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FIVE-STAR CARRIERS Brokers rate Canada’s top carriers for 2017
BUSINESS RISK The top risks faced by businesses
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BUILDING A SUCCESS STORY The power of human relationships
THE FAMILY WAY
Archway Insurance’s secrets to success
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A STRONG TEAM, OPERATIONALIZING A STRONG BALANCE SHEET. Property | Casualty | Executive & Professional Lines Builder’s Risk | Marine
Berkshire Hathaway Specialty Insurance is pleased to bring underwriting flexibility, claims handling excellence, and financial strength to Canada. 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
www.bhspecialty.com/can Asheville | Atlanta | Boston | Chicago | Houston | Indianapolis | Irvine | Los Angeles | New York | San Francisco | San Ramon | Seattle Stevens Point | Auckland | Brisbane | Düsseldorf | Hong Kong | Kuala Lumpur | London | Macau | Melbourne | Singapore | Sydney | Toronto
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ISSUE 5.04
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CONTENTS
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UPFRONT
FIVE-STAR CARRIERS COVER STORY
26
04 Editorial
Insurance needs to adapt to the changes in terrorism
06 Statistics
UPFRONT
NEWS ANALYSIS
The impact of global environmental legislation on multinational coverage
Acquisitions, what’s new and who’s moved
14 MGA update
How MGAs can contribute to the sharing economy
As the old generation makes way for the new – the key is in the blend
36
BROKERAGE INSIGHT
The success secrets of Atlantic Canada’s Archway Insurance
XL Catlin’s Joe Tocco on leadership and remaining relevant
2
12 Intelligence
18 Opinion
FEATURES
20
Has regulation in the insurance industry gone too far?
16 Technology update
Which carriers came out on top and what needs improving
INDUSTRY ICON
08 Head to head
Responding to ransomware
FIVE-STAR CARRIERS 2017
PEOPLE
10
The top business risks of 2017 at home and across the globe
FEATURES 24 Building relations
Tony Picciano from Markel on the skills needed for success
PEOPLE 38 Career path
Chris Lack rises to the challenge of becoming exceptional
39 Other life
Ironman Sebastien Rocco makes a comeback
FEATURES
40
EXPERT ADVICE RSA offers brokers success through education
INSURANCEBUSINESS.CA CHECK IT OUT ONLINE
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26/07/2017 10:59:08 3:41:55 AM 2017-03-28
UPFRONT
EDITORIAL
The changing face of terror “
Terrorism (noun): The unlawful use of violence and intimidation, especially against civilians, in the pursuit of political aims.” The official definition of terrorism doesn’t seem to do justice to the extent of the mayhem, devastation and tragedy its actions can cause. June alone saw eight people killed and 48 injured in the London Bridge attack in the UK; one killed and three injured in Melbourne, Australia, during a hostage taking and shooting; one dead and 10 injured in the Finsbury Park attack in London; a failed attack in Brussels, Belgium, in which a bomb was detonated but caused no injuries; and a police officer seriously injured when stabbed at Bishop International Airport, near Flint, Michigan. These examples, of course, on the back of the explosion in Manchester, England, in May, which killed 22 and injured 120. With the leap in lone-wolf style attacks, its clear terrorism has changed from the days of the IRA and even from the 9/11 plane hijackings. It’s no surprise then that with the rapid development of terrorism has come the need for terrorism insurance to similarly evolve.
“Insurers continue to view terrorism risk as the risks of an organized plot or threat for doing damage to property” In an analysis published on Out-Law, Pinsent Masons’ insurance law expert Nick Bradley described how terrorism insurance is widely still stuck in the past. “Insurers continue to view terrorism risk as the risks of an organized plot or threat for doing damage to property,” he wrote. “The result is a recognized ‘insurance gap’ for business interruption arising for non-property damage.” It’s a gap that needs to be addressed, with the Manchester Arena attack being one such example. While the real loss was to the families involved, there were cancelled tour dates with huge expense; and the cost of business interruption was likely to be far more significant than that of property damage. There is a need for the insurance industry to react to the changing face of terrorism – to offer a genuine solution that prevents clients from slipping through the cracks as they attempt to rebuild their lives. The emphasis is on brokers, too, to stress the importance of this cover to clients who naively assume it “can’t happen to them” – and help them find real-world solutions to the worst of real-world events. The insurance industry has often been criticized for being slow to change. This is one time when it needs to prove it can move with the times – and quickly. The team at Insurance Business Canada
www.insurancebusiness.ca EDITORIAL Managing Editor Paul Lucas Writers Heather Turner, Lucy Hook, Libby Macdonald, Tim Garratt, Joe Rosengarten, Lyle Adriano Copy Editor Jo Crichton
CONTRIBUTORS
Janine Garner, Karen Gately, Peter Kochenburger, Warren Kennaugh
ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Production Manager Alicia Chin Traffic Manager Ella Dayandante
SALES & MARKETING National Account Manager Eric Langille Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Melissa Christopoulos Project Coordinator Jessica Duce
CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global CEO Mike Shipley Global COO George Walmsley
Editorial Inquiries paul.lucas@keymedia.com Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries eric.langille@kmimedia.ca
KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Denver, London, Sydney, Auckland, Manila, Singapore, Bengaluru CMCA AUDITED
Insurance Business Canada is part of an international family of B2B publications and websites for the insurance industry Insurance Business America cathy.masek@keymedia.com T +1 720 316 0151 Insurance Business UK jonathan.connelly@keymedia.com T +44 20 7193 0935 Insurance Business Australia peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.
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We’re putting our money where our mouth is. Tom Reikman, SVP & Chief Operating Officer
$125M may sound like a lot to invest in a policy administration system, but, to Economical, it’s money well spent. That’s because, as the backbone of our business, our broker partners have always deserved our best. You’ll experience an extraordinary ease of doing business, improved underwriting capabilities and service, and advanced analytics to drive profitable growth.
Get ready for the future, with us. economical.com/brokers property | auto | business
t e
Economical Insurance includes the following companies: Economical Mutual Insurance Company, The Missisquoi Insurance Company, Perth Insurance Company, Waterloo Insurance Company, Family Insurance Solutions Inc., Sonnet Insurance Company, Petline Insurance Company. ©2017 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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UPFRONT
STATISTICS
Risky business
NORTH AMERICA 1. Cybercrime 2. Damage to reputation/brand 3. Failure to attract or retain top talent
When it comes to business risks, nothing’s more dangerous than a headline-grabbing brand misstep
THE INTEGRITY of a brand’s reputation is the top-ranked risk for businesses globally across numerous geographies and industries – and unlike many other threats, it is insurable. Cyber risk is also gathering pace as a top concern; although it only entered the top 10 in 2015, cybercrime was ranked by risk management professionals surveyed by Aon as the fifth most pressing issue faced by businesses today.
93%
Companies with revenue of $1bn or more that have a risk management department
54%
Companies with revenues of less than $500m that have a risk management department
Business interruption also made the top 10, following a year in which economic losses from natural catastrophe events topped $210bn and business interruption costs from such disasters have grown proportionally higher than they were a decade ago. Political uncertainties also re-entered the top 10 after a tumultuous year that saw volatility pervade typically stable developed nations.
71%
Companies that engage in cross-functional collaboration of risk management
76%
Companies that have adopted an approach to risk management at the board level
4. Regulatory/legislative changes 5. Economic slowdown
Insurable Uninsurable
Partially insurable
TOP 5 RISKS BY REGION The top-ranked business risk globally – damage to reputation or brand – was the primary or secondary concern for business leaders in almost every region of the world. Reputational risk also cuts across industries; it was named as the number-one risk for fields as varied as beverages, hotels and non-aviation transportation manufacturing.
Source: Global Risk Management Survey, Aon, 2017
THE GLOBAL TOP 10
LACK OF PREPARATION
High-profile scandals, product recalls and the viral spread of news on social media helped catapult reputational risk to the number-one spot.
Overall, businesses are less prepared to face their biggest risks than they were two years ago. The average readiness for the current top 10 risks has exhibited a significant downward trend, dropping from 58% in 2015 to 53% in 2017.
Damage to reputation/brand Economic slowdown/slow recovery Increasing competition Regulatory/legislative changes Cybercrime/hacking/viruses/malicious codes Failure to innovate/meet customer needs Failure to attract or retain top talent Business interruption Political risk/uncertainties Third-party liability (including E&O) Source: Global Risk Management Survey, Aon, 2017
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% OF COMPANIES PREPARED FOR THIS RISK 100% 2015
2017
Failure to Failure to Business Political innovate attract or retain interruption uncertainties top talent
Third-party liability
80% 60% 40% 20% 0
Damage to reputation/ brand
Economic Increasing Regulatory/ Cybercrime slowdown competition legislative changes
Source: Global Risk Management Survey, Aon, 2017
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ASIA-PACIFIC
EUROPE
1. Damage to reputation/brand
1. Economic slowdown
2. Regulatory/legislative changes
2. Damage to reputation/brand
3. Increasing competition
3. Increasing competition
4. Failure to innovate
4. Regulatory/legislative changes
5. Economic slowdown
5. Failure to innovate
MIDDLE EAST AND AFRICA 1. Economic slowdown 2. Political risk
LATIN AMERICA
3. Failure to innovate
1. Damage to reputation/brand
4. Failure to attract or retain top talent
2. Business interruption
5. Damage to reputation/brand
3. Economic slowdown 4. Third-party liability 5. Social responsibility/sustainability
Source: Global Risk Management Survey, Aon, 2017
REGIONAL READINESS
RISKS OF THE FUTURE
In regional terms, the level of risk preparedness has gone up in Asia-Pacific, in contrast to all other regions, which reported lower levels of readiness than they did two years ago.
By 2020, risk management professionals believe reputational risk will drop significantly in importance.
% OF COMPANIES PREPARED FOR THE TOP 10 RISKS
2017
2015
2013
Change from 2017
PROJECTED TOP 10 BUSINESS RISKS, 2020 Economic slowdown/slow recovery
Asia-Pacific
Increasing competition Failure to innovate/meet customer needs
North America
Regulatory/legislative changes Cybercrime/hacking/viruses/malicious codes
Europe
Damage to reputation/brand Latin America
Failure to attract or retain top talent Political risk/uncertainties
Middle East and Africa
Commodity price risk 0%
10%
20%
30%
40%
50%
60%
70%
80%
Source: Global Risk Management Survey, Aon, 2017
Disruptive technologies/innovation Source: Global Risk Management Survey, Aon, 2017
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UPFRONT
HEAD TO HEAD
Is the insurance industry overly regulated? Regulation is a familiar and widespread bugbear for the industry – but has it gone too far? Here’s a global perspective
Daniel J. Kaufman
Peter J. Staddon
Alan Merten
Senior vice president H.W. Kaufman Financial Group
Managing director Managing General Agents’ Association (UK)
Financial services partner Deloitte
“Insurance industry regulation varies widely across the globe. With regard to the US, the federal government has mostly opted out of regulating insurance, with each state responsible for regulation based on local needs. It is a responsive and accountable system that relies on the expertise of individual state regulators, and it has worked well for more than 70 years. My expectation is that the federal government will maintain a policy of minimizing unnecessary regulation. While some regulation provides important consumer protections, over-regulation has the potential to limit product development or stall innovation. We will continue to advocate for a balanced approach.”
“Many would say yes, but I think there is a little more to this question. I do not believe the industry is over-regulated. Many of the rules handed down relate to good business practice. These allow us to stand on a global stage and say that our industry is among the best in the world, and both investors and clients are protected. Perhaps the more pertinent question is: Are we paying too much for regulation? The answer to that is, emphatically, yes. Intermediary costs can be equivalent to employing an additional member of staff – and in some cases, two.”
“The increased attention on conduct is placing resource pressures on the industry as it works to demonstrate the value of creating safe, sustainable products and services that highlight the industry’s duties to policyholders and are fit for purpose for the longer term. The long-term nature of insurance relationships and the transformational changes in the industry, together with the regulatory constraints on changing insurance contracts, do create complexity for both regulators and insurers. However, both parties are determined to ensure that products, practices and behaviours maintain the best interests of policyholders, not just for today, but also into the future.”
RULES OF ENGAGEMENT Regulation has been a matter of tremendous concern to the global insurance industry in recent years, according to PwC’s Insurance Banana Skins Index, a survey that tracks the greatest risks (or ‘banana skins’) facing the industry in the near to mid-term future. However, the latest survey was the first in four years where ‘regulatory risk’ wasn’t present among the top five concerns. PwC attributes its absence to a ‘business as usual’ mindset setting in as recent regulatory upheavals – including the EU’s Solvency II initiative, which was implemented last year – become the norm.
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UPFRONT
NEWS ANALYSIS
Environmental minefield An intricate nexus of regulations around the globe is making coverage for multinational corporations increasingly complex – and under the glare of public scrutiny, the stakes are higher than ever
THE GLOBAL environmental regulatory landscape is a patchwork quilt of complexities, from the EU’s sweeping Environmental Liability Directive to the myriad legislations surrounding the Canadian Environmental Protection Act. For multinational businesses, operating in multiple countries is a balancing act that requires navigating an intimidating amount of legislation. “From the multinational side, it’s incredibly important to make sure the policy is responding to local laws,” says Glenn O’Halloran, Chubb’s environmental risk manager for the UK and Ireland. He says that at last count,
Regulation across various jurisdictions can be “wildly different,” says Neil Beresford, partner at Clyde & Co. Some markets, such as China, India and some countries in Europe, have compulsory insurance programs in certain areas, and it’s no coincidence that those jurisdictions tend to see the highest claims activity. Alongside this complex global landscape, there is an ever-increasing level of public scrutiny on companies – meaning the stakes are high when it comes to potential reputational damage resulting from an environmental incident. “There’s increased pressure in how
“There needs to be a greater awareness that this is not just confined to manufacturing or oil and gas sectors – it is everybody” Neil Beresford, Clyde & Co. there were around 17,000 different pieces of environmental legislation globally. “So when businesses do have an event, it’s important to have a local contact point within the certain territory where these losses occurred and to ensure that the policy is structured appropriately for that territory.”
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[firms] operate and how they manage their environmental exposure,” O’Halloran says, explaining that this is driven in part by rising public awareness, as well as the ability of news to spread quickly in the digital age. “Something that might have been a relatively benign issue can quickly become serious
from a reputational damage perspective.” But despite the weight of the risks, clients typically don’t understand the extent of their environmental exposure, and among those that do, there is a common misconception that property and general liability policies will be enough to cover the majority of any losses. “The market is in a very similar place to where D&O was, say, 15 years ago, or where cyber was five years ago, in that there’s not sufficient understanding of the generality of the risk,” Beresford says. While a great deal of work was done in the cyber market to help businesses understand that cyber exposures are not just limited to technology companies, he explains, there remains a lack of awareness in the environmental space. “If you look at the claims data across
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GLOBAL REGULATIONS AT A GLANCE
Canada
The Environmental Enforcement Act (EEA) is omnibus legislation that applies whenever an offence under the Canadian Environmental Protection Act (CEPA) is prosecuted. Fines are issued for offences involving direct harm or risk of harm to the environment.
US
Superfund liability legislates that any company potentially responsible for pollution may be held liable for the entire clean-up of a site, including all government costs, damages to natural resources and any human health concerns.
EU
The Environmental Liability Directive, which came into force in 2009, imposed new liabilities for environmental damage on many companies operating within the EU, requiring not only the prevention of damage but also restoration after an event. industry sectors, you’d be surprised at how many claims are accounted for by real estate businesses, retail businesses and
environmental legislation – including the EU’s Environmental Liability Directive – the responsibility to remediate falls not just
“A multinational client must not rely upon a single master policy to appropriately insure their overseas exposure” Glenn O’Halloran, Chubb construction businesses – they’re all facing quite significant claims,” Beresford says. “So there needs to be a greater awareness that this is not just confined to manufacturing or oil and gas sectors – it is everybody.” One aspect in particular that is not well understood is that under some
on the polluter, but the landowner too. “About half the cases that we see are cases where a landowner has been required to remediate for something that someone else has done,” Beresford says. “It’s the fact that the landowner is responsible for the acts of others that makes environmental
risk of such general application.” With such a complex landscape to navigate, how are clients – especially those facing exposures in multiple territories – best supported? O’Halloran stresses that both brokers and insurers must recognize that the differing requirements in different territories create a need for local policies. Brokers should draw not only on multi n ational insurers’ knowledge of global environmental exposures, but also on their capabilities in providing local services to clients. “The common theme here is that a multinational client must properly structure their environmental insurance policy to respond to unique risks in each territory,” O’Halloran says, “and they must not rely upon a single master policy to appropriately insure their overseas exposure.”
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UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
The Co-operators
Assurance Auclair
Acquisition of P&C brokerage to bolster The Co-operators’ presence in Quebec City
Fairfax Financial Holdings
Allied World Assurance Company Holdings
Both companies announced a two-day extension to their merger offering period; this is Fairfax’s largest purchase yet
Gore Mutual Insurance
Howard Noble Insurance
Gore Mutual acquired the brokerage as part of its commitment to the sector; Noble to continue operating separately
H.W. Kaufman Financial Group
Chlystek & White Services
Kaufman’s Colorado-based Afirm brand to take over the new acquisition’s operations; Chlystek & White’s employees will be retained
Intact Financial
OneBeacon Insurance Group
Purchase of US-based OneBeacon results in specialty insurer focused on small- and mid-sized businesses
Kootenay Insurance Services
McBain Insurance Agency
Purchase allows Kootenay Insurance Services to expand beyond its region; acquisition a culmination of a two-year review
Northbridge Financial
Fenchurch General Insurance Company
Purchase of Fenchurch’s surety bonds product will see the rebranding of United Surety Limited to Northbridge Surety Limited
Intact unveils ‘my Driving Discount’
Intact Insurance has launched its “my Driving Discount” program in Alberta, which uses data collected by a mobile app to determine a personalized discount for customers based on their driving habits. A mobile app gathers data for personal auto insurance customers. Commercial insurance customers will receive an on-board diagnostic (OBD) device that connects to the OBD port in their vehicle. Customers receive a one-time discount on their premium just by signing up for the program: 10% for personal and 5% for commercial auto insurance customers.
Gore Mutual vows to ‘protect’ Howard Noble
Gore Mutual Insurance closed its purchase of Ontario brokerage Howard Noble Insurance Limited in late June, promising to protect the latter’s workforce and independence. Paul Jackson, Gore Mutual vice-president of sales and marketing, said modernization is the company’s main stimulus for change. “We’re trying to protect and develop the broker distribution network. As the owner, we’re going to enable Noble Insurance to modernize and develop the next phase of its business,” Jackson explained. The acquisition came after Wayne Noble decided to retire as president and sell the brokerage.
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Gore Mutual to offer cyber product
Gore Mutual has struck a deal with international reinsurer Beazley to provide a comprehensive cyber and data breach response product for small businesses. Called ‘Padlock,’ it offers three layers of protection: for the client’s business, customers and reputation. “Cyber attacks have become a big issue for Canadian small businesses, and cyber and data breach response coverage is essential,” Beazley underwriter James Gray said. “We are delighted to have partnered with Gore Mutual to utilize our extensive experience in handling data breaches to develop and launch Padlock.”
www.insurancebusiness.ca
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PEOPLE Empire Life launches business travel
Empire Life has announced the launch of a new product aimed at firms with employees on short-term assignment outside of Canada. The International Business Travel Medical product aims to provide business owners with the ability to customize the benefit to meet the needs of their employees. It is administered by New York-based insurer MetLife. As the product is portable, employees can maintain the same benefit level in every country and territory. Clients who purchase the product will have access to 24/7 service and multilingual travel assistance.
Berkshire Hathaway reveals liability product
Berkshire Hathaway Specialty Insurance has launched a new policy – the Employment Practices Liability Policy. The new product “provides Canadian companies with a simple, clearly written solution for complex risks,” explained BHSI Canada executive and professional lines head Michael Densham. The policy protects companies from employment practice claims, such as wrongful termination, harassment, discrimination, retaliation and failure to employ or promote. There is also a solution available by endorsement for “pay in lieu of notice” damages.
Allied World expands risk management offering
Allied World Assurance Company Holdings has announced that its risk management clients in North America will now have access to discounted drone services, provided by unmanned aerial systems provider DataWing. According to a press release, “DataWing can help companies monitor the costs and benefits of operating a drone program, determine the best way to incorporate or maintain a successful program, stay informed on the latest FAA regulations as well as the UAS hardware and software, develop flight plans and deploy drones.”
NAME François Dagneau
John Doyle
Kyle Gray
LEAVING
JOINING
NEW POSITION
Aon Benfield Canada
Arch Reinsurance Canada
CEO of Canada branch; Dagneau replaces the outgoing Patrick McGuiness, who is retiring
N/A
Marsh & McLennan Companies
CEO of Marsh; Doyle replaces Peter Zaffino and will report to Marsh & McLennan Companies president & CEO Dan Glaser
Ridge Canada Cyber Solutions
Director of underwriting for Canadian operations; Gray will oversee product development, underwriting, and broker relations
N/A
Dominique Largeron
N/A
Chubb Global Markets
Delegated underwriting authorities manager; responsible for overseeing the company’s portfolio of thirdparty delegated underwriting arrangements internationally
Sonja Ochsenkuehn
AIG
XL Catlin
Head of Global Programs; she will be given direct responsibility over the company’s global program platform
Gerry Thiessen
Sun Life
Rise People
Senior vice-president, group benefits strategy; Thiessen leads a team that serves as a nationwide benefits adviser
Maurice Tulloch
N/A
Aviva
Executive director; Tulloch was previously Aviva’s CEO of international insurance
Arch Reinsurance Canada names CEO
Arch Reinsurance recently announced that it has appointed François Dagneau as the CEO of its Canada branch, replacing Patrick McGuiness, who is set to retire. With over 25 years’ experience, Dagneau was most recently associated with Aon Benfield in Canada. Prior to working with Aon Benfield, he was chief actuary for reinsurer Sorema in its Canada and France operations. “We are thrilled to have François joining our team, given his depth and breadth of experience,” said Arch Re president and CEO Jerome Halgan. “He has a deep knowledge of the Canadian reinsurance market.”
XL Catlin appoints head of global programs
XL Catlin has announced that Sonja Ochsenkuehn will take the role of its new head of global programs. Ochsenkuehn will be responsible for the company’s global program platform. She reports to Philippe Gouraud, XL Catlin global head of strategic client and broker management. “We made the strategic decision to strengthen our team because we recognize our clients’ needs are getting more complex, moving from the traditional risks, such as property and casualty programs, to include political violence and terrorism, supply chain disruption or cyber risks,” commented Gouraud. “Sonja has a track record of thriving in roles with a multinational focus.”
www.insurancebusiness.ca
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UPFRONT
MGA UPDATE
MGAs and the sharing economy As more entrepreneurs turn to this emerging sector, what can MGAs contribute?
right in the centre,” commented Aon Analytics global CEO Paul Mang. Mang also said that due to the instant nature of the sharing economy, personal and commercial lines will need to have crossover as policies transition to shorter terms. Sharing economy participants will also have specific insurance needs that MGAs will be well equipped to deal with.
“One of the things our industry needs to get better at ... is listening to our customers”
While the popularity of the sharing economy model, including names like Uber and Airbnb, cannot be denied, it is not without its shortcomings. Critics of the model say that users acting as vendors on the sharing economy model are walking insurance nightmares, with complicated non-standard coverage needs that swing from personal to commercial and back. To make matters even more complicated, some of these companies insist that due to the nature
NEWS BRIEFS
of the sharing economy model, they do not consider their user-vendors as their employees (preferring to call them ‘partners’), and will therefore not purchase any form of commercial or fleet insurance to cover them. So as more entrepreneurs look to the sharing economy model for new business ideas, what can MGAs do to contribute to the space and address the emerging non-standard risks? “I think that the sharing economy really does, maybe counterintuitively, place our roles
CFC wins three cyber risk awards
CFC Underwriting scooped three categories at the 2017 Cyber Risk Awards. CFC’s Graeme Newman was voted Cyber Risk Industry Person of the Year (London). The company’s cyber incident response app was voted the Cyber Risk Innovation of the Year. Finally, CFC was named Cyber Risk Insurer of the Year. “We’re passionate about this class of insurance and this will spur the team on to push boundaries further ... in this rapidly changing and challenging sector of the market,” said CEO David Walsh.
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Gary Hirst, president and CEO of Ches Special Risk, said landlord insurance made especially for Airbnb hosts is “easily available in the MGA market,” but it is “not necessarily available in the standard market.” “Standard market is called standard market because they only like standard risk,” Hirst explained. “A risk like Airbnb is presently considered non-standard. How long that will last for, no one particularly knows. We do know that, for the moment, standard insurers don’t have any appetite to pick up short rentals.” Lambros Lambrou, Global Aon Risk Solutions operating committee member and CEO of operations in Australia, stated, “We see ourselves as the trusted risk advisers for our clients, and one of the things that our industry needs to get better at, quite frankly, is listening to our customers around their evolving needs.”
Beazley reveals data breach incidents
Beazley’s Breach Response Service division posted a 39% year-over-year increase in the number of data breach incidents it handled for Q1 2017. It identified four emerging trends based on its data: hackers use phishing techniques to access employee emails; ransomware attacks in Q1 2017 were 35% higher than in the same period last year; hacks and malware represented 16% of losses in Q1 2017 for health care facilities; and hacks and malware represented 39% of breaches in Q1 2017 for banks.
www.insurancebusiness.ca
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Q&A
Susan Murphy President and CEO
Insurance is still a people business
TOTTEN GROUP INSURANCE
Career highlight Moving from the insurer side to the broker side in 2012
What sets Totten Insurance apart from its competitors? Our specialty programs and segments set us apart. These include medical malpractice, roofing, protective services, forestry, construction, mining and hospitality. We have developed strong specialized underwriting expertise in these practices. Many MGAs may offer similar products; however, we have heavily invested in these segments and have recruited some of the best technical talent in the industry.
What challenges is your company facing right now? What is being done about them? One challenge we face is the excess capacity in the marketplace and the influx of new MGAs receiving capacity from domestic insurers as well as Lloyd’s. This contributes to a focus on lowest price and dilutes our value proposition. We need more emphasis on the best solution for the customer. We are committed to specialized practices bringing more than just price to the table.
What are your thoughts about Airbnb and other similar sharing economy models? The sharing economy is here to stay and will continue to grow. While insuring Airbnb-type models has different challenges and exposures, we recognize the need to change and adapt to this new landscape. This requires us to be more creative. Continued investment in technology and our service model will be critical to future success.
Angus-Miller expands offering
Angus-Miller Insurance announced that it has not only expanded its commercial liability offering but can now also write for both US and international exposures. Features of the expanded general liability product include $10m in-house authority, low minimum premiums for both low- and high-hazard classes, special premiums for short-term events, and limited pollution coverage on select classes. The MGA has written accounts for various clients, such as welding inspectors, plumbers, IT consultants and tour operators.
Wherever the ultimate customer chooses to purchase insurance, it is critical they understand how their claims will be handled and who will be their advocate through this process.
How can the insurance space address the needs of the sharing economy model, when clients seemingly need both personal and commercial insurance? Ultimately, this depends on the customer and the complexity of the account. However, for a straightforward risk, we believe one policy would be the most appealing for the customer as it provides a single solution for all of their needs. It is also more seamless (and less confusing) in the event of a claim. To do this, it is important to ensure underwriters have the necessary expertise to assess and underwrite the exposure.
What other potentially disruptive trends should the insurance industry be preparing for? Online purchasing and consumer direct commercial insurance are in their infancy in Canada. As they continue to grow, they will become more disruptive to the current broker channel. This is where client advocacy becomes key. As we look globally, many companies have identified the Canadian P&C industry as an attractive investment option. With this will come different ways of looking at how insurance is sold and what new platforms and distribution channels will be useful.
O2 Insurance launches campaign
New MGA O2 Insurance Services launched a marketing campaign in July to bolster its presence. The MGA offers lines of business targeted at brokers’ niche needs. “We won’t be writing everything – maybe in five to 10 years our appetite list will be larger – but really to start off it’s about partnering with our brokers, determining what it is that they need and consolidating small pockets of business from multiple brokers to develop a product that will meet all of their needs,” said COO Karen McGee.
IDC Worldsource expansion plans
IDC Worldsource president Ron Madzia has revealed that the Vancouver-based MGA is looking to develop its business in Quebec. The decision to open offices in Quebec is “in response to the firm’s organic growth in the market,” Madzia said. Madzia also said IDC would be opening another office in downtown Montreal. One of the MGA’s strategies is to focus part of its business development on ethnic Chinese communities across Canada’s major cities – in this regard, the company considers Montreal to be a significant market.
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UPFRONT
TECHNOLOGY UPDATE NEWS BRIEFS Aviva in talks over driverless cars
Aviva is looking to seal deals with manufacturers and developers of driverless cars. A deal with one of these driverless car companies could mean drivers who purchase their cars from the manufacturer automatically gain insurance through Aviva, or could lead to a partnership with a start-up in the sector. “If signed this would be an Aviva first,” said CEO Maurice Tulloch. One of the companies Aviva is in talks with is based in Canada, and it has been hinted that these talks are at an advanced stage.
Generali arm offers identity protection
Generali Global Assistance has announced that its proprietary identity protection platform is being made available in Canada. The identity protection platform includes identity and credit monitoring, alerts, and resolution tools. A user-friendly dashboard allows users to easily access these services. “Identity theft is one of the fastestgrowing crimes in Canada and we are pleased to now offer our innovative suite of protection services to Canadian organizations, along with their employees and customers,” said Paige Schaffer, Generali Global Assistance president and COO of the Identity and Digital Protection Services Global Unit.
Allianz offers major drone backing
Allianz is one of the newest investors in Drone Racing League (DRL). DRL has completed its series B round of funding worth approximately $26.5m. Jean-Marc Pailhol, head of global market management & distribution at Allianz, said that the insurer was initially a
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sponsor of the DRL, but was convinced of the potential growth of the sport and turned its sponsorship into an equity stake. The money raised will be used to grow DRL’s broadcast audience, as well as to develop the technology behind the drones.
Gore Mutual unveils tech offerings
Gore Mutual revealed three new initiatives during its last Fast Forward conference. The first initiative is the development of a universal digital pink slip, in cooperation with CSIO, to serve as a convenient solution for brokers. The second is the product of Gore’s partnership with international reinsurer Beazley. Padlock is a comprehensive cyber and data breach response product for small businesses. The last initiative is the product of another partnership, with home automation company Fibaro. The partnership will allow Gore to provide flood sensors to select commercial and personal customers.
Lemonade posts customer base growth
Insurtech upstart Lemonade recently issued a statement detailing its customer base growth. The company has grown to a 14,315 customer base in just eight months in California, New York and Illinois, co-founder Shai Wininger said in an online statement, and further growth is expected. Wininger also shared other relevant company figures. Seventy-eight per cent of Lemonade’s customers were between the ages of 25 and 45, and were mostly urban dwellers. Notably, 2% of customers were 65 or older. In his statement, Wininger also took some jabs at Lemonade’s traditional opponents, calling them “old insurance companies.”
Ransomware: How should insurers respond? As more ransomware attacks affect businesses, cyber insurers will need to take more proactive roles Thanks to the high-profile malware WannaCry and NotPetya, the threat of ransomware has re-entered the public consciousness. With its ability to render an infected system inert until users pay off the cybercriminals responsible with a hefty ransom, ransomware can cause huge losses for businesses. Although both malware have been contained to a degree, the threat of another, much deadlier, ransomware remains. Even if software and cybersecurity developers patch their systems to better withstand data breaches, hackers will attempt to keep up and abuse the next vulnerability they find. Also alarming is that people will continue to be victimized, according to a survey recently conducted by the Centre for International Governance Innovation (CIGI) and Ipsos, which found that 24% of individuals said they would have no idea what to do if their computers were affected by ransomware. It is not enough for businesses to have a cybersecurity system in place – insurance will be needed to cover for any shortcomings. “There are lots of other features in a cyber policy,” explained Chubb Canada vicepresident, media and cyber liability product manager Matthew Davies. “It can help organizations respond to ransomware and extortion threats. Ransomware is quite common these days and it can affect any size of business. A cyber policy would help to cover the costs of a ransom demand, as well as deal with
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instances of corrupt or destroyed data.” But on top of offering cyber coverage to their clients, how exactly should insurers respond to the ransomware trend? Underwriters need to understand that demand for their services will increase proportionally to the demand for cyber insurance. Symantec Corporation vicepresident and general manager of cyber insurance Pascal Millaire warned that “a fundamental labour supply/demand mismatch” could arise if underwriters are unable to properly serve their clients. “Going forward, there will be a need for more technology-enabled tools to streamline the underwriting process and supplement decisions with readily consumable underwriting data,” Millaire said.
“Ransomware is quite common these days and it can affect any size of business” For brokers, it means staying on top of the increasing complexity of ransomware and other malware. This means keeping up to date with major cybersecurity events and also tracking regulatory changes to breach notifications. Brokers must also educate their clients on the advantages of having a cyber policy. “Cyber is very topical at the moment,” said Davies. “A lot of business owners and boards of directors are asking their insurance brokers about cyber coverage. The insurance broker has a critical role in explaining how to mitigate cyber risk.”
Q&A
Greg Markell President and CEO RIDGE CANADA CYBER SOLUTIONS INC.
Making a technological transition
Years in the industry 32
Which tech trend has the potential to disrupt the insurance industry?
Career highlight “Having the great fortune of working with incredibly talented, creative and intelligent people across a number of countries.”
There are so many technologies that have the ability to disrupt how we underwrite risk – from leveraging data analytics, the use of AI to supplement actuarial modelling, through to the application of risk evaluation, to fraud detection and instantaneous claims handling. Furthermore, technology is making the world a much smaller place. With a fundamental concept of insurance being the law of large numbers, access to international markets, and their respective data sets, will be powerful. Leveraging technology, like blockchain, will advance these capabilities immensely over the coming years as everything develops.
What are your thoughts on ransomware and the recent string of cyberattacks? Given that at the current time ransomware is one of the fastest monetization strategies (only social engineering fraud and hacked banking credentials have fewer steps from intrusion to cash) that the threat actors can deploy, you can expect this tactic to proliferate. Since most deployment of the malware relies on phishing campaigns, the human element is exposed/exploited. My thoughts on the subject are that we (as an underwriting community) need to be better at sharing our risk management knowledge with our retail partners. Having training on the subject will go a long way in helping employees/managers/owners of our clients recognize what to look for.
With so many ways to cause data breaches, how can an insurer provide adequate cyber insurance coverage? By truly understanding what the end client is worried about. Focusing on pain points, and helping our brokers communicate what we see regarding losses and coverage issues, so that they can have meaningful conversations with their clients.
How can insurers convince their clients that they need cyber insurance? Brokers are aware that any client using a computer has an exposure. As a wholesale market, we try to help our broker partners understand how to bring up the conversation, what the coverages are, and how they can be used in the face of an event. Conversely, knowing what to look for in terms of organizational maturity – sometimes an end client’s resources are better allocated across strengthening controls, allowing them to get more ROI on the insurance purchase in the long run.
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email insurancebusiness@kmimedia.ca
Blending generations As one generation retires from the industry, a quality transition is the key to professional survival, writes Scott Rogers IN 1969, Neil Armstrong and Buzz Aldrin walked on the moon, Woodstock debuted, and the internet was born. In 2019, scientists aim to send humans to Mars, Star Wars IX will be released, and one-quarter of insurance industry professionals are predicted to retire. Most industries experience evolutions, but are we prepared? Without a plan in place to blend generations within the workplace – and to do so quickly – the quality of an agency will greatly decline. As your workforce continues to mature in the coming years, one of the most critical business moves you can make is to focus on an effective generational transition strategy. It can be difficult to create an agency culture that is both attractive to young agents and comfortable for senior staff, but that is what we all must do in order to keep our businesses thriving. We may have been able to rely on the same great producer types for the last several decades as the pillars of our business model, but what happens when these pillars no longer exist? If the insurance industry does not modernize, become appealing to the next generation of professionals and develop a plan to make this transition go smoothly, the years of time and effort that past generations have devoted toward our industry will have been for nothing. It’s time to focus on what’s to come instead of dwelling in the past – corporately and culturally. How can we do this? By finding what motivates each generation and leveraging it to produce greater output. While older
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generations are motivated by proving themselves through their duties, I have found that younger associates find purpose in knowing their company serves the community. Our agency is deeply rooted in helping the local community; we believe this contributes to our overall success. We encourage volunteering and regularly extend this option during working hours. This shouldn’t just be a company belief – to be successful, it should be a personal belief.
It’s equally important for managers to build relationships within an agency to leverage generational knowledge and share skill sets. Encourage mentoring – no, actually require it. By imparting knowledge from prior successes or failures, mentors can pave the way for other team members. These moments encourage continual learning and personal development for both the mentor and the mentee. The mentor/mentee relationship also breaks down judgments and barriers bred by generational differences in work style. On that note, the success or failure of an associate shouldn’t be judged by the hours they keep, but by their ability to meet or exceed core objectives. This flexibility should carry over to management styles as well. I believe that being accommodating and flexible helps motivate employees, increase productivity, reduce turnover and lower acquisition costs. At the end of the day, most of us want the same thing: the flexibility to work in a fashion and style where we are most productive, and to receive praise from other associates and management for our contributions. Recognize that while we might all have different styles of working, when it comes to defining productivity
“It can be difficult to create an agency culture that is both attractive to young agents and comfortable for senior staff, but that is what we all must do” Antiquated tendencies skewed toward older generations will only add to the difficulties of combining generations within the agency. When an employment offer is made to a new team member, you must immediately recognize and identify the value they bring to the organization. As a management team, we look for ways to encourage and reward the unique strengths each associate brings to the table. Differences shouldn’t be thought of as hindrances, but rather as traits that provide team benefits. Instead of making associates conform, they should be encouraged to be unique. This attitude fosters a more positive work environment.
or work ethic, embrace each of your employees’ journeys to reaching their full potential. The insurance industry is experiencing this generational shift in an especially significant way, so it is critically important to focus on creating purpose, celebrating differences, developing relationships and remaining flexible. Being mindful of these tactics will help blend workplace generations and ensure that the insurance industry is able to continue moving forward successfully. Scott Rogers is president of The Glatfelter Agency, a retail division of Glatfelter Insurance Group [GIG]. An employee-owned company, GIG is among the largest program managers and insurance brokers in the US.
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UPFRONT
It’s not what we do that makes us different... it’s how we do it!
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.
www.mpamag.com
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PEOPLE
INDUSTRY ICON
All in, all the time XL Catlin’s Joe Tocco discusses the leadership lessons he learned while working on nuclear submarines and what his company is doing to remain relevant in the modern insurance industry
JOE TOCCO is a veteran not only of insurance, but of the US Navy. Before joining the industry, he spent nine years as a nuclear field service engineer, the majority of that time on nuclear submarines. “I think it really did form a lot of my early thinking,” he says of his time in the Navy. Tocco undertook several leadership roles during those years, but his Navy tenure also provided a valuable opportunity for him to observe and learn from other leaders. “You quickly identify with some of the good leadership – there was a lot of that,” he says. “You also quickly learn from people in these positions who were horrible leaders. It really helped form the way I thought about leading people, working with people [and] building teams. Being on a nuclear submarine, your life at any minute is dependent on having the right people around you and being able to trust the people that you’re with. So, as you built your teams, you had to make sure that if you didn’t have people you could trust, you had to help train them and bring them along.” Tocco has also faced many challenges as an insurance leader, including being on the ground in New York City during 9/11. “I was working at a different firm at the time … my office was downtown next to the World Trade Center,” he says. Tocco lost four colleagues in the attacks,
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including his best friend. “What ended up happening was I was promoted into my best friend’s role, which was, in my own mind, an incredible challenge to deal with and overcome,” he says. “And then [I had] to be strong enough to provide the leadership that the team really needed back then, because everybody was at
stand out in today’s fiercely competitive climate, Tocco says, “I really think it comes down to being absolutely excellent at everything we do. We need to … deliver on our promises and deliver excellent service from start to finish, including claims handling, payments, issuing policies and a lot of the basic blocking and tackling, but do it better than anybody.”
“It comes down to being absolutely excellent at everything we do. We need to … deliver on our promises and deliver excellent service from start to finish, including claims handling, payments, issuing policies and a lot of the basic blocking and tackling, but do it better than anybody” a loss. Nobody knew what we were going to do and if we were even going to be able to continue to work, if we could ever come back into Manhattan … [that] would probably be the biggest challenge that I think I’ve had to deal with throughout my career.”
Ensuring excellence Today, Tocco is chief executive of insurance in North America for the recently merged XL Catlin. For a massive carrier like XL Catlin to
He also acknowledges that staying on top in today’s insurance industry means investing in new technology such as artificial intelligence. “If we’re able to improve our operations and leverage real-time data [and] drive underwriting decisions better with the use of artificial intelligence, I think that would be a real benefit for us,” Tocco says. “How we can maybe use that artificial intelligence to make us better as an organization as well is certainly an opportunity for us.”
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PROFILE Name: Joseph Tocco Company: XL Catlin Title: Chief executive, North America, insurance Based in: New York City Years in the industry: 21 Fast fact: Before taking on his current role, Tocco was XL Group’s chief executive of North America property & casualty insurance. He joined XL Group in 2011 after spending almost 15 years with Zurich in North America.
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PEOPLE
INDUSTRY ICON
He points to XL Catlin’s internal innovation team, Accelerate, which works with each business unit to generate new opportunities through the use of new technologies, including AI. “That’s a fairly small team, but they’re moving very quickly and looking at all sorts of opportunities.” According to Tocco, XL Catlin has been engaging in efforts to protect itself from disruptors for some time now – particularly through XL Innovate, its venture capital play. “We make investments in a lot of different
doing with autonomous vehicles – and for us, in turn, to share with them insights on how we are going to work together to enable this technology to actually advance, because they’re going to need insurable solutions in order for this to really get mass appeal and for people to buy into this,” Tocco says. “For us, the advantage is really being on the cutting edge of the new trends associated with autonomous vehicles and how we can use that and apply that not only with Oxbotica, but obviously for all the other
“We make investments in a lot of different startup operations. We ultimately might buy those outright, bring them in-house, sell them off or maintain our investment and let things play out. But it gives us a seat at the table for all of this emerging technology” startup operations,” Tocco says. “We ultimately might buy those outright, bring them in-house, sell them off or maintain our investment and let things play out. But it gives us a seat at the table for all of this emerging technology and emerging trends. It’s been quite exciting to see that play itself out, and there are a number of examples where we’ve been very successful.” Specifically, Tocco mentions XL Group’s 2015 acquisition of New Energy Risk, an insurance solutions provider for the renewable energy sector, which he says “has really been a great win for us.” He also points to the insurer’s landmark agreement with Oxbotica, a spin-off from Oxford University’s Mobile Robotics Group, which focuses on the development of autonomous vehicles. “They reached out and asked us to partner with them to start learning what they were
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industries and manufacturers that will be using this technology.”
XL GROUP BY THE NUMBERS
7,000
Approximate number of XL Group employees worldwide
87
Number of XL Group offices around the world
30
Countries in which XL Group operates
Thinking ahead Tocco is excited to be part of a firm that’s embracing new ideas in order to maintain its relevance well into the future. “One of our new values that we’ve added recently is to be future-focused,” he says, “and it’s really about preparing us for the next few decades and to make sure that we are incredibly relevant throughout that time.” Tocco is confident that XL Catlin has the talent and the culture to make that happen. “Our culture is one that’s very inclusive – people work to help each other and for us to be successful,” he says. “As we start to really leverage that going forward, bringing the talent across both XL and Catlin … to the forefront as one XL Catlin team in this market, I think we can’t be beat.”
2015
Year when XL Group completed its acquisition of Catlin Group
$9.7bn
Gross premiums written by XL Catlin in 2016
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SPECIAL PROMOTIONAL FEATURE
BUILDING RELATIONSHIPS
Building blocks to success Tony Picciano from Markel Canada talks to IBC about the relationship skills needed to succeed in the modern insurance industry
AS TECHNOLOGY reshapes the insurance industry at such a rapid rate, it can sometimes seem impossible to keep up with the change. New systems, software and apps are changing the way people communicate and expect to do business. For people without the time or money to invest in redesigning their internal operations, it can seem like an uphill struggle. Yes, embracing the technology and innovations that are pushing the industry forward is important, but it’s not everything. The simple fact is that technology will never displace one of the pillars that the insurance industry has been built on for hundreds of years: the ability to develop and maintain meaningful, mutually beneficial relationships. An insurance professional can have all of the latest software and management systems, but if they cannot connect with a wide range of people on a human level they will struggle in this business. It’s as simple as that. One person who understands the power of relationships more than most is Tony Picciano, the vice-president and branch manager eastern region at Markel Canada. Back in 1998, when he was working for Ferrari and BMW Montreal, operating in
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the insurance industry couldn’t have been further from Picciano’s mind. He was quite content in his role, but when someone from AIG approached and offered him a position, Picciano’s interest was piqued. He called the AIG executive back and ended up starting in a claims role that September. Although the business was a complete unknown, Picciano liked the way the industry operated. “Deals were done by meeting people for lunch, not in a box,”
wedding many of his industry colleagues were in attendance. “Tonnes of brokers know my family personally – not just the alpha brokerage houses, but the secondtier and third-tier brokers, too,” he says. “So much of the success I’ve had in this business has been based purely on the relationships I have strived to harness. The business aspect is often so simple.” Building relationships has also been integral to Picciano’s personal development
“So much of the success I’ve had in this business has been based purely on the relationships I have strived to harness” Tony Picciano, Markel Canada Picciano says. “We would discuss business and then talk about our families and our interests. I was able to really get to know people.” Eighteen years on and Picciano still enjoys the relationship building and people time that his role demands. It’s not uncommon for him to invite a broker to his house for dinner. At Picciano’s 250-guest
and progression in the industry. After working at AIG, Picciano accepted a role as branch manager at ACE Canada, where the CEO at the time was Karen Barkley. Picciano eventually moved on to another leadership role at Zurich, but when Barkley took the reins at Markel, she asked Picciano to further develop Markel’s Montreal branch. It didn’t take him long to accept the offer.
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“I was so honoured that Karen called me,” Picciano says. “Quebec has a different flavour and culture – it’s very patriotic and a close-knit community. When the Markel brand was launched here, we were knocking on people’s doors. Now, I’m proud to say, people are knocking on our door. That’s all been made possible by the service we provide and by the relationships we’ve built.” Taking a long-term, out-of-the-box approach is crucial for any individual who wants to build relationships in insurance. It’s an industry that is steeped in history and tradition and although fintech and insurtech solutions are having an effect, the impact of
an old-fashioned face-to-face meeting and handshake cannot be underplayed. “It’s all about creating two-way relationships and building the trust factor with your brokers,” Picciano says. “Longevity is also important. I don’t want an account for a year. I think long term, and relationships are needed to enable that.” Being able to have an open and honest conversation with your broker and carrier partners is imperative, but you also need to have the know-how and capability to back up your promises. There is no substitute for expertise and it’s that combination of industry knowledge and people-skills that enables the top achievers to get ahead.
“You need to get into the mindset that you’re going to leave nothing unturned for your client; that you’re not just there to sell a piece of paper and take the premium,” Picciano says. “Brokers need to demonstrate a closeness and commitment that lets both the client and carrier know they are here for the long haul and ready to shine, through both the good and bad times.” Being prepared to go the extra mile for your clients and industry partners is also crucial. In order to succeed in many of the industry’s senior roles, it’s often necessary to show a level of commitment and flexibility that may not come naturally to some. In many cases, it’s not a 9–5 job.
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FEATURES
SPECIAL REPORT: FIVE-STAR CARRIERS 2017
FIVE-STAR Brokers chime in on their carriers’ performance – which ones are scoring top marks and what needs improving ONCE AGAIN, the broker community has rallied together to rate their carriers’ performance in the past year – while unveiling the ones who are outperforming the rest. Brokers analyzed their carriers’ performance across 10 categories: Reputation and financial stability Underwriting expertise Claims processing Range of products Technology and automation
Quick quotes Education and training Marketing support Competitive rates Commitment to the broker distribution channel This year, carrier performance improved in four categories, experienced no difference in four other categories and fell in just two areas. Carriers exhibited the most improvement when it came to reputation and financial stability,
notching up a 6% increase in performance over last year. This year, 21 carriers were singled out as top performers, earning five-star status by receiving an average score of 8 or higher in at least one category. Out of those 21 carriers, one carrier earned a five-star rating in all 10 categories, and four other carriers earned an overall average score of 8 or higher, cementing their place as some of the best companies the industry has to offer.
HOW HAS CARRIER PERFORMANCE CHANGED? Overall, carrier performance showed improvement in four categories this year, most notably with reputation and financial stability showing a 6% increase. Competitive rates, range of products offered, quick quotes and marketing support showed no changes this year. On the other hand, carrier performance decreased in only two areas - and only slightly, claims processing and commitment to the broker distribution channel, which experienced the most significant decrease of 6%. 10.0 9.0 8.0 7.0 6.0
Reputation and financial stability
Commitment to the broker distribution channel
Underwriting expertise
Competitive rates
Range of products
2016
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Technology and automation
Quick quotes
Claims processing
Education and training
Marketing support
2017
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R CARRIE R TA
7 201
FIVE -S
S
CARRIERS BROKERS ON CARRIERS
WHAT ARE BROKERS LOOKING FOR IN A CARRIER?
HOW WELL DID CARRIERS PERFORM ON AVERAGE?
Brokers were asked to select the three most important things they look for in a carrier partner. Here’s what they said:
Reputation and financial stability 8.13
Competitive rates 70%
Commitment to the broker distribution channel 7.62
Underwriting expertise 7.60 Underwriting expertise 56% Competitive rates 7.40
Claims processing 45%
Range of products 7.29
Technology and automation capabilities 7.14 Range of products 40% Quick quotes 7.00 Quick quotes 28%
Reputation and financial stability 25%
Claims processing 6.96
Education and training 6.76
Marketing support 6.54 Technology and automation 20%
Marketing support 6%
TOP-PERFORMING CARRIERS These five carriers received the highest overall scores across all 10 categories Beazley Insurance Company
Education and training 2%
Gore Mutual Insurance Markel Canada
Trisura Guarantee Insurance Company Wynward Insurance Group
Pembridge Insurance
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FEATURES
SPECIAL REPORT: FIVE-STAR CARRIERS 2017 WHICH CARRIERS EARNED FIVE-STAR STATUS? CARRIER
Technology and automation
Range of products
Reputation and financial stability
Competitive rates
Quick quotes
Education and training
Marketing support
Underwriting expertise
Claims processing
Commitment to the broker distribution channel
AIG Aviva Beazley Insurance Company Berkley Chubb CNA Economical Insurance Gore Mutual Insurance Heartland Farm Mutual Intact Insurance Markel Canada Northbridge Insurance Optimum General Pembridge Insurance RSA SGI Sovereign General Insurance The Commonwell Mutual Insurance Group The Guarantee Company of North America Trisura Guarantee Insurance Company Wynward Insurance Group
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S BROKERS ON CARRIERS
7 201
FIVE -S
R CARRIE R TA
REPUTATION AND FINANCIAL STABILITY
UNDERWRITING EXPERTISE
Carrier performance 8.1
Carrier performance 7.6
FIVE-STAR CARRIERS
FIVE-STAR CARRIERS
AIG
Northbridge Insurance
AIG
Optimum General
Aviva
Optimum General Pembridge Insurance
Beazley Insurance Company
Pembridge Insurance
Beazley Insurance Company
RSA
Berkley
SGI
Chubb
Sovereign General Insurance
Sovereign General Insurance
CNA Heartland Farm Mutual
Trisura Guarantee Insurance Company
Trisura Guarantee Insurance Company
Markel Canada
Wynward Insurance Group
Berkley Chubb Economical Insurance Gore Mutual Insurance Heartland Farm Mutual Intact Insurance
Wynward Insurance Group
Markel Canada Carrier reputation and financial stability was the best-performing area for carriers this year. The average score was 8.1 among brokers, and 18 out of 21 carriers earned five-star status. When considering today’s competitive market, remaining financially stable is critical for a carrier’s longevity. For brokers, having dependable, stable carrier partners is crucial as their clients depend on them to align with a carrier who can pay a large claim when needed, making a carrier’s financial stability imperative to the broker–carrier business relationship. “Very trustworthy” and “years of financial stability” were a few comments by brokers who rated their carriers highly in the category. A few brokers pointed out that while their carrier may be financially sound, their reputation falters. “Excellent financial stability [but] poor reputation,” wrote one broker. “[Carrier] has poor reputation in many cases,” said another.
Verbatim
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“Better cost and claims services, and an expert insurer [that does not] compete with brokers [as] direct writers” “Regionalize personal lines underwriting”
RSA
Northbridge Insurance Recent news has indicated that there has been a surging demand from Canadian brokers for access to London’s specialist underwriting services, thus suggesting that there is a genuine lack of local underwriting expertise, which can also be seen from some of the comments in the Brokers on Carriers survey. However, in total, 14 carriers managed to score above the rest in their underwriting expertise, with all carriers averaging a score of 7.6 in the category. At least a couple of respondents have highlighted commercial insurance as the field lacking underwriting expertise, with some mentioning specific areas, such as “poor management/underwriting in commercial auto,” “very limited expertise in PL,” and how “the underwriters do not really understand farming overall.” One broker said that with their carrier, there was “lots of turnover [and] no one really seems to be an expert at anything,” which is undoubtedly very frustrating and unhelpful for the brokers looking to help expand clients’ coverage. Another wrote that it’s important for the carriers to have “qualified adjudicators handle files, especially when it comes to MVAs,” which goes back to the lack of commercial auto expertise. And still another broker said that to start with, their carrier should at the very least “have underwriters available,” as “too many times when phoning, you can’t reach anyone,” and it’s simply impossible to move forward from that.
There is a genuine lack of local underwriting expertise As for the carriers who are doing right by their brokers in terms of underwriting, it all boils down to their being “knowledgeable,” “eager to assist,” and diligently working to build long-lasting relationships. A broker remarked that if there’s anything to improve, it’s for “staff to not lose sight of business decision-making as part of the underwriting process” by understanding the workings of the organization as a whole and how underwriting affects and is affected by these aspects. This can be linked to the rise of big data and the call to follow suit with predictive analytic models, in order for underwriters and carriers to make informed decisions and offer better coverage and pricing.
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FEATURES
SPECIAL REPORT: FIVE-STAR CARRIERS 2017 COMMITMENT TO THE BROKER DISTRIBUTION CHANNEL Carrier performance 7.6
Carrier performance 7.4
FIVE-STAR CARRIERS
FIVE-STAR CARRIERS Pembridge Insurance
Beazley Insurance Company
The Guarantee Company of North America
Berkley
SGI
Berkley
CNA
The Commonwell Mutual Insurance Group
CNA
Trisura Guarantee Insurance Company
Trisura Guarantee Insurance Company
Markel Canada
Beazley Insurance Company
Gore Mutual Insurance Heartland Farm Mutual Markel Canada Optimum General
Wynward Insurance Group
Carriers’ performance in this aspect has definitely waned, evident from the numbers themselves. From scoring the highest in last year’s result (8.2), the category has now slipped to third place (7.6) after a drop of 0.6 – the biggest drop of all the categories. For some time, industry leaders have expressed concern about the survival of small, independent brokers in the increasingly consolidated industry. Following the report of flat growth in the Canadian insurance market for Q1 of 2017, brokers are called to put in more efforts to add value to their business, said MSA Research president Joel Baker; otherwise, he said, “if it can go direct, it will go direct.”
Brokers are called to put in more efforts to add value Thus, despite many carriers insisting on their continuous commitment to the broker channel, brokers have become wary of their simultaneous ventures into direct channels, especially through acquisitions of retail/ direct underwriting arms. Several brokers perceive these business moves as major threats and are repeatedly calling them out for going direct: “Direct channel advertising is relentless, pushing accounts at the same time they shed business on the broker side.” “Client centre is offensive and in contradiction to broker distribution.” “Do not market direct to consumer with the same brand.” A couple of brokers have gone further to ask that their carriers “stay out of the retailing of insurance” and “get out of direct channel.” One respondent mentioned the option of “personal service with underwriters” as also a “threat of becoming a competitor.” Meanwhile, some carriers are doing their best to assure brokers of this commitment by introducing new initiatives that help align the goals and responsibilities of both parties. Those who remain optimistic about the situation are seeing the collaborative potential for brokers that are learning to work “under a technology umbrella” and who “share the data,” explained Traci Boland, president of the Insurance Brokers Association of Ontario in a Q&A with the association, who then proceeded to mention the rise of the one-person-brokerage model.
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COMPETITIVE RATES
Heartland Farm Mutual Optimum Insurance The Commonwell Mutual Insurance Group
Carrier performance in terms of rates has remained steady at 7.4 for both last year and this year, which might explain the flat growth recorded for the first quarter of 2017, on top of other major happenings such as costs from flooding and the changing auto insurance landscape. Some brokers are pleased with how their insurers have strived to keep rates competitive. One broker remarked that “rates have improved greatly,” all things considered, while others found some lines were doing better than others, though these areas vary greatly depending on carrier. At least a couple of brokers commented that their insurers were doing better in terms of auto rates, which falls in line with the results from the 2017 study done by J.D. Power on Canadian auto insurance. The study showed that customer satisfaction has increased despite premium hikes, which suggests a general perception among clients that there’s value for money. Meanwhile, brokers who are not satisfied with their carriers’ pricing have keyed in a couple of things to consider, such as a significant mark-up in price for renewals and “across the board increases” that do not take into consideration the clients’ individual make-up.
Verbatim
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“All carriers need to do a better job at understanding that the broker/underwriter relationship should not be a confrontational one but a partnering one”
www.insurancebusiness.ca
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S BROKERS ON CARRIERS
7 201
FIVE -S
R CARRIE R TA
INTRODUCING
CYBER INSURANCE With today’s heavy reliance on computer and data technology, businesses face heightened exposure to both data breach and cyberattack risks. Our two distinct product offerings—Data Compromise and CyberOne®—now provide a comprehensive cyber risk solution for commercial businesses across Canada.
Learn more at wawanesa.com/cyberinsurance
AUTO
HOME
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BUSINESS
FARM
LIFE AND GROUP
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FEATURES
SPECIAL REPORT: FIVE-STAR CARRIERS 2017 RANGE OF PRODUCTS Carrier performance 7.3
FIVE-STAR CARRIERS
Carrier performance 7.1
FIVE-STAR CARRIERS
Berkley
Beazley Insurance
Chubb
Berkley
Trisura Guarantee Insurance Company
Heartland Farm Mutual
Gore Mutual Insurance
Wynward Insurance Group
Markel Canada
Intact Insurance
Wynward Insurance Group
Markel Canada
This category is very much tied to the underwriting expertise aspect, and the comments show generally the same sentiments, while implying the need to improve risk appetites. Although overall carrier performance has not been affected, fewer carriers garnered a five-star rating in range of products, with just five carriers earning the mark. For carriers doing well in this aspect, it’s not necessarily just quantity but also quality, as one broker put it: “Not a large range of products, but they offer exceptional products in those areas of expertise.” Another broker said that their carrier’s “appetite is getting better,” which is a good sign. One suggested that they could use some improvement in terms of marketing, saying, “they have more products [but] they just do not communicate through their offices well.” Another mentioned the need to “improve sectorial underwriting appetite” by offering brokers the ability to place coverage across all lines available for any given sector. On the flip side, some brokers again identify commercial lines as a weak point, and are asking carriers to expand and strengthen these lines, with one broker listing a few areas such as “equipment breakdown, ground water, [and] umbrella utility,” and another specifying “pollution and E&O” as coverage that they would like available. A couple of respondents have also expressed frustration with their carriers who still “do not insure large risk” and are asking them to “expand their appetite [and] stop saying no to everything.”
Verbatim
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“Ensure policy changes are processed in a timely manner and that the documents provided are accurate” “Focus on superb underwriting”
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TECHNOLOGY AND AUTOMATION
Based on the numbers, carrier performance in this area has considerably improved, going up from 6.6 to 7.1 in the past year, though judging from the specific comments, brokers are just beginning to see signs of improvement, and are expecting more follow-through. Yet, amidst all the buzz about insurtech, the industry’s spending on technology is expected to witness a 2% year-on-year drop for 2017 at US$185bn, according to research firm Celent. Their report showed that carriers in North America are primarily responsible for a 6% drop in their expected expenditure, likely because of a maturing market facing the pressure of justifying its spending. Even as insurers are investing significantly in tech start-ups and adapting to the disruptions by coming up with new policies for the sharing economy, it seems most of them have yet to establish a smooth foundation for the day-to-day operations by properly automating the most basic processes and giving brokers quicker and better access to do their paperwork efficiently. Some brokers mentioned that their carriers have yet to offer portal options for commercial lines, with a few specifying a property portal to make it easier to issue new policies. Meanwhile, for those who already have portals in place, the problem lies in the difficulty of using/navigating the portal and lack of capabilities/options. A reader commented that their carrier’s “system needs to be a little more user-friendly.” Another described the systems they’ve been encountering as “outdated… receiv[ing] minor tweaks but are woefully inadequate,” which means that the carrier is very likely “not investing.” On the other hand, carriers who do have portals/systems in place have to regulate the frequency and extent of their updates. One frustrated broker called for their carrier to “stop [it] with the constant changes to allow us to catch up.” Others listed the capabilities they need, such as submitting and retrieving e-documents, “underwriting or issuance capability,” or simply “to be able to handle [their] own policies with regard to upload and changes, so that turnaround time does not take weeks.” One broker suggested that they could use “a better way of seeing the billing and understanding the billing,” which is a reminder that accessibility of information also requires proper presentation. Finally, carriers need to sustain their efforts and see to it that they complete what they’ve started. A respondent said that their carrier has to “move forward with implementing new technologies” and that there have been “too many false starts.” Another urged their carrier to show “true dedication to industry solutions” instead of insisting on their own systems.
www.insurancebusiness.ca
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S BROKERS ON CARRIERS
QUICK QUOTES
CLAIMS PROCESSING
Carrier performance 7.0
Carrier performance 7.0
FIVE-STAR CARRIERS
7 201
FIVE -S
R CARRIE R TA
FIVE-STAR CARRIERS
Beazley Insurance Company
Beazley Insurance Company
The Guarantee Company of North America
Berkley
CNA
Wynward Insurance Group
Markel Canada
Heartland Farm Mutual
SGI
Markel Canada
Trisura Guarantee Insurance Company
Pembridge Insurance
Wynward Insurance Group
While overall carrier performance exhibited neither an increase nor decrease when it came to their quoting turnaround times, broker comments seem to paint a different picture. In general, most brokers were displeased with their carriers’ quote times, explaining why only six carriers landed a five-star rating in quick quotes – four fewer than in 2016. Brokers’ frustration with their carriers is not unwarranted as it can directly impact their bread-and-butter business if quote times fall short of client expectations. And similarly to other categories this year, brokers took particular notice of how their carriers stammered when it came to quoting commercial lines. “Commercial quoting is terrible,” said one respondent. Other comments such as: “This is an area where they fail epically … it is weeks before quote requests are responded to” and “not sure we can get a quick quote any more,” illustrate how carriers’ performance is largely not up to par for their brokers. One broker even suggested that quotes should be responded to on the same day, mentioning that “weeks later is not acceptable.” However, there is a silver lining – a few brokers did express contentment in their carriers’ quote turnaround times, perhaps an indication that the tides could be turning for a few companies. “[Their] commercial lines is improving turnaround on quotes,” “the quotes are timely so we are able to present to prospect timely” and “very quick turnaround,” wrote a few satisfied brokers.
Verbatim
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“Flexibility on larger, targeted policies that are in renewal and not new business”
The Commonwell Mutual Insurance Group
Claims processing took third place on both counts, though sadly from different endpoints. It’s no surprise that this category is among the top three in terms of importance for brokers, yet the rating showed that it was in the bottom three based on carrier performance, which should serve as an alarm for carriers to re-examine their claims processes, considering this is what makes or breaks them in the long run. There were a few brokers who thought that their carriers were doing quite well for the most part, and a couple describing them as having “excellent, almost seamless claims service” and being “far and away the best in the industry.” However, most brokers are not satisfied with the performance, pinpointing lack of timeliness/efficiency and quality of service as the major faults. “Many unhappy clients have expressed poor claim service,” said one broker. Another described the claims department as “still a little like the ’80s,” likely struggling to keep up with today’s fast-paced operations. There are also cases such as lack of “more qualified adjustors” and the claims department having “a few bad apples.” Another concern of brokers is the lack of knowledge stemming from a sheer disconnect between the actual claims department and thirdparty service providers. One bluntly said their carrier had the “worst claims service of our markets. [They] outsource far too much to (third party) adjusters.” Another broker was similarly exasperated with their carrier’s choice of outsourcing and asked that they simply “make adjusters available rather than [have] customer support staff that cannot answer questions,” which leads to more delays and greater setback for the clients. Here is a more insightful response from a broker about their carrier’s performance and what is expected of them: “Service [is] often poor. [They] only indemnify, they do not assist the client in getting back to where they were before the loss” – a strong reminder for insurers and brokers that it’s not just about doling out the specific amount insured, but actually helping clients get back on their feet. Though it might be difficult to quantify the non-financial aspect of the assistance, this kind of expectation from clients actually strengthens the relevance/ significance of insurers and brokers alike. Fulfilling this expectation could be one of the most effective ways of enhancing their image and proving that insurance is really not just about money and profit.
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FEATURES
SPECIAL REPORT: FIVE-STAR CARRIERS 2017 EDUCATION AND TRAINING Carrier performance 6.8
FIVE-STAR CARRIERS Berkley
MARKETING SUPPORT Carrier performance 6.5
FIVE-STAR CARRIERS
Gore Mutual Insurance
Beazley Insurance Company
Markel Canada
Gore Mutual Insurance
Trisura Guarantee Insurance Company
Markel Canada
Wynward Insurance Group
Wynward Insurance Group
Pembridge Insurance
Overall, brokers seem rather neutral toward this category/service, and it comes across as more of a nice-to-have than a requirement. Just five carriers earned a five-star rating in the area, just below the six who made the list last year. Some brokers do appreciate it when their carriers offer training, “help sponsor education pieces,” and “are available when we ask.” Meanwhile, many others have also said that their carriers don’t
As with education and training, marketing support is also at the bottom of the agenda for brokers, with a number of them saying that this ought to be a “head office issue” and not really a concern with carriers. Similar to other categories of little concern, brokers rated just five carriers highly in their marketing support, with no change in average carrier performance over last year.
This category comes across as more of a nice-to-have than a requirement
Brokers who consider this important are primarily concerned with communication and information sharing
really offer much training, if any, though it’s also not on their agenda, considering it is the least important category of all. In fact, one broker was not particularly impressed with this offering from their carrier, saying that “they do too much of this given their rank [as a top insurer] in Canada,” and asked that they instead “focus on fundamentals and save this money to improve expense ratio and competitive position.” For the few who are looking for training, other than webinars and system training, there were a couple of brokers who mentioned a need for education on the Insurance Act, with one asking their carrier to specifically “teach underwriters about the Act they are governed by and the basic principles of insurance.”
If anything, brokers who consider marketing support to be important are primarily concerned with communication and information sharing – calling insurers to “improve broker contact” and foster “better communication with brokers as to what is available” in the market. One reader suggested that something brokers might appreciate is a carrier’s “willingness to share more benchmarking-type data,” while another thought of a “formal cooperative advertising program” as something that might be useful.
Verbatim Verbatim
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“Greater communication between brokers and underwriters” 34
WHAT DO BROKERS WANT FROM THEIR CARRIERS?
“Automate some basic processes to give brokers quicker and better access to paperwork”
www.insurancebusiness.ca
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IBC 5
R CARRIE R TA
7 201
FIVE -S
S
CANNABIS COVER 2017 CANADA BROKERS ON CARRIERS
OCTOBER 10 ST. ANDREW’S CLUB & CONFERENCE
In 2018, Canada will legalize recreational-use cannabis and unlock tremendous market opportunity and growth. As the cannabis industry expands, so will its complex insurance coverage demands. Cannabis Cover Canada 2017 comes to Toronto on October 10, 2017. Brought to you by the world’s largest insurance magazine, this timely cannabis insurance masterclass brings together key perspectives on regulation, cannabis-specific risk, business growth and how these forces combine to shape the insurance market. Join over 100 leading insurance influencers as they unite for this exciting event!
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• Gain insight from key stakeholders and insurance thought leaders • Establish a framework for underwriting complex industry-specific risks • Understand the needs of cannabis businesses in order to better protect against specialized risks • Network with innovators and like-minded professionals as you discover new opportunities
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FEATURES
BROKERAGE INSIGHT
Archway Insurance Gina McFetridge and Michael Stack of Archway Insurance share how their Atlantic Canada brokerage has attained years of success in this unique market
IBC: How did Archway Insurance get its start and grow over the past few decades? Gina McFetridge: In 1985, our father, Gary Stack, founded our brokerage. He came from a banking background but he always possessed an entrepreneurial spirit. When the opportunity to take over a small brokerage in Yarmouth, Nova Scotia, was presented to him, he jumped at the opportunity. Now, we are in the second generation with my brother Michael and myself leading the business as CEO and president, respectively. My father started Archway Insurance by purchasing that small brokerage in Yarmouth, and he continued this approach of growth through acquisition by purchasing another brokerage within the first couple of years in operation. As the number of brokers in our region considering retirement grows, the opportunity for Archway to be the succession plan has increased. In the last 10 years, we have very aggressively grown through acquisition, with our largest acquisition to date occurring last year. Michael Stack: In addition to our acquisition strategy, we employ an organic growth strategy for our existing agencies. Part of that organic strategy involves changing our online capabilities and
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improving the ways we communicate with our clients and them with us. We also contemplate client retention, our insurer partners and new business sales amongst other things when developing a plan for our brokerage. At the end of the day, we always have to focus on our profitability and whether or not the activities that we are involved in are benefiting our bottom line.
IBC: You bring up a great point in regard to acquisitions. How has consolidation impacted your region? MS: Several brokerage consolidators seem to exist in every region of the country, along with some national consolidators like CBL and HUB. We personally have not experienced any negative sentiment from the brokerage community, and I think are very much looked at as a good succession plan for retiring principals wanting to sell to a local family.
I certainly still do feel that there will be further consolidation of the broker channel going forward and larger brokerages will develop in most regions across Canada and likely dominate the space.
IBC: How does servicing Atlantic Canada differ from the rest of the nation? MS: We stand apart from the rest of the nation especially in terms of our demographic make-up. We certainly have the oldest demographic in the nation and along with that, our clients’ values differ. They value the things of years’ past, such as having a local brick-and-mortar shop to visit. It is also important for them to see local businesses supporting local charities, whether it is a school or a large organization. In addition, New Brunswick is an officially bilingual province and that shifts the way we service our clients based on their language preferences.
RUNNING FOR A CAUSE This past June, runners and walkers took to the course for the Archway Insurance Cross Border Challenge. Since 2013, Archway has been the named sponsor of the Cross Border Challenge. Starting in Mount Whatley, New Brunswick, runners go across the Tantramar Marsh on this 10K run, ending at Amherst Stadium in Nova Scotia. Funds raised from this annual event support charities, including the Cumberland YMCA, the Cumberland Health Care Foundation, United Way of Cumberland County, and Shriners Hospital for Children.
www.insurancebusiness.ca
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FAST FACTS: ARCHWAY INSURANCE
SERVICES Car Home Business Life Group Year founded: 1985 Number of offices: 22
“Human interactions will always be at the heart of the relationship between brokers and our clients” Gina McFetridge and Michael Stack, by Meagan Lewis of Gallery 8 Photography
GM: We are very social creatures in Atlantic Canada, so that face-to-face service means a lot. I am based in our Halifax office, so we tend to follow national trends more closely here, such as utilizing social media more and using emails and websites more to communicate to our client base.
IBC: What are your thoughts on how automation and technology have
impacted the broker channel? GM: Over the past decade, automation has impacted the broker’s role by forcing us to divide our time between serving our clients and inputting data into broker and company portals. Technology development has happened more on the insurance company side and therefore they have been the main beneficiary, not brokers and our clients. Moving forward, I believe we will find
Head leadership: Gina McFetridge, president and Michael Stack, CEO Accomplishments: Named the 2013 National Family Business of the Year by The Canadian Association of Family Enterprise ways to better leverage technology within our brokerages to both automate administrative work and enhance service delivery to our clients. It’s important that we take time to learn how we can use technology to the betterment of our brokerages while not losing sight that human interactions will always be at the heart of the relationship between brokers and our clients.
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PEOPLE
CAREER PATH
CROSSING BORDERS
Chris Lack has moved countries, switched industries, and redefined boundaries in his quest to follow his passions A small-town boy from rural Ontario, Chris shows his entrepreneurial side early, with childhood weekend lemonade stands, and middle school hockey card dealing; it is a spirit that leads to a commerce degree from the University of Guelph and a sideline in food service. “I was always the kid who had jobs early on; working in restaurants, I realized if I put hustle in I could do well. It made me learn the service side.”
1980s
REALIZES THE VALUE OF HUSTLE
2001
2003
FINDS INSURANCE A small moment with friend and professional hockey player Darcy Tucker is the catalyst to much bigger things: “Darcy was opening his mail and complaining about his disability insurance bill, and I thought ‘that could be something I could get into.’ There was no real service around insuring professional athletes and I saw my opening.”
BECOMES THE BARON OF BARS Diploma in hand, Chris launches his plan to storm the world of hospitality, becoming the youngest ever manager of a renowned local steakhouse. Under his leadership the bar bustles, and the restaurant is revitalized. After two years, in which every night seems to set record sales, Chris is handed his Christmas bonus and realizes he has to alter his trajectory. “It was about enough to buy dinner at my restaurant. It was time for me to get out of there.”
2003 JOINS HARGRAFT SCHOFIELD Realizing the opportunity, Chris pounds the pavement and quickly builds a roster of professional athlete clients for a Toronto brokerage. “I leveraged my connections with the Maple Leafs and other players throughout the NHL. Despite the NHL lockout in 2004–05, we managed to book over 50 NHL players by 2006.”
2005 FOES BECOME FRIENDS When Hargraft Schofield is purchased, Chris starts up with William J. Sutton, which provides an entrée to underwriting and experience benefits such as tickets to World Series’ games, Super Bowls and Stanley Cup finals. “I am forever indebted to Sutton; they taught me the basics of underwriting. But every day I walked in the door and hit my head on the ceiling – there was nowhere to go. I’m not a guy to work for someone else.”
2011 BECOMES EXCEPTIONAL Approached by the founder of Exceptional Risk Advisors who told him he was doing a great job, for the wrong company, Chris partners with the American company. “Our book of business doubled in the past five years. We’ve grown our team from 14 to 25. Our sports practice has increased by 555% and we will do over $50m in total sales this year. I’m really proud of what we have accomplished.”
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2008
GOES OUT ON HIS OWN Chris goes on to create his own company with expanded offerings focused on highly compensated executives, and entertainers as well as athletes beyond hockey. Early on, his practice signs an exclusive agreement with Hanleigh, an arrangement that lasts almost three years. “I’m incredibly competitive. I hate to lose. Being crazy passionate about sports gave me a head start; I realized I was missing a piece of the picture, so expanded to solve insurance problems for CEOs and entertainers.”
“I’m incredibly competitive. I hate to lose”
www.insurancebusiness.ca
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MPAMAG.COM PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email insurancebusiness@kmimedia.ca
BRAD
MAN OF IRON For Sebastien Rocco the Ironman course is a second home
15–25
number of hours Sebastien spends training on average per week
$15,000
the sticker price of Sebastien’s bike (supplied via sponsorship)
4:35
Sebastien’s Half Ironman personal best
A PIVOTAL moment in Sebastien Rocco’s life came when he was 11 in his native France, when he finished in the top five competitors of the school’s iteration of triathlon. In fact, the Toronto-based insurance consultant says that as a teen with a provincial championship and a 10th place finish in the French national championship under his belt, he considered making a career out of being a triathlete. Then came a disastrous bicycle crash at an event in Vancouver.
“I had a broken spine, 10 ribs were broken, and my lung was punctured. The doctor said I wouldn’t be able to swim again because my shoulder was in such bad shape.” The journey back to competition was a slow one, starting with a short race termed a sprint (750m swim, 20km cycle, 5km run) followed by a Half Ironman 70.3 triathlon, which covers 70.3 miles in the form of a 1900m swim, 90km bike ride, and 21.1 km run. These days, Ironman racing and the attendant demanding training schedule make up much of Sebastien’s life; typically he will train in two disciplines (say running and cycling) a day, for a matter of hours. He’s already finished two full Ironman events and 11 Half Ironman, and on the day we speak is gearing up his training plan for an event in Muskoka to qualify for the Half Ironman world championship to be held in South Africa in September of 2018.
OCTOBER 2013 | 39 39 www.insurancebusiness.ca
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FEATURES
EXPERT ADVICE of business and at all stages of their careers. Investing in the long-term success and sustainability of the broker network is RSA’s priority. For the past 10 years, RSA Canada has hosted its signature annual broker education program, Making Partner. Run in collaboration with the Queen’s University Smith School of Business, this is a one-week, in-depth leadership development course that offers strategic planning, mentoring and practical skills that empower brokers who are on track to make partner in their brokerages. This year, Sheri Walters, vice president and broker at Aon Risk Solutions, was invited to apply and was selected as one of 22 brokers for the 2017 program. She used her experience at Making Partner as a way to network with brokers across the country and build relationships with RSA’s leadership team, who were also in attendance.
Partnering for success through education WITH THE continued growth of the direct channel, the broker landscape is evolving at a rapid pace. RSA Canada recognizes the value of the broker channel and believes it will remain the largest and most dominant distribution channel for the foreseeable future. With that in mind, RSA has invested heavily in broker education to enable brokers to grow at every step of their careers. RSA sees brokers as trusted advisers to their customers; industry experts who bring the advantage of their knowledge and expertise to every client interaction. They are committed to the long-term professional development of their brokers and believe that when their brokers succeed, RSA will succeed. Which is why they offer over 30 accredited courses and resources to help brokers take their careers to the next level. Cole Halliday, personal insurance team manager at Megson FitzPatrick Insurance, can attest to this. He took part in some of RSA’s most
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recent webinars as part of their RSA Gets Personal Campaign. Some of the topics covered as part of this series include how to attract a new generation of clients, how to sell beyond price, and how to develop brand loyalty. To Halliday, education is important in any career, but particularly if you work in insurance. The industry is constantly changing, and by taking continuing education courses Halliday believes he is helping his professional development in both the short and long term. “Any course that I have taken with RSA has been easily relatable to what I do on a day-to-day basis, which I find important,” he says. “There are many insurance courses out there, but a number of them don’t really address the things I face daily. Courses like the ones RSA offers, which relate to what I do every day, allow me to meet my clients’ needs.” RSA is committed to brokers across all lines
“Courses like the ones RSA offers, which relate to what I do every day, allow me to meet my clients’ needs” “Making Partner strengthens the diverse broker channel,” Walters says. “Relationships and business strategies are key elements. We learned how to improve our influence and negotiation skills, and how to manage people with different personalities and work styles.” “After returning from Making Partner I completed my Fellowship designation and I’m now looking into the MBA program offered at Queen’s,” Walters says. “In addition, both myself and my colleague Lauren Ruffolo, who also attended Making Partner this year, were appointed into vice president roles. Being accepted to the Making Partner program and then being recognized by our company really verifies that we’re both on the right track.” RSA also offers its brokers the option to take part in its CI Boot Camp, which is designed for brokers who want to expand their insurance knowledge from personal to commercial. For more information on RSA’s education programs, visit www.rsabroker.ca/rsa-advantage/ education-training.
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