Insurance Business Canada 4.02

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CARRIERS CE RAN BUSIN SU N

2016 RS IE

E STAR C AR FIV S R ES

Brokers name the industry’s best carrier partners

I

EARTHQUAKE COVERAGE

Sobering statistics on what could happen to clients who don’t have it

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BRIDGING THE TALENT GAP

How one major player is attracting and preparing the next generation

BOTTOM-LINE PROTECTION

Why environmental liability is a financial necessity

5/05/2016 5:05:00 AM

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Our experienced team in Toronto is committed to providing precisely the coverage you need.

BHSI Canada Royal Bank Plaza North Tower 200 Bay Street, 15th Floor Toronto, Ontario M5J 2J2 info@bhspecialty.com

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ISSUE 4.2

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

CONTENTS

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UPFRONT 04 Editorial

Disrupt or be disrupted

06 Statistics

Why earthquake coverage is a must

CARRIERS CE RAN BUSIN SU N

2016 RS IE

IVE STAR CA RR SF ES

I

COVER STORY

FEATURES

ARE YOU ‘SURE’?

How technology is changing the surety sector

22

PEOPLE

INDUSTRY ICON

10 News analysis

The cyber insurance lag

12 Intelligence

This month’s big movers and shakers

14 MGA update

One MGA launches new E&O offerings The Internet of Things’ bold new frontier

FEATURES 30 A catalyst for change

FEATURES

36

SEEKING DIVERSITY IN AGE

One firm reveals how it’s attracting new talent to the aging industry

An inside look at Markel Canada’s transition from MGA to carrier

40 The reinvention of teamwork

How to create a 21st-century team

42 6 powerful marketing videos

Strategies that are guaranteed to grab clients’ attention

44 Mono-tasking is the new black Still multitasking? Here’s why you should stop

48 Expert advice

Putting culture first helped David Lockton turn Lockton Companies into an industry powerhouse

Ensuring adequate earthquake coverage

18

PEOPLE 34 Broker insight

FEATURES

38

PROTECTING THE BOTTOM LINE Environmental liability is essential to shield clients from financial disaster

2

Auto insurance in the driverless car era

16 Opinion

FIVE-STAR CARRIERS

Find out which carriers earned brokers’ highest marks in categories like claims service, technology, marketing support and more

32

08 Head to head

Rogers Insurance’s Bruce Rabik on why collaboration is essential for survival

46 Career path

An accident inspired Andrew Clark’s career in insurance

47 Other life

Sean Forgie has gone fishing

INSURANCEBUSINESS.CA CHECK IT OUT ONLINE

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CA W

AVOID NASTY SURPRISES

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

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

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

So you and your clients can rely on Markel 100% – without a shadow of doubt.

www.markelinternational.ca/cybercover

WHY RISK GOING ANYWHERE ELSE?

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UPFRONT

EDITORIAL

Beating the disruptors

G

et hundreds of insurance professionals in the same room days after the announced closure of Google Compare, and the talk will inevitably turn to the future of the independent broker and the many disruptors hoping to alter it.

That’s exactly what happened in early March when more than 1,600 independents met for NetVu 2016, the annual conference of Vertafore software users. While an earlier survey of this very group indicated that more than half (54%) view disruptors as a moderate to serious threat, the news of Google’s troubles seemed to encourage and embolden many.

This might be a hasty conclusion, but one thing is certain: There is a future for brokers. It’s just one that includes adaptation.

One thing is certain: There is a future for brokers. It’s just one that includes adaptation Keynote speaker David A. Smith, a futurist who has consulted with several insurance companies, stressed that nearly half of existing jobs will be automated in the next 20 years. To avoid falling on the wrong side of that equation, he said, agents will need to leverage technology like data analytics and predictive modeling to cement their role as trusted advisors and information gatherers.

Already, there are several brokers at the forefront of this change. Instead of fearing or dismissing the wave of disruptors taking aim at the industry, they are facing them head-on and learning lessons along the way. By combining old-fashioned relationship skills with an understanding of the modern insurance consumer, these professionals are blazing trails that will become well-worn footpaths for the rest of the industry in years to come.

The team at Insurance Business Canada

www.insurancebusiness.ca MAY/JUNE 2016 EDITORIAL Senior Writer Penelope Graham Writers Donald Horne Libby Macdonald Tim Garratt Paul Lucas Henry Preen Caitlin Bronson Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander

CONTRIBUTORS Suki Basi Graham Winter Marcus Seeger Jenny Brockis

ART & PRODUCTION Design Manager Daniel Williams Designers Joenel Salvador Randy Pagatpatan Production Manager Alicia Salvati

SALES & MARKETING National Account Manager Eric Langille Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Claudine Ting Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley

Traffic Manager Kay Valdez

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INSURANCE BUSINESS UK

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

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UPFRONT

STATISTICS

Shaking up your clients

THIS YEAR’S EARTHQUAKES

More than 4,000 earthquakes happen in Canada annually – but are your clients buying into the facts?

SOME OF the world’s largest earthquakes occur in Canada. BC and the Ontario-Quebec corridor face the highest earthquake risk – and that just happens to be where 40% of the population resides. A recent study commissioned by the Insurance Bureau of Canada found that a one-in-500-year earthquake could cost Canadians almost $75 billion in economic losses in BC, and $60 billion in economic losses in the Quebec-Ontario corridor.

As a broker, you play a crucial role in helping your clients prepare for the worst, as you understand your clients’ personal and business coverage needs best. Statistics show that only 45% of BC residents currently carry earthquake insurance. Given the risk, why isn’t that number higher? All indicators point to a big quake coming – and the numbers present the best argument for clients to purchase earthquake coverage.

As of mid-April, 18 earthquakes have already been recorded in Canada in 2016. Most have been small (magnitude 5.0 or lower) and located outside major population centres..

April 4 Magnitude: 3.1

January 12 Magnitude: 4.4

March 5 Magnitude: 4.2

March 18 Magnitude: 5.0

30%

55%

Chance of a significant earthquake in BC in the next 50 years

Percentage of BC residents without earthquake insurance

5% to 15%

96%

Chance of significant earthquake in OntarioQuebec in the next 50 years

Percentage of Quebec residents without earthquake insurance

April 5 Magnitude: 3.1

January 25 Magnitude: 1.9

Sources: Natural Resources of Canada 2010/11 and Institute for Catastrophic Loss Reduction, 2010

PROPERTY LOSS AT A GLANCE The Insurance Bureau of Canada looked at two scenarios in their projection: a 9.0-magnitude quake off the west coast of Vancouver Island with direct property losses of $58.6 billion, and a 7.1-magnitude event near Quebec City with direct property losses around $45.9 billion.

BRITISH COLUMBIA Total insured property loss

Building

14.6%

Contents

29.5%

56.0%

Direct business interruption

In projecting the impact of a major earthquake, the Insurance Bureau of Canada identified three major causes of damage: the actual ground shaking, fire following the earthquake, and tsunamis and/or landslides.

INSURED LOSS: BC $17 billion

Shake $1.1 billion

Tsunami Fire following

$337 million $1.9 billion

Liquefaction and landslide INSURED LOSS: QUEBEC

$11 billion

Shake

QUEBEC

Building

Total insured property loss

19.2% 30.6%

Contents

50.2%

Direct business interruption

Source: Insurance Bureau of Canada: The Economic Impact of a Major Earthquake in Canada

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CAUSES OF LOSS

$628 million

Fire following Liquefaction and landslide

$56 million Source: Insurance Bureau of Canada: The Economic Impact of a Major Earthquake in Canada

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MAGNITUDE February 9 Magnitude: 4.6

February 13 Magnitude: 4.3

5 4

February 19 Magnitude: 3.4

3 2 1

February 24 Magnitude: 2.8

February 5 Magnitude: 2.6

February 8 Magnitude: 3.3 February 8 Magnitude: 2.7

January 10 Magnitude: 3.2

February 2 Magnitude: 3.7 February 8 Magnitude: 3.3

January 10 Magnitude: 3.3

March 21 Magnitude: 2.8 Source: Natural Resources Canada

DIRECT VS INSURED LOSSES

COUNTING THE COST TO BUSINESS

Because of the relatively low uptake rates of earthquake insurance, the IBC predicts insurance would cover less than 30% of the total loss in both provinces.

Direct and indirect loss

billion

$60 billion Insured loss

billion

$12 billion

British Columbia

Japan

$5 billion

$147 billion

5%

$50 to $150 billion

100,000

1,000

Percentage of loss to GDP

Insured loss

$20.4

New Zealand Total economic loss

Direct and indirect loss

$74.7

Major earthquakes on the South Island of New Zealand (in 2010) and Kobe, Japan (in 1995) illustrate just how devastating a big quake can be to businesses.Â

Number of houses damaged

Direct property losses

Estimated amount of additional indirect losses

Estimated number of small and medium-sized businesses that closed permanently

Quebec

Source: Insurance Bureau of Canada: The Economic Impact of a Major Earthquake in Canada

Source: The Emergency Preparedness for Industry & Commerce Council, The Institute for Catastrophic Loss Reduction

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UPFRONT

HEAD TO HEAD

Will driverless cars be the death of auto insurance?

The insurance industry is grappling with this latest innovation that could put a huge dent in revenue

Peter DaSilva

Adam Mitchell

President and COO Cornerstone Insurance Brokers

President Mitchell & Whale Insurance Brokers

“Not at all. Someone has to be responsible for the operation of the automobile in all situations. This will mean you will still have to learn to drive a vehicle, even if it is driverless, so that you can take over in case of emergency, and when that happens, you will need coverage. No system is completely glitch-free, so coverages will still be required of operators.

And what happens if you fail to maintain the vehicle to warranty standard and something goes wrong? Even if the manufacturer accepts liability for a properly maintained vehicle, they won’t accept it for a poorly maintained vehicle. Again, the driver needs coverage because they might be on the hook for being as little as one mile over the next required maintenance.”

I think driverless cars will mean the same thing for insurance as Amazon has meant for retail. It won’t be a mass exodus, but it will definitely be an instrument of change for the industry.

What you need to plan for defending against is not the highways full of driverless cars, but the technology that will come well before that: the accidentfree car, or a car with the sensors and smarts to keep you from making any mistakes. When those cars hit a critical mass on the road, the frequency and severity of accidents will fall dramatically, in turn driving down premium and commissions per policy. It’s not property damage. Fear the accident-free car, not the driverless car.”

Debbie Thompson

Director of business development and managing partner Beyond Insurance Brokers “I don’t believe so, as no one is usually absolved of an error, omission or misjudgment.

Unless the manufacturer of the vehicle is going to accept 100% responsibility for the operation, which I doubt very much, there is a still a question of liability on the operator and the regulation of self-driving cars.

We know that in California, the Department of Motor Vehicles is stating that a licensed driver must be in the vehicle at all time, which says there is a level of responsibility transferred to the operator. The operator will still need personal automobile liability insurance.”

NAPSTER FOR THE INSURANCE INDUSTRY? A recent Bloomberg News article likened the relationship of insurance companies and the introduction of driverless cars to record companies at the dawn of online music file-sharing. Premiums consumers pay could drop as much as 60% in 15 years as self-driving cars hit the roads, says Donald Light, head of the North America property & casualty practice for Celent. His message for insurers: “You have to be prepared to see that part of your business shrink, probably considerably.”

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www.insurancebusiness.ca

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You can expect more at Trisura.

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

a step above

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

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UPFRONT

NEWS ANALYSIS

The great cyber imbalance Many Canadian companies still lack the core safeguards necessary to defend themselves from cyber risks – so the need for them to purchase cyber coverage is ever more pressing THE GOOD news is that 59% of Canadian businesses have purchased cyber security insurance. The bad news? That leaves 41% that haven’t. And as organizations increasingly adopt cloud-based services and accelerate the amount of sensitive data collected, the need for cyber coverage will only increase.

A recent study into Canadian companies’ cyber threat awareness and preparedness, however, reveals an even more compelling reason why they need cyber insurance and lots of it: basic internal defences against cyber threats are often lacking.

According to a 2016 report from PricewaterhouseCoopers, many Canadian organizations are not investing in necessary measures to better defend their operations against evolving threats. For example,

Though most Canadian companies have adopted security frameworks that identify risks; quickly detect and mitigate threats; and design, monitor, and measure progress, some companies still fall short in protecting their businesses – 36% have yet to implement cloud-based cybersecurity services that filter threats, for example.

In light of several recent high-profile hacks resulting from compromised security credentials, many Canadian organizations are turning to advanced authentication to improve trust among customers and business partners. However, Canadian organizations are falling behind compared to other global companies in terms of various authentication technologies: Only 42% have biometric technology, 48% have smartphone tokens, and 40% do not have

“The traditional cyber insurance markets run out of capacity between $200 and $300 million” Kevin Kalinich, Aon Risk Solutions half of companies in Canada do not have a chief information security officer in place – a figure well below the global average. In addition, 50% of businesses do no conduct threat assessments, and 46% do not actively monitor security intelligence to leverage big data analytics for cybersecurity.

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cryptographic keys in place of standard passwords.

Robert Hartwig, president of the Insurance Information Institute, says that while insurance professionals certainly have a ways to go toward properly insuring lagging companies, there is one encouraging

trend to be found.

“Every industry is increasing their take-up rate by a substantial percentage,” he says. “The numbers are low, but we expect them to increase rapidly. This is one of the bold new frontiers for insurers.”

However, closer analysis reveals that even those companies insured against cyber risk might not be carrying enough coverage.

According to the Ponemon Institute, most of the costs associated with a data breach will total less than $1 million. However, there’s a 5% chance the breach will cost a company $20 million or more – and most firms aren’t insured for that kind of loss.

While cost has a great deal to do with that lack of coverage, another significant reason companies aren’t buying higher limits is that they’re just not available.

According to Kevin Kalinich, leader of

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CANADIAN COMPANIES SHORT ON CYBER SAFEGUARDS

35%

Lack an overall information security strategy

36%

Have not implemented cloud-based cybersecurity

46%

Do not leverage big data analytics for cybersecurity

50%

Do not conduct threat assessments

50%

Have no chief information security officer Source: The Global State of Information Security Survey 2016, Canadian Insights

the global cyber risk practice for Aon Risk Solutions (which sponsored the Ponemon study), it’s exceedingly difficult to find policies with adequate limits.

cover a fraction of the damages that occur during and after a data breach.

“The largest coverage I’m aware of is for a bank that has about $400 million in

“Every industry is increasing their take-up rate by a substantial percentage. This is one of the bold new frontiers for insurers” Robert Hartwig, Insurance Information Institute “We are working with alternative markets because the traditional cyber insurance markets run out of capacity between $200 and $300 million,” he says.

In 2015, AIG CEO Peter Hancock made headlines by suggesting the amount of cyber liability coverage offered by carriers will only

coverage, which is very small when you think about it,” Hancock said. “When you compare it to the amount of capacity that’s available for a complex chemical plant, refinery [or] offshore oil platform, the numbers are much, much higher.”

Hancock and others are hopeful, however,

that as awareness of cyber risk increases, underwriters will start offering higher policy limits. “The willingness of insurers and by others in the industry to provide greater capacity will increase with greater comfort in the maturity of the countermeasures,” Hancock said.

Brian K., commercial department manager with Multi Risk Insurance Brokers, believes that if more high-profile cyber hacks occur, then more companies will begin to take up cyber insurance.

“At this point in time, cyber insurance is still very new in the minds of a lot of business people,” he says. “There are markets out there that will fill in an extension for cyber insurance, and most of the markets out there that don’t have high exposures seem to be pretty satisfied with that. My guess is if you get more incidents like [Ashley Madison] happening, then people might become more concerned about it. But for the time being, it seems to be an extra expense that people are not that interested in unless they have a serious exposure for it.”

www.insurancebusiness.ca

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

AIA

Tata AIA Life Insurance Company

AIA increases its stake to 49%, the maximum limit for foreign direct investment in India

Assured Guaranty Corp.

CIFG Assurance North America

The deal is estimated to be worth $450 million and will be completed in mid-2016

HUB International

BenefitSmart

The transaction allows Hub to expand its services in insurance, compliance, wellness and benefits administration

Marsh & McLennan

Celedinas

President and CEO Ray Celedinas will be transferring to Marsh.

Terms of the deal have not been disclosed.

Marsh & McLennan Agency

Corporate Consulting Services

CCS president and CEO Grant Dougherty will remain, but the business will use the Marsh & McLennan name immediately

Samsung Life Insurance Co.

Samsung Card Co.

The purchase allows Samsung Life to become the largest shareholder of Samsung’s financial units as the conglomerate consolidates

United Community Financial Corp.

James & Sons

United Community Financial Corp. moves into the insurance market with this transaction, with plans for organic growth and a selective acquisition strategy

Zurich American Insurance Company

Rural Community Insurance Services

The move expands Zurich’s portfolio of commercial insurance products in North America

Firms partner to offer enterprise cyber cover

Global reinsurer Munich Re has partnered with Beazley, a pioneer in data breach response insurance and the largest insurer of cyber liability risks in the Lloyd’s market, to offer broad protection for the digital assets and IT infrastructure of the world’s largest companies.

Coverage will be tailored to individual company needs and is likely to include hacking, denial of service attacks, cyber extortion and property damage/bodily injury exposures as the result of a cyber incident.

Groundbreaking agricultural insurance comes to Alberta

Sun Life takes control of Indonesian venture

Canada-based insurer Sun Life Financial has reached an agreement to take complete control of its joint venture in Indonesia. Sun Life will acquire the 51% of CSL that it does not already own from long-time partner CIMB. It plans to integrate the business with Sun Life Indonesia, which it already owns outright.

“This is an exciting opportunity to deepen and enhance our business in Indonesia, a priority market for our long-term growth in Asia,” said Kevin Strain, president of Sun Life Financial Asia.

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An innovative malt barley insurance product is breaking new ground in Alberta.

The product, the first of its kind in Canada, is a response to requests from Albertan farmers, according to Minister of Agriculture and Forestry Oneil Carlier. “We are proud to be the first province in Canada to provide insurance coverage for a malting end-use to growers with malt barley contracts, as well as provide additional improvements to support bee and crop producers,” Carlier said.

www.insurancebusiness.ca

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PEOPLE Allstate provides Alberta’s first usagebased auto insurance

Allstate has launched a new usagebased insurance policy in Alberta, giving brokers access to a new program that could offer clients savings on their premiums. Telematic technology is at the heart of the policy, and will collect data on how a vehicle is being driven, offering the incentive of insurance discounts to drivers who adopt the technology.

After a six-month period, Allstate will recover the telematic technology and apply the discounts.

Chubb expands environmental coverage

Chubb has broadened the availability of its premises liability and other environmental insurance products. The company’s network offers coverage to all sizes of business in areas including premises pollution liability, contractors pollution liability and tank coverage. “As other insurers exit core lines of pollution liability coverage, Chubb remains committed to being a full-service provider of environmental insurance for businesses of all sizes,” said Craig Richardson, executive vice president of Chubb Environmental.

Markel launches cyber risk insurance

Specialist insurer Markel has designed a new product to address cyber and data security threats, including cyber liability and first-party coverages for data protection, cyber risk and network interruption. The product also includes integrated claims response and a cyber risk helpline. “We know that cyber is a growth area, and we want to continue to provide a solution to brokers and their clients and remove the barriers that prevent them from buying this type of insurance,” said Darlene Chin, AVP of life science and information technology for Markel.

NAME

LEAVING

JOINING

NEW POSITION

Trista Anger-Miklusek

N/A

CSN Collision Centres

National insurance director

Lisa Butler

N/A

Manulife

Chief talent and diversity officer

Emmanuel Clarke

N/A

PartnerRe

CEO

Hazel Corcoran

Co-operatives and Mutuals Canada

Co-operators Group

Board member

Linda Regner Dykeman

Travelers Canada

Allianz Global Corporate & Specialty

Head of midcrop

Cindy Forbes

N/A

Manulife Financial Corporation

Chief analytics officer

Nick Greggains

N/A

XL Catlin Canada

CEO

Iris Handke

N/A

AXA ART

Country manager, Canada

Monica Hanna

Chubb Insurance

Centre for Study of Insurance Operations

Forms analyst

Marc Menard

Swiss Insurance Partners (Hong Kong)

Henley & Partners

Managing partner

Bob Petryk

N/A

Co-operators Group

Board member

Chris Short

Coface North America

Atradius Credit Insurance

Country manager, Canada

Diana Stockwell

State Street Global Advisors

Manulife Financial Corporation

Head, Latin American sales and relationship management

Joachim Wenning

N/A

Munich Re

CEO

Zurich appoints new SVP of distribution and regional management

Zurich Canada has appointed Patrick Healey as senior vice president of distribution and regional management. Based in Toronto, Healey will lead Zurich Canada’s distribution and regional management staff in maintaining an active market presence for brokers, customers and the community. Prior to this appointment, Healey served as vice president and national segment head for Zurich North America’s Commercial Markets business unit, based in Schaumburg, Illinois.

Guy Carpenter makes a senior hire

Global risk and reinsurance specialist Guy Carpenter has promoted Peter Stubbings as CEO of its Bermuda operations. Stubbings, who was previously chairman of the Bermuda office, will be joined by Richard Keegan as senior VP in May. Stubbings will be responsible for both the retrocession and international reinsurance treaty practices, as well as overseeing new business development and the wholesaling of the firm’s US business into the Bermuda market.

www.insurancebusiness.ca

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UPFRONT

MGA UPDATE

E&O enhancements reduce cost of claims One MGA has launched a new product that covers additional defence costs for insureds

in Canada and the US. “These coverage enhancements will help to reduce the cost of a claim for our insureds, both in terms of deductibles and potential lost earnings,” says Stefanie McKay, senior vice president of errors & omissions for ENCON. “The financial stress that may be caused by a request to attend discoveries, mediation or trial as part of the defence of a claim will be eased by the loss-of-earnings coverage that is now in place.”

“This means that defence costs ... will not erode a policy’s available limit to settle claims and pay judgments”

Managing general agent ENCON Group has announced that they are rolling out an enhanced errors & omissions [E&O] policy for many professionals, including legal, financial and insurance professionals; environmental consultants; healthcare professionals and facilities; and professional

NEWS BRIEFS

services companies and consultants.

For qualifying classes of business, the coverage enhancements include first dollar defence coverage, split damages deductible, loss of earnings coverage under certain circumstances, and coverage for claims made anywhere in the world, with duty to defend

MGAs deepen ties with cross-Atlantic counterparts

Representatives of the American Association of Managing General Agents [AAMGA] and Lloyd’s of London met recently to discuss the challenges and opportunities both organizations face.

In a video interview with AM Best, Bernd Heinze, executive director of AAMGA, detailed a meeting with Lloyd’s executives Inga Beale and John Nelson. One standout issue is the cost of wire transfers across the Atlantic. Other opportunities tackled were auditing, more multi-year contracts and manuscript policies.

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Two key additional enhancements will also apply to qualifying small firms that are claims-free with revenues of less than $2 million. These enhancements include defence costs (including investigation, legal and expert expenses) in excess of the policy limits and a zero-dollar deductible.

“The additional enhancements for small firms are significant because they help to preserve the limits available to resolve claims made against our insureds,” McKay says.

“This means that defence costs, which have been on the rise in recent years, will not erode a policy’s available limit to settle claims and pay judgments.”

Broker gets cover for client to park plane in house

APRIL Canada was recently approached to insure an Albertan home where the client wanted to use his garage to park his personal airplane. The MGA rose to the occasion to accommodate this unusual request for a trusted broker partner who understood some of the potential complexities in placing this risk.

Based on the details of the investigation, and the risk management precautions that the insured had taken to protect his property, APRIL and the broker were able to offer cover.

www.insurancebusiness.ca

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Q&A

Julio Navarro

MGA growth: You have to find your own niche

Underwriting director CAMBRIAN SPECIAL RISKS INSURANCE SERVICES

Years in the industry More than 40 Fast fact Navarro has extensive sporting experience, having being involved in hockey for more than 30 years, along with rugby, football, lacrosse and soccer

What are the main challenges for growing MGAs? MGAs are like brokers. They’re independent businesses that try to get their own niche within the industry. The challenge for us is to be able to deliver our products in a timely manner, and as we become more successful, we need to maintain our level of service to the broker community.

Being a niche player, we need to be dealing with a large number of brokers across the country, and one of the biggest challenges is to make sure our name stays in front of the brokers and that they know our products. We use email blasts, advertising, we attend trade shows, join provincial associations – and all of those things have a cost attached to them.

What product lines do you see evolving this year?

We look for innovation. For instance, in aviation, drones have become a factor. That’s an area where we’ve gone and have tried to find a solution for brokers. We find sports has become more of a frontline product for liability, especially with concussions.

You find now that organizations are beginning to look at their insurance needs more carefully because it’s becoming very litigious out there, so they want to make sure they are protected.

Why are MGAs important for brokers?

Knowing the pitfalls and knowing what to look for, it’s

MGA launches new package for recycling risks

Premier Canada is now offering a flexible insurance package to meet the needs of all types of recycling operations. The suite covers a wide range of recycling operations, including glass, electronics, metal, wood, plastic, paper, textiles, auto parts and construction materials. The program features commercial general liability, tenants’ legal liability and crime insurance, as well as cover for property, business interruption and equipment breakdown. Separate environmental impairment liability is also available.

something you need to stay on top of. You have to know your niche, know your products. What’s become more prominent for us is becoming like a consultant for the brokers – the broker who deals with the client, for instance on home or auto or commercial risk, they have a lot of expertise because they do that on a day-to-day basis. What an MGA brings to the table is a niche in a particular type of risk where they may take a request maybe once or twice a year. So [the broker] may have an overall understanding of what they’re looking for, but they rely on our expertise to make sure that we’re helping them cover all the gaps.

What makes Cambrian stand out in the MGA market?

We’ve worked very, very hard to get our MGA up and running over the last 10 years, and we’ve done it in domestic markets – for instance, we don’t use any Lloyd’s paper, and that was a big challenge for us.

We’re licensed in every market except Quebec, and we’ve licensed ourselves with the same regulations that the brokers have. We think, personally, that brokers think in terms of MGAs, there should be some regulations that the companies and markets you’re using are properly licensed to do business in Canada, that they’re adhering to a code of conduct.

I think right now MGAs as a whole are still pretty unregulated. By being regulated, that gives another comfort level to the broker. That’s an issue I think that, as a whole, we have to work towards.

New environmental impairment liability policy launched

As pressure continues to mount for businesses to be aware of their environmental exposures, APRIL Canada has introduced a new environmental impairment liability policy that allows brokers to offer comprehensive coverage for any environmental damage that may arise from a client’s business activities. The policy can include contractors’ pollution liability or site pollution liability so clients can carry out operations with security that any environmentally damaging accidents will not lead to financial ruin.

Lloyd’s Canada holds MGA roadshow

Lloyd’s of London Canada held a free RIBO-accredited lunchtime seminar on April 20 in Kitchener, Ontario.

Several underwriting experts attended and presented about various insurance fields and emerging risks, including Creechurch Underwriters on cyber risk, Eagle Underwriting on transportation and trade, MedThree Insurance on medical malpractice, Special Risks Insurance on sports, Evolution Insurance on complex liability, and ABEX on misunderstood property risks.

www.insurancebusiness.ca

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5/05/2016 10:50:59 PM

UPFRONT

OPINION

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

Insuring the Internet of Things The Internet of Things might just be the next Frankenstein’s monster, writes Suki Basi, and it’s time for insurers to recognize its growing risks

THE UBIQUITY of wireless connections between objects appears to be a digital utopia in the here-and-now. Thermostats can think, manipulate and manage a multiplicity of domestic devices, streaming real-time operational data to their makers.

‘Intelligent,’ interlinked machines and heavy industrial tools can render work more efficient and ‘learn’ as they operate.

Vehicles automatically download the latest software iterations from their manufacturers to boost performance and pre-empt mechanical problems before they even occur – all the while registering precisely where they are.

Sounds wonderful, doesn’t it?

And yet, in this brave new world, planes can now be hacked, as can oil tankers and offshore rigs. Financial institutions or entertainment companies can see their data compromised and shared beyond their customer base. Every smart, connected device may be a point of network access, a target for hackers or a launch pad for cyber attacks.

The paradox is that in such a world, our machines, our constructions and our products are autonomous yet connected at the same time. It is a strange concept to grasp, yet grasp it we must if we wish to maximize the opportunity and minimize the inevitable risks.

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Woefully, modelling industry-agnostic cyber risks is at a nascent stage of development. Not one of the leading commercial risk model players currently offers a model to diagnose – let alone prognosticate – cyber risks.

Recent cyber hacks that have inflicted significant operational and reputational damage on targets such as Target and Sony

All companies, large and small, need to carefully asses their security and how it affects multiple functions, with IT continuing to play a key role in implementing best practices for data and network security. That is all very well, but it still does not address a key concern for insurers and reinsurers, which is the supply chain risk and the wider aggregate exposure.

An organization or individual can protect their own interests to a certain extent, but their ability to conduct a security audit on all their suppliers and partners is a different matter entirely.

In a cyber environment in which PwC estimates that annual gross written premiums are set to increase from around $2.5 billion today to $7.5 billion by the end of the decade, we are going to need a workable model soon. Enterprise-connected risk solutions can help address the absence of a workable standardized cyber risk model.

We have become used to the idea of an earthquake or windstorm causing large financial losses and human misery, so it takes time to adjust to the idea that a human typing on a laptop or the loss of an unencrypted memory stick might cause the same level of threat.

“Not one of the leading commercial risk model players currently offers a model to diagnose – let alone prognosticate – cyber risks” are concentrating insurance minds on the security risks in this connected world.

All functions and – from an underwriting point of view – potentially all specialty insurance classes need to be reassessed for vulnerabilities heralded by the Internet of Things.

Typically, specialty classes operate within a ‘risk silo,’ while cyber and other enterprise risks are cross-silo or cross-class.

We think that, in the future, cyber risk sets will be available that will adequately reflect the nature of historical events and could be licensed independent of any software model needed to run them.

The reality, however, is that cyber connectivity is an existential threat to insurers’ balance sheets and those of their clients. It is surely time to address the issue collectively – with insurers, government and risk managers all working together – before it is too late.

Suki Basi is the managing and founder director of Russell Group, a UK-based risk management software company. He’s had project experience in a number of insurance and reinsurance lines, including aviation, space and offshore energy.

www.insurancebusiness.ca

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5/05/2016 4:53:30 AM

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5/05/2016 4:53:35 AM

PEOPLE

INDUSTRY ICON

COMMUNITY FIRST David Lockton explains how not just focusing on the bottom line propelled Lockton Companies to the top of the insurance world

IN AUGUST, David Lockton will celebrate 40 years in the insurance industry.

Since 2003, he has been the chairman of Lockton Companies, where he previously served as president and CEO. With Lockton at the helm, the firm has established an astonishing track record of four decades of continuous organic growth; in the 2015 fiscal year, its total revenue exceeded US$1.24 billion. Today, Lockton Companies is the largest privately held independent broker in the world.

Needless to say, Lockton and his team have scaled remarkable heights as a business.

But for Lockton, the company’s crowning achievement is its culture. “When we were 50 people, we knew we had a different kind of experience for our customers,” he says.

“The difference was that when customers walked in the door, they sensed they were the center of the universe, and we felt they were the center of the universe.

“We didn’t think we’d be able to be big and maintain that same kind of culture,” he continues. “Today, we have 6,000 people, and we have the same culture. In fact, I think it’s stronger today than it was when we had 50 people.”

The cornerstone of that culture, according to Lockton, is that unlike competitors who focus only on profits, Lockton Companies puts the onus on customer satisfaction.

“A good portion of our people join us

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from our competitors, where they’ve been in an environment that is very focused on short-term profits,” Lockton says. “When they come to Lockton, they find out that they get rewarded for practicing the profession they’ve learned, and that they’re judged based on merit – and for us, merit is how you go about creating value for our customers.

“I think that just feels right to our people.

I think the way that we care for our fellow associates feels right to our people. People get a certain energy out of it, and it’s contagious. And that is amazing to me.”

Back to the start Lockton grew up in Kansas City. After graduating from high school, he set his sights on a career as a trial attorney. His brother, Jack, the firm’s founder, tried to persuade Lockton to consider the insurance path, but Lockton wasn’t interested.

Things soon changed, though. “One day I came home, and [Jack] had bought the first new car in our family,” Lockton remembers.

“It was a convertible Mustang. I think that’s when he got my attention. I changed my major from English to business finance,

“When people come to Lockton, they find out that they get rewarded for practicing the profession they’ve learned, and that they’re judged based on merit – and for us, merit is how you go about creating value for our customers” Maintaining that culture is a responsibility that Lockton takes to heart.

“As chairman, all I have to do is come in and foster that caring culture, and concern myself with how working at Lockton can be a fun, exciting and rewarding venture. And then I just get out of people’s way and let them do what they’re good at.”

anticipating joining him.”

But before he would allow his brother to come on board, Jack wanted Lockton to get some real-world experience elsewhere.

So Lockton began working at a bank, but quickly became restless, and his resolve to pursue an insurance career intensified.

“My wife and I invited my brother and

www.insurancebusiness.ca

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5/05/2016 4:54:03 AM

PROFILE Name: David Lockton Company: Lockton Companies Title: Chairman Years in the industry: 40 Fast fact: Lockton Companies contributes more than US$3 million annually to various nonprofit organizations across the US

www.insurancebusiness.ca

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PEOPLE

INDUSTRY ICON

his wife over for dinner on the patio one night, and I made my pitch that I was going to get into this insurance brokerage business,” Lockton says. “I wanted to do it with him, but I was going to do it whether he hired me or not.

“We had a pretty long evening … but by the end of the night, he had agreed that I could come to work for him.”

Serving communities While the firm continues to sustain impressive levels of growth, Lockton

“We set up a not-for-profit within our company called Associates Caring for Each Other [ACE],” Lockton says. “It’s always been amazing to me how associates band together to help people who are in trouble, whether they have a jobless spouse or a serious illness. I felt like it was a great thing we were doing, and we didn’t want to have people fall through the cracks, so we formalized it. I think we do a really good job of making sure that [when] our associates … have those kinds of critical needs … the opportunity is extended to

“It’s always been amazing to me how associates band together to help people who are in trouble, whether they have a jobless spouse or a serious illness. I felt like it was a great thing we were doing, and we didn’t want to have people fall through the cracks, so we formalized it” Companies also places significant emphasis on giving back. “We make it our business to make our communities better – our community outside of our company and our community inside of our company,” Lockton says.

Last year, staff in the UK branches participated in Lockton Gets in Gear.

Cyclists from all 11 UK Lockton offices took part in a mission to cycle between all of those offices, including those in Scotland and Ireland. The ride raised nearly US$100,000, which went toward construction of the Lockton Suite at London’s Great Ormond Street Hospital, a facility where parents of sick children can stay at the hospital.

Another endeavour targeted at Lockton’s internal community aims to provide support for employees in times of significant need.

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associates to help them. And they come through every time.”

Looking to the future, what does Lockton’s chairman hope to accomplish?

“We’re very successful for a number of reasons, but two very important ones are that we’re privately owned – and so we’re able to stay focused on the customer and not get overly concerned about next quarter’s profits – and the other is that we’ve been able to attract a really great leadership team. Before I leave this place, I want to make sure that we have a model that will allow family ownership to be sustained through the future generations. I want to have the governance structure around that, and I want to make sure that we have all the right leaders in the right leadership positions to carry forward our success.”

LOCKTON COMPANIES

BY THE NUMBERS

1966

The year Lockton Companies was founded

by Jack Lockton, David’s brother

$1.24 billion

Total revenue (in US$) Lockton Companies achieved in 2015

6,000+

The number of associates employed

by Lockton Companies

125

The number of countries with clients served by Lockton Companies

68

The number of offices Lockton Companies currently occupies across the globe

www.insurancebusiness.ca

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5/05/2016 4:54:15 AM

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5/05/2016 4:54:20 AM

FEATURES

COVER STORY: FIVE-STAR CARRIERS

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Which carriers do brokers rank as the best of the best?

Insurance Business Canada found out WHICH CARRIERS offer an experience to brokers that should serve as a benchmark for their competitors?

Which carriers are best in class for claims processing?

And which carriers have impressed brokers through the range of products they offer?

The time to unveil the answer to those questions has arrived, as we share the results of Insurance Business Canada’s Five-Star Carriers survey. We asked brokers to rate 10 different aspects of carrier performance (detailed at right) on a scale from 1 (poor) to 5 (excellent).

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WHAT ASPECT OF CARRIER PERFORMANCE MATTERS MOST TO PRODUCERS? Competitive rates

4.59 Claims processing

4.58 Reputation and financial stability

4.57 Commitment to the broker distribution channel

4.41 Range of products

4.40 Quick quotes

4.31 Underwriting expertise

4.30 Technology and automation

4.29 Marketing support

3.96 Education and training

3.72

HOW WELL DID CARRIERS PERFORM ON AVERAGE? Commitment to the broker distribution channel

4.09 Reputation and financial stability

3.74 Claims processing

3.70 Competitive rates

3.70 Underwriting expertise

3.69 Range of products

3.65 Quick quotes

3.51 Technology and automation

3.31 Education and training

3.27 Marketing support

3.26

CATEGORIES RATED BY BROKERS We combed through hundreds of responses to find out not only how brokers feel their carriers are performing overall, but also which carriers are regarded as a cut above the rest. These five-star carriers received consistently excellent marks from brokers in at least one category, and many even featured in multiple categories. Only those with the highest marks were named five-star carriers.

So, how have carriers fared in brokers’ eyes in 2016?

Pretty well, as it turns out; the average carrier rating for most categories was at least 3.5 out of 5. Here’s how the numbers shook out.

• Technology and automation • Range of products • Reputation and financial security • Competitive rates • Quick quotes • Education and training • Underwriting expertise • Marketing support • Claims processing • Commitment to the broker distribution channel

www.insurancebusiness.ca

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FEATURES

COVER STORY: FIVE-STAR CARRIERS TECHNOLOGY AND AUTOMATION

RANGE OF PRODUCTS

FIVE-STAR CARRIERS AIG Chubb Markel Insurance Intact Insurance Northbridge Insurance SGI

FIVE-STAR CARRIERS Allianz Arch Insurance Canada Aviva Markel Insurance Intact Insurance RSA Sovereign General Insurance The Guarantee Company of North America Trisura Guarantee Insurance

While technology and automation wasn’t rated as the most important aspect of a broker’s relationship with carriers, its overall score indicates it’s something that brokers still feel is important. Six carriers were awarded five-star status, and the average carrier rating in the category was 3.31 out of 5.

Well-designed online technology makes life easier for the broker. But in a digital world, expectations of online systems are not set by competitors, but by best-inclass service providers such as Google and Apple, something those who design carrier systems should keep in mind.

One broker who awarded his carrier a high score commended its technology on being “amazing, user-friendly and easy to work with,” while another described his carrier’s technology as “very innovative.”

“They are trying to make it easier for the brokers to use technology to help write their policies,” wrote another highly effusive broker.

Those who scored carriers on the lower end of the spectrum cited reasons such as “[the] portal could be more user-friendly and interactive” and “[the] portal always seems to have issues.” And another broker marked a carrier because they had no broker portal.

One broker simply described his carrier’s technology as an “antiquated system.”

While some carriers clearly need to look at how best to provide an experience more in line with broker expectations, others appear to be in the process of implementing changes for the better. One broker who participated in the survey acknowledged that he was “starting to see changes” from his carrier.

Importance to brokers Average carrier rating

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4.29

3.31

BROKER FEEDBACK

“They are trying to make it easier for the brokers to use technology to help write their policies”

It’s hardly surprising that the range of products offered was one of brokers’ top five most important aspects in a carrier – it’s essential for brokers to be able to provide their clients with choice. In this category, carriers averaged a reasonable 3.65 out of 5, and an impressive nine carriers achieved five-star status.

One broker gave commended his carrier on their ability to “write anything,” while another commented of his carrier, “They offer most of the products that I need to keep my business running.” On the other side of the coin, one broker said his carrier needs “to get up with most other companies on products.”

BROKER FEEDBACK

“They offer most of the products that I need to keep my business running” Jo-Anne Yanuziello, vice president of strategic resource services at five-star carrier Sovereign General Insurance commented on the company’s priority on offering a broad range of products: “We recognize the importance of providing risk solutions that enable businesses to adapt and thrive through change. Leveraging a set of diverse capabilities across our organization, we focus on delivering innovative solutions for our brokers and clients.”

Importance to brokers Average carrier rating

4.40

3.65

www.insurancebusiness.ca

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5/05/2016 4:55:41 AM

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REPUTATION AND FINANCIAL STABILITY

COMPETITIVE RATES

FIVE-STAR CARRIERS Allianz Aviva Berkshire Hathaway Specialty Insurance Chubb CNA Economical Insurance Intact Insurance Northbridge Insurance Pembridge Insurance RSA The Guarantee Company of North America Trisura Guarantee Insurance Zurich

FIVE-STAR CARRIERS AIG Allianz Economical Insurance Northbridge Insurance Portage Mutual Insurance The Guarantee Company of North America The Commonwell Mutual Insurance Group Trisura Guarantee Insurance Wynward Insurance Group

Reputation and financial stability was rated the third most important category among brokers, averaging 4.57 out of a possible 5. It was also the second best-performing area for carriers; on average, carriers received a score of 3.74 out of 5, and 13 carriers received five-star honours.

Many brokers feel there’s no better way to judge a BROKER FEEDBACK

“I believe their claims service ruins their reputation” carrier’s reputation than by their response when called upon to pay a claim, and interestingly, some of our survey respondents revealed that their lower marks for a particular carrier’s reputation were influenced by claims experiences.

“Reputation is slipping due to claims handling,” was one broker’s comment in scoring a carrier. Another broker, scoring a different carrier, said, “I believe their claims service ruins the reputation.”

Importance to brokers Average carrier rating

4.57

3.74

Brokers were more concerned about competitive rates than any other category, scoring its importance at 4.59 out of a possible 5. It’s a clear indication of just how big of a role rates play in a broker’s choice of carrier. Nine carriers earned a five-star rating in this category, and carriers averaged a score of 3.70 out of 5.

One satisfied broker said his carrier offered “very competitive rates … sometimes beating all other companies.” But for some, it was a case of glass half full (or half empty) when it came to their experience with carriers. One broker’s score for a carrier reflected a view that the competitiveness of the company’s rates was dependent “on the territory.” Another remarked that a carrier was “good for certain classes, [and] poor in others.”

A third broker scored a carrier lower because the carrier was “not competitive on home insurance.”

And then there was some feedback that was less than mixed. One broker commented on a carrier’s rates fluctuating too much, while another respondent gave a carrier low marks because of “very high increases upon renewal.”

Finally, some reported having more positive experiences than they had in the past. Rating one carrier, a broker said, “Rates seem to be getting more competitive.

For a while they were quite a bit higher than average,” while another broker simply commented that his carrier’s rates were “getting better.”

Importance to brokers Average carrier rating

BROKER FEEDBACK

“They have very competitive rates … sometimes beating all other companies”

4.59

3.70

www.insurancebusiness.ca

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FEATURES

COVER STORY: FIVE-STAR CARRIERS QUICK QUOTES

EDUCATION AND TRAINING

FIVE-STAR CARRIERS AIG Allianz BMO Insurance Chubb Edge Mutual Insurance Intact Insurance Northbridge Insurance RBC Insurance SGI The Commonwell Mutual Insurance Group

FIVE-STAR CARRIERS Aviva Chubb Edge Mutual Insurance Intact Insurance The Commonwell Mutual Insurance Group Trisura Guarantee Insurance

While brokers didn’t rate quick quotes as important as rates and claims processing, it still scored a high 4.31 out of 5. Carriers achieved an aggregate score of 3.51 in this category, and 10 carriers earned five-star status.

Some brokers who awarded lower marks accompanied those scores with comments such as “terrible” and “poor at best.” Those reporting better experiences commented on the “great turnaround” of quotes and on estimates that “are close to real premium.”

BROKER FEEDBACK

“I get really fast quotes from my underwriters” Romal Bryce, director of national industry programs at five-star carrier BMO Insurance, said of his company’s placement on the list: “BMO’s positive rating with the brokerage industry should come as no surprise, given the level of support and involvement we provide to the independent brokerage community. BMO has prided itself as being a financing pioneer in this space and was the first to develop a comprehensive financing program for independent brokers nationally. We believe in providing brokers with capital that helps to promote the independent broker model and continue to be an advocate for the industry.”

Importance to brokers Average carrier rating

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4.31

3.51

The education and training resources offered by carriers were the least important consideration for brokers – and also the second weakest category for carriers. Brokers rated the importance of education and training at 3.72 out of 5; carriers’ average score was just 3.27, and only six achieved five-star ratings.

One broker commended a five-star carrier, saying that their training “is scheduled well ahead of product launches and quite thoroughly anticipates concerns.” Another broker rated a carrier highly because “webinars and courses for new products are always available.” Seminar and webinar offerings were cited by several brokers as the reason behind their high marks in this category. Another broker commended his carrier for their “knowledgeable staff … quick at answering any questions I have.”

BROKER FEEDBACK

“Webinars and courses for new products are always available” Those unsatisfied with their carriers’ education and training offerings often commented that there was simply no training available at all. Another broker provided a more thorough explanation of the reason behind his lower score: “Training is sometimes late and not very thorough. They don’t seem to anticipate all issues ahead of time.”

Importance to brokers Average carrier rating

3.72

3.27

www.insurancebusiness.ca

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5/05/2016 4:55:51 AM

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MARKETING SUPPORT

UNDERWRITING EXPERTISE

FIVE-STAR CARRIERS Allianz Chubb Edge Mutual Insurance Markel Insurance Intact Insurance Northbridge Insurance RBC Insurance Trisura Guarantee Insurance

FIVE-STAR CARRIERS AIG Berkshire Hathaway Specialty Insurance Chubb Economical Insurance Edge Mutual Insurance Intact Insurance Peace Hills Insurance RBC Insurance RSA Saskatchewan Mutual Sovereign General Insurance The Guarantee Company of North America Trisura Guarantee Insurance

Brokers clearly feel marketing support is important, scoring it 3.96 out of a possible 5. But when compared to other aspects of carrier performance, marketing support was simply not as crucial; it was second to last in terms of importance. It was also the category for which carriers received the lowest score, averaging just 3.26 out of 5. And yet, eight carriers managed to achieve five-star status in this category.

BROKER FEEDBACK

“All the “We have great support underwriters from them. They come to I have our small rural office at worked with least once a month” have been So what were the frustrations expressed by brokers amazing and who assigned lower scores? One commented that their marketing representative is unable to fix problems and very helpful” BROKER FEEDBACK

merely “takes info back” to the office. Another simply described a carrier’s marketing support as “poor.”

On the upside, a number of brokers had good experiences to report. “We have great support from them,” one broker said. “They come to our small rural office at least once a month.” Another broker scored a carrier highly on the basis of regular e-blast communications, as well as underwriter lunch visits. Yet another described the information being sent to clients as “good and informative.”

Importance to brokers Average carrier rating

3.96

3.26

It’s clear brokers value underwriting expertise, rating it at 4.30 out of 5. So it’s good to see that 13 carriers were awarded five-star status in this category.

Some of the comments for higher-performing carriers revolved around the helpfulness of a carrier’s underwriting staff. “The different departments are quite well versed,” one broker commented. “The underwriters are good at their jobs and current with new products,” said another.

Another broker praised the fact that he was always able to get hold of an underwriter every time he called, and another commented, “All the underwriters I have worked with have been amazing and very helpful.”

At the other end of the spectrum, one broker chided his carrier’s underwriters for poor response times, saying, “[I] often do not have answers for several days.” Another was critical of underwriters’ “limited creativity.”

Jo-Anne Yanuziello of five-star carrier Sovereign General commented on her company’s performance in this category: “Our empowered underwriting talent with a diverse set of capabilities provides extensive expertise in the area of commercial property, casualty and automobile insurance, as well as professional liability, technology and cyber, equipment breakdown, and surety.”

Importance to brokers Average carrier rating

4.30

3.69

www.insurancebusiness.ca

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FEATURES

COVER STORY: FIVE-STAR CARRIERS BROKER FEEDBACK

“Some claims staff are excellent, while others seem to be not well trained or customer service oriented at all”

CLAIMS PROCESSING

COMMITMENT TO THE BROKER DISTRIBUTION CHANNEL

FIVE-STAR CARRIERS AIG Allianz Arch Insurance Canada Gore Mutual Insurance Halwell Mutual Insurance Intact Insurance The Commonwell Mutual Insurance Group The Guarantee Company of North America

FIVE-STAR CARRIERS AIG Allianz BMO Chubb CNA Edge Mutual Insurance Gore Mutual Insurance Halwell Mutual Insurance Markel Insurance Pembridge Insurance The Commonwell Mutual Insurance Group Trisura Guarantee Insurance Unica Insurance Wynward Insurance Group

Claims processing was almost as important to brokers as competitive rates; they rated the category secondhighest in terms of importance, with an average score of 4.58 out of 5. It was also one of the highest-scoring categories for carriers – they garnered an average rating of 3.70 out of 5. In addition, eight carriers were awarded five-star status.

One broker described claims service from a carrier as “wonderful,” adding, “[I] love that we can report and follow the claim online.” Others indicated that their high scores were driven by customers, with comments such as “Clients [are] very happy” and “No negative feedback from customers.” Another broker praised a particular carrier for moving claims along smoothly, while another applauded his carrier for the responsiveness of its claims staff.

Some respondents reported mixed experiences, however. “Some claims staff are excellent, while others seem to be not well trained or customer service oriented at all,” one broker said. Another described his carrier’s claims response as being “good at [the] first call, then not so good.”

Perhaps one respondent put it best with a general comment about claims service: “I do believe that the claims process needs to be flawless. Communicating and educating the client are key!”

Importance to brokers Average carrier rating

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4.58

3.70

In a survey of brokers, it’s buoying to see commitment to the broker channel receive the highest average score – 4.09 out of 5. Not only that, but this category also saw the highest number of five-star carriers, an impressive 14.

“They are always trying to help us make things easier and better,” one broker said of a higher-ranked carrier, BROKER FEEDBACK

“They are always trying to help us make things easier and better” while others described particular carriers as “very supportive” of the broker role.

Paul Jackson of five-star carrier Gore Mutual Insurance was pleased to see his company’s name on the list. “We have always been – and continue to be – firmly committed to the broker channel,” he says. “Everything we do, including all our recent product and technology innovations, is undertaken with the goal of our mutual success as we look towards a bright future.”

Importance to brokers Average carrier rating

4.41

4.09

www.insurancebusiness.ca

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5/05/2016 4:56:02 AM

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We offer comprehensive care so your client can

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5/05/2016 4:56:09 AM

SPECIAL PROMOTIONAL FEATURE

COMPANY PROFILE

A catalyst for change Markel Canada president Karen Barkley chats with Insurance Business Canada about her company’s transition from MGA to carrier BEING BOUGHT out by an international giant often leads to uncertainty in business.

After carefully building a solid reputation and experiencing strong success, an acquisition can feel like anything but a reward. But that scenario couldn’t be further from the truth for Markel Canada, which was known as Elliot Special Risks [ESR] until 2009, when it was purchased by Markel International, a London-based specialty property & casualty insurer and reinsurer.

As well as adapting to a new parent company, Markel Canada has also undergone a change in its business operations. When Karen Barkley took over as the company’s president in 2013, she saw the need for a change in approach. Barkley reorganized the company and helped to change how its leaders viewed the business. Most significant, however, has been Barkley’s role in transitioning Markel Canada from MGA to carrier.

“For brokers, our transition from MGA to carrier has been very positive,” she says.

“We’re now able to give better broker commissions, and we’re better aligned now that all

the separate placement slips are gone. We’re writing business under the umbrella of Markel. We design our products, do package policies, offer a claims service, and brokers get more rounded responses from us.”

Rod Spurrell, vice president of underwriting and business development at Markel Canada, adds that being attached to the London market has opened up a whole host of opportunities for the company. “It’s the birthplace of insurance, and the people in London understand the industry and are in it for the long haul,” he says. “As ESR, we had Markel on some of our programs and had a relationship with them for a long time. It was the best option for us because they understood the ups and downs of the market, our business model and the lines we wrote.”

The transition to carrier has enabled Markel Canada to continue writing lines of business in specific niches, with the ability to build a cache of products around a client’s specialty. “We’re able to be more creative in our alliances with strategic brokers,” Barkley says.

“For brokers, our transition from MGA to carrier has been very positive. We’re now able to give better broker commissions, and we’re better aligned now that all the separate placement slips are gone” Karen Barkley, Markel Canada 30

In order to better align the company with brokers, Barkley also has spearheaded a shift in organizational structure, which has helped the organization build strategic relationships with brokers across the country. Barkley has noticed that many brokers are looking to minimize the number of markets they deal with.

“A number of brokers wish to align with us because we have access to our London market, we have an online portal, and we pride ourselves on service and issuance timelines,” she says. “There’s also uniqueness in our offerings, and we’re able to put out package policies and take a run at the larger accounts. Brokers are trying to get down from 80 to 20 markets; we’re making every effort to be one of those 20 markets.”

Although the organization has evolved since the ESR days, Barkley was keen for Markel to hold onto some of the values and operating practices that helped build ESR’s reputation. There have, however, been some fundamental changes in approach. ESR had a reputation for hiring older, experienced staff and for being the first to market with innov-

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MARKEL CANADA: CORPORATE TIMELINE

2015

Launches new corporate name, Markel Canada

2014

Transition from MGA to carrier begins

2014

Organization is restructured to improve the alignment and management of business sectors

2013

Karen Barkley joins as president

2009 “Moving to Markel was the best option for us because they understood the ups and downs of the market, our business model and the lines we wrote” Rod Spurrell, Markel Canada ative products. The staff now has a lower average age and is more blended, with a mix of young up-and-comers and experienced mentors. “The average age used to be 53 – at 42, I was one of the young ones,” Spurrell says.

“You need energy for growth, and you need young staff to achieve that.”

Markel Canada continues to bring innovative products to market, though, as evidenced by the launch of their life sciences and cyber products. The increased legal, regulatory and actuarial analysis required to launch products has slowed the path to market for all in the industry, but innovation remains a key part of Markel Canada’s ethos – and Barkley

notes that the company’s compliance barriers appear to be less prohibitive than at other carriers. “We’ve hired people who were frustrated at how tough it was to get things done at other insurance companies due to compliance,” she says. “There’s a respectable amount of freedom here.”

Being a part of an international insurance company allows Markel Canada to connect with resources and experts from across the globe. All international divisions share their research and development with each other.

“That means we might be able to pick up a product that’s already 75% complete and then just Canadianize it,” Barkley says. “We can

Vancouver office opens

1966

Elliott Special Risks [ESR] begins operations, specializing in unusual commercial covers and providing insurance solutions to the brokering community

draw on resources from Singapore, the US and Europe.”

Under Barkley, Markel Canada also acts as an open market correspondent to brokers for any products offered in the UK. “We can leave the expertise in the UK and still make sure the products are available to the Canadian market,” she says.

The company’s big transition may be behind her, but Barkley continues her mission to make Markel Canada the optimal value proposition for Canadian brokers. “Brokers know we’re not a ‘here today, gone tomorrow’ type of syndicate,” she says. “We’re looking to build relationships in the long term.”

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SPECIAL PROMOTIONAL FEATURE

SURETY

Are you ‘sure’?

Sovereign General’s David Hodgson outlines the importance of embracing change in today’s surety industry SURETY IS the insurance line that isn’t really insurance at all. The concept has been around since biblical times – to quote Proverbs 11, verse 15: “He that is surety for a stranger shall smart for it.” In modern times, surety has evolved and is handled by insurance companies with dedicated departments committed to this specific line of business. Today’s sureties fundamentally guarantee the performance of construction companies.

Surety companies are experts at financial analysis and contract review, and have a high comprehension of the idiosyncrasies of the various types of construction companies. In order to understand and meet the requirements of any project that needs to be bonded, Sovereign General works in concert with various stakeholders, including brokers, contractors and business owners. We aim to be flexible and innovative in formulating solutions for any issues confronting our stakeholders.

Every construction company and every project that is guaranteed surety is different.

In order to keep abreast of the construction industry, which is on the cusp of significant changes in innovation and methodology, the

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surety industry needs to evolve to meet the requirements of their stakeholders. Gone are the days of antiquated fax machines – now everyone needs to be connected with mobile devices to communicate and coordinate tasks. The surety department at Sovereign General has moved to a sustainable, paperless environment in which our employees can be in any part of the country and still access the information they need to make informed and meaningful decisions in real time.

Employees do not have to be in the office to be productive and remain informed about requests from stakeholders.

Owners are also responding to technological advances and moving toward electronic tenders and bonding. It’s only matter of time before this will be considered the standard way of tendering and bonding a project. Tender/contract documents no longer need to be printed; everything can be sent electronically. This is a far more sustainable, efficient way of handling the tender process. The documents can be reviewed online to identify onerous clauses and negotiate or implement amendments to mitigate any potential exposure.

Electronic bonding is being increas-

ingly embraced by owners. At Sovereign General, we have recognized this trend and have trained personnel in our offices to offer advice to our brokers on the most expedient way to set up an electronic bonding system.

There are two main systems currently being used, each with its respective virtues, and our personnel are conversant in both systems. We were proactive in assisting our brokers in setting up their systems when the City of Calgary implemented an electronic bonding program last summer.

Will other systems be used in the future?

We can’t say for sure, but the key is to be prepared and to become familiar with such changes. Eventually, there will be standardization, so everyone needs to be prepared for the next innovation that changes the marketplace.

David Hodgson is assistant vice president of surety at Sovereign General. The company’s in-house specialty operations practices include professional liability, technology & cyber, and equipment breakdown.

Sovereign General also offers a dedicated energy practice in Calgary and, through external partnerships, marine, environmental, sports, leisure and entertainment, and warranty.

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IBC 4

MASTER CLASS Get the latest updates and expert advice on the industry’s most challenging subject - Flood Risk & Insurance

The Insurance Business Magazine brings together top experts in the field of flood risk and overland water insurance this June in Toronto.

This timely one-day conference explores how government agencies, the scientific community, brokers, insurers and other key stakeholders are working together to manage all aspects of flood risk.

The conference will host over 100 business leaders to discuss current and future state of the Canadian flood landscape. Insurance brokers will benefit from this event by understanding the differences between various insurance products currently available on the market, by learning flood terminology and by understanding various flood models.

Insurance companies will gain insights into Canadian climate change and flood outlook, flood mitigation strategies undertaken by municipal and federal government, and finally practical considerations for launching new insurance products in Canada.

REGISTER NOW! June 16 th, 2016 St. Andrew's Conference Centre Toronto, Ontario

• Engage in 7 hours of cutting-edge content • Network with likeminded insurance professionals • Learn how to better explain and sell flood insurance to your clients • Understand different types and causes of flood • Get the latest updates on flood mitigation strategies

Visit ibmasterclass.ca for more information

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5/05/2016 4:57:15 AMPM 29/04/2016 11:13:11

PEOPLE

BROKER INSIGHT

Navigating a changing industry Rogers Insurance’s Bruce Rabik discusses the importance of corporate culture, adaptability and surviving a rapidly changing broker space

IBC: Tell us about Rogers Insurance.

Bruce Rabik: I was the 54th employee. We’re now over 400 employees. We’ve got a lot on the go. Very important to us for the future is the Canadian Broker Network, or CBN. That’s [made up of] several of us large independent brokers across Canada.

Together, we’ve made joint investments that are pretty significant. For example, we own South Western Group, which is about the fifth largest wholesaler in Canada. And together we built BullfrogInsurance.ca, which is Canada’s first online commercial insurance brokerage.

We’re having great success on both of those.

CBN is, I believe, Canada’s fourth-largest insurance intermediary. We write over $900 million of premium.

IBC: In terms of corporate culture, what sets Rogers apart?

BR: We’ve tried very hard to build a culture that’s based on respect. Now, everybody says that, but what does that actually mean? Take, as an example, big companies and bureaucracies. Some of our big competitors are very bureaucratic – they put a lot of emphasis on titles and so on. One of our cultural artifacts is that a lot of our employees have the title of ‘associate’ – meaning equal.

As far as I know, we have the most inclusive share ownership program in Canada of anybody in our industry. We have about 73

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shareholders right now who are all employees, and every single employee in our core group of companies gets to be a shareholder after two years. It’s proving very successful; our competitors have a very hard time prying staff away from us.

IBC: Do you think it’s a good time to be in the industry?

BR: I would say that it all depends. I think a big chunk of our industry is sleepwalking right over a cliff. There’s lots of talk about disruption and so forth, but it really is happening.

Independent brokers keep losing market share to direct writers every year. The online thing is just exploding.

So is it a good time to be a broker? I think it’s an incredible time – if you’re prepared to reinvent the way you do business. There’s disruption, but there are tons of opportunities.

It’s an absolutely horrible time to be a broker if you’re a traditional brick-and-mortar broker

who’s just doing things the same old way.

IBC: You’re in a network, CBN – do you think it’s important to be part of a network in the current climate?

BR: CBN has been around for 14 years. It started as a best-practices group – brokers getting together and sharing things. I would say any broker who actually wants to continue, as opposed to selling out in the next few years – if they’re not part of a best-practices group, they’re almost dooming themselves.

At CBN, for almost 14 years, we’ve shared complete financial statements with each other. We meet regularly through the year; we know what’s working and what’s not working.

That’s invaluable. It’s like having a very knowledgeable board of directors who are all in your industry and are friendly critics of everything you do. There’s just no doubt that propels you forward.

Our broker group, I think, is unique

ROGERS AND PHILANTHROPY Rogers Insurance was inspired to start one of the insurance industry’s largest charity runs after a group from the company ran the Marathon Medoc in France in 2010. While in France, the group met Nobel Peace Prize nominee Jean Vanier, founder of L’Arche, an organization that helps those with developmental disabilities. In 2011, Rogers Insurance mounted Run for L’Arche, a charity run to benefit L’Arche Canada’s homes for adults with developmental disabilities. In the years since, the run has become one of the industry’s largest charity runs and has raised more than $200,000 for L’Arche Canada.

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CANADIAN BROKER NETWORK FAST FACTS

Founded: 2002 Member brokerages: • Capri Insurance Services • CMW Insurance Services • Dan Lawrie Insurance Brokers • Lloyd Sadd Insurance Brokers • Moore-McLean Corporate Insurance • PBL insurance Limited • Rogers Insurance • Smith, Petrie, Carr & Scott Insurance Brokers • Vezina Assurances

Insurance companies worked with: 100+

Annual premiums: $900 million+

“Our industry’s in massive change. You’ve really got to be plugged in right now, or you’re just going to be swept aside” because we’ve evolved into a higher level of collaboration. We’ve made investments literally into the millions of dollars, which would be out of reach for any of us individually. But as a group – with Bullfrog, for example – to use Steve Jobs’ phrase, we are putting a dent in the universe. We’re changing

the way insurance is done in Canada. It’s the first time that commercial clients can buy insurance online and have choice.

Our industry’s in massive change, both on the insurer level and the broker level. You’ve really got to be plugged in right now, or you’re just going to be swept aside.

Canada’s fourth-largest insurance intermediary

Acquired South Western Insurance Group, one of Canada’s largest wholesalers, in 2012

Founded Bullfrog Insurance, Canada’s first online commercial insurance brokerage, in 2014

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5/05/2016 10:51:26 PM

SPECIAL PROMOTIONAL FEATURE

RECRUITMENT

Seeking diversity in age The shortfall of young talent is one of the top concerns for the Canadian insurance industry.

Jodie Kaufman Davis of Burns & Wilcox Canada shares what her firm is doing to address it THE INSURANCE landscape in Canada is quickly evolving in positive ways, from an increase in the amount of women entering the workforce to the recruitment of more employees from a wide range of backgrounds.

However, in Canada and industry-wide, we are facing a talent shortfall, the likes of which the industry has not seen before. According to a recent report, a quarter of insurance professionals will retire by 2018, and the industry is not attracting the amount of talent needed to replace these retirees.

Another recent study, by the Insurance Institute of Canada, found that individuals aged 46 to 65 made up 32% of our industry in 2012, as compared to 49% in 2007. The needle is pointed toward a more balanced workforce with younger employees. However, the same report also stated that for every 10 employees over the age of 55, the industry is only recruiting four under 25 years of age.

At Burns & Wilcox Canada, we’ve benefited from the perspectives of individuals across multiple generations. With generational differences come varying opinions and strategies, and ways of working and thinking,

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all of which add value for a business. In order to foster a culture that is appealing to young professionals, it is vital that we offer training and mentorship opportunities to plan ahead and ensure that we are preparing the next group of insurance leaders.

The insurance industry is in the midst of a recruitment battle. In many cases, the industry finds itself competing against banking, finance and other areas of business to recruit university students who do not view insurance as an appealing career choice.

In order to change that view, we must do a better job of providing insurance education in schools and at universities. We must also create professional development curriculum for young professionals to keep them engaged and help them understand the depth and breadth of opportunities available to individuals starting an insurance career.

As managing director of a managing general agent that provides our retail broker clients with solutions for some of the hardestto-place risks in the world, I am confident that there is an insurance specialty for nearly every interest. Do you have a passion for computers

and technology? Cyber insurance could grow from $2.5 billion to $7.5 billion in written premiums in North America during the next four years. Do you love spending time on the water? Ocean marine insurance continues to grow as a result of larger ships entering the market, such as the Triple-E cargo ship, which can carry as many as 18,000 containers of insured cargo.

In addition to education efforts, it is also important for the industry to build programs to nurture talent. Whether by hosting professional development seminars, providing access to continuing education courses or offering management training, we must

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provide the tools necessary to set up new generations of insurance professionals for success. These programs will help young professionals envision what an insurance career might look like and understand the process for how they can achieve their goals.

For instance, at Burns & Wilcox Canada, we have a number of professional development opportunities in house, including the Kaufman Emerging Leaders Program [KELP] and Kaufman Advanced Manage­ment Program [KAMP], administered by our parent company, H.W. Kaufman Financial Group.

The KELP program is a selective training program for Burns & Wilcox employees who

recently graduated from university. Selected participants are exposed to company leaders, who lead training in a variety of disciplines, including underwriting, property & casualty, professional liability and other areas of focus.

We have built upon the emerging leaders program and introduced KAMP, a management development program that provides experienced employees who demonstrate long-term leadership potential with the opportunity for individualized executive education, management coaching and corporate training.

Now is the time for the insurance industry to act. We have seen gains in attracting and

retaining young professionals. However, we are not yet where we need to be. As an industry, we must be proactive in our outreach and education efforts to students, in creating programs that help foster growth, in cultivating leadership skills early in an insurance professional’s career, and in demonstrating the wide range of opportunities available in insurance today.

Jodie Kaufman Davis is a corporate vice president and managing director of Burns & Wilcox Canada.

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SPECIAL PROMOTIONAL FEATURE

ENVIRONMENTAL INSURANCE

Protecting the bottom line Effective environmental impairment liability policies can help keep an environmental disaster from turning into a financial one AS ENVIRONMENTAL regulations tighten, business owners in all sectors are under increasing pressure to adopt green practices. In response to the increased scrutiny from government and public bodies, brokers are turning to environmental impairment liability [EIL] policies to provide their clients with protection from loss of income or costs incurred due to an unexpected environmental situation or accident.

“It’s really important for contractors and businesses to be aware of their environmental exposures because these issues are heavily prominent in the news these days, and governments are cracking down,” explains Kent Pitkin, national director of commercial lines at APRIL Canada. “Business owners need environmental policies to make sure their interests are covered – not only financially, but morally as well. Businesses want to be seen as being socially responsible.”

EIL policies, which can include contractor’s pollution liability and site pollution liability, allow companies to carry out operations knowing that an accident that results in environmental damage will not lead to financial ruin. “EIL policies can cover events that are often missed in regular policies,” Pitkin says. “For example, current liability policies exclude all pollution cover. EIL policies can cover clients for both sudden and gradual pollution events and third-party

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claims, including injury, property damage and cleanup costs.”

EIL policies also can cover emergency costs and claims expenses, including investigation and legal defence fees, which can escalate rapidly. “If something happens that leads to contamination in the groundwater, that can result in hundreds of thousands of dollars in legal fees,” Pitkin says. “But it’s not only the environmental impact on the ground, soil or water that needs to be considered, but also the possibility of injury or harm being caused to a person. In that situation, you could get sued, and considering that the average three-day trial costs $34,000, you can see how easily the costs add up.”

Pitkin also gives the example of a contractor using an excavator and hitting an unsighted oil tank below ground. “If that oil then leaks into the ground, you could be looking at thousands of dollars in cleanup costs,” he says. “In most cases, you don’t just have to clean up the area of the spill; you have to take out tons of earth around the spill. When it comes to some of these spills, cleanup costs are extremely expensive – that’s why it’s so important that contractors are properly covered.”

Brokers have an important role to play in assessing their clients’ environmental exposure. Even if a client has only a slight chance of exposure, whether it’s land or water pollution, brokers should be consid-

WHAT’S INCLUDED APRIL Canada’s contractor’s pollution liability policy includes: $30 million maximum limits Minimum $5,000 deductible Single project policies available on an owner-controlled basis Maximum periods: • Claims made annual – 36 months + extended reporting • Project policies up to 10 years + extended reporting

ering the potential impacts and pitching the appropriate environmental policy. “EIL policies are not new or complicated policies, but they’re becoming more important as business owners realize how damaging an environmental exposure can be,” Pitkin says. “Everyone is on the environmental kick these days, and any business that pollutes or creates an environmental issue is going to have a lot of bad attention. There are gaps in most regular policies, and it’s important for brokers to discover those gaps and inform their clients accordingly.”

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ouT of The box insuranCe DesigneD for Brokers CoMMerCial . residenTial . TransporT *. Marine .

*auto liability cover available in Quebec only.

At APriL Canada, we understand that not all risks are created equal. our team specializes in designing “out of the box” solutions for “out of the box” risks, working in partnership with insurance brokers for the benefit of your clients.

ToronTo . MonTreal . Calgary 1-855-745-1010 www.april.ca Changing the image of insurance.

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5/05/2016 5:00:37 AM

FEATURES

TEAMWORK

The reinvention of teamwork Technology gives us the power to communicate, collaborate and learn across great divides – but ultimately, it remains a tool. The real key to 21st-century business success is teamwork, writes Graham Winter DISRUPTION IS the buzzword of business.

And why wouldn’t it be, when tech-centric companies like Amazon, Uber, Netflix and Twitter are transforming the way we shop, travel, play and communicate?

Perhaps your business is trying to disrupt itself. If not, then you can be sure that someone else’s is, and chances are they’re doing it with quite different teamwork practices than what you treat as the norm.

Is it technology that’s making the difference inside these disruptive companies? Yes, to the extent that product technology supports their exponential growth. However, inside the company, everyone has the same access to pretty much the same technology at the same time, everywhere. It’s cheap, easy to use and mobile. And let’s remember that instant messaging, email, smartphones, video, collaboration software and the like are tools – and tools only.

Where’s the difference?

Share and share alike There’s a clue in the common purpose of many of these new technologies: to facilitate the sharing of information.

Indeed, this is exactly why the Internet was invented in the first place. Social media platforms like Facebook, LinkedIn and Twitter are popular because people like to share. We have social brains, and our evolution has programmed us to connect (because it saved our early ancestors from the disruption of sabre-toothed tigers). Even Daniel Goleman,

the acclaimed thought leader in emotional intelligence, now speaks of social intelligence.

We are genetically wired to engage and share with others and, in doing so, to adapt and respond and learn, which is precisely what the disruptive teams in places like Uber and Dropbox are doing so brilliantly. And they’re doing it with the help (and at times hindrance) of new technologies.

Here are six things you can do to lead your team to be disruptors, or at least nimble adaptors.

they use to share information (the tools are very similar), but whom they share it with and what they (collectively) do with it.

Fast disruptors know that technology can be duplicated, but there is one thing that can’t be. In a disruptive world, the secret to success remains what it was thousands of years ago: the ability of people to work together toward a shared purpose. In a word, teamwork – but a more fluid and flexible style that suits a world that has seen its boundaries shatter in the face of globalization.

Technology is the vehicle. It is who you take along for the ride and how you use the technology to share the challenges and opportunities that make the real difference 1

Find the secret

We live in an age of information overload, bombarded with data 24/7.

We are most certainly sharing, and it’s on a global scale that’s faster, more frequent and, some would argue, less meaningful than ever before. The importance of focus can’t be underestimated, as we must navigate through the distraction of always being ‘on.’

The better performers in this digital world derive their focus from the core belief that it’s not so much which collaborative technology

2

Make the secret scalable

While technology and globalization continue to disrupt the business landscape, they are not reinventing teamwork in their wake, but rather scaling it as a capability and culture.

The typical company circa 2016 has people dispersed across multiple locations and issues arising at the speed of light, which is why teamwork makes the business more than the sum of its parts. Great teamwork scaled across the business makes anything possible.

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as one team.

Think of a flock of migrating geese, which always fly in a V formation. Geese innately know the secret to great teamwork. They have a common destination and work in perfect unison. When a goose drops out of the V formation, it quickly discovers that it requires a great deal more effort and energy.

Geese help each other, too. When a goose gets sick or wounded, two geese drop out of the formation and follow their fellow member down to help provide protection.

They stay with this member of the flock until he or she is either able to fly again or dies.

Then they launch out on their own, creating another formation, or they catch up with their own flock.

6

This is why a national 2014 employment survey in the US, as reported by Forbes, found that the skill employers looked for in their new recruits was the ability to work in a team structure. The second most important skill was the ability to communicate verbally with people inside and outside an organization.

3

Accelerate and share the learning

Business has always been a team sport, and there are many good reasons for this; however, one now stands alone as pivotal to organization survival and success.

Business is consumer-driven (or more specifically, customer-experience-driven), which means our teams must be agile, innovative and constantly learning how to optimize that experience for a customer who has abundant choice.

Shared learning is the key, because working alone or in silos of expertise reduces learning, growth and creativity. When there is no one to challenge us, we simply don’t leverage our experience and ideas.

4

Escape the gravity of hierarchy and structure

Daniel Pink, acclaimed business thought leader, argues that we are now in the Conceptual Age, in which right-brain thinking reigns supreme. There is much evidence for this.

Pink talks of the necessity for organizational symphony: through empathy, intuition, play and meaning.

The disruptive companies are enterprises more than organizations, unencumbered by the gravity of organizational hierarchy, process and division.

They play like they’re in the Age of the Entre­ preneur: risk-ready, nimble, wellconnected folk who thrive on change.

5

Harness the power of the whole team

The leaders of the most successful disruptive companies share their vision and move others to see it, too. They’re marvellous storytellers, connecting with others, who in turn connect with them. They inspire people to think as one team, to move as one team and to learn

Share the truth

The disruptors share the reality. They are not afraid of the truth. In fact, what they fear most are hidden agendas, silos and the status quo. As in professional sports, they make sure the whole team knows whether they have won or lost and why. The focus is always on what is best for the business, even if getting to the marrow of this takes some tough conversations. The leaders insist that they be challenged. They embrace feedback and tap into the power of their people, because a good idea can come from anywhere.

Make the secret yours Technology gives us the power to communicate, collaborate and learn across great divides. Very few of us do this well. To prosper in today’s markets takes real teamwork, and we are just beginning to harness technology to this end.

Beware those who see technology as an end itself. Technology is the vehicle. It is who you take along for the ride and how you use the technology to share the challenges and opportunities that make the real difference. This is what it’s really all about.

Graham Winter is the bestselling author of Think One Team. Learn more at www.thinkoneteam.com.

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FEATURES

MARKETING

6 powerful marketing videos to grow your business If a picture tells a thousand words, then video is … priceless! Marcus Seeger presents six of the most powerful and effective marketing video concepts that have been proven to create a steady stream of leads and profitable sales for businesses just like yours

1

Promotional video

The promotional video is the most common and powerful video and is typically on the homepage of your website. If you only make one video, then this is the one most people will make. A promotional video is a fantastic opportunity to present your unique selling proposition, or USP. Often, the first contact a customer has with your business is your website’s homepage. Ninety per cent of customers who land on your site will prefer to watch your video rather than read text.

The key to making your promotional video successful is to engage your audience, and this can be done with a story. Let them know who you are and how you best serve your customers.

Consider this message as coming from a customer’s perspective, and avoid the

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words ‘me,’ ‘mine,’ ‘I’ and ‘we’ – it’s not about you! By simply focusing on how your customers can benefit from your product or service, you will increase your promotional video’s effectiveness. The promotional video can be quite broad; it gives your customers a general overview.

2

Products and services video

In this video, it’s important to start to drill down and provide more specific information about the benefits of your products and services.

The success of this video is largely determined by how well you can communicate the ‘what’s in it for me’ information. Again, approach this video from your customer’s perspective. It is very common for us, as experts in our field, to over-complicate information. Keep your video as simple as

possible, and focus on the benefits rather than what your products or services are.

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About us video

4

Testimonial video

Typically, a website will have an ‘about us’ page that is full of text and only talks about themselves – what a waste of time! If your competitors are doing this, then you are in luck, and I encourage you to start working on your ‘about us’ video right away.

The ‘about us’ video is actually not about you at all, but is about the customer.

The trick with a successful ‘about us’ video is to focus 100% on reinforcing and clearly demonstrating your USP. It is important to move as far away as possible from talking about yourself and focus instead on the benefits your valued customers receive when they do business with you.

We all know that testimonials are valuable, and they do help potential buyers arrive at the decision that you’re a safe,

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reliable and trusted business.

However, what we’ve seen to date is mainly text-based testimonials, sometimes with a photograph, which makes them a little bit more believable, but most people these days are quite skeptical about the authenticity of these testimonials. If you replace these with video testimonials of live people, then it’s going to be extremely powerful for you. Your customers are far more likely to believe these testimonials and see them as valued sources of information, and they will positively impact their buying decision.

5

Social video

Have you noticed a steady increase in video content on popular social media sites? This is considered by many to be the year of social video, so it’s a good time to take advantage of this trend.

For example, Facebook is rapidly growing its video capabilities. According to the company, since June 2014, there have been more than 1 billion video views on Facebook every day, on average.

Your customers are far more likely to believe video testimonials and see them as valued sources of information, and they will positively impact their buying decision With the auto play feature, videos are now even more engaging. You could consider posting Facebook video ads, publishing videos to engage your fans or perhaps even creating user-generated content by running online competitions.

6

Video email

The statistics around video emails are compelling. For example, simply using the word ‘video’ in an email subject line can boost open rates by 18.5%, click-through rates by 65% and reduce unsubscribes by 26%.

Instead of sending a lengthy sales email in response to an inquiry, you can send a single video or a series of informative videos that add value and position you as

somebody your new lead would like to do business with.

It is quite likely that very few of your competitors are investing in video emails, and by doing so yourself, you will stand out from the crowd, and your customers will see you as being innovative.

Of course, I would encourage you to try to create all six types of videos for accelerated results.

Marcus Seeger is the number-one Amazon bestselling author of Video Marketing for Profit: 14 Proven Strategies for Accelerated Business Growth. Seeger is managing director of the video marketing and production agency Video Experts.

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FEATURES

PRODUCTIVITY

Why mono-tasking is the new black

Forget multitasking – we need to narrow our focus to become more efficient and stay mentally fit, according to brain expert Dr. Jenny Brockis

SURVIVING IN the crazy, busy modern workplace has resulted in our adoption of some new strategies designed to save us time. The problem is that no one appears to have done the necessary checks to see that these actually work. The one strategy most widely adopted has turned out to be the worst performance-enhancing strategy ever, because it requires us to use our brain in ways it wasn’t designed for.

Yes, multitasking is the biggest new brain myth on the block. It’s time to get rid of it and replace it with a far more efficient method of getting more done – mono-tasking.

Multitasking is trying to focus on more than one thing at a time. Sure, you can drink a coffee while walking along and talking to a colleague, crossing the road and taking a selfie, but you‘re not paying focused attention to any one of those things, including your colleague.

One of the reasons multitasking has become so pervasive is because everyone’s doing it, and ticking off items on our to-do lists makes us feel good – which adds to the delusion. We know using our mobile phones while driving is dangerous, yet more than 70% of us admit to doing it. We ignore the risk because multitasking has become the ‘norm’; it’s considered a basic work requirement.

We even post job listings that say that multitasking skills are desired.

Multitasking fragments our attention – a quick email response here, a two-minute conversation there. We skim information and only grab the headlines. The outcome?

The cognitive cost includes poorer memory, mental fatigue, and reduced efficiency, effectiveness– and innovation. We make more mistakes, and we miss opportunities.

Overall, multitasking puts us at increased risk of burnout, damaged relationships and

WHY MULTITASKING FAILS When we attempt to multitask, our obliging brain attempts to help by giving one task to each hemisphere. The trouble is, the brain can still only pay attention to one at a time, so the brain task switches very, very fast, giving us the illusion that we are paying attention to two things simultaneously. This can be made more obvious when we look at optical illusions.

What do you see in this picture, a native chief or an Inuit?

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poorer performance; it’s hardly the time- and energy-saving solution we thought it would be.

What’s going on in the brain when we multitask?

One of our brain’s primary functions is to keep us safe; we scan our environment every one-fifth of a second on the lookout for changes.

The brain loves patterns and things that are familiar, because the implication is that this is a safe place. Our selective focus has developed so we pay attention to what is most important to us at any given moment while being alert to other things happening on the periphery.

When we direct our focused attention, we use part of our prefrontal cortex, the highly specialized part of our frontal lobes used for higher-order executive thoughts such as planning, organizing and regulating emotion.

This area has what can only be considered a couple of design flaws: It’s small, highly demanding of energy and can only handle a small amount of information at any one time. That’s why the number of thoughts we can hold ‘front of mind’ at any given time is around seven. As the ideas get more complex, the space available reduces. When it comes to focused attention, there is only room for one.

Multitasking is the one brain function that the more we practice, the worse we get. It has been shown that chronic media multitaskers fragment their attention so much that they perform worse even when trying to monotask.

It has been estimated that multitasking causes us to make up to 50% more mistakes and take 50% longer to complete our work, equivalent to roughly a 25% drop in

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individual productivity over the course of the day. An innocuous two-minute interruption can translate into 24 minutes before you get back to where you were before your train of thought was broken. No wonder some days we can feel we’ve gotten nothing done, yet are exhausted.

Multitasking in an organization reduces performance further – for example, when we are kept waiting for a piece of work by a multitasking colleague or need a decision to be made to move forward on a new project, so we end up starting something else.

We cannot multitask even if we are young, if we are female, if we are Clark Kent or if we like wearing our underpants over our trousers. Multitasking is multi-failing unless you happen to be one of the 2% on the planet who are supertaskers and whose performance gets better the more they multitask. (If you haven’t undergone the cognitive tests to prove it, your belief in your ability to multitask is most likely delusional – research has shown that those who believe they are really good at multitasking perform the worst overall.)

The way to get rid of multitasking is to stop doing it. But just like giving up any habit, such as smoking, it’s not always easy, especially if we are under pressure; the temptation for

the brain is to default to the survival route it thinks works best. Here are four ways to move away from multitasking:

1

Introduce mono-tasking into the workplace

While we can all try to limit our multitasking tendencies individually, the need is to reduce organizational multitasking, which has to come from the top. Making mono-tasking the preferred way of doing things gives everyone permission to follow suit.

2

Prioritize your priorities

3

Communicate your priorities

Take 10 minutes at the end of the working day to determine your top three most important and urgent tasks for the next day, and list them in order of priority. Shove everything else into a holding pen – those items can wait. The next day, start on your top priority first and don’t move to the second item until the first is completed.

In the office, make sure everyone is on the same page and knows which priorities have been agreed on so that there is no temptation to start on something else. This will boost completion rates.

4

Practice mono-tasking

Choose one activity, close the office door, switch your phone to silent, avoid all interruptions and work on just that one activity for a specified amount of time.

Mono-tasking leads to more work being completed more quickly and to a higher standard. Completing our work well feels rewarding, resulting in the brain secreting more dopamine, making us feel good and motivating us to repeat that rewarding activity. Emotions are contagious, so when we are feeling good, others will too, and the working atmosphere becomes more positive and vibrant. Being in a more positive mood opens our mind to more innovative and creative thinking – making it easier to solve more problems and make good decisions.

Working with our brain in the way it was intended is not just a better way of working; it also leads toward creating a high-performance workplace.

Dr. Jenny Brockis is a medical practitioner, specialist in the science of high-performance thinking and author of Future Brain: The 12 Keys to Create Your High-Performance Brain.

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PEOPLE

CAREER PATH

CHANGING COURSE

Andrew Clark got into insurance literally by accident – but he’s since put his stamp on the industry by launching his own brokerage 2014

LAUNCHES ALIGNED After many years at Marsh, Clark saw a need in the market and created his own company, Aligned Insurance, which focuses on aligning broker expertise with a client’s specific needs “I launched Aligned in 2014 based on a unique philosophy – value proposition and business model was a huge step in my journey”

Early on in his career, Clark realized the importance of giving back, and made a point of lending his time to various industry organizations “Volunteering with the IBAO, CIP Society and coordinating volunteering events for and with my colleagues became and continues to be an important part of my path”

GETS NOMINATED FOR AN AWARD Clark’s hard work, both at Marsh and in his volunteer activities, paid off when he was named as a finalist for the IBAO’s Young Broker of the Year Award

“I am continuing to learn and appreciate that my career path is secondary, and that supporting and encouraging the success and development of my colleagues and teammates is my number-one priority”

2009

MAKES VOLUNTEERING A PRIORITY

2007

MAKES A HARD DECISION

2004 While enrolled at the University of Guelph, LANDS FIRST Clark got his first insurance job at INDUSTRY JOB Aon Reed Stenhouse “I worked with many amazing people whom I still think about, admire and learn from today.

Having the opportunity to work in Toronto my entire career showed me that the industry is also a community, which I value and respect” Many people claim that they fell into the insurance industry by accident, but for Andrew Clark, it was a bit more literal “I was involved in a serious car accident and was sued for $2.2 million. That changed my life forever and was my first experience with an insurance claim – that’s when I realized the insurance industry is ultimately about helping others”

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2011

Aon Reed Stenhouse nurtured his career for three years, but Clark eventually found himself craving a new challenge and made the leap to Marsh “It was a tough decision to move to a new brokerage after my first three years in the industry, but it was a great decision that led to great opportunities and the privilege of working with many more great people”

2004

WORKS TOWARD CIP DESIGNATION

2001

GETS INTO A CAR ACCIDENT

Seeing insurance in his future, Clark began making plans “After setting my sights on the industry, I started my CIP while I was still in university, which really helped me find my first job”

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PEOPLE

OTHER LIFE

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

CASTING CALL When he’s searching for peace of mind, Sean Forgie grabs his fly rod and heads to the river SHORTLY AFTER he started working in the insurance industry as a loss adjuster in the mid-1990s, Sean Forgie discovered fly fishing. “I’d always enjoyed fishing with friends and family, and fly fishing seemed like the next logical step,” says Forgie, who is currently the national director of casualty/ liability at Cunningham Lindsey in Toronto.

It turned out that fly fishing on notable trout rivers such as the Grand, Nottawasaga and Credit was the perfect antidote to stressful days in a claims office, giving Forgie the opportunity to quietly enjoy the outdoors, recharge his batteries, relax and organize his thoughts.

“There is no better feeling than making a perfect cast, landing your fly on target, and being rewarded with a rising fish and a strike,” he says.

Forgie counts himself lucky enough to have enjoyed memorable fly-fishing trips to Ireland, British Columbia and Northern Quebec, but his most beloved fishing spot is the one closest to home.

“In 2007, I joined the Franklin Club, a private fly-fishing club just 15 minutes from my home in Newmarket,” he says. “The club offers excellent fly fishing for rainbow and speckled trout, 365 days a year.”

1909

The year the Franklin Club was founded

18

Weight, in pounds, of the largest fish Forgie has caught while fly fishing

8

Number of fly rods (so far) that Forgie owns

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FEATURES

EXPERT ADVICE Conversations with clients should include cost factors they need to consider, such as: • Replacing household possessions • Additional living expenses in the case of damage to the home following an earthquake • Repairing or rebuilding their home • Fulfilling financial commitments such as a mortgage or secured line of credit.

Why don’t many Canadians have earthquake insurance?

Andreacchi says the two common myths that need to be dispelled in assessing the need for earthquake insurance are:

Ensuring adequate personal earthquake coverage EARTHQUAKES, while not as frequent as other natural disasters, can occur without warning and cause tremendous damage to homes. According to the International Federation of Red Cross and Red Crescent Societies’ 2010 World Disasters Report1, over the years, the costs of earthquakes have increased due to growing urban development near fault lines and the vulnerability of older structures not built to current building code.

add-on and typically is subject to a higher deductible,” explains Carolyn Andreacchi, personal insurance underwriting director at RSA Canada. For example, if an earthquake were to cause a gas main to break and ignite a fire, only the resulting loss or damage from the fire would be covered under the base home insurance policy, not damage related to the earthquake.

Earthquake coverage: what you need to know

“As a broker, you are in the best position to help your clients evaluate how much earthquake insurance is adequate for their individual needs, should they find themselves in such a circumstance,” Andreacchi emphasizes.

“It’s important for clients to know that earthquake insurance is not included in a standard home insurance policy, but it can be purchased as an

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What can brokers do?

“Earthquakes in Canada may seem a far-fetched risk to discuss for many homeowners,” Andreacchi says, “but we know that consumers rely on brokers for trusted, sound advice.

Earthquake insurance is an excellent way to educate clients on their geographic risk and ensure they are adequately protected when disaster strikes.” Key information that brokers should share with their clients: 1. Illustrate the math by sharing costs from similar or past disasters 2. Identify those in high-risk zones and provide coverage options that match their budget and needs 3. Help them develop a preparedness plan for their family

How much earthquake insurance should one have?

“As a broker, you are in the best position to help your clients evaluate how much earthquake insurance is adequate for their individual needs ...”

Carolyn Andreacchi, RSA Canada

• Slim chance of impact: The impact of an earthquake can affect surrounding regions as well, and the probability of a seismic event in Canada is rising.

• Existing coverage: Home insurance policies and government disaster programs do not provide a sufficient avenue for recovery.

For more information on earthquake zone mapping across Canada, see www.iclr.org/ images/Earthquake_Hazard_Zones.pdf. For more information on how you can ensure your clients are prepared in case of an earthquake, visit www.rsabroker.ca/climate smart.

1

Source: www.ifrc.org/Global/Publications/disasters/WDR/WDR2010-full.pdf

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What is Craftsmanship ?

SM

To be crafted is to meet exacting standards.

It’s the human touch that combines art and science to create something unique.

©2016 Chubb. Coverages underwritten by one or more subsidiary companies. Not all coverages available in all jurisdictions.

Chubb®, its logo, Not just coverage. Craftsmanship.SM and Chubb. Insured.SM are protected trademarks of Chubb.

We tend to think about craftsmanship in terms of physical things: Fine wine, classic cars, custom furniture and iconic structures.

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But what about the underwriting of insurance to craft protection for your unique and valuable things?

And the service behind that coverage when you need it most — like claims and loss prevention?

For your business.

Your employees.

Your home.

The people you love.

Things that need a particular kind of protection and service.

The kind Chubb provides.

Not just coverage. Craftsmanship.SM Not just insured.

Chubb. Insured.

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Linda Bradley, Personal Recovery Coordinator, Advocate Insurance Group property

|

auto

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business

“There is such satisfaction and relief when I know it’s a loss that’s going to be handled by Economical.”

In Linda Bradley’s work with claimants, it’s all about relationships. That’s why she’s especially grateful for the excellent connections she’s made with Economical, helping her to truly be an advocate for her clients. “Economical gets where we’re coming from and they get that we’re going to live out our name,” Linda says. “They look after people.”

Because their story is ours too. economicalinsurance.com/stories

The Economical brand includes the following property and casualty insurance companies: Economical Mutual Insurance Company, Perth Insurance Company, Waterloo Insurance Company, The Missisquoi Insurance Company. ©2016 Economical Insurance. All rights reserved. All Economical intellectual property, including but not limited to Economical® and related trademarks, names and logos are the property of Economical Mutual Insurance Company and/or its subsidiaries and/or affiliates and are registered and/or used in Canada. All other intellectual property is the property of their respective owners.

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