What was it about Lola? Girls will be boys; boys will be girls?
For Canada’s property and casualty insurance industry, as surely is the case elsewhere, it is a mixed up, muddled up, shook up world as well.
Angela Stelmakowich, Editor, Canadian Underwriter
Traditional views of what brokers, insurers and reinsurers are – and what they do – is undergoing big changes.
Add to the unfolding transformation global economic pressures, the influence of technology and ever-increasing customer demands, and it is little wonder that every link of the insurance chain is looking for ways to not only protect what it now has, but also to establish new connections where it can.
That may be one reason announcements by the Insurance Brokers Association of Ontario (IBAO) in January and the Insurance Brokers Association of New Brunswick (IBANB) in March to suspend their sponsorship partnership with Aviva Canada is not surprising.
The moves follow the insurer’s announcement to offer “team-branded” home and auto insurance directly to consumers. The partnership with Maple Leaf Sports and Entertainment (MLSE) targets fans of Toronto’s Raptors and Maple Leafs sports teams.
Within days of the announcement, IBAO chief executive officer Colin Simpson, noted, “Aviva continues to leverage the Aviva brand for broker-distributed products and direct-to-consumer products, with an inconsistency around product availability and pricing – a strategy the IBAO believes promotes confusion for consumers.”
Arguing that consumer awareness of the insurer brand was built in partnership with the broker channel, he said IBAO “cannot continue to promote Aviva as a supporter of broker distribution in Ontario while it continues to leverage that brand against us.”
The “multi-channel use of the same brand name creates confusion among consumers over what Aviva Insurance is and who services the account in the event of a claim,” IBANB added. “Having a business partner compete against you, with the same brand you have helped build, does not sit well with brokers.”
The reaction is not surprising. But, perhaps, neither is the move by Aviva Canada.
The insurer has reported it remains fully committed to its broker partners.
It further pointed out it had communicated its strategy to de-emphasize direct in favour of partnerships like it has with Royal Bank of Canada (RBC) – Aviva Canada has an agreement with RBC Insurance to provide policy administration and claims services – and affinity deals like MLSE.
“We are having productive discussions with many brokers about how customers want to buy insurance and we are actively supporting our brokers with a range of innovative solutions to help them meet the evolving needs of their customers,” a spokesperson said in January.
Selling direct is not new. Some Canadian insurers have been doing so for years; others are newer to the game.
Simpson noted during a recent talk to brokers, though, that he draws a distinction between Aviva Canada’s strategy and those of Intact Insurance and Economical Insurance, which sell direct through separate vehicles.
All is not lost. Both IBAO and IBANB report continuing dialogue with Aviva Canada to try to find a mutually acceptable approach.
The hope is the current rift can be smoothed out.
But the situation should be viewed by insurers and brokers alike as an opportunity for a possible reset. What are insurers looking for that they are not currently getting from their traditional broker partners? How can brokers better parlay their local connections and vast risk management expertise into something insurers value more?
Times are certainly changing, and insurers and brokers may not be the only potential games in town anymore.
Disruptors are coming. Having traditional players work more closely together – capitalizing on each other’s expertise, including remaining open to partnerships with new kids on the block – may be one way to maintain the value of the old while adding the potential of the new.