Technology creating space for direct writers in provinces with public auto

Internet use, 1-800 telephone services and expanded access to vehicle license services have created opportunities for banks and direct writers to compete in provinces with public auto systems, which typically distribute products through the broker channel.
Representatives of the Saskatchewan and Manitoba broker associations observed similar trends affecting their members at the Insurance Brokers Association of Alberta (IBAA) annual general meeting in Jasper, Alberta on May 16.
One trend is that government-run auto systems appear to be increasingly attractive environments in which direct writers can compete with brokers in the distribution of vehicle licensing services.
Barry Seabourn, vice president of the Insurance Brokers Association of Saskatchewan (IBAS), noted that brokers currently handle 92% of Saskatchewan’s underwritten insurance business, thanks in part to the government’s public auto insurance system, which works through the broker channel.
But in September 2010, Saskatchewan Government Insurance (SGI) opened up vehicle license and issue appointments to insurance companies and bank-owned and direct writers. One month later, SGI launched online customer service for auto renewals.
“The extensive new changes will no doubt create renewed interest in our province from direct writers and more competition for our member brokers,” Seabourn said in his address to the IBAA.
In Manitoba, the public insurer, Manitoba Public Auto Insurance (MPI), announced a five-year license and policy renewal process effective in March 2010. Manitoba drivers are now able to renew their licenses and vehicle insurance online each year.
Consumers now have to visit an Autopac [insurance] agent once every five years, instead of once each year.
This kind of online access to online vehicle licensing services in Manitoba has also created an opportunity for directs, said Curtis Wyatt, vice president of the Insurance Brokers Association of Manitoba (IBAM).
“As a government-run auto province, we [brokers] often felt in some ways that we were protected by government auto versus the direct writers,” he said. “Barry’s comments [about the situation in Saskatchewan] are very true, and that change is coming in quickly.
“The use of the Internet and 800-numbers has brought direct writers into Manitoba.”