Canadian Underwriter

Insurance Brokers Association of Ontario continues ‘to have multiple discussions with Aviva:’ Simpson

March 28, 2017   by Greg Meckbach, Associate Editor

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Two months after the Insurance Brokers Association of Ontario announced it would no longer invite Aviva Canada Inc. to participate in IBAO’s sponsorship program, the association continues to hold talks with Aviva, IBAO’s chief executive officer said Tuesday.

“We continue to talk to Aviva,” IBAO CEO Colin Simpson said.

“The challenge we have with Aviva is that they have a particular brand strategy that directly competes with you and your offices,” Simpson said during the annual general meeting of the Insurance Brokers of Toronto Region, held Tuesday at Le Parc banquet and conference centre in Markham. “It does so by branding a product with the Aviva brand but is sold at a different value proposition than what you can sell in your office.”

Aviva announced Jan. 18 it is offering “team branded” home and auto insurance directly to fans of the Raptors and Maple Leafs. Those insurance products would be offered at a “competitive price,” Aviva said at the time. In a partnership with Maple Leaf Sports and Entertainment, Aviva Agency Services Inc. offers and administers the insurance over the Internet. The coverage is underwritten by Aviva subsidiary S&Y Insurance Company.

“I completely understand Aviva’s position,” Simpson said. “They have a strategy and they want to do it.”

On Jan. 23, IBAO announced that Aviva would “no longer be invited to participate in the IBAO’s Sponsorship Program for the foreseeable future.”

“We will see how this evolves,” Simpson said Tuesday at the IBTR AGM.

“We keep getting asked, ‘Why don’t you pick on Belair?’ or ‘Why don’t you pick on Sonnet?'” Simpson said, alluding to the direct writers owned by Intact and Economical respectively. “To us there is a clear distinction between the value proposition of a direct writer and what Aviva is doing.”

Simpson added that IBAO plans to publish a white paper in which the association will make its position “very clear.”

That white paper “will probably be coming out at the end of April,” Simpson said. “I will commit to you that I cannot take an insurance company’s money to promote a brand that is going to take business away from you.”

The team-branded Aviva insurance will include live chat assistance and will be offered in the Raptors’ and Maple Leafs’ marketing territories.

In January, Aviva said it “remains fully committed” to its broker partners.

“We have had multiple discussions with Aviva and we continue to have multiple discussion with Aviva,” Simpson said Tuesday. “They see the use of that brand as being to the benefit of the brokerage – ‘whether it’s competing against you or not, any exposure of their brand is good for you.’ We completely disagree. We have examples, we have anecdotes, we’ve got real live rating issues that we have presented them that specifically states that what they are doing is damaging our business. We have customers going into some of our members’ offices that are saying ‘we have worked with you guys for 30 years and you have been ripping me off.’ Consumers don’t understand the nuances of the same branded product. Aviva disagreed with us.”

One member attending the IBTR AGM asked Simpson whether Aviva will be allowed to attend the IBAO Convention, scheduled Oct. 25-26 in Ottawa.

“At the moment the only thing we have decided is that we will not take their money,” Simpson said. “Because the convention is so far off we really do want to try and fix the situation that we find ourselves in. Those decisions will be taken as we get further down the path.”

Before joining IBAO as CEO of its Independent Broker Resources Inc. (IBRI) subsidiary, Simpson had been president and CEO of Intrinsync Insurance Solutions Inc. He was CEO of York Fire & Casualty Insurance Company before it was sold by Kingsway Financial Services Inc. to La Capitale General Insurance Inc. Simpson later became CEO of Kingsway at the time it sold Jevco Insurance Company to The Westaim Corp.’

“I come from the dark side,” Simpson quipped Tuesday.

“As you get through a lot of initiatives at the insurance company end, one of the hardest things is trying to work out what it is that brokers really truly want,” Simpson told IBTR members. “A lot of you are strong entrepreneurs. A lot of you are used to doing your own thing. So it is tricky trying to work out what it is that brokers want.”

Brokers need to “take a leading role” in technology, Simpson suggested.

“It is getting to the point where there is obvious concentration of effort, from an insurance company perspective, on certain systems,” he said. “If we do not take the lead now, what we will end up finding is we will end up in the portal situation where they will develop their own types of solutions out in the marketplace and we will just have to suffer whatever comes in our direction.”

IBAO officials are “going to spend a lot of time in the next few months focussing on that particular angle to make sure that we put our stake in the ground as to where we expect to see technology going in the next two to three years,” Simpson said.