June 19, 2018 07:00
Photo : Rawpixel.com
The transactions that resulted in a shift from general agents in the lap of insurers have multiplied over the last year. However, this had no impact on their activities, evidenced by many industry players.
It is including the collection of Doug Paul, vice-president, individual products and investment life insurance at SSQ financial Group, in relation to acquisitions of Group financial Horizons by Great-West Lifeco Group and PPI by ai financial Group. «Frankly, they have very well made things. I have not noticed a single change in the acceptance of these general agents. It didn’t change anything to our daily life. They have acted very fairly in order to maintain an independent distribution, » he says.
Jim Virtue, president and chief executive officer of Solutions PPI, says that belonging to a large insurance company, has no impact on its operation, which continues to operate independently. «The independent representation represents a good value,» he said. This is the reason why we are witnessing this trend. It will be interesting to see if other insurers will follow, but it is clear that iA and Great-West see a lot of value. «
Financial support increased ?
The influence of the parent company, will manifest it more in the future ? Insurers provide more capital to general agents acquired ?
Jim Virtue, of PPI, said that this money is used primarily to obtain better tools, increased support in the areas of compliance and regulatory, as well as a better service to independent advisors. PPI could see its parent company to increase the customer base through acquisitions continued. iA financial Group has acquired April 10, ABEX Brokerage Services and its subsidiary ABEX National Brokerage.
Mr. Virtue also hopes to develop a program in which iA will help to finance the transition when a new adviser wants to buy the business of an adviser who is retiring. «The access to capital facilitates so greatly the things. «
The Group financial Horizons, president / founder John Hamilton claims to have made more than 35 acquisitions for the company for five years. (Editor’s Note : John Hamilton will transfer on 1 July the presidency to Nick Pszeniczny.) The company has also created the Financial Centres in the Continuum, a company designed to attract new advisors in the industry and pair them with advisors who are retiring.
«We have a strategic plan to be very strong in order to pursue acquisitions, both on the side of general agents as advisers,» he said. We have been very active on this front. «
Acquire advisors in advance of general agents
The consolidation continues at a reasonable pace. Some industry observers say they seek to make the acquisition of offices of councillors rather than business as such.
«We find ourselves in competition with major financial institutions and large companies of capital-investment that will show up on the market with an attitude of go-getter and pay huge royalties to multiple, said Paul Brown, president and chief executive officer of insurance Network IDC Worldsource. We see more value in the acquisition of advisers, as opposed to that of businesses. This does not mean that we are not open to strategic acquisitions. «
Mr. Brown said that he had noted, for several years, the competition has increased due to the presence of these great players. «There seems to be a desire to grant royalties to multiple quite large. I don’t know if it will last. When you want to sell, it is probably attractive. But as a buyer, proceed with caution. «
Compliance will also have its effects, » he said. «We are on the cusp of fundamental changes in the way in which the general agents will work and will work with the advisors. There will be an increased emphasis on the monitoring and supervision of advisers. General agents will be more accountable to know the counselor, to understand what kind of business it is, and that they will have a more important role to play to ensure that interests of the client first. «
Invest among competitors : the coopetition
There are avenues other than the sale and purchase, notes Doug Paul. He notes that SSQ is currently out to general agents who do not act under the aegis of one of the big insurers.
SSQ would like to see if it would be possible to form groups where companies are likely to invest in business opportunities with a certain scale. The organization could also invest in a technology that could be used at all, or to pay for a agent-general to purchase another.
«We would like to explore another approach. It would be to work with various general agents gathered under the umbrella of an insurer and to see if we could invest in their good works in exchange for a right of first refusal in the event another great life insurance company to make an offer on them. Having this right of first refusal, we éviterions to see this investment go to a different insurer. «
Empire Life will not purchase of general agents
Empire Life is another insurance company that does not intend to make the acquisition of firms distribution. Sean Kilburn, senior vice-president, individual markets, says that his company has developed lending terms and a variety of other types of financial arrangements that allow his company to support the general agents independent without outright purchase.
«We’ve set up our company in such a way as to support independent financial advisors. We are not spending all of our efforts to the purchase and operation of an office of agent-general. We believe that we can play a support role with the offices of general agents existing, strong and independent, to help them maximize their potential, » he says.
The skills necessary to be successful in attracting and retaining independent advisors are very different from those it takes to create a designer life insurance products or its own sales force, » said Mr. Kilburn. «We believe that the best way for us to support advisers, this is to help them to know that they have choices when they select the agent with whom they will work. «
Invest in the digital
Instead of investing in the distribution, Sean Kilburn indicates that Empire Life is rather interested in the evolution of the technological needs of the industry by investing in the process of selling digital. These have been designed to help advisors manage their time more efficiently while responding to the new needs of the customer and his buying preferences.
«All we have done is we have done to increase the speed, simplicity and ease of management of Empire Life in our digital world,» he said. We do everything that we can to create digital processes that are simple, quick and easy. This frees up our team, which can offer a tremendous support. Empire Life is intended to be strong in digital and human relations. »