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IBAO survey shows Ontarians favour broker channel


October 17, 2007   by Canadian Underwriter


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About 51% of Ontario insurance consumers buy their insurance products through the independent broker channel, while 38% buy from agents or direct markets, according to a 2007 independent consumer survey commissioned by the Insurance Brokers Association of Ontario (IBAO).
The survey found a further 11% of Ontario consumers purchased insurance through group plan providers and 4% with a financial institution.
The survey results were presented at the IBAOs annual general meeting in Toronto. Conducted by Navicom, the consumer study was sent to 15,000 Ontario consumers, with a response rate of 5% (or about 750 consumers).
IBAO president Steven Wagler, who presented some of the survey results to the IBAO membership, noted the survey included some of the reasons why consumers chose brokers over agents for purchasing insurance. Among them, he noted:
brokers identify a range of insurance companies and options that best suit their needs;
brokers are involved in their local communities; and
brokers are perceived to be independent of the insurance company.
The other key benefit consumers identified as a strength for brokers is that [brokers] have values consistent with their own, Wagler noted.
Wagler said the Ontario research was inspired by suggestions that the Canadian independent broker channel would ultimately go the way of the United Kingdoms.
The mindset [among Canadian insurers that have a multi-channel distribution network] is entrenched in the belief that the broker market in Canada will emulate the marketplace in the United Kingdom, where the independent brokers market share has settled at about 30%, versus the 70% market share we have in Canada, Wagler said. The IBAO board of directors is of the opinion that it is up to brokers to decide where their market share will be and it will not be influenced by multi-channel insurance companys predictions.


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