Making Better Brokers

cu | Why get involved in continuing education?
I compete with my competitors not just for clients, but also for competent employees. One of the things we do, which I harp about consistently, is to have an employee education program in our shop. You make better brokers by ensuring that they remain informed and competent. If you are a manager, and if you don’t implement a process that keeps everyone informed of the constant changes we face, then you become less competitive; also, you become an errors and omissions hazard. There is a real cost to having employees who are uninformed on the insurance side. If we pay for some of their education, they become more valuable to us when they complete it. That’s the real motivation. I’m not just a nice guy offering benefits and trying to create a nice workplace. This actually makes you money, so you should be doing it. That’s lost on a lot of people.

cu | What if your employees go to work for someone else after you educate them?
You still have to educate them. If you don’t, someone else will. We have always had a professional development program in our brokerage; sometimes I have expanded that program to include any kind of education. It doesn’t really have to be specific to insurance. So, if you want to learn accounting, for example, or if you want to expand your knowledge and ability, I will pay for that as long as you get a passing grade and
you stick with me for a year.

Thom Young, co-founder of Lundgren & Young Insurance Ltd. Photo by Bizu Tesfaye

cu | Do you give employees time off to continue their education?
If someone wants to go on leave, and the purpose is within reason, we will hold their job open for them. We have had people go on leave for missionary work, and we have given people leave to do military service if they are in the Reserves and they get sent overseas. It’s a good way to run a business. In the end, you make more money doing it that way.

cu | What is the risk of not having continuing education?
I have been on the General Insurance Council of the province’s broker regulator, the Alberta Insurance Council, for 16 years. I have seen just about every screw-up there is. As a broker, you need to be wise, intelligent and able to communicate complex concepts to lay people. You must be able to analyze people’s insurance needs and risks. You must train brokers and agents, and you need to keep them trained because the business is constantly changing. I can think of 15 or more new products in just the last five years.

cu | What are some of these new products?
There have been huge changes in some crime insurance policies, for example. Some business policies are written in such a way as to catch everything. We may call them “new” products, but they are usually variations of something that we did before. However, there’s enough of a change in the end result that people must be made aware of the differences. The industry gives products different names and we throw in different wordings and that creates different expectations in the marketplace. If you are not aware of those changes, you can be a hazard to your clients.

cu | What can you do if you do not understand the recent changes?
Brokers have to be smart enough to understand that when they get out of their depth, they need to bring in somebody else rather than try to wing it; that’s part of the education process. Knowing your limitations is not just a line from a famous movie: it’s important when you are in any business. If you are an engineer and you don’t understand the process that you’re analyzing, you can create a huge mess; the same is true for an insurance broker. I have been in the business for a long time, but I don’t pretend to know everything. I know enough to find the right person to fill in the knowledge I am lacking.

cu | How should brokers deal with changing technology?
Adapt to it. Don’t be afraid of it. Embrace it and find out how it can make you more money. Change gives you an opportunity to do a reset and find out how to make that change work for your benefit. We went paperless in 1997. That was a real issue for some companies, because they wanted to do everything on paper – and some of them still do. Going paperless meant we had to have digital imaging at every workstation. I was paying between $5,000 and $8,000 a desk for digital imaging back in the mid-1990s. Today you could probably do that for under $1,000.

cu | You started your career in the Canadian Armed Forces in 1969. How did that lead to a career in insurance?
I was an army brat. I joined the cadets, then the Reserves and then the Regular Force. I was posted to Shilo, Manitoba. At the time, there were a lot of United Nations missions going on. Turkey invaded Cyprus. Any time anything happened, I would be on a plane going somewhere. The military is a great place to learn basic discipline. It got me thinking about what I should be doing for the rest of my life. I went into the insurance business in 1975 in Winnipeg because my wife was working for The Co-operators. I got recruited by the Co-operators and worked there until 1980, when I became a commercial lender for the Bank of Montreal. In the mid-1980s, we sold everything we owned in Winnipeg and loaded up a pickup truck and trailer. We came out here to Calgary and bought a house. Neither one of us had a job. Then my wife became a collateral securities clerk for a trust company. We bought into Lundgren Insurance in 1989. At the time, Jack Lundgren’s brother-in-law was his partner. I bought out Jack’s brother-in-law. I am still friends with Jack.”