Insurance Business Canada 6.04

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CARRIERS Brokers reveal the best places to find competitive rates, quick quotes and more

BUILDING CYBER RESILIENCE How prepared are businesses for today’s cyber threats?

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CANNABIS IS LEGAL ... NOW WHAT? Brokers’ options for insuring companies in this budding sector

INSURANCE’S NEXT BIG THING

As parametric insurance gains traction, learn how it can benefit your clients

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ISSUE 6.04

CONNECT WITH US Got a story or suggestion, or just want to find out some more information? twitter.com/InsuranceBizCA

CONTENTS

plus.google.com/+InsurancebusinessCa facebook.com/InsuranceBusinessCanada

UPFRONT 04 Editorial

The next big thing in insurance

06 Statistics

FEATURES

36

BROKERAGE INSIGHT

SPECIAL REPORT

24

Navacord’s Shawn DeSantis and T. Marshall Sadd discuss how their network is keeping the independent brokerage model alive and well

20 2

10 News analysis

What is parametric insurance – and is it the right choice for your clients?

12 Intelligence

This month’s big movers, shakers and new products

14 MGA update

Technological progress is opening up cities to ever greater risks

FEATURES

Beazley property head Mark Bernacki outlines how the specialty insurer is growing its presence in North America

Should insurers have the power to control autonomous vehicles?

16 Technology update

Brokers told IBC which carriers are leading the pack in terms of rates, quoting, technology and more

INDUSTRY ICON

08 Head to head

MGAs are scrambling to find coverage for the now-legal cannabis industry

FIVE-STAR CARRIERS

PEOPLE

The high and low points of businesses’ cyber resilience

40

BECOME AN INSPIRATIONAL MANAGER

Five ways to inspire – and motivate – your employees

18 Opinion

The industry is long overdue for an image makeover

FEATURES 38 Creating a culture where innovation thrives

Three ways to make sure innovation is more than just a buzzword

42 Command and control

Take control of your business with this easy-to-implement reporting strategy

PEOPLE 45 Career path

48

A chance encounter led Nicole Benson to a thriving insurance career

46 Other life

Finding the rhythm with Alberta broker and dance teacher Alison Rutz

FEATURES

EXPERT ADVICE

How to make sure an insurance policy will cover your multinational clients in all jurisdictions

INSURANCEBUSINESS.CA CHECK IT OUT ONLINE

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UPFRONT

EDITORIAL

Jump on the new bandwagon

I

f you’re selling cyber insurance, have a website with a chatbot to answer clients’ questions while you’re asleep, and you’re already considering how the blockchain might transform the insurance business, then you’re right to feel you have your finger on the pulse of a changing industry. However, there’s one more new trend you need to be aware of: parametric insurance.

Risk managers have been buzzing about parametric insurance for quite a while. The idea is that rather than indemnifying a pure loss, this new type of policy instead pays out automatically when a ‘trigger’ event takes place within certain parameters – for example, if an earthquake occurs within a five-mile radius of a business’s premises. It’s particularly useful for catastrophic events, but it has plenty of uses in other areas as well, such as agricultural insurance, where the trigger could be a certain amount (or lack) of rainfall that could impact a crop. Generally, parametric insurance is well suited to low-frequency, high-intensity losses.

“Buyers are now more sophisticated, and they understand some of the limitations of a conventional insurance policy” In theory, such a policy could have massive advantages for clients and insurers alike – the payouts would be predictable, making them easier to account for, while also reducing arguments over the amount of damage suffered. Insurers could also reduce transaction costs with the way they write and administer policies. No surprise, then, that the concept is already proving popular.

“We have definitely seen more inquiries over the last year,” Steve Harry, risk finance consultant in Marsh’s Financial Solutions Group, told IBC in June. “I also think buyers are now more sophisticated, and they understand some of the limitations of a conventional insurance policy. Some people like the uncertainty that gives them, in that they can always argue about a policy contract, and other people like the certainty that an index-based product would give them.”

Of course, as with anything new, there are areas of debate: What indexes will be used? What triggers will be set, and how will they be monitored? How can it be used to incentivize best practice? While some answers remain hazy, what’s clear is that there’s massive potential in this product – so it makes sense to familiarize yourself with insurance’s hot new thing now before it’s your clients who are asking the questions.

The team at Insurance Business Canada

www.insurancebusiness.ca EDITORIAL Managing Editor Paul Lucas Writers Lyle Adriano, Hannah Go, Alicja Grzadkowska, Lucy Hook, Libby MacDonald, Nicola Middlemiss, Bethan Moorcraft, Joe Rosengarten, Ryan Smith, Ksenia Stepanova, Heather Turner Copy Editor Clare Alexander

CONTRIBUTORS Bri Burkhart, Amantha Imber, Aaron Hurst, Matt Malouf

ART & PRODUCTION Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Ella Dayandante

SALES & MARKETING National Account Manager Eric Langille Business Development Manager Desiree McCue Sales Manager Dane Taylor Vice President - Sales John Mackenzie Marketing and Communications Melissa Christopoulos Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries eric.langille@kmimedia.ca desiree.mccue@keymedia.com

KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Denver, London, Sydney, Auckland, Manila, Singapore, Bengaluru

Insurance Business Canada is part of an international family of B2B publications and websites for the insurance industry Insurance Business America cathy.masek@keymedia.com T +1 720 316 0151 Insurance Business UK nathan.beach@keymedia.com T +44 20 7193 0935 Insurance Business Australia peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO 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.

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UPFRONT

STATISTICS

Preparing for the inevitable

THE CHIEF TARGETS Companies in North America and the UK were the most likely to have experienced an intrusion in the last year; North American companies were also more likely to report that the attack had a serious impact and that they expected another attack within the next 12 months. Accordingly, companies in these two locations are making more significant efforts to bolster their boards of directors with cyber-savvy professionals.

When it comes to cyber risks, many companies are likely to face an attack, but not all will be victims Cyber attacks are becoming close to a sure thing: In the past year alone, one in every three companies surveyed by Willis Towers Watson weathered a cyber incident that had an effect on or threatened operations, financials and reputation. Expectations are high that there are more such events to come.

High levels of cyber resiliency mean an organization can quickly respond to an inci-

dent, address vulnerabilities and apply lessons for the future. Many executives are confident in their company’s cyber resilience; however, many conceded that they’re falling behind in attracting talent skilled in cybersecurity. Many also said they lack the ability to drive their workforce to be more cyber-savvy. The combination of these two issues indicates a need for change on the human side of cyber resilience.

Had a cybersecurity incident in the last 12 months The intrusion had a severe impact on operations, finance and reputation Likely to have a breach with a severe impact in the next 12 months Confident in restoring operations, finances and reputation in the event of a breach Have enough directors who know cyber

38%

26%

Companies where HR handles developing employee-related cyber risk policies

Companies where IT takes the leading role in developing such policies

33%

Actively recruiting directors who know cyber

73%

Companies that spend less than 1% of revenue on cyber resilience efforts

Companies that believe more should be spent on cyber resilience

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

FOLLOW THE MONEY

READY FOR ANYTHING?

On average, companies spend 1.7% of their revenue on cyber resilience efforts, but a majority of executives would like to see this number increase by at least 10%.

When asked to rate themselves on a scale of one (below average) to five (well above average) on 10 areas of cyber resilience, most companies were optimistic about their level of preparedness, particularly when it comes to assessing their risk level.

REVENUE SPENT ON CYBER RESILIENCE 11%

2%

COMPANIES’ ASSESSMENT OF THEIR CYBER CAPABILITIES Well above average

6%

4 Average

5% or more 22%

3% to 5% 2% to 3% 0.5% to 1% Less than 0.5%

32%

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

3 2

27%

1% to 2%

6

5

Below average

1

3.71

3.62

3.57

3.57

3.56

3.53

Allocate enough budget

Balance accept versus transfer

3.46

3.44

3.41

3.15

0 Assess and Assess Integrate Incident quantify cyber risk technology/ response risks culture governance post-acquisition

Incorporate Cyber- Identify and Apply cyber into savvy fill talent lessons from business workforce gaps incidents continuity

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

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UK 41% 29% 18% 30% 27% 36%

NORTH AMERICA

EUROPE

ASIA

41%

21%

21%

54%

14%

14%

36%

14%

14%

45%

27%

21%

46%

27%

17%

36%

18%

9%

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

TRAINING THE WORKFORCE Where companies’ cyber efforts generally lag is in training employees to become cyber-savvy: Fewer than half of the companies surveyed by Willis Towers Watson have implemented even basic cyber-related HR initiatives. The presence (or absence) of such policies can be an indication of the overall culture of cybersecurity governance in an organization.

PERCENTAGE OF COMPANIES THAT EMPLOY CYBER-RELATED HR INITIATIVES 50%

WHO’S RESPONSIBLE FOR OVERSIGHT? More than a third of organizations believe it’s the responsibility of the board as a whole to provide oversight for cyber efforts, rather than a specialized cyber, risk or audit committee.

WHO CURRENTLY OVERSEES CYBER RESILIENCE

40%

Specialized cyber committee 19%

30% The entire board 33%

20% 10%

44%

44%

40%

Ongoing security awareness training

Identification of talent/skills deficits in IT/cyber

Business continuity/ workforce planning

40%

39%

38%

37%

32%

30%

0% Identification/ Security Measurement action of incident of training at-risk communication effectiveness employees

Post-breach workforce planning

Post-breach Behavioural change rewards/ management incentives

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

WHO SHOULD OVERSEE CYBER RESILIENCE Specialized cyber committee 24% The entire board 38%

Source: “Decode Resiliency,” The Economist Intelligence Unit and Willis Towers Watson, 2018

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UPFRONT

HEAD TO HEAD

Should insurers be able to control driverless cars?

Could autonomous vehicles that respond to the commands of an insurer be the perfect course correction?

David Williams Technical director AXA UK

“People might think insurers would jump at this opportunity, but one of the biggest lessons from our involvement in five government-backed driverless consortia is the scale of the ecosystem being created. It’s estimated that one vehicle will generate around four terabytes of data a day; multiply that across an insurer’s motor and fleet book, and you will quickly appreciate how difficult the proposal would be.

Many parties will have a stake in the data created – the passenger/driver, connected infrastructure providers and transport network operators, for example – and it’s clear that our focus needs to be on working together.”

Thom Rickert

VP and emerging risks specialist Trident Public Risk Solutions/Argo Group “The answer is no, at least for now. The insurance industry should work to develop best practices and innovative coverage, influence safety regulations, and deploy technology to reduce claims.

But directly controlling autonomous vehicles would change the carrier’s role from transferring or managing risk to assuming the risk for any vehicle hardware or software failure. This would be analogous to an insurance company controlling an airplane’s autopilot system or a utility’s supervisory control and data acquisition [SCADA] platform. I think the industry would agree that this would be problematic.”

Tom Super

Director, P&C insurance practice JD Power “Insurer intrusion is more disruptive than beneficial for partially automated [vehicles]; insurers may be better positioned to share data with consumers to improve decision-making. Fully automated options, some of which are years from becoming mainstream, allow insurers to better price all types of risk and then pass those efficiencies on to the consumer.

Ultimately, consumer preferences will determine insurer involvement.

Manufacturers and ridesharing companies will likely remain in control, while insurers’ role will evolve to empower consumers with information and tools that inform their driving choices.”

TAKE THE WHEEL In a recent interview with the MIT Technology Review, Paul Newman, the co-founder of driverless car startup Oxbotica, raised the possibility of self-driving cars being monitored by insurance companies, which could address proximate risk factors by altering vehicle behaviour. He gave the example of a car noticing a sudden increase in the number of children on a sidewalk outside a school and reporting seeing more potential obstacles than normal; an insurer processing that data could either reroute vehicles or only allow them down the road at a reduced speed. “Insurers can adjust the envelope [in which a car can operate] to control the risk on the policy,” Newman said. “The autonomy system has insurance built into it that allows it to control risk over a fleet.”

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25/07/2018 1:01:33 AM

UPFRONT

NEWS ANALYSIS

The next insurance model Industry experts say parametric insurance – a specialized form of insurance or reinsurance tied to a defined trigger – could be set to take off in the commercial sector

AS AN INSURANCE model that uses predefined trigger and payout mechanisms, parametrics promises speedy, no-nonsense claims resolution that could help policyholders with cash flow and minimize insurance disputes.

According to a new report produced by risk management association Airmic in collaboration with insurance giants Marsh and Swiss Re, parametric insurance could soon become more mainstream in the commercial sector and help clients address some of the limitations of traditional insurance. But how does it work in practice, and where does the parametrics market stand today? IBC spoke to

be in terms of the trigger of the insurance, the payout or both, Harry adds: “Broadly, it’s an insurance program that is triggered and/ or paid very simply using an index rather than words.”

Under a parametric model, underwriters and buyers agree in advance that a claim will be automatically triggered by an agreedupon occurrence or a movement in an index, removing the need to investigate the precise extent or cause of damage. As a result, parametric solutions allow clients to insure risks that are difficult or even impossible to insure in the mass market. And while a complex

“Broadly, it’s an insurance program that is triggered and/or paid very simply using an index rather than words” Steve Harry, Marsh several industry experts to find out.

“Parametric insurance works using a clearly defined parameter – i.e. a metric or an index that is easy to determine,” says Steve Harry, risk finance consultant in Marsh’s Financial Solutions Group. That can

10

insurance claim on a traditional policy can take a long time to adjust and be paid out, the clarity around parametric policies allows claims to be resolved much faster and without disagreement over exclusions and complex policy wordings.

“The way we would express it is that it improves liquidity,” Harry says. “Really what we are looking to do is mitigate the liquidity risk of a traditional insurance contract in these complex areas.”

Currently, parametrics is mostly used in catastrophe bonds, but there are moves being made to apply the concept in the travel, retail and agricultural sectors – and the insurance industry has its eyes set on a much wider application in the future. While there have been very few direct parametric policies placed by insurers, Harry says that could be about to change.

“We have definitely seen more inquiries over the last year,” he says. “The data and modeling is now so much better that it’s a real reason to be optimistic that some of these deals might take off.”

According to Airmic chair Paul Goulding, while “parametrics is still work in progress … I can see it becoming mainstream in the

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FAST FACTS: PARAMETRIC INSURANCE

Parametric insurance was developed in the catastrophe bond market in the 1980s and early ’90s

The world’s first multi-country risk pool, CCRIF SPC, was formed in 2007 to provide parametric catastrophe insurance coverage in the Caribbean

Haiti received a $20 million payout under a parametric catastrophe policy following Hurricane Matthew in 2016

future, because it offers certainty of timing and hassle-free payment.”

Airmic technical director and deputy CEO Julia Graham adds that there has already been some growth in the commercial market.

“We are starting to see some businesses begin to take this cover seriously, and we’ve

in their coverage. Those who want speedy adjustment and an easy-to-work-out scale of payment might find parametrics appealing. However, Harry points out, “Some people like the uncertainty [a traditional policy] gives them, in that they can always argue about a policy contract.”

“I can see it becoming mainstream in the future, because it offers certainty of timing and hassle-free payment” Paul Goulding, Airmic heard of some big buys in the aviation sector, for example,” she says. “Organizations have started to buy this. We think it’s bubbling.”

As for whether a client should choose a parametric policy over a traditional one, that all depends on what they’re looking for

Airmic warns that commercial insurance buyers eyeing parametric solutions face a number of challenges and may need to acquire new skills. Buyers should have a good understanding of their organization’s business model and risk landscape, and may

A single parametric policy was written to protect 22,000 Spanish olive farmers from extreme weather temperatures in 2018 Sources: CCRIF SPC, Meteo Protect

need to get early buy-in from senior colleagues such as the chief financial officer.

Ultimately, though, parametric insurance can help businesses strengthen their financial protection by reducing the uncertainties around cover and cash flow that traditional policies can cause.

“Concerns about large, complex risks directly related to business operations are on the rise – it’s about protecting revenues,” says Christian Wertli, head of innovative risk solutions at Swiss Re Corporate Solutions.

“Parametric solutions can be used as a business tool to provide certainty and speedy access to liquidity when most needed.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

BrokerLink

Adriatic Insurance Brokers, Magermans & Raes Insurance Brokers and Insurance Protection Group

The three acquisitions give BrokerLink seven new locations in Ontario

Hub International

Optimum Group Benefits & Insurance Services and Wm. W. Hammond Insurance Agency

Hub acquired both companies with the aim of bolstering its employee benefits capabilities across Canada

Marsh

Wortham Insurance

Based in Houston, Wortham is one of the biggest independent insurance brokers in the US

MBC Group

Claim Assist

Claim Assist provides small post-loss appraisal, ladder assistance, mediation services and industry education across Canada

Western Financial Group

Axion Insurance Services

Ontario-based Axion is Western Financial’s first acquisition outside of the four Western provinces it operates in

a

CAA rolls out pay-as-you-go auto insurance program

First announced in May, CAA Insurance’s pay-as-you-go auto insurance plan is now available in Ontario. CAA’s MyPace program allows drivers to pay for insurance for every 1,000km they drive. According to CAA president Matthew Turack, the product is aimed at motorists who drive less than 9,000km a year, since they pose “less risk on the road.” According to CAA, a motorist could potentially save up to 30% with the pay-as-you-go program versus a traditional insurance policy. The association plans to eventually expand the program to other provinces and territories in Canada, starting with the Atlantic provinces.

Western Financial snaps up Axion

Western Financial Group has acquired Ontario-based Axion Insurance Services.

The transaction, completed in mid-June, gives Western Financial 10 business locations and about 60 insurance experts. Founded in 1990 and operating out of several locations in and around the GTA, Axion provides personal and business insurance services, as well as online services.

“As part of our Canadian expansion strategy, we are excited to make our first acquisition beyond the borders of the four Western provinces, and we felt that Ontario was an ideal place to start,” said Western Financial president and CEO Kenny Nicholls. “As the insurance experts who create security and provide the right protection for Canadians, Western is committed to expanding its physical presence across Canada and ensuring that Canadians get the best advice for their insurance needs.”

12

SSQ Insurance enhances group benefits

SSQ Insurance has teamed up with BiogeniQ – a company specializing in pharmacogenomics, a field that combines the sciences of genetics and pharmacology – to enable the insurer’s group insurance customers to access depression treatment services. A patient typically has to undergo several treatment strategies for depression before the right drug and/or approach is identified. According to SSQ, the new partnership will allow members to more easily find the right treatment with BiogeniQ’s help.

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PEOPLE DMC, BlackBerry partner on trucking program DMC Insurance, which provides commercial transportation insurance solutions, has partnered with BlackBerry to help trucking companies improve operations, increase safety and better manage the total cost of risk. The two companies will create insurancebased products and services that use near real-time data, including route and mileage, temperature, and cargo load state, from BlackBerry’s Radar tracking solution, which collects up to a hundred times more data than conventional GPS-based tracking solutions.

CHES launches active shooter products

CHES Special Risk has launched a new range of products to address active shooter and terrorism risks. The company’s active assailant insurance package protects against losses businesses and their owners might sustain following an active shooter event. The terrorism insurance package addresses risks more in line with terrorist activity, including cyber terrorism. The ‘threat of terrorism’ package looks to mitigate the damages caused by the mere threat of a terror act; there is no property damage trigger required for this coverage to take effect.

Markers introduces medical cannabis coverage

Markers Insurance is offering what it claims to be Canada’s first guaranteed-issue medical cannabis insurance product for individuals.

Makers will initially launch the coverage as an individual product in August, to be followed by a group product. The insurer said it will directly pay medical cannabis producers licensed by Health Canada, similar to the way dental insurance is administered. Policies will be customized to each insured’s actual requirements, with no caps or restrictions based on pre-existing conditions.

NAME

LEAVING

JOINING

NEW POSITION

Michele Briggs

AIG

Combined Insurance

Senior vice-president of human resources

Andrew Coutts

Brit Global Specialty

XL Catlin

Global practice leader, cargo

Matthew Dolan

Ironshore US

Liberty Mutual

President of North American specialty

Carla Greaves

N/A

XL Catlin

Chief underwriting officer, global excess casualty

Matthew Hardy

N/A

Chubb

Executive vice-president for global energy

Shaun E. Kelly

N/A

Liberty Mutual

President of distribution, Global Risk Solutions

Jamie Miller

Swiss Re

AIG

Chief underwriting officer, North American property

Rocco Neglia

Economical Insurance

Automotive Industries Association of Canada

Business development head, Canadian Collision Industry Accreditation Program

Monica Ningen

N/A

Swiss Re

President and CEO, Swiss Re Canada and English Caribbean

Jerry Ridge

Willis Re

Lockton Cos.

Global head of marine and energy reinsurance

Ben Rockwell

N/A

Chubb

Chief underwriting officer, North America commercial insurance

Darin Scanzano

AXIS Capital

Everest Insurance

CEO, Everest Insurance Canada

Nancy Suffolk

Hiscox

Allianz Global Corporate & Specialty

Global head of product development, entertainment

Swiss Re names new Canadian head

Swiss Re has appointed Monica Ningen as president and CEO of Swiss Re Canada and English Caribbean. Ningen has more than 20 years of industry experience; since joining Swiss Re in 2006, she has held several leadership positions in property underwriting, most recently as head of property underwriting US and Canada.

“Monica’s business experience and strong leadership skills will be a key asset in helping Swiss Re to grow our business and client relationships in Canada and the English Caribbean,” said J. Eric Smith, president and CEO of Swiss Re Americas.

Liberty Mutual adds two new leadership roles

Liberty Mutual has named Matthew Dolan (pictured) and Shaun E. Kelly to two new roles within its leadership structure. Dolan will serve as president of North American Specialty. He has nearly 30 years of industry experience, most recently as president of Ironshore US. Kelly, meanwhile, was named president of distribution for Global Risk Solutions, where he will lead distribution and marketing for GRS’ commercial and specialty insurance and reinsurance product portfolio. He also has nearly three decades of insurance experience, most recently serving as president of GRS’ North American Specialty unit.

www.insurancebusiness.ca

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UPFRONT

MGA UPDATE

Cannabis legalization has MGAs scrambling Insurers’ uncertainty about cannabis has forced MGAs to step up to the plate

work, a lot of research, a lot of risk management, and we’re going to make product offerings because the marketplace does need coverage.”

Looking to the US is one tactic SRIM has used – insurance examples from California, Nevada and Washington have all helped the MGA figure out where to avoid missteps. Still, the questions around the sector are seemingly endless and won’t necessarily be clarified until months or even years into legalization. How to

“The main markets are quite unsure about it, so we’re doing a lot of work …”

After a tumultuous back-and-forth between the House of Commons and the Senate, Bill C-45 finally passed in mid-June, which means Canadians will be able to consume marijuana recreationally starting October 17.

Legalization has been a long time coming, and many companies in the insurance space have been diligently preparing for it. Specialty lines MGA Special Risk Insurance Managers [SRIM] is one of the companies leading the

NEWS BRIEFS

way in bringing coverage to businesses in this emerging market; it’s already providing insurance for some cannabis facilities.

“With this cannabis program coming at us fast and furious, we’re having to move at speeds not typical to the insurance market,” said Mark Woodall, SRIM’s president and CEO. “The whole issue of cannabis is changing; it’s coming. The main markets are quite unsure about it, so we’re doing a lot of

Hub International acquires Torontobased MGA

Insurance brokerage Hub International has acquired shares in Toronto-based MGA Independent Financial Concepts Group [IFCG]. IFCG was founded in 1999 by president and CEO Gary Mandel and EVP Jaymie Bongard. “The addition of IFCG is an exceptional opportunity for Hub to expand our broker network and enables us to continue providing financial advisors and insurance brokers seeking multi-fund insurance and risk solutions with additional world-class services,” said Hub Financial president Terri Botosan.

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detect impairment – important to determining social host and commercial host liability – is one of those. Whether there will be a legal minefield, as in the case of tobacco, is another. Even the number of expected cannabis users is difficult to pin down.

“Right now, there’s approximately 260,000 legal cannabis users in Canada who have medical certificates, so after cannabis is legalized, how many consumers are we going to have? We’re guessing somewhere in the area of 2.5 million to 5 million,” Woodall said, adding that if it’s at the higher end of the scale, the insurance market needs to ramp up quickly.

“A lot of these [things] we don’t know, and we’re just trying to figure it out as we go,” he said.

ARAG open for business across Canada

Specialist MGA ARAG Services Corporation has extended its full range of commercial and personal legal expense insurance solutions to brokers and other insurance intermediaries across Canada.

CEO Jo-Anne MacDonald said that since the firm’s inception in 2016, it was always ARAG’s plan to make its range of products available throughout Canada. “Globally, ARAG is known as a highly innovative and flexible partner to work with, and we have instilled that same ethos here in Canada,” she said.

www.insurancebusiness.ca

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25/07/2018 1:03:09 AM

Q&A

Nick Bush President and CEO

Rethinking construction coverage

MERLIN UNDERWRITING

Years in the industry 21 Fast fact Bush launched Merlin Underwriting in 2017, making it Canada’s newest specialty MGA with a specific focus on the Canadian construction sector

What sets Merlin Underwriting apart from other MGAs that serve the construction industry?

Merlin was founded to provide the Canadian construction sector, in a logical, clear and transparent way, a single-sourced 100% solution to the three main construction coverages typically placed individually for a construction project. Our UNITY facility consolidates the CoC, wrap-up, and architects and engineers E&O exposures under a single policy – a true industry first.

Our subscribing insurers all take the same proportional share of each of the coverages, thereby eliminating the chance of insurers denying liability between each other. We have made a claim a collective responsibility rather than an individual one, the result of which will significantly reduce the claims payment processing time, enabling the insured to be back up and running quicker than ever before.

How do your products better serve today’s construction industry?

From a B2B perspective, I feel that, as an industry segment, we have taken our eye off the ball as to what really drives sustainability and ultimately leads to profitability – that being truly understanding the needs of the insured, who is our ultimate client. In recent years, we have seen a strong drive, both domestically and in Lloyd’s, for bottom-line growth, and in some cases pure top line. The effect of this has

The Edge Benefits adds to business overhead

Ontario-based MGA The Edge Benefits has announced several new enhancements for its business overhead insurance product for both new and existing policyholders. The product is designed to help take the financial load off struggling small business owners. The injury coverage has increased to a pool of up to 24 times the fixed monthly expenses, up to $144,000, at no additional cost to both current and new policyholders. Previously, the product provided a pool of up to 12 times fixed monthly expenses, up to $72,000.

forced rates down to a level that is unsustainable in the long term.

This is far from an easy fix – whoever blinks first and attempts to increase rates will likely lose, given the oversupply of capacity. As an industry, we need to strive for better product development. This requires significant investment, but will provide the insured with options based on where they are on the spectrum of buying preferences. When the three main construction coverages frequently cost less than 1% of the overall project value, small increases in rates, if accompanied by greater coverage options, will provide the insured the thing they have been missing: choice.

What new developments can you share with us? Do you have any plans to create another multi-line product like Merlin Unity?

As a team, we have identified a number of areas where our approach of consolidating coverages will create a more efficient product for both the broker and the insured in terms of shoe-leather cost of sourcing the solution, together with expediting the claims payment process and adding coverage clarity.

In the immediate term, our focus remains as a specialty construction market. As we look further ahead, our suite of products will be expanded into sectors that naturally fit our approach and complement our existing product offerings. As Merlin continues to evolve, product development will be at the forefront of our success.

Schinnerer Group undergoes rebranding

Schinnerer Group has revealed that it will rebrand itself as Victor.

The new name pays tribute to Victor Schinnerer, who founded Victor O. Schinnerer & Co. in 1938. The group’s businesses – Victor O. Schinnerer & Co. in the US, ENCON in Canada, Bluefin Underwriting in the UK, Mees & Zoonen in the Netherlands and Italy, and Schinnerer’s operation in Bermuda – will all adopt the new name. Meanwhile, acquisitions Dovetail Insurance and ICAT will be incorporated into the global business.

AmTrust at Lloyd’s says goodbye to marine business

AmTrust at Lloyd’s [ATL] is letting go of marine underwriting, a company spokes­person told Reinsurance News. In September 2017, ATL had announced it was seeking approval to combine its marine, consumer products, and marine and energy liability Lloyd’s syndicates. This latest statement has been the only update since. According to Reinsurance News, the marine syndicate’s gross premiums were up in 2017, but the book was impacted by large loss activity and adverse attritional loss going into 2018.

www.insurancebusiness.ca

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25/07/2018 1:03:13 AM

UPFRONT

TECHNOLOGY UPDATE NEWS BRIEFS ACORD reveals new data breach standard for the industry

Global insurance standards-setting body ACORD, together with Aon and Beazley, has launched the insurance industry’s first ever standard for cyber data breaches. The new standard increases operational efficiency and effectiveness for cyber risk stakeholders, establishes a baseline for compliance and audit-related activities, and enables solution providers to leverage standards for increased support. The standard is available now to all ACORD members for review and feedback. It will then be incorporated into the next scheduled release of the ACORD Property & Casualty Standards.

CatIQ launches insurance industry exposure database

Catastrophe Indices & Quantification [CatIQ] has announced the launch of Canada’s first insurance industry exposure database, developed in partnership with Switzerland-based business management consultant PERILS AG. The database includes 2016 and 2017 year-end estimates of Canadian industry property sums and is based on exposure submissions from most of the Canadian insurance sector.

The database will be updated annually each spring, effective 2019, following PERILS’ methodology of publishing exposure and loss data. The first loss estimate release is expected this August.

Chubb enhances cyber incident response management

Chubb has enhanced its cyber incident response management capabilities and introduced two new ways to access the service: a mobile app and a dedicated website. The company has expanded its

16

network of incident response manage­ ment firms to include services in more than 50 countries, with the goal of providing faster response times and access to local expertise. In addition, policyholders can now report an incident via the new Chubb Cyber Alert mobile app, which provides customers with access to a live cyber response specialist.

Wawanesa opens Innovation Outpost lab in Ontario

Wawanesa Mutual Insurance has opened a new facility in Kitchener, Ontario, that could help develop new digital innovations for the company’s broker partners. The new Innovation Outpost lab is Wawanesa’s second. The lab will partner with key players – including startups, global-brand brokers, broker associations, government agencies, academic institutions, tech incubators and accelerators – to create digital solutions for the company’s broker partners. It’s currently working on interactive voice technology using Amazon’s Alexa device, which would connect customers with brokers for home and auto insurance quotes.

AI-powered insurtech startup receives millions in funding

Planck Re has raised US$12 million in a Series A funding round led by Israelbased Arbor Ventures; other investors included Viola Fintech and Eight Roads.

Planck Re leverages an AI-powered platform that aggregates publicly available data on small and mid-sized businesses, including images, text, videos, social media profiles and public records. That data is then analyzed by the platform, providing carriers information on their customers’ potential risk level. The recently raised capital will be used to expand the company’s product line into more SME segments.

The tech progress conundrum As cities create, develop and use new technologies, their techrelated risks are growing

While there’s no denying the destructive potential and risks associated with severe weather and calamities, natural disasters mighty not be the greatest threat facing today’s metropolitan hubs. That was the conclusion of the most recent Lloyd’s of London CityRisk Index, which analyzes the ‘GDP@Risk’ of 279 cities worldwide. GDP@ Risk is Lloyd’s term for an expected loss figure based around a city’s exposure to 22 threats in five categories, including finance, economics and trade; geopolitics and security; health and humanity; natural catastrophe and climate; and technology and space.

In the latest version of the report, Lloyd’s revealed that man-made threats – specifically those related to technological developments in cities – account for 59% of the total GDP@Risk. North American cities in particular have a high potential for economic loss from technology and space risks, including include cyber attacks, solar storms, power outages and nuclear accidents. In particular, cyber attacks are seen as the top risk for North American cities; six cities from the region ranked in the top 10 globally in terms of GDP@Risk due to cyber peril.

“Given that a number of North American cities function as major business and economic centres, it’s not surprising that their economies have potentially significant impacts in the face of a cyber attack,” says Sean Murphy, president of Lloyd’s Canada.

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25/07/2018 1:03:50 AM

Q&A

These risks aren’t going to disappear; in fact, North America’s vulnerability to tech and space threats will likely persist (or worsen) as the region continues to develop and introduce more and more technologies.

“New and improving cities can create a blueprint for other cities to build resilience” Murphy, however, remains optimistic that answers will be developed alongside technologies to allow cities to mitigate their risk.

“While risks to cities will always exist, the future shows great opportunity to mitigate against them as we continue pushing for dialogue and greater understanding of the perils and potential solutions,” he says, adding that some of the older urban hubs in the world, such as London and Paris, are already addressing their aging infrastructure in preparation for the future.

Murphy also believes newer cities with the latest innovations will lead the way in risk management – not only for cyber threats, but for other risks as well.

“As new technologies develop that can protect cities from risks across the board, these new and improving cities can create a blueprint for other cities to build resilience to the evolving man-made and natural perils that threaten their communities,” he says.

Thomas Accardo

Giving brokers digital capability

Co-founder BROKERLIFT

Years in the tech industry 18 Fast fact Accardo started BrokerLift after spending five years consulting with insurance company and broker executives

What is BrokerLift, and what sets it apart from similar insurance solutions?

BrokerLift is an e-retail solution for insurance retailers. Our platform is built from the ground up to support a better experience for the insured to purchase and renew their insurance. Every product we support is fully broker-branded and configured to quote, bind and issue instantly to give brokers and agents the ability to offer their customers instant coverage through their website.

Are you working on any new developments?

The BrokerLift platform continues to evolve to meet the need of insurance customers, brokers and now MGAs. Rapid development has been a core value since our founding and, in less than two years, we’ve built more than 45 products from over 25 insurance companies, and we’ll have built another 12 to 15 products before the year is up.

We are starting to roll out more features to allow for B2B selling – that is, MGA to broker or broker to association members, where user authentication is important. These updates to the platform will also enable us to support active policy management, such as endorsements, certificate issuance, cancellations, etc.

BrokerLift offers to do the heavy lifting for brokerages when it comes to digital insurance sales, but what else should brokerages do to improve their online presence?

The brokerage website is obviously critical – it’s the broker’s online storefront. It must be contemporary, relevant, offer trust cues and be fully self-serve for buying and managing policies, where applicable. Use of social channels and content creation/ broadcasting, as well as some paid digital advertising, helps keep the site ranking well with search engines.

Aside from maintaining an online presence, how can insurers better appeal to younger customers?

Omni-channel sales and service is critical for younger customers – at this point, that goes without saying. However, what we believe is more important for the future of insurance retailing to new generations is product variety and custom solutions: think specific coverage for life events, specific property items, business contracts – coverage the user can turn on and off when needed. The idea of broad annual term coverages is being challenged.

So do you think the future of insurance is headed in the direction of on-demand insurance?

Yes. Even beyond episodic coverage, like travel or drone flight, we are seeing the idea of selling insurance like any other subscription product, such as Netflix, taking off. It’s on when you need it, off when you don’t. It offers the greatest flexibility to customers and actually some regularity relief to insurers.

www.insurancebusiness.ca

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25/07/2018 1:03:46 AM

UPFRONT

OPINION

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

Insurance: the new kale Rebranding the industry to appeal to fresh talent requires rethinking the human factor, writes Bri Burkhart REMEMBER WHEN kale sat untouched beside your meal at a restaurant, eventually ending up in the trash? In those days, kale wasn’t exciting or noticeable, and it definitely wasn’t the star of a single social media photo. Now, people brag about eating kale and have dubbed it a ‘super food.’ Smoothies, chips, you name it – if someone is delving into green goodness, kale is the star of the show, and you’re going to hear about it.

Right now, the insurance industry is stuck in the same place kale once was. Insurance careers can become something young professionals aspire to and brag about at mixers, but for that to happen, the industry needs an attitude adjustment.

Recent graduates look upon the insurance industry as old-fashioned. Before applying to an open position in your company, you can bet they’ll be scrolling through your website and examining your social media pages.

If the impression they get is boring, bland and unappetizing, they’re probably not even going to apply.

And it’s not just new talent that is put off by the industry’s apparent resistance to change and a fear of new technology; such attitudes keep the best established talent looking elsewhere. Just as kale had to reveal its superpowers to become popular, the insurance industry needs to reveal its hidden greatness.

So what’s holding the insurance industry back? It’s simple: the human factor. We’re afraid. Some people fear failure. Some people fear the unknown. But, more than that, some

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people fear that their business’s mission will get lost in change. Although change and innovation can be frightening, they’re vital to keeping an aging industry alive.

We don’t just need to adjust our attitudes about change; we need to adjust our mindset about what’s important. Beyond attracting new talent or being ‘trendy,’ advancement doesn’t just keep us relevant – it makes us better.

case that. Instead of getting lost in applications, submissions and policies, try getting lost in the situations that create claims. Those moments can be life-changing. Whether it’s an accident, a natural disaster or even something small, it’s our job to be at our best for clients in their time of need.

As counterintuitive as it might seem, at the heart of this move to cultivate the human element is technology. We need to continue to evolve to meet the world’s everchanging needs, because part of being there for our clients means meeting them where they currently are. If the client is our priority, changing with them should be, too.

You can no longer hand a potential client a business card and assume that they’re going to call you. You can no longer be silent online and expect your competitors to do the same.

You can no longer talk to your clients in insurance lingo and assume they aren’t going to look elsewhere for a partner who can explain those concepts in understandable terms. You simply can’t afford to stay in the past.

This means finding a way to talk about products that connect with your clients

“Just as kale had to reveal its superpowers to become popular, the insurance industry needs to reveal its hidden greatness” The good news is that the very thing holding the insurance industry back is the thing that can move it forward. Rebranding and updating requires us to prioritize the human factor.

To most people, insurance is a necessary evil or a small piece of financial planning.

We need to constantly remind our clients – and ourselves – that insurance is more than a piece of paper. It’s about supporting people through some of their most challenging moments. In fact, we’re at an advantage because our products have a truly emotional purpose: protection and peace of mind.

This is powerful now, because people want to see businesses taking on the initiatives that our industry is naturally a part of.

We’re already making a difference, but we need to adapt our mentality to better show-

on a human level, such as social media or e-marketing. This means embracing digital processes that give your clients the fast responses they now expect. This means talking about your job in a way that isn’t purely transactional.

Insurance truly has the ability to become a ‘super industry’ that people hanker to be part of. What we need is buy-in. I don’t know who changed the conversation about kale, but I do know who can change an outsider’s view of insurance. It starts with us.

Bri Burkhart is an integrated marketing specialist at Glatfelter Insurance Group who uses content marketing across channels to build relationships and promote the success of niche insurance programs.

www.insurancebusiness.ca

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25/07/2018 1:04:15 AM

SUM_

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Professional Liability

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5/23/18 1:58 25/07/2018 1:04:19 AMPM

PEOPLE

INDUSTRY ICON

FROM THE GROUND UP Beazley Group’s Mark Bernacki joined the company during a critical moment in its worldwide expansion. He tells IBC how growing the company’s property team and gaining global experience helped shape his career

DESPITE HIS 20-plus years of experience as a property underwriter, Mark Bernacki has only two companies listed on his résumé.

Bernacki kicked off his insurance career in 1993 as a property special risk underwriter for Wausau Insurance; in 2005, after eight months of pursuit by a headhunter, he joined Beazley, where he’s been ever since. In that time, Bernacki has racked up a variety of experiences that have given him the expertise and skill set needed for his current role as head of Beazley’s property team.

“One could actually argue that either I’m an extremely dedicated employee or just a horrible interviewer who only got it right two times,” he jokes.

Bernacki’s initial push to enter the world of insurance came from his father, who oversaw commercial lines for Sentry Insurance in Wisconsin. Bernacki had a degree in finance and management, but the thought of spending all day working on spreadsheets in a cubicle wasn’t exactly enticing. “[Insurance] was a great way to balance both analytical skills and engaging with people,” he says.

Bernacki got a handle on the property underwriting business while working for Wausau in Los Angeles, and then moved across the country to become the regional manager for the mid-Atlantic region of Wausau’s property operation. His roles and responsibilities expanded as he helped drive business production in New York

20

and Philadelphia. Finally, after crisscrossing the US for years, Bernacki relocated to London, becoming Wausau’s only international employee.

“I was managing director of a company called Wausau UK Limited, which was a wholly owned subsidiary of Wausau,” he says.

“In that role, I was essentially responsible

the global insurance market.

“The turning point in my career that unleashed greater opportunities was that first stint in London in 1999,” he says. “I think the fact that it gave me an understanding of different ways that insurance worked within and outside the US, and it gave me additional international experience

“When you look at insurance outside of North America and western Europe ... there’s just much greater developmental opportunity that everybody can win because the size of the pie is growing, and insurance saturation in some of those areas is so insignificant compared to what we have here in North America” for writing our US clients that were moving offshore and garnering their policies in the EU, and also writing all of their cover outside the US through fronting arrangements and through affiliate companies that I had aligned and created.”

Planting the seeds In London, Bernacki was also exposed for the first time to Lloyd’s, which he credits with giving him a better understanding of

and Lloyd’s experience – that was probably the pivotal turning point that opened up new and future opportunities for me.”

The call from Beazley came when the company was in the midst of expanding its Lloyd’s presence in the US. “After eight months of solicitation,” Bernacki says, “I finally said yes to Beazley because I saw an opportunity to put my own fingerprints on an operation, rather than just driving a ship that somebody else had built for me.”

www.insurancebusiness.ca

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25/07/2018 1:04:46 AM

PROFILE Name: Mark Bernacki Title: Head of property Company: Beazley Based in: Chicago Years in the industry: 25 Career highlight: Working in London for Wausau and gaining Lloyd’s experience

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25/07/2018 1:04:51 AM

PEOPLE

INDUSTRY ICON

When Bernacki moved over to Beazley, the company’s US outpost had less than 25 people and a blank book of business.

“We had a dream and a vision for what our US operation could become,” he says. “I spent the first four years at Beazley here in Chicago helping to build and develop our US property operations both from an admitted and a non-admitted perspective, and also from a commercial lines and a personal lines perspective.”

A move back to London in 2010 led Bernacki to his current position. Today, he

can win because the size of the pie is growing, and insurance saturation in some of those areas is so insignificant compared to what we have here in North America.”

Only the beginning Despite being at Beazley for 13 years now, Bernacki insists he’s just getting started.

“That’s not [to say] that we haven’t accomplished a lot,” he says. “We’re a fastgrowing and developing specialist insurer, and there’s always something to do. I’ve been quite lucky at Beazley that I keep getting new

“I’m a big believer that ultimately every client or broker takes the path of least resistance to get to the same means, and I believe that if we’ve got more access points and more specialist insurance hubs, we’re easier to do business with” runs global property and sits on Beazley’s UK managing agency board, executive committee and all of Beazley’s legal entity boards in the US. He also had the opportunity to lead Beazley’s Asia Pacific strategic initiative. Accordingly, his advice for up-andcoming insurance professionals looking for new opportunities is to mirror his own experiences working around the world.

“Every day, the insurance space becomes smaller as the globe becomes smaller,” he says. “Most of the large insurance entities are all global in nature. When you look at insurance in developed markets, the only way that you can win is to steal business from others.

When you look at insurance outside of North America and western Europe – when you look at insurance in Southeast Asia or Africa or Latin America – there’s just much greater developmental opportunity that everybody

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BEAZLEY GROUP BY THE NUMBERS

opportunities and new roles.”

The progress the company has made in expanding its global footprint stands out to Bernacki, who jumped on the Beazley bandwagon during a critical moment in its history.

“As I sit here today and I look at my team now, we operate out of five specialist hubs,” he says. “We can access business all around the globe and truly have a multinational specialist insurance business.”

And, he adds, Beazley’s worldwide reach has benefits for all of its partners, no matter what side of the globe – or the transaction – they’re on.

“I’m a big believer that ultimately every client or broker takes the path of least resistance to get to the same means,” he says, “and I believe that if we’ve got more access points and more specialist insurance hubs, we’re easier to do business with.”

1986

Year the company was founded as Beazley, Furlonge & Hiscox before being bought out by Andrew Beazley and Nicholas Furlonge in 1992

1,327

Number of Beazley employees globally as of December 2017

65+

Number of territories worldwide where Beazley is licensed to trade surplus lines insurance and reinsurance

US$2.34 billion Gross written premium reported

by Beazley in 2017

35

Number of industry awards Beazley has won since 2011

www.insurancebusiness.ca

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25/07/2018 1:04:54 AM

Want something real?

Real people. Real relationships. Real expertise.

Find out more about our specialty insurance, warranty and surety solutions.

Visit 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 Brokers Association of Canada.

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25/07/2018 1:04:59 AM

SPECIAL REPORT

FIVE-STAR CARRIERS

FIVE-STAR Brokers told IBC which companies are scoring top marks and where carriers can improve their service FOR THE third year in a row, Insurance Business Canada surveyed hundreds of brokers across the country to find out what they expect of their carrier partners, how well carriers have met those expectations over the past year and how they can do better in the year ahead.

Brokers were asked to rate their carriers on 10 different aspects of their service on a scale from 1 (poor) to 10 (excellent). Their responses indicate that carriers have been through a rather challenging year. While 17 carriers achieved five-star status by scoring an average of 8 or greater in at least one category, that’s quite a drop from the 21 carriers that received the honour in 2017. In addition, only three carriers earned the

right to be named an All-Star Carrier by receiving five-star rankings in all 10 categories, compared to the six that made the list last year.

Carrier performance dipped slightly in a number of categories this year. Commitment to the broker distribution channel took the biggest hit, dropping half a point compared to last year’s score, possibly due to carriers’ moves to grow their consumer-direct channels. However, carriers were still able to boost their performance in terms of their claims processing services and the range of products they offer, and they were consistent with 2017 in terms of quick quotes and reputation and financial stability. Read on to find out exactly what brokers had to say.

HOW HAS CARRIER PERFORMANCE CHANGED OVER THE YEARS? Overall, carrier performance has slightly declined, particularly when it comes to carriers’ tech capabilities and their commitment to the broker distribution channel. Two categories – range of products and claims processing – did see slight improvements compared to last year. Meanwhile, when it comes to reputation and financial stability and quick quotes, carrier performance remained the same as in 2017.

10.0 2016

2017

2018

9.0 8.0 7.0 6.0

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Reputation and Range of products financial stability

Underwriting expertise

Claims processing

Commitment to the broker distribution channel

Competitive rates

Quick quotes Technology and automation

Education and training

Marketing support

www.insurancebusiness.ca

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25/07/2018 1:05:31 AM

S BROKERS ON CARRIERS

8 201

FIVE -S

R CARRIE R TA

CARRIERS WHAT ARE BROKERS LOOKING FOR IN A CARRIER? Brokers were asked to select the three most important things they look for in a carrier partner. Their top priorities – competitive rates, range of products and underwriting expertise – remained consistent from last year, although the last one experienced a marked jump in importance. Significantly less important to brokers this year were carriers’ claims processing and tech capabilities.

Competitive rates 2018: 71% 2017: 70%

HOW WELL DID CARRIERS PERFORM ON AVERAGE IN EACH CATEGORY? Reputation and financial stability 8.09

Range of products 7.56

Underwriting expertise 7.44

Underwriting expertise 2018: 64% 2017: 56%

Commitment to the broker distribution channel 7.13

Range of products offered 2018: 40% 2017: 40%

Claims processing 7.06

Claims processing 2018: 34% 2017: 45%

Quick quotes 7.02

Quick quotes 2018: 34% 2017: 28%

Competitive rates 6.99

Reputation and financial stability 2018: 28% 2017: 25%

Technology and automation

Technology and automation 6.71

2018: 15% 2017: 20%

Marketing support

Education and training 6.70

2018: 4% 2017: 6%

Education and training

Marketing support 6.43

2018: 3% 2017: 2%

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25/07/2018 1:05:40 AM

SPECIAL REPORT

BROKERS ON CARRIERS

8 201

FIVE -S

R CARRIE R TA S

FIVE-STAR CARRIERS

WHICH CARRIERS EARNED FIVE-STAR RATINGS?

CARRIER

Reputation and financial stability

Range of products

Underwriting expertise

Commitment to the broker channel

Claims processing

Quick quotes

Competitive rates

Technology and automation

Education and training

Marketing support

Allianz Aviva Chubb CNA Economical Insurance Gore Mutual Insurance Intact Insurance Liberty International Underwriters Canada Northbridge Insurance Portage Mutual Insurance RSA SGI Canada Sovereign General Insurance Company Trisura Guarantee Insurance Company Wawanesa Insurance Wynward Insurance Group Zurich Canada Denotes All-Star Carrier

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www.insurancebusiness.ca

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25/07/2018 1:05:41 AM

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25/07/2018 1:05:41 AM

SPECIAL REPORT

FIVE-STAR CARRIERS

REPUTATION AND FINANCIAL STABILITY

RANGE OF PRODUCTS

Carrier performance 8.09

Carrier performance 7.56

FIVE-STAR CARRIERS Allianz Chubb

FIVE-STAR CARRIERS Sovereign General Insurance Company

Aviva Chubb

Intact Insurance

Trisura Guarantee Insurance Company

Liberty International Underwriters Canada

Wawanesa Mutual Insurance

Northbridge Insurance

Wynward Insurance Group

Sovereign General Insurance Company

Portage Mutual Insurance

Zurich Canada

Trisura Guarantee Insurance Company

SGI Canada

As they did last year, carriers received the highest marks from brokers for their reputation and financial stability, which is especially reassuring when brokers are faced with a volatile market. Reputation and financial stability remain a leading criteria for brokers when choosing a carrier, even if they’re not as vital as top-of-mind categories such as rates and underwriting expertise.

As a couple of respondents noted, reputation is all about how carriers “walk the talk” and ensure “solid growth over the years [and] no nasty surprises.” One broker remarked about a carrier: “They are very aware of their reputation and take many steps to ensure that they are well respected.” Others delved a little deeper, pointing to the

Economical Insurance Liberty International Underwriters Canada Portage Mutual Insurance

Wynward Insurance Group

Partnering with a carrier that has a wide arsenal of products is one the top priorities for brokers – as it should be. A broker’s ability to offer clients the coverage and products they need is critical to maintaining business. This is also carriers’ most improved category: Average performance climbed 0.3 points compared to last year, and eight out of 17 carriers earned a five-star rating.

Brokers’ feedback almost exclusively fell into two camps: those who loved their carriers’ product offerings and those who were less than impressed. “Innovative and progressive, [with] new, more broad wordings” and “good range of risk appetite” were among the comments from brokers who were pleased with the products available to them.

Meanwhile, those who felt their carriers were lacking options complained about the “limited scope of products” and called on their carriers to “expand your appetite.”

Brokers didn’t hold back in their suggestions for products they’d like

Reputation is all about how carriers “walk the talk” and ensure WHAT BROKERS WANT “solid growth over the years with no nasty surprises” “Broadening of risk appetite” underlying factors that support a carrier’s reputation: “Tough underwriting guidelines ensure financial stability,” one respondent matterof-factly put it, while another emphasized the value of prompt service in maintaining a stellar reputation.

And the reverse holds true for the carriers whose performance wasn’t up to snuff. One broker called out his carrier for “poor policy service and poor underwriter response time,” while a couple of others mentioned poor claims service as the reason for their low marks. One respondent described his carrier as having “strong marketing and brand recognition,” but said they need to “live up to their marketing message.” That gets to the heart of what reputation and stability are about: ensuring consistency and long-term sustainability.

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“[With] small business they are fantastic – bring that culture to mid-market” to see, mentioning commercial farm, flood, umbrella, broader construction coverage, more products for US-based clients and commercial auto. That last one in particular came up several times among brokers who were specifically seeking more options for their hauler and transportation clients.

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FIVE -S

BROKERS ON CARRIERS

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Carrier performance 7.44

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UNDERWRITING EXPERTISE

R CARRIE R TA

COMMITMENT TO THE BROKER DISTRIBUTION CHANNEL Carrier performance 7.13

FIVE-STAR CARRIERS FIVE-STAR CARRIERS

Chubb

SGI Canada

Liberty International Underwriters Canada

Sovereign General Insurance Company

Chubb

Northbridge Insurance

Trisura Guarantee Insurance Company

Liberty International Underwriters Canada

Wynward Insurance Group

Northbridge Insurance

Portage Mutual Insurance RSA

Gore Mutual Insurance

Portage Mutual Insurance Although carriers’ performance in underwriting expertise dipped slightly compared to last year, this category still ranked among the top three in terms of both performance and importance.

For the outstanding performers, brokers were quick to commend the underwriting staff as “one of the best” and “well trained” with “good knowledge and good personal skills.” As one broker described, underwriting expertise really comes down to the details and fine print: “I like to read policy wordings and find their staff are able to explain intent and provide good examples.”

There were others who felt their carriers had “some good WHAT BROKERS WANT

“We need more user-friendly communication [from underwriters] so that we can provide timely and concise updates to the applicant” knowledgeable [underwriting] staff,” but not quite enough of them to meet the demand. In other cases, the quality of underwriting is also linked to turnover. One reader who gave his carrier top marks in this area mentioned that “there is very little turnover in staff at [the company], so you are usually speaking with the same person for years.”

For the carriers that received low marks, brokers’ feedback revealed a lack of consistency – underwriters having different answers to the same question, for example. Another broker observed that underwriting service also depends on the carrier’s technological capacity, saying “[They have a] great team, but they could fix the auto underwriting in the portal.” However, this aspect can be tricky to navigate, as there are still brokers who prefer good traditional underwriting and are wary of carriers “relying too much on technology to solve everything.”

Sovereign General Insurance Company Trisura Guarantee Insurance Company Wawanesa Insurance Wynward Insurance Group

SGI Canada The growing trend of carriers taking their business direct to consumers has been a looming concern for many brokers. Compared to 2017, it seems brokers are noticing more activities from their carriers in the direct-to-consumer arena. Just 10 carriers earned a five-star ranking for their commitment to the broker channel – two fewer than last year – and the average score fell 0.5 points, the most significant drop this year. “[They use] the same brand for direct and broker business – not a big issue for me, but it has other brokers upset,” wrote one broker, who was clearly in the minority, as the majority of feedback signalled growing distrust in brokers’ partnership with carriers.

“Don’t like the direct writer direction they have” and “drop the direct arm of the company” were among the responses from dissatisfied brokers; others elaborated further on why they gave their carriers poor marks in this category. “They continue to say they support the broker, but then they allow their direct subsidiaries to get away with stuff the broker cannot,” said one angry broker, who added: “Hard to promise commitment to the broker channel when they have a direct market that is less expensive.”

WHAT BROKERS WANT

“Support the channel that made you. If you market affinity programs, make sure that brokers have access, or just don’t do it” But there is a silver lining. While there’s no doubt that most brokers are frustrated with their carriers’ direct business, some carriers are clearly committed to their broker partners: “Probably the top insurer when it comes to being committed to the broker channel” and “strong supporters” were two of the very few positive responses.

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SPECIAL REPORT

FIVE -S

QUICK QUOTES

Carrier performance 7.06

Carrier performance 7.02

FIVE-STAR CARRIERS

FIVE-STAR CARRIERS

Chubb

Liberty International Underwriters Canada

Liberty International Underwriters Canada

Northbridge Insurance

Northbridge Insurance

Portage Mutual Insurance

Portage Mutual Insurance

SGI Canada

Sovereign General Insurance Company

Sovereign General Insurance Company

Trisura Guarantee Insurance Company Wynward Insurance Group A lot hinges on the claims process – many clients evaluate their brokers’ and carriers’ service on this aspect alone, which is why it remains one of the top qualities brokers seek in their carriers. So it’s heartening to note that claims processing was one of two areas where carrier performance improved. Many brokers offered encouraging reviews of their carriers’ claims service, offering feedback such as “very responsive and willing to work with us on setting clients’ expectations” and “fast and efficient; [they] took care of everything.”

For the most part, carriers’ claims services are meeting expectations, but brokers did acknowledge that there’s always room to improve.

“Primarily prompt on claims; however, there are times when they drop the ball,” one respondent said. Another commended his carrier’s efforts to enhance the claims process, saying, “Some customers have complained about the claims handling, but I have seen an improvement in this area.” Another broker noted, however, that it can be difficult to judge a carrier’s claims service as a whole, because the claims experience

Several brokers expressed dissatisfaction specifically about their carriers’ inability to provide a timely response on catastrophe claims and efficiency often depends on the adjuster assigned to the case.

One class of business that brokers find to be the most challenging when it comes to claims is catastrophe – several brokers expressed dissatisfaction specifically about their carriers’ inability to provide a timely response on catastrophe claims. “At times [claims] are very good, but very little extra capacity for weather events until the ‘cat team’ is called in, which takes weeks,” one respondent noted.

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BROKERS ON CARRIERS

8 201

CLAIMS PROCESSING

R CARRIE R TA S

FIVE-STAR CARRIERS

Trisura Guarantee Insurance Company Wynward Insurance Group

The quoting process is crucial when it comes to securing new business, but brokers weren’t that pleased with their carriers’ quoting capabilities.

Respondents provided mixed to negative reviews on quoting, and only seven carriers earned a five-star rating in this category.

Some brokers indicated that quote turnaround times can vary considerably, depending on the line of business: “Usually quick turnaround on small business; no better than anyone else on mid-market and up quotes,” one respondent said of his carrier. Another described his carrier’s quoting as “unreliable,” adding: “They seem very enthused in some areas, while in other areas they show zero interest.” A few brokers remarked that a carrier’s business agenda has the potential to

A few brokers remarked that a carrier’s business agenda has the potential to impact quoting: “Quoting is very fast when they decide they want the business and slower when they do not” impact quoting in a negative way: “Quoting is very fast when they decide they want the business and slower when they do not,” one respondent observed.

But certain carriers do provide a smooth quoting experience. Praise from brokers included comments like “response time amongst the best” and “quicker turnaround on quotes and renewals.” Others noted that while their carriers’ quote times weren’t as quick as they would like, carriers are usually willing to be accommodating in instances where quick quotes are essential.

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Using KMs.

Saving KMs.

Introducing CAA MyPace™, the first auto insurance payment program in Canada for low-mileage drivers. Designed with your clients’ individual lifestyles in mind, only CAA MyPace enables you to offer a new way to pay for and manage insurance premiums for motorists who drive less than 9,000 kilometres per year. broker.caainsurance.com

Auto Insurance is underwritten by CAA Insurance Company. Certain conditions, exclusions and underwriting eligibility rules apply. ®CAA trademarks owned by, and use is authorized by, the Canadian Automobile Association.

Available in Ontario only.

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SPECIAL REPORT

FIVE-STAR CARRIERS

COMPETITIVE RATES

TECHNOLOGY AND AUTOMATION

Carrier performance 6.99

Carrier performance 6.71

FIVE-STAR CARRIERS

FIVE-STAR CARRIERS

CNA

Portage Mutual Insurance

Liberty International Underwriters Canada

SGI Canada

Northbridge Insurance

Sovereign General Insurance Company

Portage Mutual Insurance

Trisura Guarantee Insurance Company

SGI Canada

Wynward Insurance Group

Sovereign General Insurance Company Trisura Guarantee Insurance Company Wynward Insurance Group

The competitive rates category experienced a notable decline from last year in terms of carrier performance, falling from an average score of 7.40 in 2017 to 6.99 this year. Carriers’ shortcomings in this area were particularly disheartening to brokers, 71% of whom named competitive rates as their most important criteria when choosing a carrier.

Sustainability, or the lack thereof, was the hot topic among brokers, who are universally frustrated with carriers’ rate swings. “Rate increases across the board” and “some classes are just not competitive” were among the comments from dissatisfied brokers. Others felt carriers need to be savvier about offering more competitive prices to renewal clients and when considering rate discounts for prospective clients. “Rate reductions are used by producers to prospect accounts,” one broker said. “This is not going to change, but be mindful of who you drop rates for.”

Some brokers did voice satisfaction about their carriers’ competitive prices, but also mentioned that those rates are not maintained across

Sustainability, or the lack thereof, was the hot topic among brokers, who are universally frustrated with carriers’ rate swings all lines of business. One respondent described his carrier as “historically competitive” but said there’s growing concern over increased auto rates, which appears to be a trend. Another broker noted that personal lines coverage is becoming more a challenge for clients as carriers increase home and auto rates across the board. That said, several brokers praised their carriers for attempting to be competitive if and when they can: “Always willing to take another look to offer the best rates possible,” said one respondent.

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Although carriers are making strides in their technology offerings, overall performance in technology and automation has declined since 2017 – falling from an average score of 7.14 to 6.71 – suggesting that brokers are still not 100% pleased with carriers’ tech advancements.

In fact, just five carriers garnered a five-star rating for their technology offerings, the least out of all categories, and a slight drop from the seven carriers that earned the accolade last year.

With the exception of one broker who said his insurer still insists on delivering policies on paper, most brokers are generally pleased with the technological capabilities offered by their carriers – a couple WHAT BROKERS WANT

“It would be helpful to have online access to wordings” “Continue to develop automation and invest in technology” described their carriers’ offerings as “progressive and innovative” and “very modernized and easy to use.”

And many brokers reported that while their carriers’ tech capabilities are still lagging, they’re at least making strides toward improvement.

“Despite the new system slowing things down, I think they are going in the right direction,” said one broker, whose sentiment was echoed by others who reported that their carriers are “working hard to catch up.”

However, it’s clear that there’s still more carriers can do in this area – particularly when it comes to e-document capabilities. A few brokers mentioned the need for downloadable documents, instead of documents that can only be accessed online, as well as the ability to make online policy revisions.

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EDUCATION AND TRAINING

MARKETING SUPPORT

Carrier performance 6.70

Carrier performance 6.43

FIVE-STAR CARRIERS

8 201

FIVE -S

R CARRIE R TA

FIVE-STAR CARRIERS

Chubb

Chubb

Liberty International Underwriters Canada

Liberty International Underwriters Canada

Northbridge Insurance

Northbridge Insurance

Portage Mutual Insurance

Portage Mutual Insurance

Sovereign General Insurance Company

Sovereign General Insurance Company

Trisura Guarantee Insurance Company

Trisura Guarantee Insurance Company

While brokers don’t find education and training to be a top priority – a mere 3% selected education and training as a key aspect they consider when choosing a carrier partner – many agree on the benefit of receiving relevant information on a regular basis from their carrier partners. They also agreed that carriers could put in more effort in this area, giving them an overall average score of 6.70 – down just slightly from last year’s 6.76 – and awarding five-star ratings to only six carriers.

“They provide seminars that are not really relevant” and “they don’t teach enough of what brokers want; most training is what they think brokers want” were two of the top complaints about carriers’ training offerings “They provide seminars that are not really relevant” and “they don’t teach enough of what brokers want; most training is what they think brokers want” were two of the top complaints about carriers’ training offerings. A couple brokers observed that while they appreciate the education their carriers provide, they feel some of that effort should be focused internally to better train underwriters and staff.

Yet there are carriers that do provide quality training. Many brokers commended the “excellent” and “thorough” online training and information available for their use. “I’ve had the opportunity to attend training at their office, which was educational and well managed,” one respondent praised. To greater support broker education, many respondents suggested carriers offer RIBO credits with their training courses and webinars.

As in previous years, marketing support is where carrier performance struggled the most. Carriers earned an average score of 6.43 in this area, down slightly from 2017’s score of 6.45. The good news is that it’s not a priority for brokers, either – just 4% marked it as a top quality they consider when choosing a carrier.

A significant number of brokers were surprised to learn that carriers even offer marketing support, implying that some carriers are doing a poor job at making this resource available and known. The brokers who do use the marketing resources available, however, were generally not

Several brokers reported that their carriers focus more on marketing their direct channels than offering marketing assistance to brokers impressed. “Good collateral materials; however, not always Canadian content,” one respondent said. “There is a need to improve this area by communicating with key brokers at specific brokerages to get feedback,” suggested another.

Tying into brokers’ dissatisfaction with carriers’ commitment to their channel, several reported that their carriers focus more on marketing their direct channels than offering marketing assistance to brokers.

That lack of commitment also comes through in the partnership between brokers and some carriers’ marketing reps. “Never hear anything from our marketing rep” and “broker visits are not being done” were a few of the comments accompanying poor scores for carriers in this area.

Carriers aren’t falling behind in this area across the board, however.

“They provide great resources,” one broker said of his carrier. “In addition to being informative for brokers, the materials are also excellent pieces to share with clients.”

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25/07/2018 1:06:15 AM

SPECIAL REPORT

FIVE-STAR CARRIERS C

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CANADA’S PREMIER INSURANCE INDUSTRY AWARDS IS BACK! Since its inception in 2016, the Insurance Business Canada Awards has celebrated excellence across the entire spectrum of the Insurance industry in Canada.

Today it is recognized within the industry as the leading representation of service, performance, innovation and principle in the business.

Finalists will be announced in IB magazine and online, and across national media outlets. Winners will be announced live at the black-tie awards ceremony on Thursday, November 29th at The Liberty Grand Toronto.

“With ambition and grit, determination and talent, insurance is one of the great enterprises. To be recognized with an award like this, it confirms that what you’ve done and continue to do has been successful.”

- Chairman, H.W. Kaufman Group, LifetimeAchievement in the Insurance Industry

SPECIAL THANKS TO OUR AWARD SPONSORS

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R CARRIE R TA BROKERS ON CARRIERS

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LAST CALL FOR NOMINATIONS for over 20 award categories open to large and small organizations — brokerage, insurers, agencies — and top insurance professionals.

ORGANIZATIONAL AWARDS               

Brokerage of the Year (Fewer than 10 Staff) The Burns & Wilcox Canada Award for Brokerage of the Year (10 Staff or More) Big Brokerage of the Year Excellence in Customer Service by a Brokerage Brokerage / Network Cluster of the Year Life & Health Insurer of the Year The DKI Canada Award for P&C Insurer of the Year MGA of the Year Readers’ Choice Award for Best Service Provider Readers’ Choice Award for Best Advertising Campaign Digital Innovator of the Year Insurance Industry Employer of Choice The Winmar Award for Excellence in Claims Service The iv3 Solutions Award for Excellence in Risk Management The CNA Canada Award for Excellence in Philanthropy & Community Service

INDIVIDUAL AWARDS Insurance Broker of the Year Woman of Distinction The PAL Insurance Brokers Award for Young Gun of the Year  The Empire Life Award for Life & Health Advisor of the Year  Business Development Manager of the Year  The FIRST Insurance Funding of Canada Award for Lifetime Achievement in the Insurance Industry

  

There’s no better recognition than an Insurance Business Award — but you can’t win it if you’re not in it!

VISIT WWW.IBAWARDS.CA TO NOMINATE NOW Hurry! Entries close on Sunday August 12

www.insurancebusiness.ca

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25/07/2018 10:26:36 1:06:23 PM AM 24/07/2018

PEOPLE

BROKER INSIGHT

Fostering the entrepreneurial spirit Focused on building partnerships with insurance brokerages, Navacord’s CEO, Shawn DeSantis, and executive chairman, T. Marshall Sadd, share how brokers can survive in a competitive market

IBC: What does the current landscape look like for Canadian insurance brokers?

with brokers through an equity partnership with a majority interest in the business.

Shawn DeSantis: Today, brokers are thinking about the future from a technology point of view. They are thinking about how to build talent, and they are making choices around whether they want to face that road alone or if they want to partner with someone.

The distribution channels in Canada continue to change, and many brokers are thinking about who can help them take their business to the next level, which is why we created Navacord four years ago.

IBC: What are the major challenges facing brokers?

IBC: What is Navacord’s approach to partnering with brokerages?

T. Marshall Sadd: When Navacord came together, the options for brokers at the time were to sell to an insurance company or sell to a US-based multinational brokerage, ending the story of the broker entrepreneur. In 2013, Shawn and I had a conversation about creating an option to continue that journey for the entrepreneurial broker who is passionate about the success of their clients. We knew that we needed to be bigger and have scale with insurance companies, and today, Navacord partners

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SD: One of the trends that we’ve seen is the digitalization and commoditization of personal insurance. We are seeing this war on distribution happening in personal insurance, where there are direct writers competing with brokers and carriers are buying out brokerages.

IBC: How can brokers compete in that sort of environment?

SD: If you look at what’s happening in the Canadian marketplace, we are seeing brokers making the choice to play on the transactional

side of the business – the commodity side – which is all about speed, scale and how to get business done with the least amount of human touch. Then there’s the other side of the business built on expert advisors and outsourced risk management.

We have been very thoughtful about moving away from the noise that exists in the transactional side of insurance and focusing on areas where we think the client continues to need expert advice from a broker. As the world continues to become more complex, individuals and businesses are going to need more knowledge and expertise with risk transfer and would prefer to work with someone who is specialized in his or her area versus a generalist.

WHERE IT ALL BEGAN With more than 25 years of experience in insurance, T. Marshall Sadd is the third-generation CEO of Lloyd Sadd Insurance Brokers. Beginning his career in 1991 after graduating from the University of Alberta, Sadd became the firm’s president in 1999.

Shawn DeSantis joined Jones DesLauriers Insurance Management in 2013, where he currently serves as president and CEO. Prior to JDIMI, DeSantis was executive vice president for RSA Group of Companies for nine years. In 2014, DeSantis and Sadd co-founded Navacord, a national insurance brokerage trading under local broker partner brands.

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FAST FACTS: NAVACORD

Year founded: 2014

Headquarters: Mississauga, Ontario

“We have been very thoughtful about moving away from the noise that exists in the transactional side of insurance and focusing on areas where we think the client continues to need expert advice from a broker” IBC: What specialty areas have you seen growth in?

SD: We are one of the largest construction brokers in Canada working with mid-market construction clients, and now larger clients and projects with the addition of broker partner Wylie-Crump.

What’s happening is that governments across Canada, particularly in Ontario, are focusing on infrastructure spend. Construction has been a big growth area for our business in the past couple of years, and if you look at government investments and budgets over the next 10 years, we believe that sector

will continue to be a strong contributor to growth.

TMS: Canada is very resourced-based, and in Alberta and out West, the energy sector is a big focus. In 2015, we saw that sector slow down, but we are now seeing a 50% increase in growth in that sector, everywhere from the pipeline and the oil sands to exploration and production.

IBC: What else can brokers do to survive and thrive in such a competitive climate?

TMS: We’re seeing a trend around talent

Broker partners: Lloyd Sadd Insurance Brokers; Jones DesLauriers Insurance Management; Iridium Risk Services; JDIMI Consulting; Petrela, Winter & Associates; Whitley Insurance & Financial Services; Toole Peet Insurance; Partners Indemnity; Wylie-Crump

Leadership: T. Marshall Sadd, executive chairman (pictured at right); Shawn DeSantis, president and CEO (left); Steven Ridgeway, chief financial officer

development. The brokers who will survive going forward will be those who have fulltime internal recruiters and trainers who are dedicated to educating and developing talent focused on delivering the best client experience possible.

We don’t see a lot of smaller brokers moving into the growing mid-market commercial space because they are being purchased by insurance companies. In order to survive in that mid-market space and bring expert advice, you need to develop people who are thinking about how best to work with clients in a rapidly changing world.

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FEATURE / BROKER EDUCATION FEATURES

INNOVATION

Creating a culture where innovation thrives What does it take to embed a culture of innovation in an organization?

Amanda Imber examines the key drivers of innovation culture

DOES YOUR organization have a culture in which innovation thrives? Are people challenging the status quo and being encouraged by leaders to take risks in pursuit of innovation? Or is the opposite true – managers don’t take time to listen to new ideas, and suggestions to make improvements are met with the comment, “But we tried that last year and it didn’t work”?

Building a culture of innovation is hard work. Many leaders who have been given this directive immediately think about the Googles and Apples of the world. Images of beanbags and table-tennis tables fill their minds, as do ‘blue sky’ workshops in far-off country retreats.

However, what we know from research is that all of this is completely ineffective in creating a culture of innovation. As is often the case, the voice of popular culture and fad-ridden management books wins out over the voice of scientific research. Jargonfilled, densely written journal papers are harder to access than the pop-psych books filling the shelves.

The scientific research into how to create a culture where innovation thrives is both plen-

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tiful and precise. For example, Samuel Hunter from the University of Oklahoma, along with his colleagues Katrina Bedell and Michael Mumford, ran a large-scale meta-analysis to understand which variables had the biggest impact on innovation culture. They reviewed 42 journal papers, which, in total, had drawn

lenge’ as the “perception that jobs and/or tasks are challenging, complex and interesting – yet at the same time, not overly taxing or unduly overwhelming.”

It is important that you don’t simply think about how to give people the biggest possible challenge. Instead, you should ensure that the

It is not uncommon for senior leaders to play it safe when confronted with the choice of whether to support innovation data from 14,490 participants.

The research revealed 14 key drivers into innovation culture and ranked the drivers from most impactful through to least impactful. Let’s delve further into three of the top-ranking variables.

1 Find the right level of challenge

Hunter’s meta-analysis found that employees feeling a strong sense of challenge in their work is one of the strongest drivers of a culture of innovation. They defined ‘chal-

level of challenge you set is one that is achievable. On the flip side, setting tasks that people are able to complete with their eyes closed will not breed a culture where innovation thrives.

In a 2014 review of several meta-analyses, Silvia da Costa and several colleagues from the University of the Basque Country examined the difference in creativity for those in challenging versus non-challenging roles.

The researchers found that if people are in a role that challenges them, 67% will demonstrate above-average creativity and innova-

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your company doesn’t just pay lip service to risk-taking, but actually does it. You might even want to consider having a company award for innovations that were not successes, but where the learnings were really rich.

Finally, consider reframing risk-taking in a positive way, such as talking about how risks provide people with the opportunity to learn.

3 Support from the top

tion in their performance. In contrast, only 33% of people in ‘easy’ jobs show aboveaverage innovation.

At GE, Jeff Immelt famously introduced imagination breakthroughs [IBs], defined as an innovation that will contribute $100 million worth of incremental growth, to his senior leadership team. Each member of the team was responsible for generating three IBs every year. The challenge is big, but the resources made available to leaders make it a challenge they can meet.

Matching the level of challenge to an individual’s skill level is key to finding the optimal level. As a manager, take time to thoughtfully consider how you allocate tasks and projects to people. Ensure that you are matching these elements so that people feel a significant sense of challenge.

2 Encourage risk-taking

The notion of failure being unacceptable is one that I have found resonates with many organizations. Failure is generally thought of

as a dirty word, something that gets swept under the carpet when it does rear its ugly head. But being able to acknowledge and learn from failure is a huge part of building a culture where risk-taking is tolerated and innovation can thrive. Leaders play an important role in signalling that risk-taking is encouraged and that failure is tolerated.

The Tata Group is an example of a company that has embraced risk-taking. Like many organizations serious about innovation, they have an annual innovation awards program, known as InnoVista. While that is not particularly ground-breaking, what is innovative is the awards categories. InnoVista pays tribute to the group’s most outstanding and promising innovations, but there is also a category called Dare to Try, which was launched back in 2009. This category is reserved for ideas that were attempted but that, according to the Tata Group, ‘have fallen short of achieving optimum results.’

As a leader, think about initiatives and actions you can put in place to illustrate that

Ensuring that senior leaders in your organization understand and communicate the importance of innovation is critical. In fact, Hunter’s meta-analysis showed that people feeling that the top level of management truly supported innovation efforts was one of the strongest predictors of an innovation culture.

Unfortunately, it is not uncommon for senior leaders to play it safe when confronted with the choice of whether to support innovation. I recently worked with the Australian leadership team of a global technology company. While innovation was a strategic priority for the company globally, the Australian CEO was frightened of innovation because it meant taking a risk. And this fear permeated the business, which meant that employees were too nervous to do anything differently because that was the message they were getting from the top.

If you are a senior leader, make sure that you see your role as actually innovating, as opposed to just delegating it to other people.

Research has shown this is a key differentiator between leaders in innovative versus non-innovative companies. Further, as a leader, think about behaviours you can engage in that symbolize your commitment to and support of innovation.

Dr Amantha Imber is the founder of Inventium, a leading innovation consultancy. Her latest book, The Innovation Formula, tackles the topic of how organizations can create a culture where innovation thrives.

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FEATURES

MANAGEMENT

Five ways to become an inspirational manager Inspired employees are productive employees.

Aaron Hurst offers five tips for spurring your team to greatness

WE HAVE known for a long time that having engaged team members is better than having people who are simply satisfied. Engaged employees are 44% more productive – that’s like adding a part-time person to your team at no additional cost.

According to Bain & Company, however, it looks like engagement is too low a bar. It turns out that inspired employees are 125% more productive than satisfied ones. That’s like adding more than one full-time person to your team.

Why is inspiration so powerful?

When we are inspired, we are releasing serotonin and dopamine, two of the most critical neurochemicals. They are deeply connected to our well-being and energy.

Serotonin makes us feel significant and important, while dopamine motivates us to act to achieve goals and gain a sense of progress.

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They are the fuel behind the fire that boosts productivity by an incredible amount.

My grandfather, JE Slater, intuitively understood the power of inspiration. His advice to us growing up was to “always keep exhilaration in front of exhaustion.” I can remember very few moments with him where he wasn’t in a state of inspiration. He was always full of joy, wonder, momentum and energy.

Like my grandfather, I am nearly always exhilarated at work. I wasn’t always that way – it was something I had to learn and develop.

I have been researching and experimenting with it for more than 20 years. Here’s what I’ve learned about how to help people be inspired:

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the destination may be far away, if we believe in it and want it, we can be exhilarated by making measurable progress toward it.

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See the superhero in people

3

Let people grow and fail

My friend Tara Russell is an inspiring manager. When I see her working with her team, you can feel the energy and exhilaration. She takes the time to see the potential in people and to help them see it.

When you’re around someone who sees you for who you are and who you can become, it is inspiring. It gives you a sense of significance, which produces serotonin, but also gives you a sense of hope and anticipation for the future (our friend dopamine again).

Define a shared purpose

While we gain meaning from the journey, what inspires us is usually the dopamine-producing pleasure of seeing ourselves make progress toward a goal. While

It’s a cliché at this point, but it’s an important one: Give people permission to fail.

This isn’t just to drive innovation, but also the

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When we are inspired, we are releasing serotonin and dopamine, two of the most critical neurochemicals. They are deeply connected to our well-being and energy experience of taking risks, which is thrilling and inspiring. When you ask people about the manager who most consistently inspired them, they almost always point to the one who believed in them enough to push them out of their comfort zone.

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Cultivate curiosity

Most of my inspiration comes from being curious. It isn’t doing anything or making any impact. It is self-generated and is 100% in my head. I just love asking “What if?” all the time.

I read for at least an hour every day and am always looking to uncover new research and then spend days playing with possible implications and applications. I learn about business models and wonder what it would look like to superimpose that model on a totally different business in a different industry. What if what we assume is true isn’t?

As managers, we can encourage building habits that provoke curiosity. The trick is to find out what triggers curiosity for each person. It is usually ultimately tied to the person’s psychological purpose drivers.

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Celebrate inspiration

In my book, The Purpose Economy, I share the nightly practice that Jennifer McCrae has built with her family. At dinner, rather than ask her kids what they learned at school, she asks them to share one thing that moved or inspired them.

I have adopted this practice in my office during our team meetings. It helps us to see the abundance of sources for inspiration all around us if we are just open to it.

Aaron Hurst is the foremost expert on the science of purpose at work. In 2014, he brought global awareness to the rise of the fourth economic era in history, the purpose economy. He is the author of The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World and the co-founder and CEO of Imperative, the technology platform for leaders in the new economy. For more information, visit imperative.com.

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FEATURES

REPORTING

Command and control Business strategist Matt Malouf talks through the reports and feedback you need to keep your business running at full speed

REPORTING AND accountability are essential for you to understand what is going on in your business and ensure that tasks are getting done at the correct time and to the standard you expect. Regardless of the size of your business, having your team report to you regularly will be a great measure of their productivity and will inevitably improve yours.

Now, don’t stress and think that the reporting I’m talking about is going to be more work. In fact, reporting will be a vehicle that will allow you to: Motivate your team members to make regular, measurable progress Answer any questions or be clear on where your team needs your assistance Invite your team to provide suggestions and give feedback on what is working and not working Without an effective reporting process in place, it is quite challenging to understand if your team is doing a good job and moving in the right direction. This then leads to many unnecessary conversations and emails so you can understand what is going on.

This takes a lot of time and can be quite frustrating. You may feel out of control and uneasy instead of feeling in control and clear about what is going on in your business each day.

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A good reporting rhythm is essential. I recommend three key reports – daily, weekly and monthly – to provide clarity about what each person is doing and responsible for, along with the confidence that these tasks are

getting done when you need them to be done.

Daily reports The daily report is designed to give you an understanding of what your team member has

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achieved during that day. The report answers three questions: 1 What did you accomplish today?

2 Did you achieve everything that was

scheduled to be completed today? (If no, please list what wasn’t completed and why it wasn’t completed.)

3 Is there anything you need help with, or

do you have any questions?

These questions are designed to keep your people focused on the specific tasks that have been assigned to them, and to also ensure that they are performing their assigned tasks in a timely fashion. They also allow for open dialogue on a daily basis to ensure that tasks and projects are moving forward and aren’t delayed because of you.

Weekly reports The weekly report is designed to be a summary of the week’s activities. Each person needs to report on the success or failure of achieving their key responsibilities and report to you their weekly KPIs. This report will also include answers to the following questions: 1 What was your brightest moment of

the week?

2 What was your biggest challenge of

the week?

3 What did you learn in the last week?

4 Based on the week gone by, I believe we

should stop doing …

5 Based on the week gone by, I believe we

should start doing …

6 I need your help with …

This report will form a good part of the agenda for the weekly meeting you have with your team. The report is designed to allow you to gauge how each person is feeling throughout their workweek, in addition to giving you valuable feedback and ideas on how to continue to grow and develop your business.

Monthly reports The monthly report is designed to be a mini 360-degree assessment of each employee’s performance. The team member will list each task that has been assigned to them, the frequency of the task and the importance of the task. They will then list the date they were trained in the task and who trained them. The person completing the report will then give themselves a score out of 10 on their ability to complete the task with 100% confidence and trust.

This report will then be submitted to the team member’s direct manager (this might be you or somebody else) for them to assess.

Once the assessment is complete, a meeting should occur to discuss the assessment score variances and how these will be rectified.

This will often involve retraining or further system development.

Accountability Accountability often gets confused with someone taking the blame for something.

This is not what we’re talking about here.

Accountability is, in my opinion, about delivering on a commitment. It’s being answerable or responsible to someone for something. It is essential to your ability to stop doing the tasks on your list that can be delegated to someone else, who then becomes accountable for the task or activity.

In order to achieve this, it is essential to implement the following five steps: 1 Set clear expectations. Your people can only be accountable if they understand what is expected of them. Hence, it is important to be clear about the outcome you desire, the timeframe in which you require this to be completed and whether you require them to follow a specific system to achieve the outcome or if they can choose their own adventure.

2 Arm them with the tools of success.

Make sure your people are trained and have all the tools they require to achieve the

desired outcome; otherwise, you are setting them up to fail.

3 Create a simple scoreboard of performance. While you might discuss the specific outcome you desire, it is important to establish some milestone check-ins and progress reports to enable you and the person performing the task or project to clearly understand whether they are ‘winning.’

4 Conduct constructive feedback sessions. Open, honest and constructive feedback is essential to ensure your people understand how they are performing. This is made easier by implementing the first three steps. This will require some tough conversations at times, but remember, the only way for your people to get better is for them to understand what they need to improve.

5 Establish clear rewards and consequences. Most accountability is ineffective because there are no clear rewards or consequences for following through on what you said you were going to do. If a person has succeeded, then they should be rewarded in some way. This could be as simple as acknowledging their achievement – or, if they prove themselves over time, it could lead to a promotion.

If they have not followed through and delivered on their commitment and you feel confident you have set them up to succeed, then you might need to consider assigning the task or activity to someone else or perhaps even moving the person on.

While this might seem simple to follow and execute, this five-step process is often neglected. Take the time to understand and implement this, and you will be amazed at how quickly you see a positive return.

Matt Malouf is a business strategist. This article is an edited excerpt from his book The Stop Doing List, which draws on his work in helping business owners free up time to build their businesses.

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PEOPLE

CAREER PATH

TRUE BELIEVER

S

Nicole Benson is no stranger to long journeys, be it to the top of the corporate ladder or the other side of the world Growing up in Australia, Benson spent years playing competitive netball at a high level while studying for her first degree and the supplementary second degree that qualified her as a teacher “Playing competitive sports taught me invaluable lessons around mindset, the value of teamwork, and that preparation always leads to tangible results”

1990s BECOMES A TEAM PLAYER

2001 FINDS INSURANCE In Winnipeg, Benson began temping with the aim of entering the insurance industry – and proved to be in the right place at the right time “I was sitting at the front desk of Cambrian Credit Union when an insurance broker came in; we had a conversation, and I asked a lot of questions. He said I should come in for an interview; I became VP of business development and his right hand”

2004 BECOMES PRESIDENT Having been recruited out of the brokerage, Benson was invited back when an American firm acquired it and asked her to run their captive Canadian brokerages “They interviewed multiple credit unions and heard from more than one that I would be a good choice.

I’m a firm believer in relationships and the power of working with multiple people in the industry”

2017 SEIZES THE OPPORTUNITY When her company decided to sell the two previously siloed business units that Benson had been integral in combining, she came to the attention of the purchaser, Securian Financial “I had worked with them for six months as part of the due diligence for packaging it up for sale, so they knew me. When they bought the business, they reached out and asked if I would like to be CEO, and I thought, ‘What a fantastic opportunity’”

1999 COMES TO CANADA Teaching degree in hand, Benson packed her bags for the Great White North to join her Canadian boyfriend, whom she met when he was studying in Australia. A few months after she returned to Australia, he flew across the world and asked her to marry him, bringing Benson back to Canada for good “By May 2001, I had residency and we had made the choice to start in Winnipeg, his hometown”

2001 LEARNS THE INDUSTRY Her new position with a brokerage producing $30 million in annual gross premiums provided Benson with a thorough education in the field “I would work with the lenders to make sure they understood the product and the benefits of positioning. For me, it’s about the relationship. I’m very client-centric – a true believer in the value of working with people and learning from that experience.

That position evolved, and my responsibility grew”

2007 REWRITES THE PLAYBOOK Benson’s strategic initiative to acquire a competing loan originator resulted in a new mode of behaviour within her brokerage

“We want every individual bringing their own leadership to the table. If the organization is quiet and there’s not that constant hum, you stagnate. Being courageous enough to have that kind of conversation is what sparks initiative” www.insurancebusiness.ca

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PEOPLE

OTHER LIFE

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

Due to the high de ma nd for classes, Rutz recently hired additional teachers for the first time

3

Age of the youngest student at AMR Dance

23

Number of classes the school offers

10

Pairs of dance shoes in Rutz’s “current rotation”

DANCING QUEEN Every day, Alison Rutz passes on her love of dance to students at the dance school she founded ALISON RUTZ first started dancing at the age of 4; with three older sisters who all danced competitively, it was a foregone conclusion that the Alberta-based insurance broker would eventually take her place at the barre. “We all did tap, jazz and ballet growing up,” Rutz says, “and when I wasn’t in dance lessons, I was always

46

dancing around the house.”

It’s fitting, then, that Rutz is now passing along her knowledge to the next generation with at her own dance school, AMR Dance, which has grown from 16 students in its first year to more than 70 today. “Dance is totally my passion,” says Rutz, who’s known as “Miss Ali” to her

students. “I feel so happy when I dance.”

These days, Rutz’s schedule is packed, between her job at Rutz Agencies Central Insurance Group, running the school and personally teaching from 4 to 9 p.m. every evening. But, she says, “I tell people that being a dance teacher is not a job – it’s a lifestyle!”

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25/07/2018 13/07/2018 1:10:56 1:55:17AM AM

FEATURES

EXPERT ADVICE

The multinational proposition for overseas operations IN TODAY’S business landscape, many companies are building their operations beyond Canadian borders to remain competitive and drive growth. With expansion overseas comes the need for an adequate, comprehensive and legally compliant insurance solution. That’s where RSA’s GSL Specialty team can really show its value. Our specialized underwriters, risk engineers and claims specialists ensure that Canadian entities with international operations are protected abroad the same way they are at home.

The multinational solution Any large multinational company [MNC] with global operations or plans to expand globally should have an insurance partner that can match its global footprint to ensure that the company is adequately covered in foreign markets. This is especially important in complex and highly regulated countries such as China, India and Brazil.

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RSA’s global network reaches more than 150 countries, offering comprehensive protection for MNCs across the globe.

A Canadian-issued policy, which becomes the master policy, ensures that Canadian operations abroad are insured locally to the same level as if they were insured at home. Otherwise, MNCs would have to rely on offices in each country they’ve expanded into to arrange coverage independently, which could complicate things if important exposures of the client’s business are not insured adequately. By purchasing coverage with a global insurer in Canada, there is consistency in coverage and a uniform standard of claims handling and risk management.

“In situations where a multinational solution is not purchased, an MNC may be unpleasantly surprised to learn that adequate insurance was not in place both pre- and post-loss,” explains Vangie Artes, underwriting director for multi-

national and global risk at RSA Canada. “The client’s local business operations may be adversely impacted when the out-of-territory or nonadmitted insurance is unacceptable to local regulators and third parties. There have been several cases in the recent past where large MNCs were fined for tax avoidance simply because of improper cover provided within their multinational program.”

As a result, it’s critical to ensure that a client’s multinational solution is compliant with all local regulations. Inadvertent breach of these laws or regulations might render the insurance contract illegal or unenforceable, which could leave the company suddenly ‘uninsured.’ To ensure this doesn’t happen, RSA’s global network specialists ensure that the MNC’s policy meets all the local regulatory requirements in those countries.

Key takeaways Brokers have a critical role to play in helping clients purchase an adequate, compliant multinational insurance solution. In cases where an existing overseas operation does not have adequate coverage on a centrally purchased multinational solution, brokers can help identify gaps and propose a solution to ensure proper coverage for the MNC’s global network.

According to Artes, brokers and their clients can satisfy the following three key areas by purchasing a centrally controlled multinational program with a Canadian-based insurer: Capability: Brokers and risk managers should be looking for a global insurer that can provide multinational solutions anywhere in the world and support their clients through areas of potential complexity, such as local policy compliance, tax payment and claims handling.

Compliance: Many international markets require global market policies to be locally compliant. Thus, a local policy should take into consideration the local regulatory and tax implications of all countries involved.

Consistency: As the client controls insurance purchases, the coverage, claims handling and risk management are held to a uniform standard to ensure consistency in all markets.

While many insurers might only issue policies in Canada and the US, larger insurers with a multinational network, such as RSA Canada, are ideal partners for multinational policies. To learn more, visit rsabroker.ca/gsl.

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