Alberta auto brokers: Insurers want you to diversify your books

If Alberta brokers want to support their carriers as government hashes out its auto insurance reform options, they’re going to have to diversify their lines of business, insurer CEOs told attendees at the Insurance Brokers Association of Alberta Convention 2024 in Banff. 

The topic came up during an IBAA panel discussion, when carrier executives discussed the mounting pressure on Alberta’s auto insurance product. 

The United Conservative Party announced a auto policy rate cap, starting on Jan. 1, 2024, for an indeterminate period. And as province conducts a review of its long-term auto reform options to bring premium prices down, carriers are feeling the burn now. And they want their brokers to act.

“If we see brokers that are just providing auto to us, we’re going to have to have difficult conversations that say, ‘Maybe we’re not your partner for you, if that’s all that we’re here to serve you,’” said Graham Haigh, Western senior vice president and chief operating officer at Wawanesa.  

“Brokers have to look for a way to help out your carriers in producing a diverse book of business,” he said.  

“We need to see our brokers come to the table as well, and look at rounding out accounts, providing us a diverse portfolio,” said Haigh, “and that lets us manage the auto file a little bit better.” 

The company is committed to the Alberta marketplace, Haigh said. “We’re looking to defend our market share in personal insurance. And that is in all lines of personal insurance, and certainly includes auto.” 

Tracy Garrad, CEO of Aviva Canada, echoed that insurers are increasingly counting on brokers’ diversification. 

“Unless and until some major reforms happen that do change the position on auto, we rely upon diversifying our business lines and diversifying where we can make some margin, and so we rely upon [brokers] to help us with that.” 

As for what reform options would best suit Alberta auto, consumer choice in insurance providers tops the list, said Garrad.

But “the fact is, at the moment, they don’t have that,” she said. “In theory, and on paper, it’s a private auto insurance system. But actually, it’s completely government controlled. The price and the rate of top line is controlled, the product specification is controlled. And now we’re going to have restraints and profit provisions.” 

The longer the industry waits for government auto reform from government, the more insurers begin to “take drastic measures that many brokers would deem as adverse,” said Jhnel Weller-Hannaway, IBAA CEO and panel moderator.  

Weller-Hannaway didn’t specify the measures insurers may take. But the Insurance Bureau of Canada has warned of the risk of insurers pulling out of the Alberta auto market altogether in order to stay profitable. 

Andrew Voroney, executive vice president and chief operating officer of SGI Canada, emphasized that insurers need brokers’ advocacy in political playing fields when it comes to auto reform.  

“Everyone is looking for ways to stop the bleeding, stop the pain to a large degree, and sustain through whatever time period we need to, to commit to Alberta,” said Voroney. “We really do need a large indication from government [that] reform is coming, in a reasonable period, and to a reasonable degree, and they’ve done some of that.

“But it does need to be louder. And that’s where that combined…voice of the brokers is very, very appreciated.” 

Garrad said, “I really encourage every one of you in the room today to be the voice…helping to push [the notion] that reform is actually needed.” 

Feature image by iStock.com/Brankospejs