Beyond the Black Tie

Angst, apprehension and horror marked the first time Justin MacGregor attended an Insurance Brokers Association of Canada (IBAC) meeting as president of the Toronto Insurance Conference (TIC).

The angst and apprehension were not his own. Such energized emotions radiated from the several insurance company CEOs who lined up to face the “intimidating” group of 50 executives making up the IBAC directorate.

The horror, however, was all MacGregor’s. “Three of these chief executives walked into the room and as each came past me they said: ‘Oh Justin, we didn’t know you were involved with these guys,'” MacGregor recalls. “So, they just didn’t see the TIC as being part of IBAC and that’s horrifyingly wrong.”

Rather than cover his eyes, MacGregor is staring horror in the face; he is taking several brave steps towards developing the TIC profile and increasing its industry involvement. “Even though we (TIC) always had a seat on the board at IBAC, we were more a passive participant,” MacGregor says. “But today we’ve enhanced the extent that we are actively involved. Looking forward I would like to see TIC being mainly recognized for the part we play as a partner in the industry, without losing the cach of the Black Tie Dinner.”

This year marks the 50th anniversary of the Black Tie Dinner. The TIC was established in 1918.

Networking by way of the Black Tie Dinner’s “little quark” – referring to the TIC delegates’ seating arrangements – is a tradition, but this year attendees of the November 10 event witnessed a twist: in light of the fact that CBC anchor Peter Mansbridge was the keynote speaker for the 50th anniversary celebration, MacGregor allowed guests to purchase entire tables.

COMMUNITY FOCUS

Leading up to the 50th dinner, the TIC put something back into the community. Throughout 2005, it concentrated much of its efforts on raising funds in support of a North York-based Community Safety Village. The culmination of these outstanding efforts – which resulted in an initial donation of $50,000 – peaked with a silent auction held at the 50th dinner “for fun, but also to raise funds,” as MacGregor put it. The proceeds were devoted to the Safety Village, which was spearheaded by the North York chief of police.

“We chose the Safety Village because it focuses on a number of different safety issues,” McGregor explains. “It focuses on child safety on the road and the rules of the road, but beyond that the village has classroom facilities and a mock condo unit in which they can teach fire safety so the kids can try to escape in a ‘real’ environment.”

The motivation for increasing the public’s awareness of the Safety Village is directly related to the insurance industry’s goal of promoting home and auto safety in the community and with clients. Although the TIC represents members who must operate with at least 65% commercial business, MacGregor says its members “are very aware that this is a concerted effort and that it has a huge impact on the brokerage community and while we say that, the companies are still operating 35% personal lines which represents a lot of revenue.”

MacGregor says there is a natural tie between teaching safety and accident prevention, which TIC hopes will eventually lead to fewer claims. “Building our community image through this charity was instigated partly in conjunction with a feeling from the insurance industry that we need to improve our image, and we feel our 50th was a great opportunity to begin playing our part.”

STRENGTHENING TIES

In addition to elevating the TIC’s role in local community, MacGregor is devoting his attention to increasing the TIC’s active role within other industry organizations. “This year probably more than ever we’re working with the IBAO on joint issues as a sister organization rather than being in our own independent silos,” MacGregor says. The TIC, he adds, must consistently “play its part,” by offering its unique expertise to the insurance industry. In return, the TIC can expect other insurance associations to “stay ahead of the game and continue to raise the bar in the financial services industry, rather than wait to respond to the problems,” he says.

A crucial partnership between the IBAC, IBAO and TIC – fostered in response to the recent media frenzy around the so-called, Spitzer-inspired insurance “inadequacies” – is one example of building strong relationships, MacGregor says.

This partnership contributed to the creation of protocol dealing with the issues of non-disclosure that was acceptable to both IBAO and TIC members. “We’ve embraced it and the TIC is stepping up to the plate by being fully compliant with the new protocol.”

As a result of this forward thinking, the TIC is confident issues of disclosure and conflict will subside, MacGregor says. Nevertheless, he recognizes this is only the beginning; the onus is on the TIC to continually monitor disclosure and conflict of interest insurance practices. “We (at the TIC) are getting perspective, primarily form IBAC, on what’s happening in some of the other countries that are at forefront of the insurance industry,” MacGregor says. “Through IBAC we can learn about countries that have already put models in place to deal with issues that will likely arise in Canada’s insurance industry.”

BUTTING OUT BANKS

Now that issues of disclosure and transparency have been addressed, a new white elephant has emerged – the threat of bank-based insurance sales.

MacGregor says the concentrated efforts of all insurance organizations will be necessary to educate politicians and consumers alike as to the intricacies of broker value as opposed to “pre-packaged, off-the-shelf” insurance products that banks are fighting for the right to sell directly.

The insurance industry is different from all the other financial wealth management sectors; as such, it deserves to be treated differently and allowed to behave differently, says MacGregor. “Other financial sectors are being given custody of their clients’ finances with the intention that these monies will grow, whereas brokers are being given their customers assets in order to protect them.”

The TIC is concerned that if insurance is sold in bank branches, uneducated consumers might assume policies can be taken out as easily as opening a bank account. However, what clients do not realize – and what necessitates strong lobbying initiatives on the TIC’s behalf – is that there is a highly personalized and individual risk aspect that should be acknowledged with regard to insurance products.

The TIC is working to match the IBAO’s province-wide political lobbying efforts in the Toronto core. Specifically, MacGregor says the TIC is implementing intense lobbying efforts regarding the Bank Act.

Because the TIC deals with commercial insurance, their lobbying tactics can be somewhat different than the IBAO’s. TIC members can play up the economic influence of insurers and brokers in business sectors where the industry provides substantial job opportunities.

Whether lobbying by way of commercial economic sway or by educating about the nuances and values distinct to the insurance industry, MacGregor says the key is making sure the insurance voice is loud and clear; that politicians are educated in some way as to the importance of the industry at large.

BEHIND THE MAN

MacGregor is an appropriate choice to educate the public about the intricacies of insurance. He has served the industry for 28 years, gaining experience in many different commercial lines of business – from non-marine, marine and energy to professional liability.

MacGregor’s rise up the insurance ladder began in London, England in 1977. There he worked at the Sedgwick Group – which was acquired by Marsh & McLennan Cos. in 1998 – and eventually did a three-year stint in the energy business sector. His job required that he regularly travel to Calgary; in 1990, this led to an opportunity to work in Toronto, building Se
dgwick’s relationship with Canadian insurance companies.

MacGregor launched a national specialty division in 1995, which ran until Marsh acquired the company. After a three year interlude at Willis’s Toronto office, he joined Hugh Wood Canada Ltd. as president. He remained there until mid-October 2005.

Once again switching gears, MacGregor is now initiating a new endeavor with Toronto-based Martin Merry and Reid Ltd., where he is executive vice president. The private firm boasts over 100 years in the insurance industry; with MacGregor’s help running day-to-day operations and building the professional client base, it is looking forward to at least 100 more.

MacGregor says he looks forward to working in professional liability as well as covering a lot of the Company’s marine business. “I’ll also be doing a fair amount of risk profiling but mainly I’ll be identifying avenues of growth where we can accelerate the firms current growth.”