Are insurance companies embracing direct also committed to brokers?

Published: December 4, 2019



Brokers in Canada have consistently voiced concerns about direct-to-consumer insurance products. Three major Canadian insurers, Intact Insurance, Economical Insurance, and RSA Canada are all moving full steam ahead with direct solutions. However, each has also reaffirmed commitment to the broker channel.

So, which is it, can insurance companies have the best of both worlds, and does this suit brokers?

During a recent executive panel at the Atlantic Insurance Brokers Convention (AIBC), leaders from the three insurance companies faced brokers’ questions about their direct solutions. Once again, Intact, Economical, and RSA all pledged their commitment to brokerages across Canada.

Debbie Coull-Cicchini, executive vice president at Intact Insurance, said: “We have always been transparent at Intact Financial Corporation. We do have a direct arm, but we learn through that direct arm, and we take most of that learning into our work with the broker channel. It’s a challenging world out there, and the industry is changing massively on a digitization front. A lot of brokers I’ve spoken to in the last couple of years have made leaps and bounds [in terms of digitization], and we’re there to help you in any way can.

“Brokers are not created equally coast to coast. There are brokers who have different expertise and different skills. In some cases, they have the expertise and resources within their brokerage to create their own digitization, but, in other cases, brokers are asking for our assistance, and we’re happy to provide it. There’s always going to be concern about us having a direct arm, but we think we bring a lot of value to the broker channel. We spend hundreds of millions of dollars a year on technology for the broker channel, and we spend a significant amount on marketing as well. The broker channel is 80% of our business, it’s very important to us, and we’re very bullish on [our support] for it.”

Economical Insurance has been perhaps the most bullish in its push to direct-to-consumer with tis Sonnet Insurance company. Launched in 2016, Sonnet provides home and auto insurance online. However, the company wants to continue to work in-depth with brokers.

Tom Reikman, senior vice president and chief distribution officer at Economical Insurance said the company believes it is “very important to be able to provide a multi-channel solution” as consumer preferences evolve, and Economical Insurance strives to become a top five carrier in Canada.

“A lot of our learnings from Sonnet have been incorporated into our Vyne delivery mechanism. We’ve shared a lot of the functionality and the technology capabilities. We’ve also spent a lot of time on consumer research, which is done on behalf of both Sonnet and Economical, and a lot of that work is permeated through to our product offerings – simplified wordings being a good example. There’s a lot of work that overlaps both companies.

“The way we look at it is – we want to meet the needs of as many Canadians as possible. Sonnet is a very small portion of our overall portfolio. Right now, it’s about 6%, and while we continue to see it grow, it’s not growing exponentially. It’s an individual business unit and it has to stand on its own. It’s also important that as Sonnet stands on its own, the broker channel continues to not only stand on its own, but it also continues to grow. The expectations on the broker channel for us are enormous. This is not small stuff. This is about growing market share, continuing to grow the Economical brand, and continuing to grow within the broker channel. It’s not about staying still.” 

Donna Ince, senior vice president of P&C Insurance at RSA Canada, said the firm has been very clear about keeping brokers and direct separate.

“We are very committed to the broker channel,” she said. “We always have been, and we always will be. We put a lot of our investments in technology to support brokers and help them become more efficient. One of those investments was our RSA Pro tool for SME business. We built RSA Pro in 2017 using broker insight and broker feedback on how we could build the technology out to enable brokers to do business online with us in a faster, more effective way. We also launched our RSA Claims Point portal last year. That’s for brokers to be able to go online and get a claim moving very quickly within minutes. We’re very focused in on supporting the broker channel. We will continue to do that, and we will demonstrate that through our investment from a technology perspective.”