14 August, 2018 07:00
Can we see a loss of influence of the Quebec among insurers to brokerage ? No, according to brokers interviewed by the Journal of insurance. Rather, it is the tightening of the market, attributable to poor results recorded by insurers in Quebec, it must first of all point the finger at to explain this loss of influence.
Louis-Thomas Labbé, president and CEO of GPL-Gallagher, points out that the debate on Québec’s weight in the insurers to brokerage is not new. For him, in respect of the insurance of large risks in companies, decisions are always taken in Toronto. For small-and medium-risks, insurers have a presence strong enough in Quebec, ” he said. It states that dealers should not worry about it.
What the major concern is the loss of talent in the quebec insurers. “Among several insurers, it’s not worth the expensive ton. We all have difficulty recruiting. This is also true in the manufacturing sector, ” he said. Mr. Labbé also said to believe that the insurers will soft-pedal in the recruitment over the next few years. Why ? Because they have invested millions in the fintechs, ” he said.
“I’m not certain that there will be a lot of subscribers in 10 or 15 years in Quebec. The table is set, it is only a matter of time. The dealer will only have to enter their data into the system and everything will be automated. The submission will come out. The broker can then negotiate the terms. It is he who will be in the best place, because it will be facing the client and he will give him to the council. “
The economy justifies it
To Mr. Labbé, what are economic reasons that justify the loss of influence of the management teams of the insurers to brokerage in Québec. Not because of political reasons.
Although insurers are decreasing their presence in Quebec, he points out that there are some who take the opposite path and sees an opportunity to grow in Quebec. Liberty Mutual is one of them, according to him, the person who has understood this and is investing heavily in Quebec.
Stéphan Bernatchez, president of Fort Insurance, has attributed also to the tightening of the insurance market quebec the decrease of the presence of the insurers to brokerage in Québec. “It is a question cyclical. We had not lived in a market as complex for a long time. This is not the client that we should sell the coverage, but the insurer. The latter must take a decision, which, sometimes, seems to us not as pragmatic or thrust as you would like. These are not local decisions. It has always existed. This is most obvious at this time. “
The one who has been chairman of the board of directors of theinsurance brokers Association of Canada (IBAC) points out that this situation is lived everywhere in Canada, although it is lower in Ontario due to the presence of corporate headquarters. “If the results were better, this would not be the case. Insurers suffer across Canada. Decisions are taken differently. They are more focused on profitability. “
He adds that as business manager, it attempts to decentralize the decisions. However, when the results are bad, a centralization follows. “It is a management issue above all. “
Bernard Chagnon, CEO ofUnivesta Insurance and financial services, said that the situation varies from one insurer to the other. “There are insurers who manage everything in a more holistic way, especially those that have large capacity of goods. It is normal for a company to communicate its values throughout its ranks. An insurer should have a single corporate culture. He can’t have one per province. “
It is true that in Quebec, the legal context is different, the fact that we find in the civil Code and not common law, said Mr. Chagnon. It brings different challenges, but insurers manage well. It is necessary to deal with the relationship that we should have in Toronto. This is not different from what we did ten years ago “, said Mr. Chagnon.
Mr. Chagnon also cautions, however, insurers tempted to generalize too much their decisions at the national level. “It is normal for there to be a branch that goes less well sometimes. The insurer must adapt its decisions. What is done in our industry is also in other. It would be illogical to think otherwise. “
For Francis Jean, president of Forum of Risk and Insurance, there are a limited number of insurers whose decisions are being made in Quebec. He also said he has seen a lot of delegations of authority which have been reduced or eliminated in Montreal.
“A lot of decisions are made in Toronto, or even in the United States in some cases. What is it made of ? It creates a period of time to obtain a quote. It is something that one is accustomed to in the medium and large risks. Even when there were delegations of authorities in Montreal, there were delays. The underwriters themselves were limited in these cases. “
Acquire outside Quebec
Yan Charbonneau, who has particular Deslauriers + Associates and Couture Rochette, says that the weight of decision-making in Quebec is much lower than it was. “There are a minimum number of insurers who are still taking some decisions in Quebec. Everything that is big, complex, or that do not fit into the mold of going to Toronto. It is the same in claims. If there is a contested decision, an appeal is made in Toronto. “
This is also the case for all matters relating to partnerships, be it for an acquisition or a loan, ” says Mr. Charbonneau. “It is possible to get a loan of 500 000 $ in Quebec. If you want an investment in the seven figures, you have to go to Toronto. In some cases, the decision shall be the same in New York or London. “
He regrets that this situation entails differences in treatment. Mr. Charbonneau said to have lived in a situation where he was in competition with a broker in ontario and that it has obtained a better rate than hers.
To alleviate this situation, Mr. Charbonneau is actively looking to acquire a firm in ontario. He wondered even why some firms larger than him have not yet laid down this gesture.
“The headquarters are in Ontario. The big brokers are national. I want to have counters with insurers. I have risks that are difficult to place because I am established in Quebec. I have to take this direction, ” he said.
Difficult to obtain a favour of an insurer
Scott Root, president of Root & Chamberland, says that if some insurers do the housework, this is not the result of chance. “An insurer who has had a bad year in 2017 has left from the leaders. We were made to understand that it came from the head office. To another insurer, the Quebec represents only 5 % of its volume. He wants to increase it, but it is sure that Quebec does not weigh heavy. “
He adds that it also depends on a lot of the leader in place. “In some cases, they have a national influence. They have more listening, because they can show more high. It was also our quebec players who enter the game “.
In the end, Mr. Root said that it is now more difficult to ask a favour of an insurer. “Sometimes, I have folders ex gracia, where the risk is not covered. In some cases, it is only a premium of $ 7,000. I do say that it is necessary to ask the permission of Toronto. The arms I fall ! These insurers do not understand the reality of Quebec. “
As a quebec broker, Mr. Root noted that he did not always have the same weight as a broker in ontario. “The $ 15 Million that I endorse in auto insurance worth $ 45 Million home. It is therefore not sure that I will not have the same weight in the insurer. Some insurers do not understand the reality we live in with direct insurers because they do not live themselves. “
Mr. Root added that because of the language, the brokers are often the last to benefit from technological innovations insurers to brokerage. The phenomenon is accentuated because of the centralized decision-making. “Instead of having four or five decision-making centres, the insurers have more than one. Insurers cut in the expenditure and in the post. There was a delegation that was headquarters for some insurers. This is no longer the case. We are not the only province to experience that. ”