Part of the Conversation

Hugh McTavish, president of both Godfrey Morrow Insurance and Financial Services Ltd. and InsureMy Ltd., a Calgary brokerage specializing in telematics, understands the value of being connected.

That value has become even more clear as insurers continue to offer reduced auto rates based on data gleaned from telematics, suggests McTavish, pointing out that InsureMy is using the vehicle-monitoring technology to provide independent advice to customers.

Although a full-service brokerage – which sells telematics-based auto policies to commercial and personal lines customers in Ontario and to commercial customers in Alberta – he notes it is “branded around a connected world.” As insurers “look for direct channels and look for other opportunities to talk to the consumer,” McTavish says, telematics “allows us to be part of that conversation in a much more relevant way as people have questions.”

McTavish says that he wants the brokerage to be a source of products for personal lines auto customers should insurers in Alberta receive the green light from the provincial Superintendent of Insurance to use telematics to approve private passenger auto rates. Even with approval, he says many consumers are still reluctant to share data on their driving behaviours with insurance providers if they do not think they will qualify for a large discount.

Consumers seem open to having data shared “in other parts of their life,” McTavish says, citing as an example the value-added service of knowing the price of gas at the next gas station. “But as soon as you mention insurance, a lot of people don’t want to do that. We think there’s real value to the customer in better understanding their insurance costs through the data, so we want to be part of that conversation.”

RURAL ROOTS

Raised on a farm near Shakespeare, Ontario, about 30 kilometres west of Kitchener, McTavish says that he, like many others, “fell into insurance.”

He studied at the University of Western Ontario in London, working in construction, to make some money. But after finishing, he found that in 1979, “there were not a lot of jobs so I ended up laying sod,” he reports. “I had a very well-educated crew. I think we all had at least a BA,” McTavish quips.

At one point, he owned a farm and later did income tax returns for farmers.

But in 1982, he began his insurance career, hired as a claims adjuster for Safeco and moving to Calgary in 1987. Safeco was later acquired by then Dominion of Canada General Insurance Company, which, in turn, was acquired in 2013 by The Travelers Companies Inc.

In 1992, McTavish left The Dominion to work at ING Western Union Insurance Company, later amalgamated with ING Insurance Company of Canada (now Intact Insurance). His roles at ING included, among others, regional vice president for southern Alberta and vice president of commercial insurance.

After earning his MBA from Western University’s Ivey Business School, McTavish left ING Canada in 2000 to work in Calgary as regional director of pensions, Western Canada for Manulife Financial Corporation.

During his two-year stint there, he “kept in touch” with people he knew from ING Canada, some of whom ended up working at Equisure Financial Network Inc. The brokerage network was acquired in 2000 by ING Canada and is still owned by Intact Financial Corporation. At the time, ING Canada sold portions of each brokerage to local insurance professionals.

Around the time McTavish left ING Canada, companies that were acquiring and consolidating brokerages – such as Equisure Financial Network, BrokerLink and Hi-Alta Capital Inc. (now Western Financial Group Inc.) – were “really having an impact,” he reports.

“In the two years on the pension side, I had spent a lot of time with financial advisors, life (insurance) folks and pension advisors,” McTavish says. “There seemed to be a strong opportunity to cross sell p&c.”

Today, Godfrey-Morrow Insurance and Financial Services – formed in 2002 when McTavish merged Bishop Morrow Insurance with Godfrey Jolin Insurance – offers both commercial and personal lines property and casualty, as well as life insurance and financial advice.

At the time the brokerage was formed, McTavish says he felt “that you needed about 10,000 customers to really have enough to make it viable from a financial services standpoint, so I bought 50% of two brokerages.”

REMAINING RELEVANT

McTavish reports that he “got serious” about telematics about two years ago after following developments in Europe and the United States, where insurers were starting to use telematics to sell auto directly to consumers. “My concern was, how does a broker remain relevant in that conversation?”

InsureMy launched its telematics offerings in November 2014, though the domain name insuremy.ca had already been registered by Godfrey-Morrow Insurance and Financial Services as “an Internet play to get more traffic to our website,” McTavish reports.

“It made sense that we set up a separate company and branded it differently,” focusing on telematics, he says of InsureMy. “Not everybody out there is going to be interested in telematics.”

The brokerage is “a different type of advice channel,” he suggests. “We talk a lot about data, because that’s where we believe that the consumer will become more empowered around understanding and controlling their insurance costs,” he says.

Commercial clients get “what we call effective fleet management,” McTavish says.

“We will visit with them at least twice a year to go over the data to see what the data is saying. ‘Is there a way that we can improve this fleet?

Is there a driver who is obviously either going to have an accident or cause the rates to go up through other things?’ So we see the data before something might happen.”

The same sort of opportunity is there for a brokerage offering telematics-based insurance to private passenger auto customers. Beyond providing the device, “the data will be shared with the customer, and they can look at what they can do to improve their behaviour. Eventually we will be able to take that data and shop it to various companies and say, ‘What is your premium for this data?'” McTavish says.

For a policyholder with a young driver, a broker could provide coaching and explain what the data means “without the insurance company having to be involved,” he says. “Ultimately, what we want to have is something where somebody comes in and says, ‘I am interested in telematics’ and our discussion is around, ‘What features are you looking for? What benefits are you seeking? Here’s a couple of different products.’ Price certainly remains a very relevant part of the discussion, but you certainly have a lot more to talk about,” he reports.

Telematics is really “all about this connected world that everybody talks about,” McTavish says. “What about homeowners and commercial buildings? Should they all pay the same, depending on what the building is telling us? If the building is occupied, 90% of the time, should that (policyholder) pay as much as a building that’s not occupied?”

Brokers “have an opportunity to remain relevant” to consumers by providing advice and advocating on their behalf, McTavish says. “We just have to find ways to remain relevant in the conversation and get in front of those customers, whether it’s virtually or physically, letting them decide how they want to deal with us and making sure we are able to do it.”