is the first step to introducing cyber liability, Chin says. “Data and technology are critical to the ongoing operations of a business. The compromise or damage of either can result in significant cyber liabilities.”

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A 360-DEGREE VIEW OF RISK EXPOSURE

“It is a lot easier for smaller companies to be exposed, as they may not have a fulltime IT person on staff ” Darlene Chin, Markel Canada Despite the almost daily revelations in the media of cyber hacks, there remains a perception among small business owners that cyber risk is something they’re not exposed to, as if they’re operating under the bad guys’ radar.

Although many different kinds of people are using cyberspace to commit crimes, the criminal motivations remain much the same as they always have and can be clustered into four broad areas: stealing or destroying information, exploiting victims through bullying or stalking, stealing corporate knowledge and trade secrets, and attaining political goals through state-sponsored and terrorist attacks.

And being small doesn’t make a company

less of a target. In fact, because they lack the resources large corporations have to shore up their security, smaller businesses are actually much more attractive to cyber criminals.

“A lot of clients say, ‘We’re not a target,’ but what they may not understand is that the targets are not necessarily the large retailers or banks,” Chin says. “It is a lot easier for smaller companies to be exposed, as they may not have a full-time IT person on staff.”

Add to the mix companies that are becoming more comfortable with employees using their own tablets and smartphones to conduct business and access or share sensitive information, and it is a recipe for disaster.

Markel has contracted risk assessment specialist NetDiligence to offer clients a Cyber Health Check, which aims to document an organization’s risk profile so they know where their exposures are and can take the appropriate actions to mitigate them.

An assessment gives organizations a 360-degree view of their people, processes and technology so they can: • Reaffirm that reasonable practices are in place • Harden and improve their data security • Qualify for network liability and privacy insurance • Bolster their defence posture in the event of class-action lawsuits In addition to conducting a thorough and comprehensive Cyber Health Check assessment, NetDiligence performs a network vulnerability scanning service to test the effectiveness of firewalls and web servers, and identify thousands of vulnerabilities that hackers can exploit, including unpatched, non-hardened or misconfigured externally facing network servers and devices.

Something for everyone Markel’s cyber products are aimed at a wide spectrum of industries, including professional services, healthcare, manufacturing and industrial.

The company also has partnered with NetDiligence to assist with risk management and prevent claims by offering up-todate information and templates through the eRiskHub portal. The portal provides a one-stop information source for those looking to learn more about cyber risk and to provide guidance should the worst happen.

“We are excited to launch our cyber product in Canada,” Chin says. “We know that cyber is a growth area, and we want to continue to provide a solution to brokers and their clients and remove the barriers that prevent them from buying this type of insurance.”

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SPECIAL PROMOTIONAL FEATURE

CREDIT INSURANCE

Closing the credit insurance gap The Guarantee Company of North America recently hosted a roundtable to examine the market for credit insurance and whether generalist brokers have the tools to sell it IT’S A NICHE product with broad implications and an even bigger book of clients just waiting to be served. So why aren’t brokers rushing out to sell credit risk insurance?

“Today the list of specialist brokers is clear, and there is a short list of first-rate specialist brokers who know this niche and are ready to help clients and their generalist brokers,” says Alister Campbell, CEO of The Guarantee Company of North America. “My instinct is that there is still an untapped market in Canada, because Canadian commercial clients have been very loyal to the independent broker. But there is this untapped market, partly because the generalist brokers have not been comfortable discussing this ‘banking product’ when they are insurance professionals.”

The idea is to “expand the pond,” as Campbell puts it, to get generalist brokers comfortable enough to broach the topic, introduce the product and partner with a specialist to deliver a winning client solution.

But that isn’t happening yet.

“I think there is still a big gap there – from our perspective, anyway,” Campbell says.

Mark Hall, a credit insurance specialist at Dan Lawrie Insurance Brokers, agrees. “I think there is a big geographic issue out there as well,” he says, “as the specialist brokers are concentrated in a couple of markets, and that leaves a huge part of Canada untouched.”

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Requests for credit insurance are coming regularly from bankers, particularly when a client gets to a certain size. Bankers need to margin against the receivables, and having credit insurance gives them assurance that the receivable has been vetted. In the event of a loss, the receivable will be covered up to 90% as long as the terms and conditions of the policies are met.

“The other reason is after a catastrophic loss has occurred – a big bankruptcy – and people find out that other people on the creditor’s list are insured, and they got 80% to 90% of their money back, while the other company

didn’t, they want to take advantage of the product going forward,” Hall says. “While it doesn’t help them with what happened in the past, they definitely don’t want it happening again.”

“Maybe that is where the real risk is for us as brokers – having that conversation after the fact with the client,” says John Hubbard, a credit insurance specialist with Hubbard Insurance Group. “‘You mean that coverage is available? Why didn’t you tell me?’ That is for sure a loss of client faith.”

“From the underwriting point of view, when it comes to credit management, it is

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a very complementary product for credit managers,” says Jay Rampersad, vice president of credit insurance for The Guarantee Company. “And for larger clients at the initial underwriting stage, we do our due diligence on the credit department of the client, and we typically give a bigger discretionary credit limit for that client.”

A part of the underwriting is the consideration for risk, and if that is an unknown for brokers, it can put a halt to the client conversation before it even starts. But the appetite is there, says BFL Canada’s Mike Sullo.

“I think the insurers do have an appetite for risk,” he says. “The markets are adapting to the current economic climate, the customers’ needs – there are certain products they’ve added into their core policies that are available to brokers now. It creates additional opportuni-

ties for brokers when there are potential gaps in coverage. There seem to be solutions that are available; it’s just a matter of approaching the right insurer and finding them.”

Hall agrees that there are enough insurers in the market today to provide capacity, and that the only time there was a lack of capacity was with clients that were bad risks.

“I think we’ve moved past that in recent times, except for a couple of significantly wellknown names in the marketplace,” he says.

“But there is sufficient capacity now that a client shouldn’t be turned down on a policy.”

Carolyn Sloan of Millennium Credit Risk Management agrees that the marketplace has plenty of capacity – so it comes back to the generalist broker taking the initiative to offer the coverage.

“There needs to be some sort of process

“It creates additional opportunities for brokers when there are potential gaps in coverage.

There seem to be solutions that are available; it’s just a matter of approaching the right insurer ...”

THE PANEL ALISTER CAMPBELL CEO The Guarantee Company of North America

MIKE SULLO Client executive and trade credit specialist BFL Canada

MARK HALL Associate broker and credit insurance specialist Dan Lawrie Insurance Brokers

CAROLYN SLOAN National vice president of sales Millennium Credit Risk Management

JAY RAMPERSAD Vice president of credit insurance Guarantee Trade Credit Solutions The Guarantee Company of North America

JOHN HUBBARD Associate broker and credit insurance specialist Hubbard Insurance Group

JOHN MIDDLETON President Global Credit Risk Management

in place where the broker needs to ask these questions,” she says. “I wish every broker would do it, but I also think there are a lot of owners who are just too busy to listen for that long of a time on a policy when renewing – because that’s when brokers walk in the door.

“The real solution? It is not just the brokers [talking about it] – it is the bankers, it is the lawyers, it is the consultants,” Sloan continues.

“It’s not that you hear it once, but that you hear it a number of times. Then the client starts talking about it, then starts thinking about it – and then, hopefully, they buy it.”

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PEOPLE

CAREER PATH

A HELPING HAND

From assisting with storm damage to volunteering with children’s organizations, Chad MacKenzie is driven by a desire to help those in need 2013

VOLUNTEERS WITH MAKE-AWISH FOUNDATION As the CEO of his own firm, MacKenzie recognizes the importance of being a leader and focuses on consistently improving his leadership skills. He also makes time to give back to his community – he’s been on the organizing committee for the Make-A-Wish Foundation Golf Classic since 2013 “I just believe that we all have a duty to help out, and I’m just so blessed to have been given so many wonderful opportunities to pay it forward” MacKenzie’s stint on the Storm 2010 Team inspired even bigger dreams.

Recently married with a growing BECOMES A FINANCIAL family, he took a position as an ADVISOR associate insurance/financial advisor in a local Co-Operators agency “[While on the Storm Team], I decided to become an advisor and help educate people on the types of coverage they really need. It was an honour to be the person who was able to provide financial support” MacKenzie soon felt the pull to advance in his career and move into claims investigation.

He bid Drayden goodbye and moved over to The Co-Operators, where he worked as an auto investigation adjuster

2007

BECOMES A CLAIMS INVESTIGATOR

I excelled quickly in this role, and an opportunity came up to be on the first ever Storm Team Chad MacKenzie’s introduction to the insurance industry came at an early age. While playing junior hockey, he had an assistant coach who was an insurance broker. MacKenzie respected his coach’s ability to juggle his career and family life, and he was inspired to join the Insurance and Risk Management program at MacEwan University “[My coach] strongly recommended insurance and helped me understand that there is something there for everyone”

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Shortly after becoming a financial advisor, MacKenzie applied for ownership of a Co-Operators office that had become available in southwest Edmonton. In 2011, he was able to realize his dream of opening his own practice, the MacKenzie Insurance Group

2011

OPENS HIS OWN BROKERAGE

2008

MOVES TO THE STORM TEAM For two years, MacKenzie worked for The Co-Operators Storm Team, where he assisted clients impacted by major weather events such as flooding, hail and tornadoes – including a major storm that left up to 8 feet of rainwater in basements.

MacKenzie travelled across Western Canada to help his clients understand how their coverage works and simplify the insurance process.

2006 LANDS HIS FIRST JOB MacKenzie’s first job out of college was as an insurance broker with Drayden Insurance, an independent brokerage, where he handled personal lines for both home and auto

2004

GETS INSPIRED TO JOIN THE INDUSTRY

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email insurancebusiness@kmimedia.ca

ROUND THE CLOCK PROTECTION Kirby Wallis spends his days insuring his clients against potential losses, but his service to the community hardly ends there KIRBY WALLIS knows a thing or two about the importance of insurance – his work as a volunteer firefighter keeps him up close and personal with losses as a result of fire.

Wallis joined the Glenboro-South Cyprus Fire Department in southern Manitoba in 2009, following his father into the service.

“I got approached by a couple of the current members, who asked if I’d be interested in [volunteering for the department],” Wallis says. “I thought it would be a pretty good way to get involved in the community and give back to the community.”

And indeed it is. Wallis responds to handful of emergency calls each month, and attends practices and training sessions twice a month to keep his lifesaving skills sharp. He is also active in promoting fire and loss prevention in the community, which certainly helps his insurance business.

“The biggest thing for me was building relationships within the community,” he says. “The insurance industry is so relationship-oriented, so [firefighting] helps me become more of a part of the community.”

2010

Year the newly renovated Glenboro-South Cyprus Fire Department opened

15

The number of volunteer firefighters in the department

4

The number of fire trucks the Glenboro-South Cyprus Fire Department uses

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FEATURES

EXPERT ADVICE day-to-day, we forget to ask ourselves how to do different things or how to do the same things differently,” Mufti says. “Executive education causes you to pick your head up to think strategically.”

Part of that strategic thinking involves the constantly evolving environmental and technology challenges that impact brokers.

Pre-2008, growth was top of mind for brokers, suggests Mufti, and now it’s competition. To tackle these challenges, broker managers need to figure out how to strategize.

Prepare for the long run

Executive education takes brokers to the next level LIFE IN the broker sector is not linear, so your education shouldn’t be, either. In a rapidly changing P&C landscape, brokers need exposure to leadership and strategy best practices to solve current challenges, evolve their businesses over time and take their careers to the next level.

“The benefits of broker management education are vast for aspiring leaders,” says John McNeil, manager of learning and development at RSA Canada. “It’s a way to enrich your overall skills and confidence, broaden your network and provide time to reflect on what’s working and what needs improvement.”

One such opportunity is Making Partner, a unique program developed through a partnership between RSA and the Smith School of Business at Queen’s University.

Strategize for the future “This executive education program is focused on meeting the needs of working brokers,” says Dr. Salman Mufti, associate dean and executive director of Queen’s Executive Education, Smith School of Business. According to Mufti, there are typically three streams of potential issues

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that a broker may be facing: strategy, leadership and execution. “Brokers tend to be very good at execution,” he says. “The areas that most brokers identify as problematic are leadership and strategy.”

That’s why getting away from the everyday grind is important. “When we get mired in the

“Brokers tend to be very good at execution.

The areas that most brokers identify as problematic are leadership and strategy” Dr. Salman Mufti, Smith School of Business at Queen’s University

While executive education does take a level of investment in time and money, brokers should consider three key benefits: 1. Time to reflect. McNeil says it’s important for brokers to disconnect and broaden their perspective. Mufti adds that in a fast-changing world, it’s natural for us to be reactive, “but it will tire you out,” he says. “To be in it for the long run, you need to think about things differently.

You need new ideas and techniques that make you a high performer.”

2. Broaden your network. Executive education programs like Making Partner provide access to thought leaders and can expand your network by introducing you to other brokers facing similar challenges.

3. Refine your skills. The Making Partner program is a unique, custom-designed offering for the broker learner. “We’re offering this program to motivate and support our brokers’ long-term development,” McNeil says. “This type of education provides an opportunity to enrich your skill set and tap into your existing knowledge to challenge the way you are thinking about your business through practical and academic information.”

Advance from player to coach Taking the time for executive education will help you move from being a player in the field to being a coach, Mufti says. “It will help give you the confidence you need to manage the game and help motivate others.”

The 10th edition of the Making Partner program runs from May 8-13, 2016, in Kingston, Ont. To apply to Queen’s University’s longestrunning executive management program, visit www.rsabroker.ca.

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SWGINS.COM Your specialty insurance provider

Contact us: Quotes@swgins.com Fax: 1-877-FAX-2-SWG (1-877-329-2794) Phone: 1-866-SWG-LINE (1-866-794-5463)

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Why travel?

When you can TravelWell® Whether your customers are travelling outside the province or out of the country, Intact offers personalized travel insurance to ensure they are properly protected.

Help them get covered against the cost of unexpected emergencies that may happen prior to or during their trip, such as trip interruption, medical insurance, and travel assistance.

Most benefits packages or credit cards offer only limited protection.

TravelWell® provides complete coverage for your customer, whether they travel once per year or once per week.

There are two options to choose from: • TravelWell® Emergency Medical Plan • TravelWell® All-Inclusive Plan

Try Us

When a client walks into your office we want you to think of us first.

Talk to Small, your Intact Insurance representative about TravelWell® medium, or large, we have experienced underwriters whotoday. have the training and skills to write all sizes of operations. Bring us your submissions today – we’re confident we can work with you to develop the coverage your clients need.

If the unforeseen happens, you can count on our dedicated Commercial Insurance Claims team. They have the expertise to get your customers’ business up and running as efficiently as possible.

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The BIPBIP logo is a registered trademark of the Insurance Association of Association Canada (IBAC).ofAllCanada other trade-marks areother property of Intact Financial Corporation used The logo is a registered trademark of the Brokers Insurance Brokers (IBAC). All trade-marks under license. © 2014, Intact InsuranceCorporation Company. are property of Intact Financial used under license. © 2009, Intact Insurance Company.

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