The Truth Behind Axiom

For more than a decade, ‘Axiom’ has provided realistic insight into the Canadian insurance community using the literary vehicle of fiction. The column’s casual, tell-it-like-it-is tone has often served to discuss real-world issues brokers and insurers face in their day-today business. What’s more, through the voice of the column’s regularly featured characters such as Fred Wilson, the manager of a large, downtown insurance company, and Bob Davies, who runs a prosperous midtown brokerage, AXIOM has provided some wisdom in aid of resolving some of these issues. Now, however, after 12 years of writing — including 53 columns and nearly 100,000 words — the man behind Axiom’s pen has decided to retire the column.

Gordon Findlay, aka ‘Axiom,’ has served as a voice of the insurance industry for far longer than when his first Axiom column graced the pages of the February 1996 issue of Canadian Underwriter. He has been in the insurance communications business for 53 years. When he retired from his full-time position in 1995, he held the title of manager of communications and public affairs at Royal Insurance Company of Canada (now Royal & SunAlliance). Prior to that, his career snaked through various industry trade publications and national advertising and public relations companies, all of which dealt with the insurance industry in one form or another. Royal finally poached him to run its communications department in 1978. This is where he spent the bulk of his career; upon retirement from Royal, he kept his ear to the ground and decided to pen a column for Canadian Underwriter.

Launching Axiom represented a type of homecoming of sorts for Findlay. He recalls landing as a young Scottish immi grant in Toronto in 1955, having moved from a journalism career in Dundee, Scotland. He landed his first job in Canada at Canadian Underwriter that same year. “I had been in the newspaper business in Scotland, but none of the Toronto dailies would hire me back in 1955, since, as a brand-new immigrant, I was unfamiliar with Canadian geography, history, culture or terminology,” Findlay recalls over a cup of coffee in his Etobicoke, Ontario home.

Canadian Underwriter was looking for an associate editor. The magazine’s editor at the time, Ken MacLeod, a Cape Breton native, admitted to feeling a sense of kinship with the young Scotsman — fresh off the boat, as it were — and hired him.

Findlay speaks of MacLeod as a mentor as he recalls learning the landscape of the Canadian property and casualty insurance industry. “The production of the annual statistical issue was a long and tedious business,” he remembers. Lacking today’s fax machines, emails and computer technologies, MacLeod and Findlay resorted to sending out forms and begging the firms to complete and return them as soon as possible. “Most did, but there were always the laggards, or those whose results were so horrific they were in no great hurry to announce them to the world,” Findlay says. “Ken and I would have to trudge up to the Ontario government’s statistics office, then on Queen Street in Toronto, and plead to be allowed to see the results which all licensed insurers were required to report to government.”

To calculate loss ratios, MacLeod and Findlay hired a “nice Lithuanian lady, a Mrs. Kalpokas, who lugged her hefty, finger-powered, 100-key computer into the office on weekends and, using all her fingers criss-crossed over the keys, crunched them down again and again until the correct percentage showed up in the machine’s window.”

OPENING COMMUNICATION CHANNELS

Since those days in 1950s, regulators have required insurers to be much more open and comprehensive in the reporting of financial results. Even so, Findlay says, communications between insurers and the public have always been — and will likely continue to be — a major hurdle the industry needs to clear.

When he joined Royal in the late ’70s, the age of consumerism had dawned, Findlay says. The public demanded better service and explanations of the products they purchased. This broad social trend coincided with the appointment of a dynamic British executive, Alan Horsford, as Royal’s general manager for Canada.

“Canadian consumers were generally wary and suspicious of general insurers — particularly when they had to make a home or auto claim,” he says. “But the 1970s was also a decade when Canadian customers of every kind began to find their voice. Class action law suits were filed against auto manufacturers, against drug companies and against banks.”

Horsford read the signs, Findlay recalls, “and almost single-handedly dragged Canada’s tradition-bound general insurance industry into this new age of consumerism.”Royal launched programs allowing consumers to appoint an arbitrator of their choice, guaranteed satisfaction repair services, a tri-lingual consumer information call service and plain-language policies. These offerings pushed the company to the front of the tide, Findlay says. “I remember sitting there and cutting away through the dense and arcane language of a policy and trying to translate it into a ‘Reader’s Digest’ level so that anyone could read their policy and understand the terms.”

Although these measures helped, Findlay admits a major disconnect still exists between the insurance industry and consumers. “For example, many Canadians get mad when they read that insurance companies have turned a profit,” he says. “For many people, profit occupies the same position in their minds as sex. They think there is much more of it around than there really is, and they’re convinced that someone else is getting it all.”

Profit remains the primary yardstick of success, but Findlay believes more insurance companies need to take a leading role in supporting and enriching the communities in which they operate. Such initiatives may also be used as a gauge of success. “The fact is, no company operates in a vacuum,” he says. “Companies are a part of society, and while insurers may complain about being unloved by Canadian consumers, they have many opportunities to change that image by supporting activities that are at the core of any thriving community — social services, youth activities, education and medical care.”

OLD HABITS DIE HARD

Another recurring theme persisting over the decades is the insurance cycle — “boom and bust,” as Findlay says. If nothing else, the insurance cycle proves the old maxim that those who can’t remember the past are doomed to repeat it. People are always preaching underwriting discipline, he notes, but then as soon as the money starts flowing in from investment income, discipline becomes an inconvenience.

“Fifty years ago, I was writing the same terminology using phrases like ‘underwriting discipline,’ he says. “But then we would get a new breed that came along and said: ‘Hey, we’re getting 12 points on investments.’

“Investment income is the crack cocaine of the insurance industry, I think. It’s always been that way. It blows away all restraint and there will be no tomorrow. But as we know in the insurance industry, there always is a tomorrow — and it’s often an unpleasant one.”

Throughout the history of Canada’s insurance industry, the investment tail has wagged the insurance premium dog, Findlay maintains.

Findlay has given a lot of thought to the broader issues facing the insurance industry. But through his Axiom column, he hopes also to tackle issues at the day-to-day grind level. Findlay says the stories of frustration that he heard from both sides of the fence, from both the broker and insurer camps, motivated him to launch Axiom. He noted industry publications already tackled the broad issues of the day, but he wanted to speak directly to the people working on the ground about their realities.

“One of the things I always tried to emphasize was that the company-broker relationship is the foundation of the business, and it’s an interdependent relationship,” Findlay said. “Brokers don’t o
perate in isolation, nor do companies. Anything we can do to smooth and improve the process is to the benefit of the industry as a whole.

“No problem is insoluble. There is always a solution somewhere. It might be impalpable in the short term to both sides, but it’s something that can be solved with both sides going halfway to a solution.”