June 10, 2011 by Suzanne Sharma
The percentage of market share that brokers control is getting smaller as time goes on, according to Randy Carroll, CEO at the Insurance Brokers Association of Ontario (IBAO) and Bryan Yetman, chairman of the board at IBAO.
“Brokers are slowly losing market share and their strong positions in the marketplace,” said Carroll at the IBAO Young Brokers Conference on June 9.
In the early and mid-’80s, brokers controlled 77% of market share, revealed Carroll at the event held in Niagara Falls, Ont. Today, brokers across Canada own about 67% of market share. In Ontario specifically, brokers own about 64% of market share.
Additionally, brokers control about 93% of the market share for commercial property. However, Carroll warned this wasn’t anything to get excited about because banks such as TD Canada Trust and RBC were getting aggressive and marketing commercial products online.
For personal property, brokers own about 56% of the market share, and for auto lines the percentage of market share is also 56%. However, most shocking is that the statistic for auto lines includes commercial auto.
“Our message as we go across the province is that it’s time to take notice,” said Carroll.
Yetman and Carroll agreed there are still measures that brokers can take in order to remain competitive and beat the directs. It involves using technology, as well as information technology (IT) initiatives, marketing schemes, and social media consistently.
Approximately 51% of Canadians are shopping online, stated Yetman. He asked attendees who shopped online and why. Most in the room agreed it was faster and more convenient. Yetman stated if the majority of brokers shopped online, why would their customers be any different. Brokers that don’t embrace technology lose business, he said.
Brokers should also use IT to their advantage. About 43% of brokerages provide online quotes, but 100% of the competition has it, said Carroll.
Additionally, 84% of brokers who responded to an IBAO survey stated they don’t have a system for prospecting clients. Marketing and advertising should be part of a broker’s business plan. And brokers that aren’t using Facebook or updating Twitter accounts yet should start small and eventually commit to regular posts.
“Many consumers don’t care if you’re an advocate or on their side,” said Carroll. “We need to transition brokerages to do business how [consumers] want [us to]. We need to open a door so consumers that don’t deal with you today do so in the future.”
This story was originally published by Canadian Insurance Top Broker.