Halifax presents new broker models

Responding to a market survey of insurance brokers across Canada, ING Halifax is offering brokers three different partnership models in the coming years, Don Lough, ING Halifax president, told lunch guests at a recent Metropolitan Toronto Insurance Brokers meeting. ING research conducting over the past few years has found insurance brokers prioritize carrier consistency and stability, underwriting authority and point of sale support such as technology solutions. “There is a surprisingly high conceptual support for enhanced partnerships between insurers and brokers,” says Lough who admits being surprised by the findings. Halifax has created three models for future partnerships with brokers — exclusive alliances, lead carrier, and traditional distribution.

Exclusive alliance brokers place over 75% of their business with Halifax. Lough maintains these brokers will benefit by being prioritized as distributors of ING integrated financial services. Also, ING will guarantee the equity of the brokerage when it places its 75% book with the carrier, to safeguard brokers concerned other carriers could undercut Halifax and steal away the broker’s clients. “This benefit should not be seen as an exit-strategy, it is a sleep easy initiative. If you want to sell you brokerage there are plenty of people out there willing to buy it.” Currently, only a handful of brokers are test-sites selling ING’s integrated financial services, but the company expects to expand by another twenty brokers this year. “These offerings turn your operation from a brokerage to a financial services organization,” he adds.

While Lough does not encourage insurer equity stakes in brokerages — “we’re good at handing underwriting, not distribution,” he says — Halifax is open to equity investment in brokers and will accommodate brokers looking for that type of investment. “We prefer to encourage loans, but if a broker want us to have 20% to 30% equity, we can do it.”

ING’s findings, Lough maintains, indicate brokers do not want to move to a call-centre distribution mode. “We’re finding that brokers do not want to abandon their service role to carrier call centres,” he says.