Insurance Business Canada 2.06

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ISSUE 2.06

Contents

December 2014

22

FEATURE

MGAs A comprehensive guide to getting the most out of your MGA relationship

48

INDUSTRY ICON

26

Chris Floyd IBAO’s president reflects on his tenure and his new transition to chair of the board

COVER STORY

Hot List We culled your nominations to find the 50 people who had the biggest impact on the insurance industry in 2014

FEATURES 18 | Here comes the well-insured bride Why your clients should be protected if something goes wrong on the big day 21 | In person A winding path took Stephen Ruschak to a top spot at The Guarantee 42 | Producer profile For Connie Kraeker of The Co-operators, working in insurance means being a vital part of the community

BROKER ADVICE 8 | Head to head Do Canadians really need earthquake insurance?

10 | News analysis How the Ebola outbreak could affect your business 14 | Technology update How the insurance industry can mine big data 16 | Fraud update The latest insurance fraud cases impacting Canadians

20 | Travel insurance Get your customers prepared for winter getaways 46 | Prioritization Do you know what your clients’ priorities are when disaster strikes?

52 | Driving change Learn when to involve employees on a big initiative 56 | Expert advice Three things your clients should do to prepare for winter

REGULARS 4 | Editorial 6 | Statistics What insurers can learn from last year’s ice storm 12 | Industry intelligence This month’s big movers and shakers 55 | Favourite things Adrian Kraizel, Desjardins Financial Security Independent Network

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What makes an underwriter stand out in a crowd?

In today’s virtual sea of options, we believe “standing out” has a lot to do with relationships—the ones we have with you and those you have with your clients.

Thinking outside the box, responding quickly and providing effective long-term solutions for your clients...

That’s what gives ENCON a warm glow.

Tap into ENCON’s 50+ years of experience in specialty insurance today. www.encon.ca/outofthebox Professional Liability, Commercial General Liability, Construction and Environmental Insurance Marketed through licensed insurance brokers.

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CRU Ad_Press Release_Nov.pdf 1 20/11/2014 4:16:27 PM

IT’S HAPPENING RIGHT THERE. THAT’S WHERE WE’LL BE

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Independent Insurance Adjustment Service For Catastrophic Events CRU offers Catastrophic Planning services that work proactively with your Claims Exectuive, Underwriting and Distribution team to build a unique model, based on your wants and needs. The Plan will respond to any catastrophe or disaster, whether it be Wind, Hail, Water, Fire or Earthquake in your underwriting territories.

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15 Allstate Parkway, Markham, ON L3R 5B4 855.324.0278 info@cruadjusters.com cruadjusters.com 4/12/2014 2:56:39 AM

STATISTICS

ICE STORM SHOWS IMPORTANCE OF RISK MITIGATION Severe weather events cost the Canadian insurance industry $3.2 billion in insured losses in 2013 - that’s the highest in Canadian history ACCUMULATION The worst-hit areas were around the shores of Lake Ontario, where ice accumulation on surfaces reached 2 to 3 centimeters in some locations – easily enough to topple trees and other vulnerable structures Source: Globe and Mail

POWER

130,000

Number of calls to Toronto Hydro’s call centre (a regular day for the centre is about 3,000 calls). Over 10 days, the centre received 374,000 calls.

416,000

Number of Toronto Hydro’s approximately 725,000 customers (57%) who lost power during the ice storm

ASSESSING THE DAMAGE The City of Toronto had 10.2 million trees to assess for damage after the storm.

DEBRIS City crews dealt with between 400 and 500 truckloads of chipped-up twigs, branches and brambles daily. Cleanup began Jan. 3 and lasted eight weeks.

In the wake of the ice storm, trucks carted away about 40,000 tons of branches and limbs that had fallen or been removed from trees. By comparison, the city gathered about the same amount of yard waste in five months in 2013.

Source: Toronto Star

Source: Metro News

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INSURANCEBUSINESS.CA

Although catastrophes like the 2013 ice storm have a major impact on insurance, weather events of any size can be costly and disruptive.

The government, insurance companies and brokers all play an important role in preparing Canadians for severe weather. It’s up to insurers to lead the charge in investing in technology to better understand changing weather patterns and to educate and support brokers and their clients on how to mitigate and prevent the associated risks.

RSA has heavily invested in technology like flood

mapping and geocoding to not only have a greater understanding of the weather, but also to help better assess, underwrite and price business. Its Climate Smart resource hub (www.rsabroker.ca/ climatesmart) gives you access to tools and tips designed to help you inform, educate and support your clients.

You also can check out tips from Alex Walker, RSA’s national claims relationship director, on page 56 for advice you can share with your clients on how to prepare their homes for extreme winter weather.

WORST-HIT AREAS (ICE ACCUMULATION ON DEC. 21-22)

Ontario Kingston

20 mm Orillia

3-4 mm

Barrie

20-30 mm

Cornwall

15 mm

Trenton

30 mm Toronto Pearson Airport

Downsview

20 mm

24.8 mm Vaughan

25 mm

$106 million

The cost of the ice storm that plunged Toronto into darkness

$171 million

Total cost of extreme weather events in the city in 2013

Source: National Post

Hamilton

Kitchener 15-20 mm

20 mm

Niagara

Niagara Escarpment

7-8 mm

Grimsby

27.7 mm

27.7 mm

Source: Canadian Underwriter

IBC STATS Insured losses totaled $200 million, mostly due to claims for homes damaged by trees that fell as a result of ice buildup.

Year-end severe weather cost insurance companies a total of $3.2 billion, which is the highest in Canadian history.

Insurers paid more than $25 million in claims for vehicles damaged in the storm.

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HEAD TO HEAD

Q:

Do Canadians need earthquake coverage?

With all the recent talk about earthquakes in Canada, Insurance Business reached out to industry experts to get to the bottom of things

LYNN ZIMMERMAN

BILL ADAMS

DANIEL MIRKOVIC

IRWIN & BILLINGS INSURANCE BROKERS

WESTERN & PACIFIC INSURANCE BUREAU OF CANADA

SQUARE ONE INSURANCE SERVICES

“Being an insurance broker in Vancouver, I feel our insureds are more aware of earthquake coverage. A few years ago, we had many clients take the coverage off, then the earthquake happened in Japan, and most, if not all, of our clients added the coverage back onto their policy.

Clients need to understand that if a major earthquake happens, they will be dealt with first by the insurers. We have been advised by a few of the companies we represent that they are planning to ‘pay out’ an insured right on the spot. The insurers feel that this would be beneficial to the client, as they would be able to take the money and perhaps rebuild somewhere else in a timelier manner.

If the client didn’t have earthquake coverage, this would not be an option.”

”Last year, the Insurance Bureau of Canada [IBC] released a study showing that a 9.0-magnitude earthquake in British Columbia would cause losses of almost $75 billion, and a 7.1-magnitude earthquake near Quebec City would result in losses of nearly $61 billion. These are very serious scenarios, yet a Pollara poll shows that overall take up of earthquake insurance is low – 45% in British Columbia and just 4% in Quebec.

The insurance industry aims to be a leader in preparing Canada for an earthquake. That’s why IBC recently hosted a symposium to bring together experts from around the world to discuss Canada’s state of earthquake preparedness, recognizing that Canadians need to be prepared well before the ground begins to shake.”

“According to our recent survey, 90% correctly understand that earthquakes can occur anywhere in Canada. However, 56% wrongly believe that the government will provide financial assistance to homeowners and renters for earthquake damage. And, 30% are unaware that earthquake protection can be added to most home insurance policies.

At Square One, we believe all Canadian need earthquake protection. So, we automatically include it in our home insurance policies. This lets us discuss the earthquake risk with our clients and address any misconceptions. Since earthquake insurance can cost as little as a dollar or two a month, it’s simply not worth the risk of going without it.”

Personal lines sales representative

Vice president

President & CEO

Got an opinion that counts? Email iba@keymedia.com or join the discussion www.insurancebusiness.ca

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25 CELEBRATING

YEARS!!

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NEWS ANALYSIS

The spread of the Ebola virus to North America poses

EBOLA 2014: TIMELINE March 25

The CDC issues its first announcement on an Ebola outbreak in Guinea, totaling 86 suspected cases

April 16

Patient Zero, a two-year-old in Guinea, is identified in the New England Journal of Medicine

July 29

Patrick Sawyer, a government official in the Liberian Ministry of Finance, is the first American to die in the Ebola outbreak

August 8

The World Health Organization declares the Ebola epidemic the “worst outbreak” in its 40 years of tracking the disease

August 19

Liberian President Ellen Johnson Sirleaf declares a nationwide curfew

September 30

The first diagnosed case of Ebola in the U.S. is identified in Dallas, Texas

October 8

Thomas Eric Duncan dies of Ebola in Dallas

October 11

Nina Pham, a Dallas nurse who cared for Duncan, tests positive for Ebola.

INSURANCE IN THE TIME OF EBOLA In March 2014, 86 people living in West Africa were discovered to be infected with the Ebola virus, an infectious deadly disease characterized by high temperature and severe internal bleeding. Just five months later, the epidemic had metastasized into the largest outbreak ever documented, and major North American insurers began to consider how a potential transfer overseas could affect the commercial insurance market.

That hypothetical circumstance became a reality in late September, when the first case of Ebola in the U.S. was confirmed. The patient, who died of the disease, infected two nurses who had been taking care of him at Texas Health Presbyterian Hospital, and insurance companies began to react.

Ebola-specific products and exclusions on commercial property/casualty policies have now become commonplace in the U.S., and although the virus has yet to spread north of the border, continued Ebola cases elsewhere have sparked plenty of rumblings in the Canadian insurance industry over just what would happen if it did.

With increased screening from the Canadian Border Services Agency and work on an Ebola vaccine at Canada’s National Microbiology Laboratory in Winnipeg, Ebola’s threat to the country is considered remote.

Few people from the affected countries travel to Canada, and Federal Health Minister Rona FAST FACTS ON THE EBOLA VIRUS

October 15

Total cases

Amber Vinson, another Dallas nurse, is diagnosed with Ebola

15,351

October 24

Laboratory-confirmed cases

Pham is declared virus-free

November 10

Dr. Martin Salia, a native of Sierra Leone, arrives at Nebraska Medical Center after testing positive for Ebola

November 17

Salia dies at the Nebraska Medical Center

9,566 Total deaths

5,459 Source: CDC, as of Nov. 2014

Ambrose has repeatedly ensured that ‘strong measures’ – such as equipping provincial laboratories for accurate testing – are in place.

Nevertheless, the disease makes it difficult to confirm an immediate diagnosis, and insurance industry experts have met to discuss the possibilities and remedies available in the event of a national outbreak.

Wendy Hope, a spokesperson for the Canadian Life and Health Association, says the CLHA’s Emergency Preparedness Committee, a special body of insurance leaders that exists to address widespread threats to the industry, remains particularly watchful.

“We have certainly put the wheels in motion to make sure that if Ebola does come to Canada, we can quickly get together to discuss what the industry will do,” Hope says.

“We are keeping a close eye on the status of the disease, and should the virus make a move toward Canada, I am sure we will be activating our Emergency Preparedness Committee.”

Industry leaders also stress that the sector is no stranger to health- and disease-related risk, and past crises have formed a basis for confronting the Ebola challenge.

“The SARS crisis in the early 2000s provided a good model for Ebola,” says Dr. Steven Weisbart, an economist with the U.S.based Insurance Information Institute. “There was the same kind of concern over a potential GOVERNMENT PREPARES FOR EBOLA

$23.5 M

will go to further research and development of Ebola medical countermeasures, including the Ebola vaccine and antibody treatments

$3 M

will be used to support the delivery of infection control training and equipment, including assisting provincial and territorial health authorities with additional resources if needed

$1 M will be invested to deploy quarantine officers to Canadian airports to enhance screening measures Source: HealthyCanadians.gc.ca

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unique risks to commercial insurance pandemic, and it helped the industry realize the need for specialized protocols, behaviors and policies to address these challenges.”

These specialized policies, while increasingly popular in the U.S., have not taken off to the same degree in Canada. In the event of a pandemic situation and government quarantines, this could leave business owners open to unique exposures for which they are not covered under current policies.

The lasting influence of Ebola may likely be on business interruption policies.

According to information from the Insurance Bureau of Canada, the vast majority of business interruption policies provide coverage only for loss that can be tied to physical damage to the property. As such, business interruption stemming from a government quarantine of an Ebola-infected area or from reputation loss after an Ebola

diagnosis on the property would not trigger payout.

Some global insurers have moved to close this gap. U.K.-based Miller Insurance Services, for example, announced its Pandemic Disease Business Interruption Insurance policy in October, which would respond to income loss resulting directly from quarantine shutdowns and their aftermath.

However, a large majority of these new and emerging policies are only available in affected countries, or for companies with a presence in those areas.

Other insurance lines, such as general liability, medical malpractice and directors & officers liability, could also be affected by an Ebola outbreak. D&O, for example, may experience claims “asserting the policyowner was negligent in failing to prevent transmission of the virus,” says Weisbart.

As for any lasting effects? “Reinsurance will help mitigate the financial effect of a surge in claims, which are likely to be very costly in the vent of actual work-related infections,” he concludes.

The chances of Ebola becoming a national threat will likely continue to remain low.

However, given potential coverage gaps and the possibility of errors and omissions-related lawsuits plaguing the industry, NAPCO CEO David Pagoumian advises insurance professionals to cover their bases by speaking frankly with policyholders.

“Reinforce to the population that some policies, like business interruption, are not intended to cover Ebola,” Pagoumian says.

“Advise them on any exclusions that may be surfacing on general liability policies, and make it clear that health policies are going to take the brunt of this.”

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INDUSTRY / INTELLIGENCE

INDUSTRY INTELLIGENCE Insurance Business Canada’s CORPORATE MOVES Acquirer

Target

Comments

EXL

Overland Solutions

EXL boosts underwriting support by acquiring Overland’s audit, commercial and residential underwriting surveys and outsourced loss control services

R-T Specialty

Tennessee Underwriters

Ryan Specialty Group’s wholesale brokerage acquires the Franklin-based assets of an excess and surplus brokerage

Hub International

Laurus Strategies

Hub International acquires the assets of Laurus Strategies, an employee benefits, human resource technology and global benefits consulting business

Aon

Safe Brokers

Top reinsurance intermediary and capital advisor acquires a leading Greek and Cypriot independent reinsurance broker

Fenkel Benefits

The Moyer Group

One of the largest privately held employee benefits brokers acquires fellow New York-based benefits provider

Marsh & McLennan NuWest

Top insurance provider snaps up Irvine, California-based middle market property/casualty broker

Hub International

Fotek

International insurance powerhouse acquires middlemarket employee benefits provider

Arthur J. Gallagher

The Forker Company

International insurance brokerage and risk management firm acquires Midwest contract surety solutions provider

Harmonia Howden Insurance Corretora de Brokers Seguros

Hub International sells its Brazil-based commercial lines broker to its London-based counterparts

IndependentInsurance AgentsofTexas(IIAT) LevelFirst LLC ServicesMGA

Texas-based trade association is expanding operations with the acquisition of Dallas-based MGA

Hub opts for domestic focus over international presence No less than three years after CEO Martin Hughes called the purchase of Sao Paulo-based brokerage Harmonia Corretora de Seguros “transformational for our company,” Hub International is offloading its only South American operation. “We have been pleased with the contribution that Harmonia has made to Hub,” Mr. Hughes said in a company statement. “However, we have made the strategic decision to focus on North American opportunities, which have been more robust than at any time in recent memory.” Corretora de Seguros has been acquired by fellow international insurer Howden, a unit of Hyperion Insurance Group.

PRODUCT NEWS > Aon launched Ebola liability coverage for hospitals and other health care institutions. The coverage will be for situations where existing liability programs may not apply, providing up to $25 million in overage. The coverage also will protect hospitals from cases related to their response to Ebola brought by employees, patients or even potential patients who have been refused admission. > J.W. Terrill has launched its own private health benefits exchange called TerrillChoice. The new exchange allows employers with 100 or more benefit-eligible workers to provide their employees with fixed contributions toward the cost of health insurance and other benefits, coupled with multiple benefit plan options and decision support tools designed to help individual employees select the coverage. > K&K Insurance, a subsidiary of Aon, recently launched a new accidental death and disability coverage for firefighters. The policies can be written for an entire state or on an individual firehouse basis. The offering is not available in AL, FL, IN, MA, ME, MN, MS, NY, OH, and VA. > Marsh is rolling out a proprietary analytics solution, Marsh Analytics Platform, which is now fully integrated with the company’s claims database, Global Loss Data Library. The expansive database holds information for more than 20 industries in several countries, amounting to approximately $300 billion in aggregate claims data. > Ryan Specialty Group has expanded the scope of its operations to the United Kingdom by creating a managing general agent to write directors and officers liability insurance in London. According to a company press release, the unnamed MGA will write excess layers for Fortune 1000 companies and primary cover for both smaller public companies and privately held companies.

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regular wrap of all the important industry moves and plays

MOVERS & SHAKERS Name

Leaving

Joining

New position

Christian Ryan

Willis

Marsh

Managing director, U.S. gaming practice leader

Paul Meinschenk

Simmlands Insurance Services

CNA Canada

VP of sales and producer management

Bryce Williams

Towers Watson

SeeChange Health

President and CEO

Mark Church

Marsh

Aon

Head of global general aviation

Catherine Besselman

Novae Group

Ironshore International

Divisional director, global head of agriculture

Courtney Leimkuhler

N/A

Marsh

Chief financial officer

Christopher Sindle

Edgewood Partners Insurance Center

Hub International

Sales consultant

Howard Potter

CNA Europe

Hardy Underwriting and CNA Europe

Head of cargo and specie

Matthew McKenna

First Niagara

Prime Risk Partners

Senior VP

Axel Roesner

Zurich Insurance Group

Generali Global

Head of operations in Asia

Michael Caruso III

New York Life

Alper Services

Business developer

John Sawyer

Faraday Holdings

Barbican Insurance Group Underwriter to lead property binders

Neil Lipuma

Arch Insurance

Hiscox

Senior VP

Drew Johnston

Aon

IMA

Account executive

Scott Tramel

Euclid Energy & Longshore Underwriters

Blue River Underwriters

VP of U.S. Longshoreman and Harbor Workers Act underwriting

CNA Canada makes market move North America’s eighth largest commercial insurance writer and thirteenth largest property and casualty company has expanded its sales department by adding seasoned veteran Paul Meinschenk. Serving as VP of broker distribution at Simmlands Insurance Services, Meinschenk will be responsible for developing and managing CNA’s distribution strategy/sales initiatives.

Bryce Williams to head SeeChange Health SeeChange Health, recipient of the Red Herring’s Top 100 Innovation award and used by more than 1 million members across some of America’s largest health plans, has appointed Bryce Williams as president and CEO. Williams comes from benefits consultant Towers Watson, where he had served as managing director of the company’s Exchange Solutions business segment since 2012.

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TECHNOLOGY UPDATE

Keeping producers at the front of

NEWS BRIEFS not stored in the friendly and manageable confines of a database. Despite the wealth of data and content available today, decision-makers are often starved for true insight, the study said.

>> MORE EXPERTS ON STAFF A new study from Strategy Meets Action (SMA), an insurance strategic advisory firm, found the number of big data experts in the insurance industry with advanced degrees rose from 21% to 51%. >> CONSUMERS MOVE ONLINE Swiss Re’s study, “Digital Distribution in Insurance: A Quiet Revolution,” highlights that while the number of policies sold online is still small, it represents a significant shift in consumer behavior. The internet is now considered a trusted, go-to source for insurance information, with price comparison tools and social media recommendations playing a large role in the consumer’s end decision. However, consumers still report valuing the face-toface interaction and expert advice provided by an insurance producer, particularly when considering tricky products like commercial and life insurance.

>> UNSTRUCTURED DATA An IBM study found that only 20% of the average insurance company’s data is structured, meaning that 80% of data is

>> NEW APPLIED SYSTEM TARGETS CONNECTIVITY Applied Systems, a leading provider of insurance software, has increased its automation and connectivity operations through the launch of Applied TAM 2014 R2. Applied TAM 2014 R2 provides greater consistency to workflows throughout the system, increased carrier and insurer connectivity, and enhanced usability, enabling agencies and brokerages to increase productivity and improve client service for continued business growth and profitability. More specifically, the improved technology aims to reduce time spent on administrative tasks, decrease errors and omission risk, ensure seamless training experiences and better allow businesses to respond to client needs.

>> TRANSFORMING OLD MODELS According to an industry report released by PricewaterhouseCoopers, insurers using big data can improve their overall performance by facilitating greater pricing accuracy, deeper relationships with customers, and more effective and efficient loss prevention. PwC predicts the use of big data eventually may transform the commercial insurance business model as insurers find ways to use these new streams of information to radically alter business processes.

INSTITUTIONAL ROADMAP FOR DATA OPTIMIZATION To make the most of big data, start with a concrete plan for implementation Big data is becoming one of the key words in the contemporary era, and the transition process for companies certainly isn’t being aided by looming regulatory shifts and the costs of funding the transformation.

That said, there has been a push within the insurance industry toward mastering enterprise information management. For the companies who have not fully invested in the process, a new report from Deloitte could lend some helpful insights.

Titled “Information Rich, Knowledge Poor: Overcoming Insurers’ Data Conundrum,” the report highlights the state of the insurance industry’s big data outlook, establishes a plan for providers to follow, and identifies what lies ahead for big data in insurance.

“Insurers have always used tons of data to run their businesses, and the volume velocity and the variety of data is only going to continue to grow,” explains Michelle Canaan, manager of strategy, brand and innovation at Deloitte. “In spite of considerable efforts, for the most part, insurers haven’t mastered seamless, enterprise-wide data fluency, even for their traditional information.”

Generally speaking, insurance companies need to stop just tweaking their systems and processes, and need to look at data through a new lens. They need to take it in small bits rather than one encompassing initiative and know that it is going to be a multi-year journey.

Most important, companies need to

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technological advancement envision enabling information as a strategic asset, not a transitional burden.

This process begins with what Canaan calls a ‘roadmap,’ which outlines the strategic trajectory of the company’s data transition. Following this, it is fundamental to get executive- or board-level buy-in, because without their funding and support, the initiatives are doomed to stall or fail from the onset.

In the preliminary stages of the strategy, it is advised to keep complexity low to win over any skeptics and ensure a good start to the initiative.

“In spite of considerable efforts, for the most part, insurers haven’t mastered the seamless, enterprise-wide data fluency, even for their traditional information” Equally vital is to establish a data champion to spearhead the initiative. This person and their team will act as the primary liaison between the business units, their functions and IT operations. They will also spearhead the data governance initiative for the enterprise wide deployment.

“Finally, you need to decide which business unit is going to kick off the effort,” says Canaan. “Marketing, actuarial and finance are probably the best suited because they each have a vested interest.”

Q&A: MAKING SENSE OF BIG DATA Q: How would you define big data to insurance professionals?

A: Whether it’s better inputs for the models that support the

KEN KRUPA Enterprise CTO MARKLOGIC

“Data technologies available today make all of an enterprise’s data more visible”

underwriting process or a clearer picture around the claims process, data technologies available today make all of an enterprise’s data more visible to decision-makers.

Q: What tools are used to analyze big data?

A: NoSQL database technology and Hadoop are very much at the center of things. Some of the things being built around these tools may be “unattended” and batch-oriented (e.g. machine learning), while others may rely more on a real-time human-to-computer feedback loop. By and large, though, the tools end up turning data into information for people to interpret, whether the people are decision-makers looking at a trend graph or users on mobile devices receiving tailored business experiences.

Q: What are the benefits of properly managing big data?

A: Proper management and governance around big data aren’t so much benefits as they are obligatory. There’s a lot of talk these days around moving toward a “data lake” strategy where enterprises can just “pour” all of their data into a massive digital storage pool, and magic just happens. Well, that’s simply not the case, particularly because the management needs from a business point of view haven’t gone away. This is particularly true in the insurance space, where PII (personally identifiable information) concerns are very real. Because we can do more with more data and more quickly, it is more critical to ensure the data is managed properly. That’s why enterprise capabilities and concerns (e.g. security, consistency, data quality) are at the forefront in discussions of today’s big data strategies.

Q: What are the key takeaways for insurance professionals?

A: Today’s customer-centric requirements and opportunities in insurance are changing the status quo in fundamental ways. The industry is awash in data from so many sources. Most of the data remains unleveraged or under-leveraged. Relational database management systems (RDBMS) technologies are not sufficient to meet today’s data needs.

Q: Anything else we should know about big data in insurance?

A: For insurance companies that have felt they were behind the technology curve, today’s new technologies are offering a leapfrog opportunity. For instance, the self-describing data formats (XML and JSON) associated with today’s NoSQL databases happen to map well to the Cobol copybooks of yesteryear. Those older filebased formats had things like deep hierarchies and polymorphic models that happen to be easy to map as XML documents or JSON objects today.

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INDUSTRY UPDATE: FRAUD

Insurance Business Canada takes an

CANADA’S FALSIFIED REALITY regulators as a number of fraud criminals posing as licensed professionals continues to grow. The message stems from a case involving Renato Nolivos of Mississauga, Ont., who posed as a provider and collected nearly $5,000 from an unknowing victim referred to Nolivos by a friend. Although Nolivos is facing criminal charges, the cash is still unaccounted for. >> CLINIC OWNER FOUND GUILTY OF $5,000 OF FRAUD A recent fraud case involving Arun Reddy, the owner of a health care clinic in Lindsay, Ont., was resolved with the defendant pleading guilty to fraud over $5,000.

Although his sentence was suspended, Reddy was ordered on probation for 12 months with the conditions that he could not apply or make application as a physician anywhere in Canada, and could not submit invoices to insurance companies for services rendered of any kind.

Reddy also was also required to pay restitution of more than $50,000, including $15,490 to Aviva Canada and the remaining $36,717 to the Insurance Bureau of Canada to be distributed among the eight other insurers affected. >> NEW FRAUD ALERT: INTERNATIONAL VEHICLE SHIPPING An increasingly popular way to commit insurance fraud within crime circles is shipping vehicles to foreign countries and claiming them as stolen. Desmond Stewart, a 55-year-old from Whitby, Ont., attempted to do just that this year after his car was tracked clearing customs in Nigeria.

Fortunately, his insurance provider thought the stolen claim was peculiar and raised concerns with their in-house investigative team. Stewart eventually pleaded guilty and was ordered to pay $3,450 and complete 100 hours of community service, and received one year of probation. >> NUMBER OF CRIMINALS POSING AS INSURANCE PROVIDERS GROWS If it seems too good to be true, it probably is. That’s the message coming from Canada’s biggest insurance providers and

>> KMI BROKER CONSPIRES WITH CLIENTS TO SECURE FALSE DISCOUNTS It has been discovered that a former employee of KMI Brokers in Mississauga, Ont., has been conspiring with policyholders to misrepresent themselves to Aviva Canada in order to obtain cheaper premiums. Policyholders were coached to provide incorrect addresses and not disclose poor driving histories in order to get discounts they did not qualify for. After investigating two questionable automobile claims submitted under policies written by the accused, Aviva Canada’s Anti-Fraud Management Team detected a number of inconsistencies and anomalies in the applications for insurance. Together with KMI Brokers, Aviva Canada audited all policies written by the accused while employed at KMI. In total, 17 investigators from Aviva Canada conducted 40 investigations and uncovered 27 policies with misrepresented information.

>> FIGHTING FRAUD TO REDUCE AUTO INSURANCE RATES Bill 15, designed to reduce the costs of auto insurance rates by fighting fraud and protecting consumers, has passed the second reading. The Fighting Fraud and Reducing Automobile Insurance Rates Act now moves to the committee state, where it will be reviewed and scrutinized. The provincial government of Ontario aims to reach a 15% average decrease in insurance rates for all drivers.

MORE THAN 100 DRIVING WITHOUT VALID INSURANCE A septuagenarian is alleged to have been selling fraudulent insurance in the Greater Toronto Area, and Toronto Police Services suspect there could be as many as 100 people driving without proper insurance.

Rick Dubin, vice president of the IBC, says brokers should remind clients that insurance should be purchased through the normal channels – and that an unusually low rate should be questioned.

“If it seems too good to be true, it probably is,” Dubin told reporters at a press conference. “If someone offers you insurance in a doughnut shop … a red flag should go up. We need to raise awareness about fraudulent pink slips.”

Alexandr Chertin, age 73, faces two counts of fraud and two counts of uttering a forged documents. Chertin is alleged to have sold fake insurance cards to unsuspecting buyers through cash transactions.

According to police, the false insurance was discovered during a routine traffic stop.

They couldn’t comment on the specifics of the crime, stating that the investigation was ongoing, but they did say that the fraudulent insurance slips have been sold since 2013.

The most recent case of insurance fraud hit close to home for law enforcement, when a York Regional Police officer was charged by her own force after company insurance benefits were allegedly misused.

In that case, Constable Salwa Husseini was suspended with pay and charged with two counts of uttering false documents and two counts of fraud under $5,000.

The charges stem from an investigation launched by the force’s Police Professional Standards Bureau back in July in response to complaints from the benefits provider.

Husseini is to appear in Newmarket court on Nov. 27.

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in-depth look at the country’s fraud issues

Q&A: LEARNING TO RECOGNIZE INSURANCE FRAUD Q: What are some common signs you’re being sold fraudulent insurance?

A: Usually if the words ‘insurance company’ do not appear on a company website, then GORD RASBACH odds are there is something Vice President of Anti-Fraud Management wrong. Equally, if the word AVIVA CANADA broker doesn’t appear on a website, odds are it’s an unlicensed intermediary. The second sign is whenever someone, in whatever transaction, starts asking for cash – that’s an obvious one.

Then comes buying insurance through ads on classifieds – a lot of our problems come from that. Another issue is people who are new to Canada and rely on a specific community to become acclimated to the culture. People take advantage of that and will go get your insurance for you – you’re going into all kinds of issues that way. Finally, after you’ve made the contact and they want to meet in a public place to conduct a transaction, the vast majority of times something goes wrong.

Q: How prevalent is the insurance fraud problem in Canada?

A: The good news is that it’s only small minorities who commit it, but even the small minority in aggregate comes to a sizable number. In Ontario, the estimates have run anywhere between $1 and $1.6 billion, depending on the study. It is a hard thing to get a tangible number on. The most recent study by the Ontario government’s anti-fraud task force, who spent a lot of money to hire KPMG to put a number around it and rationale behind it – if you look that up, and it’s only about 2 years old, it puts the number around $1.6 billion.

Q: How does insurance fraud affect all parties involved? I know a common misconception is it only affects the insurance company.

A: That’s absolutely correct. The concept of insurance is a pool of people contribute to the losses of a few. If those losses are exaggerated or fictitious, then the cost goes up, and that translates into higher premiums for everyone. While the company absorbs the cost of identifying, investigating, taking steps to prevent it, deterring – all of those things, at the end of the day, go toward costs of the product, so in the end, it’s the policyholders that lose.

“While the company absorbs the cost of identifying, investigating, deterring ... in the end, it’s the policyholders that lose ” Q: Is there anything specific that Aviva is doing in relation to auto fraud?

A: The focus on trying to stop people who sell fraudulent insurance needs to be the focus of our industry.

We now know what we didn’t know before, from the people who chase the individuals committing claims fraud, is after we caught them and we looked at how they were getting the insurance initially, they committed underwriting fraud more than 50% of the time.

What that translates to is, odds are better than not that if you commit fraud and misrepresent yourself to get cheaper insurance, you will probably also commit fraud by making up or exaggerating a claim.

We need to focus efforts on stopping fraud rather than tracking it down after it happens. We’d also like to see more public authority involvement.

Q: What is rate evasion?

A: New York City is probably the number one place where it started. You have people who commute every day from Connecticut, Pennsylvania – New Jersey is almost a suburb now. Each one of those states has its own rating system that’s based on its loss history and claims experience. They then allow insurance companies to charge policyholder based on what they expect the losses to be. What happens is that once one state has a more favorable loss experience, for whatever reason, other states’ rates become comparably higher. People then start going to great lengths by falsifying identification, changing addresses and all other kinds of scams to meet the criteria to say you’re a resident of the more favorable state. Your insurance premium will go down considerably once this happens, but the risk you run is if you’re found to have misrepresented yourself at the time when you bought the product ,and the premium is considerably lower, then the policy can be voided. Then you’re in a situation where you may not even be covered.”

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FEATURE / WEDDING INSURANCE

HERE COMES THE WELL-INSURED BRIDE Brokers are catching more than the bouquet by promoting themselves through wedding insurance.

They’re also capturing couples early on for home, life and auto coverage It is her wedding day, and all eyes are on the beautiful bride. But long before the wedding march began to play, one savvy broker had used Weddinguard coverage to open a conversation with the young couple that could lead to home, auto and life insurance.

“It is a great tool for brokers,” says Matthew Taylor, general manager of operations at PAL, in Simcoe, Ont. “It is the first contact for brokers with a new client, and it opens the doors; it is a great marketing tool.”

Weddings are a billion-dollar-plus industry in Canada, a market in need of insurance coverage, says Amber Morrison-Givens, marketing director at PAL in Calgary, Alta. And it is one brokers are taking advantage of in greater numbers.

“There have been a few brokers already who have asked us for brochures,” she says. “And what they do is hand out their information at trade shows, and stamp their name on the back. We don’t have a problem of handing out 200 or so brochures for this.”

“It is almost a no-brainer to think that all the money you’re investing, all the time you’re putting into a wedding, how can you not have insurance? You have insurance for everything else in your life“

DON’T GET HITCHED WITHOUT IT Finding clients in need of wedding insurance requires a bit of ingenuity, she admits.

“In the past few years, since we revamped the product, we’ve been going to wedding fairs across Canada, trying to get the word out to potential clients that the insurance exists, because many people don’t know of its existence.”

Although many people may not know about wedding insurance, once they are made aware of the product, there are just as many who realize they can’t have a wedding without it, says MorrisonGivens.

“It is almost a no-brainer to think that all the money you’re investing, all the time you’re putting into a wedding, how can you not have insurance?

You have insurance for everything else in your life.”

Taylor points to a recent example of three venues that closed their doors, leaving 40 couples in the lurch and without their deposits.

“They were located in Hamilton, Northern Ontario and just outside of Calgary,” he says. “If they had Weddinguard, they would have had their deposits covered.”

NOT INSURANCE, ‘ESSENTIALS’ A piece of advice for brokers looking to sell wedding coverage is not to use the term ‘insurance,’ as it is viewed as a bit of a negative by some, says Taylor.

“We’ve seen it in the past, and Amber has noticed it as well, when you say ‘wedding insurance,’ people kind of turn off,” he says. “So we changed the term to ‘wedding essentials.’ It’s more of a positive.”

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The connotation of ‘insurance’ with ‘weddings’ can be that of insuring against a no-show by either the bride or groom. But that isn’t what product is all about. “We don’t cover the ‘cold feet’ portion,” says Taylor.

Morrison-Givens is a true believer in the product, having purchased the platinum product for her own nuptials last June.

And ironically, she very nearly needed to make a claim herself.

“My wedding was June 1, 2013, and we returned on June 21, the day of the Calgary flood,” she says.

“The following day, June 22, was one of the biggest wedding days of the year.”

A lot of weddings were cancelled, remembers Morrison-Givens; she counts herself lucky that she had chosen early June for her wedding and honeymoon.

May and June are traditionally the biggest months for weddings, she says, with mid-June being the heaviest time of year for couples tying the knot.

“My wedding attire was more than a couple of thousand dollars, so I definitely wanted to protect it,” she says. In Morrison-Givens’ case, the platinum package bridal attire coverage would have covered up to $7,000.

IT STARTED WITH LIQUOR LIABILITY Bridal attire, rings, wedding presents, the rented property, cancellation expenses (honeymoon included) are all part of any wedding coverage.

Then, perhaps most importantly, there’s the liquor liability.

“There is a large exposure when you host an event where gauests are drinking,” says Taylor.

The PAL Weddinguard policy had its birth as a general liquor liability coverage, he explains. “The way the wedding program started, we pretty much tied it with a PAL policy, which is a straight host liquor liability and general liability, for use of a church or the reception area,” he says. “Over the years, we saw clients who were worried about whether the caterer was going to show up, or if the bride’s dress was ruined before the event. So we expanded to where we are now, with the silver, gold, diamond and platinum coverages.”

“Alcohol liability is our bread and butter at PAL,” says Morrison-Givens. “That is how we got our

start and our name: Party Alcohol Liability.”

But the business has changed – and one of those changes has been the shift to the internet by clients looking for coverage.

“We’ve listened to our clients and to brokers as to what it is they want, what liability concerns they have,” says Taylor. “The most recent change we made is extending coverage for three 24-hour dates of general liability, which handles slip-and-falls and host liquor liability.”

The three 24-hour dates extend cover to the dinner rehearsal, ceremony and reception date, and gift opening the following day.

With the majority of business coming directly through the website – an estimated 70% to 75%, says Taylor – PAL is the model of a paperless office.

“Our office is 99% paperless,” says Taylor. “We have updated and streamlined the online processing, and are able to hand e-signatures and e-documents within minutes.”

MATTHEW TAYLOR General Manager of Operations PAL INSURANCE

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TRAVEL INSURANCE

TRAVEL INSURANCE: WHAT TO KNOW As the cold weather sets in, here are some of the most important considerations for your winter getaways Travel insurance may be the last thing on your mind when planning on jet-setting to exotic locations across the globe, but forgetting or ignoring proper coverages could cost you thousands of dollars.

“As an advisor, it’s important to protect our clients from financial risks,” says Jamie Stangel of Group Medical Services. “Part of that plan should include a discussion around health and travel insurance to protect clients from exposing themselves to extremely costly medical emergencies when travelling outside their province of residence, or more importantly, outside of Canada.”

Above all, it is important to realize that all emergency medical travel policies are not created equal, although they may appear so on the surface.

Typical benefits such as hospital stays, surgeries, physician costs, ambulance and diagnostics are vitally important, but it’s also a good idea for brokers to review the benefits of a policy before a client purchases to ensure it has the benefits to protect them for their specific vacation circumstances.

For instance, not all policies will have benefits for ‘remote evacuation.’ This benefit could be very important for people who are going on a cruise, hiking or skiing in the mountains, or perhaps touring the Grand Canyon.

“In addition to the emergency medical benefits, having additional benefits for trip cancellation, interruption and baggage protec-

tion is a great idea as well,” explains Stangel. “Canadians are spending a great deal of money on their vacations, and protecting your investment in regard to your prepaid vacation expenses is very important.”

These products are not only helpful when you have to cancel your vacation for unforeseen reasons, but also in the event your vacation is disrupted for any one of a number of possible reasons listed under the policy.

Moreover, all polices have exclusions, all of which are important; however, probably the most important exclusions relate to pre-existing medical conditions. Most policies do not cover travelers for conditions that existed prior to departure unless they are considered ‘stable.’ It is important to understand the definition of ‘stable’ in the policy, as some insurance carriers are more or less restrictive in this regard.

It is also very important for advisors to remind their clients that they need to update their application and/or advise the insurance carrier if their health changes after they purchase the policy but before they travel.

Finally, travelers will often seek out the least expensive travel policy options, but for the reasons mentioned, this isn’t always the best idea.

“It’s important to compare the benefits, eligibility and exclusions with an advisor to ensure you get the policy most suited to your needs, regardless of price,” says Stangel. “Most consumers wouldn’t buy the least expensive parachute to jump out of a plane, so it’s important not to do that with your travel insurance, either.”

“It’s important to compare the benefits, eligibility and exclusions with an advisor to ensure you get the policy most suited to your needs, regardless of price” 20 | DECEMBER 2014

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In Person ATTORNEY TURNED INSURANCE COO

Stephen C. Ruschak, president and COO (U.S.) of The Guarantee, sheds light on industry issues and personal accomplishments How did you make your way to being president and COO of The Guarantee?

The greatest career advice I have ever received was from my father, who told me that “you have to reinvent yourself every few years in order to remain viable and vibrant.”

Every new job I’ve started was different from the last. I entered the insurance industry as a surety claims attorney and later became a reinsurance underwriter in Bermuda, handling global surety, fidelity, trade credit and political risk. After a brief stint as a reinsurance broker, I was given a tremendous opportunity to join The Guarantee.

How do you think your previous posts prepared you for the challenges involved in your current post?

Being a reinsurance underwriter provided me with a broad understanding of the surety business. I was able to meet with surety executives and listen to their views on the industry and their company’s role in it. I obtained significant insight into industry challenges and market trends.

What’s your favourite part about working in the insurance industry?

Working in the surety segment of the insurance industry is a truly rewarding career choice. The broad skill set required of the surety professional complements this dynamic work environment. Additionally, we get to collaborate with a lot of skilled industry experts.

What do you see as potential risks, and how do you plan to deal with them?

As a surety professional, you always worry about the overall and construction econo-

mies. We still haven’t experienced the expected recovery from the Great Recession, which continues to impact government spending and public construction.

We have seen a number of Property and Casualty companies start surety operations in the U.S. over the last few years due to significant underwriting profitability. This phenomenon continues, even though the industry is probably at excess capacity levels. The increased competition will undoubtedly lead to pressure on underwriting terms and industry conditions as the construction economy improves. It’s important for sureties to maintain their discipline as they seek new opportunities.

Another concern is how we as an industry attract, develop and retain top professional talent that might not be considering surety and/or insurance as a viable career path. We must do a better job of attracting, developing and retaining top professional talent who might not be considering surety or insurance as a viable career path.

Can you elaborate on what you think makes The Guarantee an industryleading corporation?

Our people are the greatest asset of The Guarantee. It’s often said that surety is a relationship business and it really is true.

Our success over the last couple of years is due to the solid relationships our underwriters have with their agents in the local markets. We get opportunities because of those relationships and then we roll up our sleeves and look for solutions that help the agent and the principal. It isn’t revolutionary, but we work hard to support our partners.

How do you personally try to better the image of The Guarantee, and how do you pass that along to your employees?

I’m really passionate about the work we do.

As an organization, we all work hard to support our business partners. I encourage a positive environment amongst our team and recognize the hard work they do.

Who are some of the people who have gotten you where you are today?

I don’t know where I would be without the support of my wife, Kristin. My parents also provided plenty of support and opportunities. Professionally, Jules Quenneville and Robert Dempsey brought me to The Guarantee and gave me a shot at running a business. It’s been a tremendous experience, and I’d like to think that I have repaid their confidence in me.”

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MGAs

WORKING ON THE EDGES Working on the edge of underwriting is helping MGAs provide greater value to brokers

One MGA is digging deep into its bag of tricks, underwriting deals that mainstream insurers are turning away – and building solid broker relationships along the way.

John Barclay, president of South Western Group, is part of that push among MGAs to present a broader offer to brokers – meeting that need for underwriting that is outside the risk comfort zone of mainstream insurers.

“Because we’ve been around for so long, we’ve got a little bit of everything in our tool kit,” says Barclay. “A lot of people may not know, but we’ve got a very good professional liability capability as well. Professional liability is doing well; specialty general liability is coming along quite nicely – and more of our product-oriented property and casualty offerings are doing well. That is driven more as brokers look for a product that sits on the edge of what a general insurer would be comfortable with.”

Working with the broker is key to making the underwriting work,

Barclay adds. “Really, what we do is listen to the broker and take the time to solve the problem – and not to stick to an underwriting model that says ‘yes or no.’”

Listening and feedback is important, says Jean Laurin, president of ENCON Group, who found the survey of Producers on MGAs in the previous issue of Insurance Business quite valuable.

“The survey feedback is an important reminder to MGAs that we can’t rest on our laurels,” Laurin

“My advice, perhaps self-serving, would be to maintain discipline in the regular market and leave the specialty market to those underwriters who possess the unique knowledge to assess and price specialty business” John Barclay, President, South Western Group

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says. “While MGAs are known for out-of-the box thinking and underwriting excellence, in today’s marketplace, we all live and die by our responsiveness and turnaround times. It’s the reason we’re obsessed with service – and it drives everything we do as a company to keep improving service levels.”

As greater pressure is being placed on brokers to compete and grow, MGAs have to focus on how to add value for brokers and their clients, or risk becoming irrelevant, says Laurin.

“We’ve always believed that education is a key way to add value,” he says. “We’re investing heavily in webinars, webcasts, seminars, articles and bulletins – all to ensure that brokers are armed with the information they need to sell hard-to-place insurance, advise their clients appropriately in a changing environment and to educate them about potential exposures and risk mitigation. This is key on a number of levels, because brokers who do not have a solid understanding of the products they are selling, or the risks their clients face, can increase their own E&O exposure.”

The ‘need for speed’ in claims management is crucial, and it comes as no surprise to Laurin that quality and speed of claim management ranked so high in the survey.

“I strongly believe that the real value of an insurance policy – and the MGA or insurer behind it – is only revealed when you experience the company’s claims service. This is where the rubber hits the road,” Laurin says. “When evaluating a potential insurance provider, it’s not only about how quickly the MGA or insurer responds to a client’s notice of claim, but other factors are significant, too. Does the MGA’s in-house claims team have the experience necessary to direct the defence of your client? Do they understand your client’s industry? Do they offer loss-prevention resources to your clients that can help prevent a claim? The more that clients understand the many factors that can influence a positive claims experience, the more they can look beyond price alone when making important coverage decisions.”

Given the close relationship between MGAs and

“I strongly believe that the real value of an insurance policy – and the MGA or insurer behind it – is only revealed when you experience the company’s claims service. This is where the rubber hits the road” Jean Laurin, President, Encon Group Inc.

brokers, is South Western Group’s Barclay concerned by murmurings throughout the channel that directs will eventually replace the independent broker?

“I think it is Chicken Little talk,” he says. “I think the industry, to a certain extent, is correct in its view that a very significant proportion of the marketplace – from a risk perspective – you can model. And if you can model it, you can put actuarial science against it, and you can apply technology against it.

That’s the internal solved. That is where the consumer is going.

“We are working with some of our brokers on automated rate bind issue fulfill platforms, to be part of the distribution channel in a way the consumer wants to trade. For us, it is about looking at our premium flow and our product basket, and saying, ‘We now have to push harder into the specialty, non-standard space, where the model is less likely to apply.’”

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MGAs

CULTIVATING FERTILE GROUND MGAs see maintaining a good working relationship with the broker essential to expanding their market presence A sustained soft market means MGAs have to work hard to cultivate lasting relationships with their broker partners. GroupOne Insurance Services president and CEO Kay-Lee Franklin sat down to talk about the state of MGAs in Canada today.

KAY-LEE FRANKLIN GROUPONE INSURANCE SERVICES

“MGAs are the perfect vehicle to provide these nuances.

As an MGA, looking internally at how well you’re delivering on these aspects will certainly drive future growth”

IBC: Where is the ‘fertile ground’ for MGAs today, given the competitive nature of the market?

Kay-Lee Franklin: In the MGA’s own backyard. Given the continuance of this soft market, we think organic growth with existing broker partners is critical. This translates into making sure you’re taking care of your existing book of business by being a true partner to your brokers and helping them keep their business by being dialed in to their clients’ changing needs.

Having said that, new business is also very important, and MGAs must be ready with excellent service, comprehensive product offerings and competitive pricing. One must also stand prepared to step into new opportunities when brokers require more.

We have seen, through a variety of surveys and articles directly from our brokers, that they are seeking service, broad product offerings, niche programs and competitive pricing. They are also looking for differentiators in their own product offerings.

MGAs are the perfect vehicle to provide these nuances. As an MGA, looking internally at how well you’re delivering on these aspects will certainly drive future growth.

IBC: Do you see the growing calls for MGAs to fall under a regulatory body as helping or hurting operations?

KLF: Compliance and strict adherence to those regulations should always be paramount in the operation of the MGA. If these insurance markets are doing their due diligence through regular audits and inspection of their MGA partners, there should be no need for a separate regulatory body. That said, GroupOne does voluntarily belong to the provincial Insurance broker association [RIBO] and complies with RIBO’s terms and regulations that protect the consumer.

IBC: GroupOne has a fairly wide offering of products, from E&O to marine to a variety of property liability.

Is that where MGAs are headed, away from specialty niche to competing on a variety of products?

KLF: No, specialty niche offerings have and will continue to be the mainstay of the MGA. But a broad product offering in the substandard special risk marketplace is also an important factor in maintaining relevance and driving growth.

At GroupOne, we do both. We offer a fairly broad product offering, but our focus is on our current and in-development niche products.

When offering niche products, the most important element of the offering lies in the underwriting. At GroupOne, we strive to have ‘best in class’ underwriters and will continue with that philosophy in all niche areas we pursue. Our hospitality program is an excellent example of that philosophy … having maintained a successful book for over 40 years.

IBC: Brokers love MGAs, as they are willing to ‘think outside the box’ on underwriting. Is that evolving?

Are mainstream underwriters becoming too conservative, too cautious now? Is this opening the door for MGAs to grow their own presence in the market?

KLF: Well, MGAs love brokers! The most successful broker/MGA partnership actually exists when both think outside the box.

To answer your question, I would say that yes, in some areas, standard market underwriters are pulling back on certain coverages. I think most brokers would agree that broad-form water damage coverage would be one of those areas. If the standard market underwriters are pulling back, it’s creating an opportunity for MGAs and their market partners to provide programs for those difficult-to-place coverages.

In essence, it is our job is to find a way to help the broker satisfy their client’s needs, but also ensure that the solution is profitable for the MGA, their market partner and, in the end, their broker partner.

The real opportunity for MGA growth lies in the maintenance of existing and new relationships, in combination with the development of niche products that require underwriting expertise. This in turn will give brokers access to differentiated programs that provide value added options to their clients.

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Welcome to Insurance Business Canada’s Hot List, the annual spotlight on the power players in Canada’s insurance industry.

We asked you to nominate your picks for the big names to be considered for inclusion on this list of Canada’s movers and shakers, and you responded. From C-suite leaders and company presidents to local business owners, the names came flooding in.

While this isn’t an exhaustive list, we’ve whittled it down to 50 people we think merit recognition. Some of them helped mold small start-ups into industry-leading firms. Others have worked to shatter barriers and bring more diversity to the industry. And all of them are changing the face of insurance in Canada.

Jeff Sutton, SVP of National Sales, Opta Information Intelligence

T

A leader in Canada’s property and casualty industry, Jeff Sutton took the reins as SVP at Opta in September. Prior to joining Opta, Sutton held executive positions at SCM Insurance Services and iClarify. While with iClarify, Sutton was instrumental in developing and establishing the company’s Canadian market.

Monique Leroux, President, CEO and Chair, Desjardins Group Monique Leroux was already a big name in the world of high finance even before joining Desjardins Group. As president, CEO and chair of the board of the company, Leroux is lauded as an inspiration for women looking to break the executive glass ceiling. She’s a member of the Canadian Council of Chief Executives and the Founder’s Council of the Quebec Global 100 network. Leroux holds honorary doctorates from Université de Montréal, Université de Sherbrooke, University of Ottawa, Concordia University, Bishop’s University and Université du Québec à Chicoutimi. Among numerous other honors, she’s received the Women Corporate Directors Visionary Award, been named a Woman of Outstanding Achievement by the Women’s Y Foundation, been named Quebec’s Financial Person of the Year and received the Woodrow Wilson Award for contribution to Canadian society from the Canada Institute of the Woodrow Wilson International Center for Scholars.

Danny Sgro, Partner, Producer, Chief Sales Officer, Jones DesLauriers Insurance Consistently named one of the top professionals in the industry, Danny Sgro has brought high-profile recognition to Jones DesLauriers Insurance Management. This year, Sgro committed to mentor five producers through continued training, support and evaluation. Sgro’s mentorship program consistently produces high-achieving insurance pros and is recognized as one of the best programs in the industry. Committed to charitable initiatives, Sgro was instrumental in convincing Jones DesLauriers to support Free the Children, a program that promotes education and active citizenship among youth across the world. This year, Jones DesLauriers has announced that Sgro will receive its Award of Excellence for his sales performance and other contributions to the firm.

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SPECIAL REPORT / HOT LIST

Scott Beitel, Surety Leader, Ontario, HUB International HKMB Limited Still in his early 30s, Scott Beitel has already reached a position few achieve before their 40th birthday. One of the industry’s top advocates for technical and educational advancement, Beitel has embraced the use of HUB’s corporate social media platform to further develop its brand and enhance his team’s ability to communicate with consumers.

Christina Salvatore, Vice President, Salvatore Insurance Brokers Ltd. Christina Salvatore has risen through the ranks at Salvatore Insurance Brokers to become vice president, playing a key leadership role in the company’s growth and development.

Seizing an opportunity to serve a niche market, Salvatore has led the brokerage to success in trucking insurance.

Chad MacKenzie, Owner, Insurance and Financial Advisor, MacKenzie Insurance Group Inc./The Co-operators Chad MacKenzie began his career travelling across Western Canada working on a “catastrophe or storm team” for The Co-operators. By age 26, he was the head of his own office. A past recipient of the company’s award for Region Builders Status, Mackenzie finished first in the Edmonton North District this year and attained Executive Builder status. Not bad at the age of 28.

Jessica Jaremchuk, Manager, Risk Management Consultant Services, Frank Cowan Company As Frank Cowan Company’s manager for risk management consulting services, Jessica Jaremchuk spearheaded the development of the company’s Risk Management Centre of Excellence, an online resource library featuring everything from checklists to claim case studies and videos. The Centre also serves as a platform for Snowman, a weather-monitoring tool developed with Operasoft. Jaremchuk is also a sought-after speaker, addressing multiple industry conferences in Ontario and Atlantic Canada.

Martin Craig, Insurance Agent, The Co-operators Quebec has always been a tough market to crack, but that didn’t stop Martin Craig. At just 30, he’s helped build up a successful agency from scratch in a province where no one had heard of The Co-operators just a few years ago.

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Dean Gough, President, Itech Environmental Services As president of Itech, Dean Gough is responsible for daily operations of the company, an environmental services firm that works with insurers following floods, fires and other disasters to repair damage while staying within budget. Gough has a wealth of experience working with insurance and consulting professionals for the remediation of commercial spills and dangerous goods incidents.

Mark Jackson, President, The Insurance Market While still a young man, Mark Jackson had built a sizable book of business and acquired The Insurance Market, a respected brokerage in business since 1981. Within a year, he had doubled the company’s revenue. “Over the next 10 years, our goal is to continue to build on the success that we have had and work to establish solid, long-term relationships with our clients,” Jackson says. “We strive to build a solid team of brokers who are passionate about our business and serving our clients.”

Adam Mitchell, Broker, Mitchell & Whale Insurance Brokers Limited Adam Mitchell had been making his living kiteboarding in North Carolina and was travelling in the Caribbean when he received word that his father – who ran the insurance brokerage that his grandfather had founded – was ill. Mitchell rushed home to help his mother sell the business – but then decided to become the third Mitchell to head up Mitchell and Whale Insurance Brokers. That was in 2008. Since then, Mitchell has led his team of brokers to keep 96% of their clients returning year after year.

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Barry F. Lorenzetti, President, CEO and Founder, BFL Canada Under Barry F. Lorenzetti’s leadership, BFL Canada has become the country’s largest employee-owned and -operated commercial insurance brokerage and consulting services firm. The company is an insurance powerhouse, racking up double-digit growth even in tough economic times.

Lorenzetti oversees more than 500 employees in nine cities and six provinces, and the company has been ranked as one of the top 150 brokerage firms in the world by estimates of commercial non-life broking revenue. Lorenzetti is also a philanthropist, helping to raise more than $1 million for charitable causes this year alone.

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Norm McIntyre, Senior Vice President, Jardine Lloyd Thompson Canada With more than 35 years in the industry, Norm McIntyre has made a name for himself as one of commercial fleet insurance’s power players.

Starting as a fleet clerk with Zurich Insurance, McIntyre soon moved from the company side to the broker side, with part of that business being commercial, long-haul transportation.

McIntyre has a flair for the work – his success led to him being named one of Insurance Business’ top 30 elite brokers earlier this year. “The key to success is that you try to become an asset to the management of your customer’s company,” McIntyre says. “You become like a valuable partner – just like his accountant; you get an insight into how his business works and how insurance can go handin-hand with that to make it easier for him.”

Sharon Ludlow, President, Aviva Before taking the reins at Aviva Insurance Company of Canada this year, Sharon Ludlow served as president and CEO of Swiss Re’s Canadian operation. Ludlow led the company to a dominant P&C market position. She has also served as chief financial officer of Liberty Underwriters’ commercial P&C operation. While at Liberty, Ludlow was instrumental in launching Kanetix, a web-based auto insurance quote service. She also played a key part in the demutualization and IPO of Canada Life. In 2013, she was recognized as one of Canada’s 100 most powerful women by Women’s Executive Network.

Mike George, President and CEO, Trisura Guarantee Insurance Company As CEO of Trisura, Mike George embraces new technology to get his message out, using YouTube videos to communicate directly with independent brokers. With more than 25 years in the business, George is a member of TEC Canada’s CEO Forum and the National Council of Champions for Big Brothers Big Sisters Canada.

Frederick Ling, Assistant Vice President, AIG Canada Frederick Ling leads the National Financial Institutions practice for AIG Canada, one of the industry’s market leaders. In addition to that role, Ling leads several business and social initiatives at the company. He’s a member of AIG’s Diversity Council and the chair of the company’s Emerging Leaders program, which fosters the growth and development of high-potential employees. Ling also founded a charity event for the industry that’s raised thousands of dollars for worthy organizations such as Kids Up Front and the United Way.

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Natasha Clyde, Regional Account Manager, Marketing Manager, RSA Canada Natasha Clyde joined RSA Canada 18 years ago as a trainee underwriter. Now she’s the regional account manager and marketing manager for the company’s Ottawa Capital region, as well as all of northern Ontario to the Manitoba border. With the largest geographic footprint of any sales and marketing rep in Canada, Clyde provides service to more than 65 brokers, representing $55 million in volume. This year she’s helped RSA win more than $4 million in new business in her territory.

C.J. Nolan, VP of Business Development and Sales, Munn Insurance As vice president of business development and sales at Munn Insurance, C.J. Nolan believes that quality customer service leads naturally to success. “Insurance industry clients know it when a company treats them right,” he says. “If their insurance provider does not treat them in a fair, sensitive manner, they will move to one that does.” That commitment to customer service has paid off; Nolan has been recognized as one of the top 10 elite brokers in Canada.

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SPECIAL REPORT / HOT LIST

Lori Hildebrandt, Customer Service Representative, Western Financial Group A customer service rep for the Assiniboia branch of Western Financial Group, Lori Hildebrandt combines strong sales abilities with a deep expertise. Her knowledge about the motor licensing program for SGI often brings customers to the Assiniboia office asking specifically for her. Hildebrandt is also deeply involved in charitable causes. This year, she was the top fundraiser for Support the Cause Day, a charity walk held by Western Financial Group’s charitable arm, the Western Communities Foundation. Her efforts also led to the Assiniboia branch to raise more than all other Western Financial Group branches. Half the funds raised

by Hildebrandt and the Assiniboia office were donated to purchase new playground equipment for a local park, and the rest were distributed throughout the other communities served by the foundation.

Sherif Gemayel, President, Sharp Insurance Sherif Gemayel is taking on the big banks – and he’s succeeding. A big part of that success comes from the Sharp Insurance president’s embrace of technology – in 2010, the company was among the first to launch a mobile app, and its catchy online advertising has brought in customers. And his customer base is getting bigger – the company boasts an annual growth rate of more than 30%, which means Sehrif Gemayel is punching in the same class as industry heavyweights.

Shannon Willford, Branch Manager, Western Financial Group With more than 20 years in the industry, Shannon Willford has the knowledge to make the Fernie branch of Western Financial Group a success. She’s also passionate about giving back to the local community, spearheading many charitable events. Her team recently hosted a ‘Shave ‘n’ Shove’ event during the branch’s customer appreciation day. The event featured head-shaving and a pie-eating contest to benefit those battling cancer; all proceeds went to Fernie Friends for Friends and Locks of Love. Willford not only hosted the event, but shaved her head as well. Willford’s branch also will host a Christmas fundraiser for the Fernie Women’s Centre.

T. Marshall Sadd, Executive Chairman and Partner, Navacord President and CEO, Lloyd Sadd Insurance Brokers

Matt Baynton, Vice President, Surety (national), Trisura Guarantee Insurance Company In just seven years, Matt Baynton has helped steer Trisura Guarantee Insurance Company from a small start-up to one of Canada’s leading surety underwriters.

“We’re not short on goals here at Trisura,” Baynton says. “We’ve got a lot of runway ahead of us and some lofty ambitions.”

T. Marshall Sadd is a third-generation president and CEO of Lloyd Sadd Insurance, and has kept the brokerage growing year after year. This year, it became a founding partner of Navacord, a network of independent brokers. As executive chairman of Navacord, Sadd helped lead the new company’s strategic development and promote the advantages it can provide to its partners and clients. Sadd is also active in his community, serving as the chairman of the Stollery Children’s Hospital Foundation’s board of trustees and as a member of the Edmonton Eskimos Football Club’s board of directors. He is also a past chair of The Support Network Foundation, a past president of the Young Entrepreneurs Organization Edmonton Chapter, a past director of the Fundraising Little Warriors Organization, and founder of the Canadian Broker Network.

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We have written U.S. business since our inception, and I always felt strongly about eventually having a presence there

J. Greg Sutton, President and CEO, Sutton Special Risk, Inc. J. Greg Sutton has led Sutton Special Risk to a number of milestones – many of them in 2013 alone. The company celebrated its 35th anniversary last year, and 2013 was also the best year in the company’s history. Sutton Special Risk also marked the completion of its first year in the United States; Sutton Special Risk America was incorporated in late 2011, with its main office in New York City. “We have written U.S. business since our inception, and I always felt strongly about eventually having a presence there,” Sutton says.

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SPECIAL REPORT / HOT LIST

Don Normandeau, Broker/Owner, Le Bon Ami Insurance Brokers

Kenn LaLonde, President and CEO, TD Insurance Kenn LaLonde made a lot of people in New Brunswick very happy last year by pledging to create jobs even as another insurance company announced a string of layoffs. When one of Canada’s major insurance firms closed its doors in Moncton, N.B., 22 insurance professionals found themselves out of work. But LaLonde announced that TD Insurance would be expanding operations in the St. John area, creating 275 new jobs over the course of three years.

Don Normandeau knows how to generate big numbers in a small market.

Starting in the business at just 19, Normandeau began by working at two Winnipeg brokerages over a seven-year period. In 2000, Normandeau was hired on at MacNeil Insurance Agencies. In 2003, he was made a partner in the business; by 2009, he and his wife, Lise, had purchased all the shares of the business. Generating $250,000 in personal revenue in 780 policies, Normandeau has built a strong book of business in the Steinbach region of Manitoba, and was named one of Canada’s top 30 elite brokers.

Linda Papadopoulos, Risk and Insurance Manager, Pearson Dunn Insurance A broker for three decades, Linda Papadopoulos believes in sharing her knowledge with others. That’s why she teaches risk management courses and McMaster University and has developed a mentorship program for young employees at her firm. She also acts as a volunteer career ambassador for the Insurance Institute and Mohawk College, facilitating insurance courses for young brokers and those who want to pursue a career in insurance. Last year, Papadopoulos was named the Insurance Brokers Association of Ontario’s broker of the year.

Rick Orr, President, Orr Insurance Along with his brother Jeff, Rick Orr operates Orr Insurance, a fourth-generation independent brokerage founded in 1895. But Orr isn’t resting on the laurels of his family’s achievements – he has dramatically expanded the firm’s area of operations by acquiring seven brokerages. Orr, the chairman of the IBAO, is also the recipient of that organization’s Wally Wood Award, given in recognition of devotion to the association, its members, goals and objectives.

David Richards, CEO, JLT Canada David Richards has had a meteoric rise at JLT Canada. He joined the company in 2013 as vice president and national specialty leader for natural resources. But he didn’t take long to rise to the top, being named CEO this year when former CEO Steve Thomas stepped down to return to Australia.

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It is imperative that the next generation of brokers are at the forefront of innovation, servicing our clients in the 21st century.

Innovation alone won’t guarantee success; however; an unwillingness to evolve with the times will ultimately lead to your extinction

Sean Murray, Business development manager WCL Bauld Insurance Sean Murray is a leader in the effort to attract youth to an aging industry. As the chair of the Young Broker Network, he’s created stronger ties between his association and educational institutions in an effort to attract fresh blood to the industry. He also created a bursary program offered through a top community college. In 2012, Murray received the Insurance Brokers Association of Nova Scotia’s Young Broker of the Year Award.

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SPECIAL REPORT / HOT LIST

Richard Grant, Vice President, Surety, Trisura Guarantee Insurance Company As vice president of surety for Trisura Guarantee Insurance Company, Richard Grant is responsible for broker relationships and underwriting in the Prairie provinces. An acknowledged expert on the Canadian surety market, Grant served as chair of the western committee for the Surety Association of Canada from 2004-2006.

Michel Laurin, President and COO, Industrial Alliance Auto and Home Insurance Under Michel Laurin’s leadership, Industrial Alliance Auto and Home Insurance has been the fastest-growing company in Quebec for four years running. He was instrumental in the launch of Mobiliz, a program which uses technology to rate and change the behaviour of young insured drivers through a variable monthly premium. The program won the Celent Technology Award last year, and Laurin says it’s producing real-world results as well. “We want this to help young drivers change their behaviors,” he says.

“And it’s working.”

Michael Abraham, Broker, Paisley Manor Insurance Group He’s still a young man, but Michael Abraham already has a wealth of experience in the insurance industry, with expertise in everything from disability and benefits to life insurance and commercial/business insurance. That experience has paid off; Abraham was named one of IB’s 30 elite brokers this year for his service to his clients and his growing book of business.

Glenn Murray, Partner, Chief Sales Officer, Transportation Advisor, Jones DesLauriers Insurance Glenn Murray has a competitive streak that has served him well. At an insurance industry ski and snowboard day, he outperformed more than 100 other brokers to take home the gold medal. He’s also a gold-medal insurance pro, ranking among the top five producers at Jones DesLauriers for the last five years. Last year, Murray brought in more than $1.6 million in revenue on 452 policies. He’s also passionate about sharing his experience, mentoring young brokers who are new to the business.

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Greg Raymond, Director, InsuranceHero.ca Greg Raymond spearheaded the development of the online division at family-owned Raymond Insurance, working tirelessly to develop the company’s online business. That hard work paid off in 2011, when Raymond Insurance rebranded as Insurance Hero.ca, a completely online insurance company. InsuranceHero.ca provides insurance products online, over the phone or through email, and binds coverage through electronic signatures.

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SPECIAL REPORT / HOT LIST

David Elliott, Owner, Elliott Insurance Services

Richard Hubbard, Founder, Hubbard Insurance Group

History is important to David Elliott, and well is should be. After all, he’s a fourth-generation leader of Elliott Insurance Services, a firm started nearly a century ago by his great-grandfather and passed down to his grandfather and father before him. And Elliott is carrying on the family tradition of creating loyal customers – since 2011, the firm has had a 98% retention rate.

Dick Hubbard founded Hubbard Insurance Group in 1987 after serving for 35 years as a broker in Toronto and Montreal. Leading a team that includes his two sons, Hubbard has grown the business organically to include more than 20 insurance professionals. Hubbard’s focus from day one has been on risk management, primarily for corporate insurance clients, which make up more than 75% of the company’s book of business. Even at 85, with 60 years in the business, Hubbard still comes into the office regularly and remains a go-to source for insurance knowledge and experience.

“Coming into the office also gives me the chance to tell my sons all the things they’re doing wrong – but that’s a full-time job in and of itself,” he jokes.

Joe Palmer, Broker, Palmer Atlantic Insurance Ltd.

Ellen Moore, President and CEO, Chubb Insurance Company of Canada

Joe Palmer is a broker who believes in giving back. He’s participated in fundraising to expand and upgrade his local library in Woodstock, N.B., as well as fundraising for upgrades to the high school theatre and the civic center field house.

He also serves as the president of the Woodstock Minor Basketball Association and coaches a grade 2/3/4 team. Palmer also helped lead the Miramichi Salmon Association’s 60th anniversary drive to raise $2 million for Atlantic salmon conservation.

Ellen Moore is a champion for diversity in the insurance industry. She’s followed that calling since early in her career at Chubb, helping to found the company’s Women’s Development Council. Today, she continues to mentor and develop women and minorities throughout the company, recently bringing women’s representation in company leadership up to 56%. Her commitment to diversity is also having an impact on the broader industry; Moore co-founded the Executive Women in Insurance Network and co-chairs the Toronto chapter of the International Women’s Forum. This year, Moore received the Catalyst Award, which recognizes leadership and commitment to advancing women.

Kathy Bardswick, President and CEO, The Co-operators Kathy Bardswick has led the Co-operators for 12 years, and has kept the company growing through tough financial times. Today, The Co-operators is one of Canada’s largest financial co-operatives. Its members include co-operatives and credit union centrals across the country. It’s been listed as one of the 50 best employers in Canada by Aon Hewitt, one of Corporate Knight’s 50 best corporate citizens and as one of the top socially responsible corporations in Canada by Sustainalytics and Maclean’s magazine.

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Adrian Vanelli, Manager, Contract Security, The Guarantee Company of North America Adrian Vanelli got his start as a financial analyst with CNA Insurance in 2007. Pursuing his passion for contract surety as an underwriter at The Guarantee Company of North America, Vanelli was named a manager in less than four years. Vanelli credits his success to the example set by his grandfather, who “immigrated to Canada from Italy with literally nothing but the clothes he was wearing and his family alongside,” Vanelli says. “He taught me the value of hard work and determination.

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SPECIAL REPORT / HOT LIST

Carol Graham, Executive Vice President, COO, Sutton Special Risk, Inc.

Mathieu Gagnon, Vice President, Vezina Insurance

As executive vice president and chief operating officer of Sutton Special Risk, Carol Graham is tasked with securing new sources of distribution and enhancing the marketing capabilities of all the company’s product lines. She began her career with Sutton in the mid-80s, then held senior management positions in insurance and reinsurance companies – most recently as vice president of affinity markets for ACE INA Life Insurance – before rejoining Sutton. Graham has served on both the Alternate Distribution Committee and the Creditors’ Group Insurance Committee of the Canadian Life and Health Insurance Association.

Mathieu Gagnon believes that success is a direct by-product of excellent customer service. “With products becoming commoditized, price differentiation no longer sustainable, and customers demanding more, brokers who focus on delivering superior customer service will come out on top,” he says. And Gagnon practices what he preaches; he has a perfect client retention rate. Gagnon won the Insurance Institute of Canada’s Emerging Leader Award in 2010 and was named vice president at Vezina Insurance in 2014.

Scott Sleightholm, Commercial Lines Account Executive, Smith Petrie Carr & Scott Insurance Brokers Scott Sleightholm was a busy man last year. A director with the Ottawa Insurance Brokers Association, he organized and planned the group’s annual Open House trade show, which brought out more than 700 insurance professionals. In June, he was part of a team of 15 insurance professionals that climbed to Machu Picchu in Peru as part of a charity event. His team raised more than $150,000 for local charities, paid their own way and spent two weeks in Peru, including five days hiking the ancient Inca Trail. Sleightholm also serves as an insurance ambassador for the Insurance Institute, speaking to young people about opportunities in the industry. He’s also been recognized as the 2013 Young Broker of the Year by the IBAO.

Meagan MacDonald, Commercial account Manager, Hunt Commercial Insurance Meagan MacDonald was just 18 when she started in the insurance industry five years ago. Although she started in a marketing and underwriting position, within six months, she had obtained her broker’s license and a book of business. Currently a commercial account manager for Hunt Commercial Insurance, MacDonald also chairs the Young Professionals Network for her local chamber of commerce and has been the Territory 12 leader for the IBAO’s Young Brokers Council.

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INSURANCEBUSINESS.CA

Shawn DeSantis, President and CEO, Partner, Navacord, Jones DesLauriers Insurance Management

Eileen Greene, Vice President and Partner, HUB International HKMB Limited

Shawn DeSantis has used his proven track record in acquisition to create a strong sales culture at Jones DesLauriers. Under his leadership, the firm has been recognized as one of the top brokerages in Canada. Jones DesLauriers also became a founding member of Navacord, an innovative network of independent brokers. This new business model is spearheaded by DeSantis, whose unique vision may well be shaping the future of the broker distribution channel.

With more than 20 years in the brokerage industry, Eileen Greene is a force to be reckoned with. She’s attained “Legend” status in HUB International’s annual sales award program for achieving top annual sales five years running. She also won the WISA International Women in Sales award for insurance last year, beating out nominees from all over the world. As a result, Greene was able to begin a mentorship with Inga Beale, the first woman to be appointed CEO of Lloyd’s of London.

Kevin Stedman, Partner, Producer, Chief Sales Officer, Jones DesLauriers Insurance Recognized as one of Canada’s top brokers, Stedman consistently outperforms his peers. With $2.3 million in sales, 1,643 policies and 838 clients this year, Stedman will receive Jones DesLauriers’ Award of Excellence for his contributions to the firm.

Stedman supports not only his clients, but their charitable initiatives as well.

Through his clients, Stedman has gotten involved in Habitat for Humanity, serving meals at his local food bank and coaching minor hockey.

Sam J. Feldman, Senior Vice President, Renfrew Insurance Ltd. Sam Feldman has been a perennial top producer at his firm over the last five years. He was the top monthly producer for new business in 35 out of 60 months and in the top three most valuable producers for new business, retention and growth for four out of the last five years. He says that hitting those heights takes commitment. “My mentor taught me years ago that to be successful, you must come into the office at 4:30 or 5 a.m. to get all your paperwork done for the day,” Feldman says.

“Then, when 8:30 came around, you were ready to be on the road.”

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PRODUCER PROFILE / CONNIE KRAEKER

BACK TO BASICS

After changing careers and losing her mother to cancer, Connie Kraeker of The Co-operators realized the vital role the insurance industry plays in the community After spending 18 years working as a correctional officer in Manitoba and a brief stint at the airport in Edmonton, Connie Kraeker knew it was time for a change. Little did she know that when she walked into her local Co-operators office in South Edmonton, her life would change forever.

“The staff there were great; they treated me very well, and I just had a very positive experience that got me thinking,” Kraeker recalls.

“Remembering which courses I excelled in during my high school years, I thought maybe an office job was the place for me. I asked the staff member who did my auto policy if they were hiring. As luck would have it, they were, and I’ve been with the company ever since.”

After first starting with The Co-operators in 2006 as a receptionist, Kraeker now has moved up the ranks to IFAT, or Insurance Financial Advisor Trainee. She has held myriad positions within the organization, including auto, home and commercial specialist.

Kraeker also attributes much of her professional success to the work ethic she got from her family, including her grandparents, parents and siblings.

“I was raised to care about people, and to go the extra mile if at all possible,” Kraeker says. “I have a desire to help others, and I get great satisfaction out of feeling like I contributed in some way to the success of others.”

Her family influences are something Kraeker sees in The Co-operators, which holds the title of being one of the top 50 employers in Canada. She highlights their dual achievements of not only providing top-quality service to clients, but also recognizing and empowering staff to uphold organizational integrity.

UNFORTUNATE CIRCUMSTANCES Soon after Kraeker joined The Co-operators, she lost her mother to cancer and realized what a vital role insurance professionals play within their communities.

“It was then that I realized how important our role in this industry really is. I studied for and obtained life, accident and sickness licensing.

During our training, we were encouraged to write our story, which I did,” Kraeker says. “This was very valuable in reminding me how important all of our lines of business are, not just the life insurance. This is when I realized there was a reason for all of the things I had gone through, and felt this is where my experiences had led me.”

Connie Kraeker presents the 2014 PGI Canada Learner Achievement Award on behalf of the Co-Operators

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INSURANCEBUSINESS.CA

ALIGNING VALUES Camaraderie and having everyone’s best interests at heart are two things Kraeker and The Cooperators value. Additionally, Kraeker’s belief in sharing information and experiences, and following up with clients, have set her apart in terms of maintaining productive relationships. Since beginning with The Co-operators, Kraeker has been nominated for service excellence on multiple occasions.

“When a client comes to ask about a particular line of business, we endeavor to educate them on what the coverages are, the differences between us and the competition, and advise them of how this could affect them using real-life scenarios,” Kraeker says. “Premium always plays a role, but our clients seem to appreciate the time we take to help them understand their options and make informed decisions.”

A trend across the provinces does seem to be under-education on coverage types and related offerings, something The Co-operators and Kraeker aim to reverse. Thus, their emphasis falls not only on showing clients they care by following up after requests, but also supporting lifelong learning and

“Premium always plays a role, but our clients seem to appreciate the time we take to help them understand their options and make informed decisions” growth for all parties involved.

Behind these goals is a mixture of solid teamwork and a support system within The Co-operators organization that helps in work situations, as well as in employees’ personal lives if they think it appropriate.

“I love the way The Co-operators as a whole has made everyone in the organization an important part of a very large team,” Kraeker says. “These people are more than co-workers – they are one large family, and I am very proud to be part of it!”

BACK TO ROOTS

Kraeker with friend Margaret Belanger at the Primary Health Care facility in Yellowknife

As part of her growth with The Co-operators, Kraeker was able to relocate to the upper reaches of the Canadian territory, settling in the icy wonderland of Yellowknife. But rather than finding it cold and barren, Kraeker has discovered the warmth of welcoming people, bringing back fond memories from her upbringing in Northern Manitoba.

“They are a very diverse group,” Kraeker says.

“There are 11 official languages in the Northwest Territories, five of which are very prominent in this city – Dene and Dogrib being the primary. People here recognize how the winters and lack of natural sunlight can affect a person, and they are very welcoming and willing to offer suggestions on how to cope with the change to what feels like a totally DECEMBER 2014 | 43

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Talk to your Regional Sales Leader, visit gms.ca or call 1 855 539 9887.

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TO FIND OUT WHY MORE CANADIANS ARE CHOOSING GMS INSURANCEBUSINESS.CA

different world.”

The locals even accommodate the faint-hearted who take advantage of the ice road to Alberta to escape the long, sunless winter days. For those who decide to tough out the extreme conditions like Kraeker, life is now consumed with festivals, dogsled races, exotic crafts and extravagant ice castles.

Recently, Kraeker was able to get a taste of the local culture at a NWT Literacy Council event, where she presented Stacey Keyes the 2014 PGI Canada Learner Achievement Award. Afterwards, she was able to enjoy the local entertainment, meet some local celebrities and learn a little about Dene traditions.

“It was an honor for me to be able to participate in the Dene Drum Dance,” Kraeker says. “I am told that the dance represents community and support of community involvement, which goes hand in hand with what we at The Cooperators believe in. Attending this event truly was a blessing to me.”

WISDOM FROM ABOVE Passing along some wisdom to her peers, Kraeker emphasizes the importance of being true to who you are as a person above all else. “Without a doubt, every career will have its share of ups and downs, so continue to remember why you chose a particular career, and maintain a positive attitude to help get through even the toughest of times.

“Reach out for support during rough times, and remember, there is always a silver lining behind every cloud,” Kraeker reiterates. “As a trainee, there are a lot of expectations placed on us, and they can be very overwhelming at times. But remember, your superior chose you for the role because they believed in you!”

Yellowknife citizens participate in the Dene Drum Dance

“By following up, it shows clients that you really do care about them and are dedicated to ensuring that they are well looked after”

Contact a Regional Sales Leader in your area

BRITISH COLUMBIA

Laurence Allen

Regional Sales Leader 250.766.1988 • lallen@gms.ca ALBERTA

David Roberts

Regional Sales Leader 403.532.0667 • droberts@gms.ca SASKATCHEWAN

Jamie Stangel

Regional Sales Leader & National Accounts Manager 306.790.5763 • jstangel@gms.ca

Kristina Dickie

Regional Sales Leader 306.790.4327 • kdickie@gms.ca MANITOBA

Michelle Watts

Regional Sales Leader 204.489.9140 • mwatts@gms.ca ONTARIO

Michael Finucan

Regional Sales Leader 647.244.9462 • mfinucan@gms.ca

Joanna Leng

Regional Sales Leader 416.948.3378 • jleng@gms.ca ONTARIO & ATLANTIC CANADA

Jim Vaillancourt

Regional Sales Leader 905.987.3288 • jvaillancourt@gms.ca

GROUP MEDICAL SERVICES is the operating name for GMS Insurance Inc. in provinces outside of Saskatchewan.

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RISK

PRIORITIZATION

Your clients have priorities – are you meeting them as a broker?

What are your clients’ priorities, short- and longterm? Do you know how you can complement them?

Bill Clinton and George Bush are currently promoting the ‘interdependency of countries.’ We are an interdependent society in an interdependent country that too often has difficult relations with our closest allies, but this is the world we live in. Things can be improved upon every day, and someone must be the leader for this type of change.

Are you that person? If something goes wrong, who are you or your client going to turn to? In the event of a catastrophe, insurers and their affiliate partners will be in the street, helping wherever they can.

We are bombarded with worrying headlines, from ISIS to ebola, to false auto insurance being sold in Toronto, to GM knowing of a product defect from 2007, yet doing nothing until a number of deaths and civil suits began.

Are these matters where insurance will respond?

The losses suffered are indirect losses; therefore, insurance will not likely respond. So why would such issues matter to you? Because the end results are symptomatic of issues that could indirectly affect your customers.

Following a thorough Risk Management Review – flow-through, processes, departmental, financial, etc. – by an independent party who understands the ‘mission statement,’ many of us can be prepared for almost anything, and we will survive.

Any ‘loss control’ measures that were in place

failed, as the essential follow-up ingredients – i.e., oversight and audit – were missing. Who is analyzing the data? Is this person then presenting it to the board/management in such a way that they are engaged in the process?

ORSA came into effect in the U.S. in 2014, with filings due in 2015. Under ORSA, all insurance companies, P & C and Life & Health must file a complete ERM report in 2015. This report must include the details and structure of their plan, as well as the verified testing done to prove ‘resiliency’ under a variety of circumstances. Some version of this will be coming to Canada very soon.

The 2013 First Nations Financial Transparency Act was tabled, and two years later, some bands are not reporting. The $1.4 billion payment, over the past 10 years, has gone to four family members in a band with 185 members, of which 86 live on the reserve, some without indoor plumbing and electricity.

On October 5, the National Post reported that “tensions [are] rising in the boardroom” over bank regulators’ new rules. OSFI is asking board members to get more involved in operations, and there is a ‘push back’ against this. Some board members remain focused on GRC, which is not enough.

Compliance measures are intended to protect the public. As seen by the frequency and severity of loss on an almost a daily basis, it is likely that more of these measures are coming. How are these related to you and to your customer? Are you prepared to have this conversation with your client or the CFO at the client’s office? How will insurance respond, and to what extent?

The board of directors will review the year-end review engagement statement or the audited statement and presumably make their strategic plans from there. Are they asking any questions about issues that are not in this document, or are they being allowed to focus only on GRC? The single and sole measure of a well-run organization today is ERM (Enterprise Risk Management). The CFO cannot be the one to provide the single report on all facets of the company, as his or her role is to report on finance.

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INSURANCEBUSINESS.CA

Who will deal with internal issues with cyber and privacy? What about additional complaince measures?

Then there’s the aging workforce – who is going to replace these key people? What about supply chain bottlenecks and dependencies upon certain suppliers or distributors without a backup, should a problem arise at their end? For example, the 2008 earthquake in Japan caused certain manufacturers and exporters of parts to cease production.

Are plans in place and being practiced if something like that happens again?

You may ask these questions of your client at the annual renewal or prior to that date, but are you with them throughout the year? Have key employees been replaced, deceased or been terminated? Is the company changing direction or market focus?

These are not traditional insurance matters, but someone needs to know, as they will have an effect on the extent or level of insurance.

Through Risk Management, and only through Risk

“The single and sole measure of a well-run organization today is Enterprise Risk Management. The CFO cannot be the one to provide the single report on all facets of the company“ Management from a dedicated person or department, can a corporation hope to gain control over their affairs today and tomorrow.

For your business clients, smart planning can make all the difference. At RiskAssist Consultants, we have pre-designed Risk Management templates for 133 operations, including Continuity Planning and ERM, drafting through our partners at ClearRisk Manager and SI Advisors.

Diane S. Baker is BA FRM FIIC, is the President of RiskAssist Consulting Inc.; www. riskassistconsulting.ca.

®

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INDUSTRY ICON / CHRIS FLOYD

A YEAR IN REVIEW

After a year as president of the Insurance Brokers Association of Ontario, Chris Floyd reflects on what was and reveals his path to success

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After more than a decade of involvement with the Insurance Brokers Association of Ontario [IBAO], Chris Floyd is getting ready to become the chair of the board of directors after a transformational and busy year as president.

“From a volunteer perspective, I’ve been with the IBAO for 11 years,” Floyd says. “I served six years as a director on the board. I believe very strongly in giving back to an industry that has given me so much. I took a year off and then came back to the executive. I now have worked through the roles on the executive, culminating in being president this year, and then next year being the chair of the board.”

Despite serving as the president of both the IBAO and the Ontario Teachers Insurance Plan [OTIP], a role he has held for 10 years, Floyd doesn’t believe either role took away from the other – something he attributes to his colleagues on both sides.

“It has not been that difficult to juggle the roles,” he says. “I have a very capable and competent senior management team at OTIP that I can certainly entrust with the business. With today’s technology, you’re never out of the loop with what is happening. I won’t say it hasn’t been without challenges, but it hasn’t been overly difficult to manage.”

Floyd has ably handled the challenges presented by his dual agendas. OTIP has continued its impressive track record of growth throughout 2014, while the IBAO has been pushing forward under the theme of ‘Get ready for tomorrow today.’

AN UNEXPECTED JOURNEY Born in Hamilton, Floyd grew up in nearby Waterloo and later began his career at Cambridge-based Gore Mutual Insurance Company in 1986.

“Insurance found me,” Floyd says. “I had some friends from high school who were working at Gore Mutual, who called me up and said, ‘You should come down here for an interview,’ and one thing led to another.”

At Gore, Floyd was exposed to several areas of the business, including a number of roles in claims, underwriting and marketing.

“That really gave me a base for the business and allowed me to say ‘OK, what line of the business do I really want to be in?’” he explains.

“If we think about what insurance really does, we are one of the ultimate backstops for the economy. When catastrophes hit, we are looked at to help restore people and businesses. Being part of an industry that has that big of an impact is terrific” By 1994 Floyd had the opportunity to join OTIP in a management capacity, and he hasn’t looked back since. He has filled a multitude of roles, including his initial management position, general manager and vice president, and is now in his 10th year as president.

Moreover, the organization has expanded the scope of its operations through the acquisition of two subsidiary property and casualty brokerages, which now encompass the OTIP group of companies. OTIP’s presence can now be found in multiple provinces, specifically in the cities of Waterloo, Ottawa, Edmonton and Fort McMurray.

“I like to say to people that I’ve only ever had one interview at OTIP, but I’m on my fourth job,” Floyd says. “I’ve been very fortunate to be in the right place at the right time and help shepherd OTIP through some tremendous growth over the years. I’m one small part of what is a pretty terrific team here.”

A YEAR IN REVIEW In terms of his other role at the IBAO, Floyd has been working to raise awareness to members that as a whole, and for the long-term sustainability of the channel, brokerages need to start looking internally at the way they are operating their businesses.

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INDUSTRY ICON / CHRIS FLOYD

“I believe very strongly in giving back to an industry that has given me so much” sions that, in some instances, broke traditional business operation models, but were in the best interests of the customer.

Above all, Floyd wanted to ingrain the idea that brokers are an indispensable part of the equation for consumers at every point in the insurance purchasing process, even in the face of technological transformations.

“I laid that groundwork last October,” he says, “and looking back a year later, I think we’ve made some significant progress from the association’s perspective in the number of brokers that have enrolled in the BBIC (Beyond Best in Class) sessions, which is really speaking to brokers taking the initiative to learn and get enabled to do things differently.”

In the near future, the association will be launching three different telematics product offerings, including a behavioral-based driving program tailored for 16- to 24-year-old drivers, a very broad telematics solution for all ages and a commercial solution being tailored to fleet management called FleetAdvisor.

“Telematics is going to be a big part of our business going forward, whether we like it or not,” Floyd says.

A HELPING HAND Floyd attributes his professional success first and foremost to his family for their “unending support

and patience.” He admits that he cherishes the days, few and far between, when he gets the chance to sit at home with his loved ones and two dogs.

Professionally speaking, Floyd credits former OTIP CEO Randy McGlynn with guiding him throughout his career.

“He has been very much a mentor to me and helped me learn not necessarily the business, but how to be a good leader,” Floyd says. “He has really guided me on some of the big decisions I have had to make.”

Whether from his family or professional relationships, Floyd has certainly reciprocated the knowledge and help he has been given.

Beyond his 11 years at the IBAO, Floyd also serves as the delegate to the Insurance Brokers Association of Canada.

Floyd finds being in insurance most rewarding because of the level of responsibility the profession has in times of hardship, as was evidenced during the Great Recession.

“If we think about what insurance really does, we are one of the ultimate backstops for the economy. When catastrophes hit, we are looked at to help restore people and businesses,” Floyd explains. “Being part of an industry that has that big of an impact is terrific. The idea of being able to help a consumer and remove that fear of uncertainty around anything that they are dealing with, especially claims, is very rewarding.”

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4/12/2014 3:01:36 AM

BUSINESS STRATEGY / LEADERSHIP

DRIVING CHANGE: when to involve the troops Leadership is always a delicate balance, and knowing when to involve your staff in an important initiative is just one of these balancing acts – and the timing needs to be just right. In this extract from his book, Leadership: It’s a Marathon, Not a Sprint, Gordon Tredgold shares the perfect time to bring in support When you’re fighting a battle, how long do you have to fight it alone? What’s a duel, and what’s a war?

When should you call for reinforcements? When can you expect to find an army at your back? Someone asked me the question: At what point do we need to involve more people – like experts – when we’re shooting for those big goals?

This is an interesting and difficult question to answer. I see it as a very tough balancing act that we have to get right. If you involve too many people too early, then your goals run the risk of becoming tempered and watered down. On the other hand,

if you involve too few people or involve them too late, people might feel excluded and this can then lead to resistance, tension and lack of commitment.

That can be a huge source of conflict. In my opinion, the team defining the objectives and the goals needs to be small. And by small, I mean perhaps one to two people.

I’ll explain why I’m so conservative with that number. The more people you have involved in defining the goal, the more reasons they’ll provide you as to why you cannot hit your target. (It’s more ‘natural’ to think initially of what could go wrong.

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“If you involve too many people too early, then your goals run the risk of becoming tempered and watered down. On the other hand, if you involve too few people or involve them too late, people might feel excluded, and this can then lead to resistance, tension and lack of commitment” Remember when someone turned up late for a date or a meeting? A dozen bad scenarios probably ran through your head – from he doesn’t like me anymore to maybe he got into a car crash. Turned out, he’d just stopped to fill up with petrol.) If there are too many people involved, your goal will be watered down from big, bold and beautiful to small and not-so-impressive. It’s nobody’s fault, per se; it’s just the way of people, for there are as many opinions as there are voices. In the end, it’s your decision, and your voice has to make the choice.

We need to be dedicated and fearless when setting big and ambitious goals, and this is more easily done if we only have to deal with (or convince) a small group. Large groups tend to be more cautious, argumentative and often lean toward the safe side – not what you need when setting big, bold goals. You need healthy doses of risk, ambition and creativity, and those characteristics can get trampled by the masses.

I’ve experienced this in the workplace time and time again, like that time when I set one company’s goal for an on-time delivery increase to 80% (as compared to our old average performance of 35%).

If I had consulted with a larger group, I am sure we would have tempered the goal and probably set it at 60%; 80% wouldn’t have even been considered, much less reached.

In my opinion, keep the team to a minimum when you’re at the first step of defining success and setting the goals for a change.

So then, the second step. You have to define the why behind the what: why this goal is important, what the benefits are, the reasons behind it and so forth. The more inspirational the goal, the more convincing your why – and the bigger the buy-in.

This is when more people begin to show up.

As soon as what and why have been defined, you can begin gathering an army to tackle how.

Remember this: The goal is non-negotiable now.

There will be those who will try to deter you from it. There will be those who won’t be able to fathom the big picture. But the team’s focus should be on brainstorming and mapping out the road to success.

The vision of success has already been taken care of. All the energy must now be channelled to discovering how to achieve the bold goals – not how to temper or reset them.

The three key principles to driving change are: • Define the problem (the goal) with as few people as possible • Create an important and inspiring reason that people can buy into • Define the solution (the strategy for success while involving and welcoming more people – the troops) There will always be some resistance, of course.

You need to see beyond that now. The Chinese have a popular proverb: It is better to light the candle than to curse the darkness.

Problems exist to be solved. Your vision must be powerful enough, and your focus must be just as keen. Don’t ask your team: Why shouldn’t we do this? Instead, ask your team: Tell me what you need to make this happen. If you can attain the balance, your larger group will not feel excluded. Instead, those people will feel involved. They will take up the challenge and work with you to define the solution. After all, the resulting solution will be their brainchild, too, and involvement breeds commitment. Thus do we set big, bold, challenging goals, while inspiring people and ensuring their commitment.

Gordon Tredgold is a specialist in transformational leadership, operational performance improvement, organizational development, creating business value, and program and change management.

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INSURANCEBUSINESS.CA

Favourite things Adrian Kraizel, financial advisor and sales manager, Desjardins Financial Security Independent Network Favourite sport I am an avid skier. I used to work all summer to pay for my one-week ski trip out West

Favourite vacation spot Explora Hotel in the Atacama Desert, Chile. Being pampered in that extreme climate is the best!

My first day in insurance I started at Investors Group in 2006. I remember 10 people started the training class, and by the end of the third quarter, we were down to two

Favourite book Fear and Loathing in Las Vegas by Hunter S. Thompson. I laughed out loud at some parts

Favourite food A churrasco sandwich.

It’s a really thinly cut steak with avocado, tomato and pebre (spicy sauce) on white bread. It goes great with a beer

My best day in insurance When I received a call from a client asking if they could buy a new car. That call showed me that I had become an important part of their lives The best thing about working in insurance It’s really hard work, but it lets me have the lifestyle I want. I haven’t missed any of my daughters’ events, and that’s important to me

Favourite music I like classic rock. The Doors can get me through almost anything Favourite movie Any movie with John Cusack. His two classics when I was younger are Better Off Dead and The Sure Thing. Very funny

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EXPERT ADVICE

IT IS TIME TO TALK ABOUT THE WEATHER – WITH YOUR CLIENT Yes, everyone loves to talk about the weather.

As brokers, you can open that discussion to be more than just an observation of how cold it is, but rather how safe it is at your client’s home.

“Weather patterns are changing, and storms are becoming much more frequent and much more powerful,” says Alex Walker, national claims relations director for RSA. “The weather experts are telling us that this is going to keep increasing over the next 50 years.”

With the threat of climate change affecting us all, there is the potential for severe damage to our homes, which can be our single biggest investment.

Here are the top three things to remind your clients of when getting ready for winter:

1

Look upwards “Brokers can suggest to clients to look upwards when thinking of a flooded basement,” says Walker. “Clearing debris from eavestroughs to allow the free flow of water and having downspouts extend as far as possible away from the foundation of the home will help protect it from water damage.”

2

Shut off outdoor water Also important is to ensure that the water hose is completely drained before freezing

temperatures set in, and to bring it inside until it’s needed again in the spring, adds Walker.

Remind the client to shut off the master valve inside the house leading to the outdoor valve, he says, as water can freeze, crack the pipe and cause water damage.

And all homeowners should know where the shut-off valve is for the city water coming into the house, as it can become a bit frantic once there’s a broken pipe and you’re rushing around looking for it.

3

Stock up early Last year’s winter storm took many by surprise, and Walker suggests that clients stock up on bags of ice melt or salt, as they may not be in supply once the first snowstorm hits.

“You’ll want to make sure that you’re ready with a good shovel,” says Walker. “Shovelling your sidewalk and driveway frequently will help to avoid potential slip-and-falls.”

It’s also a good idea to remind your customers to have their snowblower tuned up and ready with fresh gas, should they own one.

While there isn’t anything we can do to stop the weather from happening, it’s important for your clients to be prepared when extreme weather arrives.

Alex Walker is RSA’s first claims relations director for the Canadian market. His mandate is to bring the claims division to life for insurance brokers and clients, as well as to unify brokers with RSA’s underwriting, claims and risk control teams to ensure maximum satisfaction for all partners.

56 | DECEMBER 2014

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Why travel?

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

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

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