Consumer affinity for insurance product and how it is sold decreases dramatically over last year: IBAO

Consumers this year have a markedly decreased affinity to the insurance product and how it is sold than they did last year, according to figures presented by the Insurance Brokers Association of Ontario (IBAO).
IBAO CEO Randy Carroll and board chairman Bryan Yetman presented the figures while discussing emerging trends in the industry at the IBAO’s Young Brokers Council (YBC) Conference, held in Niagara Falls on June 9. They noted sustainable business models rely on customer affinity for a product and how it is sold.
The IBAO has surveyed several thousand Ontario consumers that only deal with broker members. Based on the survey results, “over 50%, over half of the broker’s clients, [do not] have an affinity for the product or how it is being sold,” Carroll said.
“That’s last year’s figure. This year’s figure is 76%. Seventy-six per cent of consumers that deal with you [brokers] don’t have an affinity for the product or how it is being sold.
“What that shows me is that if [consumers] are given an opportunity to look someplace else, if somebody else gives them a reason or an invitation to look, they’re going to do it.”
Carroll and Yetman went on to note the broker channel’s market share has been in a slow decline over the past decade.
Canada-wide, in personal and commercial lines, brokers are currently sitting at a market share of roughly a 67%, Carroll noted. This compares with a 77% market share in 1987.
In Ontario, brokers have a 64% market share in all personal lines. In commercial lines, the broker channel has a 93% to 94% market share.
Carroll referred to numbers showing that the broker channel held a 56% market share in Ontario Personal Lines (Auto) and Ontario Personal Lines (Property).
“Brokers had 56% of the market share on auto, 56% of the market share on property,” Carroll said. “That number has been declining rapidly since the early ’90s, and the scariest part is that the auto number includes commercial.
“So the message is really, ‘It’s time to wake up.'”
In light of these numbers, Carroll and Yetman stressed the importance of making sure brokers are contacting the consumer as many times as possible outside of the traditional points of contact, such as annual policy renewal and policy change.