Diversity critical for MGA entering Quebec market

For Canadian managing general agents, maintaining a diversified portfolio and effective distribution channel for products is crucial to success, according to Gary Hirst, president of CHES Special Risk.

Hirst spoke to Canadian Underwriter Thursday, one day after CHES announced it was entering into the Quebec market. He was responding to a question about key issues facing MGAs in Quebec.

He talked about the importance of avoiding entry into unprofitable lines. “There’s bound to be some undesirable business,” he said. “We’re concerned we’re going to be inundated with business that perhaps we’re not targeting. You’re going to be inundated with all sorts of inquiries, whether it’s property or trucking or liability, etc.”

Hirst said CHES’s approach in Quebec will be to launch in three specific areas: construction, commercial general liability and jeweller’s block insurance.

In addition to its new Quebec office, CHES also has offices in Toronto and Ottawa. It is also eyeing expansion into two other provinces. The MGA is “actively working to open an operation” in British Columbia and Alberta, probably in the first quarter of 2019.

The main challenge will be with distribution. “How do we provide good quality service and good products and how do we choose our distribution?” Hirst asked. “This is something we are working on at the moment with our team in Montreal, trying to be careful how we distribute our products and how we deliver expectation,” he said, adding that that CHES will review each submission to ensure it fits with their underwriting requirements.

As part of its move into Quebec, Gabriel Morneau has joined CHES Solutions Spécialisées as director and senior underwriter. Hirst said Morneau started his underwriting career for what is now Intact. Morneau has held a variety of underwriting and broker roles.