Exploring New Vistas

One of the many ironies in Justin MacGregor’s intriguing professional career is that the incoming president of the Insurance Broker Association of Canada (IBAC) was about six months shy of becoming a banker.

Every five years, the government is mandated to review Canada’s Bank Act. And every five years, it seems, IBAC is engaged in a Battle Royale with the banking industry on the issue of whether banks should be able to sell insurance out of their local branches. Thus, it seems odd now to think the future leader of Canada’s national brokers’ association, a man who has loved the insurance business since he entered it in 1977, may well have been involved in the banking industry if he had his way when he was young.

MacGregor, now at Martin Merry & Reid Ltd., was 17-1/2 years old when he graduated from private school looking for a job in the financial services industry. At the time, he wanted to work in the financial services sector in the city of London, England, and he wanted to find work that would allow him to travel.

“Initially, I set my sights on the banking industry,” MacGregor recalls. “I had interviews with a number of banks — Lloyd’s Bank, Bank of England. I was offered a number of jobs, but none of them would employ me until I was 18.”

MacGregor contemplated two options while he waited until he was old enough to be a banker — work, or go to university. He elected to give work a shot. If that didn’t pan out, he would go to university.

He saw a career brochure for Sedgwick Forbes Marine Ltd., which offered him a job. “I was given the choice between marine and reinsurance,” MacGregor says. “I had no clue what reinsurance meant, but since I enjoyed sailing…I had some idea what marine might mean. So I took marine. That’s how I ended up in insurance. And banks never got me.”

Until now, that is.

In particular, the banks can look forward to hearing from MacGregor and IBAC about what has turned out to be the cyberspace equivalent of the Bank Act review issue. Recently, IBAC asked Canada’s solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI), to clarify whether a bank Web site is the same as a bank branch for the purpose of selling insurance. OSFI recently determined that a Web site is not a bank branch. Therefore the Bank Act’s prohibition against banks selling insurance from their branches does not apply to a bank selling insurance on its Web site.

“I think some people have interpreted the decisions that have come out of OSFI as being negative decisions,” MacGregor says. “I don’t see them as that. I see them as clarifying that technology has overtaken decisions that were made a number of years ago.”

MacGregor stresses this is a consumer protection issue, not a competition issue. “We have never had an issue with banks selling insurance,” he said. “There are certain things about an insurance transaction that we believe should be maintained and sacrosanct. One is, the Canadian consumer should not be disadvantaged at a point of time they are granted credit. Financially, there’s no other time than you feel more naked than when you are standing in front of your bank manager asking for a loan approval. And if he says, ‘Would you like insurance with that?’ what are you going to say? You’re going to say yes because you don’t want your answer to prejudice the key reason that you’re there, which is to get a loan. …

“We want the activity of granting credit and the activity of providing insurance — they are two very different transactions — kept separate…That applies no less equally to transactions on the Internet.”

Certainly the role and activities of the banks in the insurance sector will be a key issue for IBAC going forward during MacGregor’s term as president. “We’re not in a Bank Act review stage right now, but the spotlight isn’t off it,” he said.

But whereas the Bank Act review often inspires a spirit of solidarity and unity among brokers across the country, other issues both internal and external to IBAC make the national organization an interesting place to be. IBAC is a place where provincial broker associations come to debate issues, and not all provincial associations are steering in the same direction.

Not surprisingly, coming from a broker with a background in sailing and marine underwriting, MacGregor uses the language of a fleet commander in describing his leadership approach to brokering the various provincial interests brought to the national IBAC table.

“IBAC is a little bit like a fleet of yachts,” MacGregor said. “They all take slightly different courses, but at the end of the day the objective is to get over the line, and we’ll all be there together. You won’t necessarily all take the same course. You won’t necessarily all agree on the same issues.” For that reason, he adds, “discussion at the IBAC board table is always a very interesting place to be.”

MacGregor said his commercial insurance background, somewhat of a rarity for IBAC past presidents, brings a valuable perspective into the mix. MacGregor is the first head of the Toronto Insurance Conference, a forum for commercial insurance brokers, to head up IBAC since 1987.

By choice, MacGregor’s commercial experience extends beyond marine hull underwriting. After a brief, two-and-a-half year hiatus from Sedgwick in the 1980s, MacGregor returned to the fold in time for the founding of Sedgwick Energy.

Sedgwick Energy is an amalgam of Sedgwick Offshore, which focused totally on offshore development and production, and a nucleus of people — including MacGregor — from Sedgwick International, which did work involving downstream petrochemical operations, mining and resources.

“That led to me handling the Canadian oil and gas business,” MacGregor said. “When I made the move back to Sedgwick, I realized I didn’t want to do just marine hull business for the rest of my career. And here a company I enjoyed, a company that I knew, was giving me an opportunity to build on the previous experience that I had and expand my horizons into new areas. Of course all of my marine colleagues thought I was stark, raving nuts. But they didn’t see it the same way [as I did]. I was in it for an adventure and something new and a chance to expand my horizons and that’s indirectly what led me to Canada.”

MacGregor arrived in Canada in time for the 1988 winter Olympics in Calgary. Two years later, Toronto became the focal point of his business. “The reason for my moving to Toronto [from Calgary] was to try and accelerate the understanding and the relationship between the Canadian operation and the U. K. parent,” he said. “It worked very well in Calgary because the oil and gas business needed access to the London market. But for other lines of business, the London market could play a role.”

Throughout his time in Canada, he has seen the Canadian commercial insurance industry take a nuanced approach to the London insurance market generally.

“Ironically, even though I came from London, we probably ended up with more business in the domestic market,” said MacGregor, who returned to London, England in 1995 after the expiration of a work permit. Sedgwick promptly turned around and asked MacGregor if he wanted to stay in Canada to launch Sedgwick Marine Cargo Services. Contrary to initial expectations, MacGregor said his link between the Canadian and London markets “didn’t really accelerate the growth of the London market [in Canada], but it did improve the understanding of what they were able to offer and probably finessed the use of the London market rather than expand its use.”

After Marsh bought Sedgwick in 1998, MacGregor moved to Willis, where he worked for about three years. He joined Martin Merry & Reid Ltd. about three and a half years ago.