“The reports of my death have been greatly exaggerated.”

-Mark Twain

 

 

 

Throughout 2017, we were all barraged with countless articles about the future prospects of commercial insurance brokers. Much of it was negative, given all of the innovative disruption aimed at our industry.  The focus was on disintermediation, direct to consumer business models and artificial intelligence.

2017 was an exciting year in the life of our company. We are now an integral part of Trisura Group, a new publicly traded company (symbol TSU on the Toronto Stock exchange). However, on a personal level for 2018, I am very much looking forward to getting back to focusing on our business and continuing our work of delivering on our goal as the Canadian specialty lines leader.

I was pleased to have an opportunity to speak at the recent Canadian Insurance Top Broker Summit, and used Twain’s words to sum up how I feel about the future of commercial insurance brokers in Canada.  However, I also cautioned that I believe brokers must not be oblivious to all of the change swirling around our industry. Brokers, and their insurer partners, must collectively “up our game” if we are to succeed and thrive in the future.

As I wrote in our June newsletter, businesses built on a foundation of relationships are among the most expensive models.  In highly commoditized products or segments, expensive business models are most susceptible to disruption and lower cost alternatives.  Welcome to the reason why billions are now being invested globally in insuretech.

Mission Critical

The traditional broker-insurer model is not immune to these forces. Indeed it is now a target, and I believe it is mission-critical that insurers and brokers partner together to address the issue. These partnerships must be focused on delivering more efficient solutions. The ultimate cost borne by the consumer must be driven down, thereby disarming the direct writers greatest weapon: lower cost.

Brokers demanding more commission from insurers is not only ignoring this fundamental issue, but is actually making it worse.  In the immortal words from the John Hughes classic, Planes, Trains and Automobiles, “You’re going the wrong way”.

John’s Candy’s retort, “Oh, he’s drunk.  How would he know where we’re going” is of little comfort.  But I digress.

Imagining the Future of Commercial Insurance Brokers

The conventional broker-insurer model remains incredibly inefficient. Furthermore, our cost structure is too high in order to guarantee future success.   There are a lot of folks looking at our traditional model and licking their chops.  We need to find ways to reduce our costs and pass some of the savings on to the consumer.  Why is this an imperative?  Because if we don’t, others will eventually eat our lunch.  Imagine, for example, a world where a business model yields an ultimate cost for commercial insurance to the consumer of less than half of what it is today.  How do we compete?

There is good news. We have a little time before online direct to consumer adoption hits a tipping point and becomes irreversible.  In the commercial space, particularly in specialty lines, most customers still value, need and appreciate expert advice and advocacy.  Most commercial consumers are not quite ready to buy their P&C products online without the involvement of commercial insurance brokers. However, if the cost structure remains so high, the traditional broker – insurer model is at risk.

The Overall Goal

We have to get our collective acts together.  Improvements have to be continuous, relentless and accretive to the overall goal of delivering a broker – insurer model that gives customers what they want and need, how they want and need it, and all at a lower cost structure than what exists today.  While this won’t guarantee success, it will certainly give us a better chance.  What I will guarantee is those brokers and insurers who fail to address these realities will face a difficult future.

Getting back to business for Trisura in 2018 will definitely include working hard on delivering more efficient solutions. Our efforts will go towards helping to reduce and eliminate costs in our structure.

I would again like to thank you very much for your unwavering support of Trisura Guarantee. I wish you and your families the very best of the holiday season and a happy, healthy and prosperous 2018.

 

 

 

Q: How did you get started in the insurance industry? What drew you in/how did you get drawn in?

Q: You joined Trisura in 2013 as a Business Analyst and now hold a Senior Business Analyst role – how has your role developed/changed from the time you started until now?

A: Like most industries, technology is one of the major forces driving change in the insurance industry today. From the way that people carry out and transact business to improvement of internal processes, technology is impacting all facets of the industry. Right now, there is a focus from both brokers and underwriters to keep up and be the first or have the best new technology. It will be interesting to see what sticks and becomes industry mainstay in the coming years.

Q: What, in your opinion, is the most important thing to get right when doing business from the perspective of the insurer?

A: Understand the risk that is being underwritten. Without proper analysis of the risk we cannot accurately price premium or forecast earnings. From an external point of view, providing excellent service to our clients and brokers is a critical success factor. While excellent service means speed and relationships, it also refers to the actual service we deliver. By understanding our client’s business we can provide advice and solutions that that are mutually beneficial.

Q: Ok now the fun one…you have won the grand prize in a contest that grants you an unlimited supply of one thing (anything you want) – what do you choose?

A: This is going to make me seem like a huge nerd, but my answer would absolutely be a Tardis from Doctor Who. How could you not want to travel through both space and time! Plus, you can bring all your friends.

On November 30th, Insurance Business Canada hosted their 2nd annual Insurance Business Awards night. Throughout the evening, those who work in the industry are acknowledged and rewarded for their hard work. Hundreds of insurance professionals gathered at the Liberty Grand near Lake Ontario to enjoy champagne courtesy of Trisura, and hopefully to enjoy victory as well. 21 awards were up for grabs. When all was said and done, Trisura was not left empty handed. The winner of the Employer of Choice Award was presented to Mike George and the team in attendance. The decision of a committee of esteemed judges chose Trisura as the best among 9 other formidable nominees.

Trisura was also nominated as a finalist in 4 other categories: Woman of Distinction, Advertising Campaign of the Year, Outstanding Philanthropy and Community Service, as well as P&C Insurer of the Year.

This is Trisura’s second employer-related award of 2017, having won the Aon Best Employer’s in Canada award earlier in the same month. Check out some pictures from the Insurance Business Awards below.