November 12, 2007 by Canadian Underwriter
The Canadian independent broker channel might be swallowed up quickly if hungry European insurers turn their eyes toward the Canadian insurance market, Colin Simpson, president and CEO of York Fire and Casualty Insurance, warned delegates at the York Fire Third Annual Executive Forum.
The Canadian distribution channel is already getting blurred because of market players such as insurer-owned brokerages and direct writers, Simpson warned. New entrants, such as banks or Toyota Insurance, will only blur the channel further, he continued.
When this shifts, it will shift quickly, he warned, pointing to the United Kingdom, where about 50% of the brokers disappeared over a three- to five-year period.
In the U.K., the Top 10 companies now control 70% of the market, he noted. In Australia, the Top 5 companies hold 70% of market share. But in Canada, the Top 5 companies control only 35% of the market.
There are big opportunities here for Europeans, Simpson said. Thats why theyre coming in right now.
The interesting thing is that you guys [the independent brokers] control the bulk of the distribution. So where do you think that theyre going to take the business from? The insurance market is not growing here very much. Theyre going to take it away from you.
Simpson urged brokers to communicate with insurers, one another and their provincial associations because there is a very short window for you to garner the strength that you will need.