I recently attended the Ontario Young Broker’s Conference in Niagara Falls on June 4th to June 6th. It was a great mix of fun and work – we spoke about claims handling, the Ontario automobile insurance crisis, the issues with insuring your home to value (subjects for a future article), and the ongoing saga of the insurance brokers versus the banks. Have you heard about it? Probably not – but it is a big subject that is getting more and more heated as the days go one. Personally – i find myself constantly frustrated with my own bank – why would I want them to provide me with insurance?
The main issue centers around the concept of “Tied selling”. It is illegal in Ontario to sell insurance by either implying or forcing the product for fear of losing another. HUH? Basically this – we as professionals can’t tell you that your mandatory auto insurance policy won’t be placed unless your buy life insurance as well. In the case of the banks, the law is put into place to protect the consumer from feeling as if they have to take the bank’s insurance product for fear of losing their mortgage or loan.
Another issue centers on customer base and marketing to those customers. The banks have a much bigger potential client base than most insurance brokers. These people are walking in and out of the doors every day – the potential for business is staggering. Ontario law has decreed that banks can sell insurance products but they cannot do so from the physical bank property – they have to sell the product in a physically different location (although you will likely find banks and their insurance companies operating side by side, separated by glass walls).
The various insurance broker lobbies are constantly attacking, looking for violations of the rules and bringing them to light – It is a good idea to keep the banks in check but I firmly believe that we as brokers should do more.
The Insurance Broker’s Association of Ontario has launched the website: www.myinsuranceshopper.ca – a site that consumers can use to quote insurance and find a broker nearby. It is a site structured similarly to the hot-line sites and it actually competes with Insurance Help Canada, sort of 🙂
The problem that I see is that they (IBAO) are attacking the banks under the guise of another broker. Whenever I see the ads for their site, they appear to me as a broker who has big money and can advertise like the banks.
Their logo is quite correct – my best insurance is a broker. We have the lower loss ratios (less of our clients have claims that our competitors).
I think this should go further – as brokers we should go on the offensive. We have something that the banks will never have: knowledgeable, talented entrepreneurs who use experience and training to get the right product for our clients. We go for additional regulation (i figure we are highly regulated anyway, what’s a little more?)
We should lobby for additional licences – I think that business insurance should only be sold by a licensed expert – even though many small businesses fit into a package, they will grow into bigger businesses and just because you are a licensed insurance professional, doesn’t mean that you can handle that account. I know of a direct writer agent who knows nothing about business insurance – but he sells it anyway! He has an underwriter come out with him to assess the risk. How ridiculous it that!
Here is the main issue for consumers – do you want the ability to make your own choice? We are bombarded with ads for home and auto insurance. Great, everyone wants a piece of the pie while you have a good record – what happens when you have an awful year: You get a couple of tickets and then get hit in a parking lot – you become a residual risk driver. Companies that sell their own product just kick you off – they have no interest in writing your business now. Brokers – you make get kicked off the current insurance company’s plan, but we can find you an alternative that may even include the discounts that you currently enjoy (multi-vehicle & multi-line)
For businesses – do you really want your business’s risk management handled by an entry-level employee, sitting in a cubical who really doesn’t give a damn about you?
The power is in your hands – take a stand, stand up for your right to have the best – the prices are comparible anyway! You work hard and deserve the best.
The right insurance is provided by a broker because that is what we do.