June 16, 2014 by As told to Regan Reid
In the summer of 1994, after spending 20 years as a CFO, mostly in the textile business, I decided to make a change. I got a call from the credit insurance company that had insured me at my previous company, and they tried to convince me that I should start promoting their product in Quebec because there was no real promotion of credit insurance anywhere in Canada. It sounded like it would be a challenge and an opportunity to develop this product. I ultimately decided that I didn’t want to join the company, but that I would become a broker in credit insurance instead.
Credit insurance is a live product; it’s a live animal. Every day a businessman must decide whether he should sell to one company or another. The client is always faced with the changing financial position of the companies that they’re selling to. It could be that a client is faced with bad debt, or had huge contracts that were all of a sudden cancelled and they didn’t have any more orders or major business on hand. The risks change.
From day one, the business was a success story. I had the background to talk to company financial officers, because credit insurance really is a financial tool to protect a company’s assets—the receivables, which is usually the largest asset in the financial statement. I set out to meet five new prospects a week—250 a year. I figured I would sell 50 policies plus a year. And that’s what happened. In my first year I made as much money as I had given up as a CFO of a company—and a little bit more. So the company has now become the largest specialist credit insurance broker in Canada.
Over the last number of years, I’ve brought in both my sons. As Iget older, I tend to do more of the background work—the guiding and the direction of the company—and they do the new sales. We have about 10 employees, but I also have at least a half a dozen associates (P&C brokers who cannot and do not want to handle this product). If you were sick and had a rare disease, you would go to a specialist doctor; similarly, if you’re having major issues at the receivable end— high-risk accounts—you wouldn’t go to a regular P&C broker, but to a specialist that can handle it.
The challenge for us is that we’re growing at a very fast pace and we have experienced professionals, but we’re looking for additional personnel to help us grow internally and externally. We’re already doing business in BC and Ontario, we’re now getting licensed in Alberta, and we’re going to cross Canada. That’s the goal. Our intention is to grow as big as the largest private insurer, which right now is about double our size. To accomplish this, we hope to build a network of P&C brokers across Canada.
Copyright 2014 Rogers Publishing Ltd. This article first appeared in the May 2014 edition of Canadian Insurance Top Broker magazine
This story was originally published by Canadian Insurance Top Broker.