Ontario broker association suspends partnership with Aviva Canada
October 23, 2017 by Canadian Underwriter
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The Insurance Brokers Association of Ontario (IBAO) announced on Monday that it is formally suspending its sponsorship partnership with Aviva Canada “for the foreseeable future.”
IBAO CEO Colin Simpson argued in a media release that “Aviva continues to leverage the Aviva brand for broker-distributed products and direct-to-consumer products, with an inconsistency around product availability and pricing – a strategy the IBAO believes promotes confusion for consumers.”
Simpson contended that it’s also “damaging to IBAO member businesses. Consumer awareness of the Aviva brand has been built in partnership with the broker channel over many years,” he said, and the association “cannot continue to promote Aviva as a supporter of broker distribution in Ontario while it continues to leverage that brand against us.”
The release reported that the association received “overwhelming support” to take action following the latest direct-to-consumer offering leveraging the Aviva brand – their partnership with Maple Leaf Sports and Entertainment (MLSE).
On Jan. 18, Aviva Canada announced that it was offering “team-branded” home and auto insurance directly to fans of Toronto’s Raptors and Maple Leafs sports teams. In partnership with MLSE, Aviva Agency Services Inc. will offer and administer home and auto insurance online, Aviva reported last week. The offering will be underwritten by Aviva Canada subsidiary S&Y Insurance Company.
But an Aviva Canada spokesperson told Canadian Underwriter that “when we notified the IBAO leadership of our new agreement with Maple Leaf Sports and Entertainment to offer Maple Leafs insurance and Raptors insurance, their initial reaction was positive. However, it seems that after further dialogue with some of their members, this view has changed.”
The Aviva Canada spokesperson added that the IBAO’s decision to suspend its partnership with Aviva Canada “is both surprising and disappointing. We have been consistent in communicating our strategy to de-emphasize direct in favour of partnerships like RBC and affinity deals like MLSE. We are having productive discussions with many brokers about how customers want to buy insurance and we are actively supporting our brokers with a range of innovative solutions to help them meet the evolving needs of their customers. Aviva Canada remains fully committed to our broker partners and we will be speaking directly with them over the coming days about our strategy, the partnership with MLSE and how we continue to develop our business together.”
Simpson said that IBAO is also “committed to keeping an open dialogue with Aviva to resolve the issue of product availability and pricing under the Aviva brand.”
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As an Ontario Broker I am disappointed that this great new initiative with the leafs and Raptors will not be available to brokers. Why not?
Shocked too, to hear that Aviva will provide mid term pro-rata cancellation of existing broker placed Aviva policies to be re-written with their new branded property direct. That is a brutal slap in the face to their brokers. Shame on them
How much is MLSE making on this deal?
Great to see the brokers getting upset. Now they continue to grow their brokerage until they sell to cbl.
Long gone are the pellucid days when the model (and philosophical bent) of an insurer was found in either; absolute commitment to the broker channel; or the impenetrable exclusivity of direct writing.
The menu for delivery now comes with a smorgasbord of offerings. Many markets develop and commit to multiple streams to guard and grow their share of the pie in traditional circles, while also girding themselves against unconventional entrants, eyes fixed greedily on the insurance buffet. While not universally popular, probably tough to dispute the business case.
It’s not clear from the report if, or how Aviva’s MLSE program departs from industry precedents, but what does seem clear is that multi-channel distribution strategies are not likely going anywhere soon.
Perhaps this highlights an opportunity, if not a need, for brokers and broker exclusive insurers – waiting patiently for a dinner invitation – to come together to crash the jumbo shrimp ring, and to develop the relationships and programs that allow them to keep a bigger slice of the affinity cake, for their own consumption.
Aviva has and continues to be a great supporter of the brokerage channel. Insurers are going multi-channel- that is not news. Intact has Belair and Brokenthing (now really just an agency), RSA has Johnsons and Economical is spending an incredible amount of money on Sonnet. The only difference is that Aviva is still using the same brand? Really that is the biggest threat to brokerages?
Brokerages are behind on technology and on rationalizing the economics of their business. I congratulate Aviva on an interesting marketing initiative. Their success will not harm our brokerage’s success. It is a crowded field. We as a brokerage just need to worry about ourselves and continually get better. I am very happy that we are in the Canadian Broker Network (CBN)- the most forward thinking brokerages in Canada who appreciate that we can’t worry about what others are doing- only what we are doing.—Bruce Rabik, Rogers Insurance.
You are completely missing the point, the Aviva name recognition is totally the result of the broker channel, for them to use that same name recognition to compete with brokers is WRONG on every level. Aviva is not a supporter of the broker channel, Aviva is intent on doing its part to eliminate the broker channel. Its time the brokers rise up and eliminate Aviva from the broker channel and let them sink or swim in the direct market.
I find the IBAO quite inconsistent in this matter. Why are we not talking about InTact who blatantly erodes the broker channel?
Why no action against them? Brokerlink, Belair Direct, Greypower
Seriously, if you are upset with Aviva then do the same for InTact.
The IBAO is not inconsistent, Aviva is marketing direct and through the broker channel under the same name. Intact and none of the other do that. The IBAO is showing good management and welcomed leadership. Aviva needs to STOP using the same name in the Direct Channel.
Gord,
So let me understand your counter argument correctly. So what InTact does is perfectly fine because they operate under another name…Belair Direct as an example. Belair Direct also states they are owned and operated by Intact Financial which is a required disclosure under FSCO and other relevant Provincial bodies. In effect, this is no secret to consumers that Intact owns and operates these other entities. Are you saying that if Aviva operated under another name that there would be no issue? That you would accept this competition?
Your other point….IBAO is showing good management. Okay this is wonderful to hear but what does that have to do with their perceived consistency? Let’s call a spade and spade here….Aviva is doing nothing different then what Economical does with Sonnet or Intact with Belair Direct. Brokers need to focus on solutions rather than complain about their plight. Get creative, offer real solutions and stop complaining about something that will fade away.
Insurance brokers need to wake up to the fact that the majority of the carriers they use are actively competing against them and this will only increase with the introduction of small commercial lines business soon. Brokers only really have a limited choice of viable long term options to ensure the success of the independent broker channel.
– Sell
– Only support markets without a direct arm actively competing against them
– Create punitive consequences. (If they lose 1 policy to Sonnet then re-market 2 Eco policies)
– Collectively join up and form MGA’s to compete against them.
The Independent Broker Channel has the majority of the business out there with +36,000 members in which could cost them almost nothing to move it to form MGA’s. I think our insurers forget who’s business it really is and have showed their cards for their true intentions.