June 4, 2018 07:00
Photo : Freepik
With bill 150, the possibility that the brokers are obliged to submit four proposals is feared to wholesalers end up with a lot growing applications that will not succeed.
If the task looks easier in personal insurance, this is another pair of sleeves for the insurance companies, especially the risks of sub-standard. This is what is stated by Sébastien Gabez, chief financial officer and vice-president for Quebec in APRIL Canada.
«I can’t imagine the concept for risks such as trucking, where there are just four insurers. If the measurement of the four submissions to come to fruition, which seems to me rather as a pious hope, we will be there for the brokers. We believe that the measure could garner a surplus of activity, in which case we will be ready to receive and serve our dealers «, he says.
«The work thrown in the trash»
If the measure is adopted as it stood, when a broker presents four submissions to his client, only one of them will be accepted. Three suppliers have therefore done the work of submitting, without the latter materializes in a sale. All the wholesalers interviewed by the Journal of insurance of a perception of an increase in the requests that will not result in new business.
«I can’t allow myself to work just to make the competition at Intact Insurance , or to help the dealer to fulfill this requirement. Out of 100 submissions, we write between 15 % and 18 %. Can you imagine all the work thrown in the trash ? «stresses Pierre Chicoine, president of Profescau.
«We want to offer the service to brokers. We want this to be done in the context of a business relationship is fair and equitable, » says Sébastien Gabez. We don’t want to give bids only for the purpose of giving bids. It is necessary that one has the feeling that the broker we are seeking in order to do this business with us. We prioriserons our efforts in a context where, potentially, we will have an increase in growing number of applications. «
Mr. Chicoine deplores that the government has not made the difference between the segments of insurance for individuals and businesses. He says that this could create some insecurity among brokers.
«These may not seem in the eyes of the customers because they would not have submitted four bids before the bill. Brokers should explain that their role is not that of “magasineur”, but rather an advisor. «
In some cases, two submissions would be sufficient, » says Chicoine. In other cases, it would not be possible to present four, » he adds. «I do not know the extent to which brokers will be able to play the game of the four proposals to insurers and wholesalers. «
Relationship to review
Guy Boissé, vice-president of sales at insurance Group Totten, states need to take measures to tighten the criteria for submission. «We need to enhance the level of premium that we require. We have not yet ruled on the threshold. We want to ensure that we do not have to manage accounts that are not worth the money. «
Mr. Boissé also said that bill 150 will force the wholesalers to rethink their relationship with brokers. It still holds a glimmer of hope. «In return, this will create new opportunities that were not presented to the wholesalers. «
He feared, however, that the fact of having to make more requests to the various insurers or wholesalers increases the cyber risks that brokers face. «Brokers will have to put all their accounts on the market, the information on the insured will walk more. If I was a cabinet, I would put the emphasis on the protection of data, since a larger movement of the latter increases the chance of a computer breach «, he says.
For Jean-Francois Raymond, president of Groupassur, the challenge for wholesalers in the face of the bill 150 is not located with the obligation of brokers to provide four submissions, but rather to the status of the brokerage firm linked to the ownership thereof by the insurers.
«If a brokerage firm becomes an agency because he has a financial relationship with an insurer and that he concentrates with it, the volume that was previously at the wholesaler, will go to the insurer of the owner «, he explains.
However, for Sebastien Gabez, this measure turns out to be rather good news for the interest of the clients. «If the draft law brings more transparency in the relationship customer-dealer, it is necessarily good. If a client goes to see an agent, he knows he is going to see a representative of the insurer. When a client goes to see a broker, it assumes that the dealer is his representative, and not that of the insurer. He pays for the transparency and neutrality that implies the title of broker. He wants the broker to go and search for the best offer on the market in relation to its access to the market, » he says.
All in all, the future of the bill 150 is still uncertain. «The bill is not cast in concrete. It is therefore difficult to predict the effects it might have. If it is adopted, we will need to prepare to be able to offer the service and give the submissions «, said Mr. Gabez.
«I have big doubts that bill 150 be adopted, in view of the slowness with which the bill 141, which reform the Law on the distribution of financial products and services, is investigated,» says Mr. Raymond, who is also vice-chairman of the board of directors of the Chamber of damage insurance.