22 February, 2018 07:00
The stricter rules imposed in terms of compliance so that the general agents need to increase their sales. Otherwise, they will not be able to stay in business for a long time.
“The rules change all the time. The level of service we must bear for the offer of the board in all lines of business is very high in the wholesale general agents, and the margins are becoming smaller and smaller. It takes a lot of volume, ” said Stephane Rochon, president and ceo of Humania Assurance, at the Congress of the insurance and the investment.
The recent transactions on large blocks to brokerage put a lot of pressure on the finances of the smaller players in the distribution network, ” he continues. By adding the thinner margins, the level of service to maintain, and the need for access to capital during the transfer of block of sales, these are all factors that require the ongoing consolidation.
Without providing a specific figure, Mr. Rochon believes that the general agent must reach a certain critical mass to stay in business. The insurer who invests in a agent-general does not seek an immediate return, but to expand its distribution network. “Everyone’s interests are better aligned. Access to capital for medium-sized firms, it is already a big challenge, ” adds the CEO of Humania.
Regardless of the size of the company, the brokerage firm must now designate a person responsible for compliance, ” says James McMahon, president, Quebec region, at Group financial Horizons. “Five years ago, we had a person in the service of conformity. Today, they are 12, more lawyers. “
The general agents have become big business. They must provide resources, ” he adds.
It is necessary to constantly innovate to stay in business and to modify their offer to stay connected with the customer. “We have no choice but to adapt. It is necessary to act quickly and predict the future. It is necessary to support the advisors. The one who has built his career for 10, 20 or 30 years with the help of the same agent general, we do not have the right to let it go. “
Technology is a huge challenge, ” added Mr McMahon. “It takes the young advisors “, he insists.