15 August 2017 07:00
Denis Dubois | Photo : Denis Méthot
Insurance brokers fear the day on which Desjardins group will launch its new digital platform. That time is soon. The cooperative will attack moreover the digital by the insurance companies.
It is said Denis Dubois, chief executive officer in property and casualty insurance Desjardins Insurance and president of the subsidiary Desjardins general insurance Group (DGIG), during an interview on the 29th of June last, in Lévis, in the offices of the insurer. The insurer will launch the first component of its platform Next September in English Canada insurance companies. The Québec will monitor at the beginning of 2018, still in the insurance business. The individual insurance will also be integrated to this platform later on. Desjardins can meet all the needs of its customers from a single platform, which also includes the applications that the insurer develops.
Several insurers have chosen the platform of the provider californian GuideWire in the last few months. Desjardins has chosen to deal with another firm : Demands Insurance Solutions. And the co-op puts as necessary. Mr. Dubois did not want to disclose the amount invested. The Journal of insurance, however, has obtained confirmation that the amount of the investment is 400 million us dollars (M$) over six years.
Insurance brokers in Québec have in mind the decision of Desjardins launching direct distribution in the early 1990s. This decision has been the catalyst for the fall of market share of the insurance brokerage private individuals. Mr. Dubois believes that the launch of its platform for insurance companies will have the same impact ? He says in doubt.
«The insurance companies represents 5% of our volume,$ 120 Million in Quebec and about$ 260 Million in total in Canada. It is necessary to make efforts to increase this. We will not look on the side of big business. We do not believe that the direct model is the best to serve this clientele. «
Mr. Dubois believes, however, that the direct model may well serve a large portion of entrepreneurs. «We have an appetite for it. There is something important to go searching. «
Agility and client focus
For Mr. Dubois, the damage insurance is currently experiencing profound changes after a long quiet period. He stressed that it is necessary to have agility. «Organizations must adapt. «
Desjardins group is continuing to pursue its strategy of focusing on the customer, which, because of its status as a cooperative is also a member. «It must now be put in a corner of innovation and prevention. It is necessary to do insurance differently. It has been active in this area with our programs, Ajusto, in auto, and Alert, in home insurance. The technology is being used to decrease the risk. It is the confluence. «
Climate change is thus at the top of its list of concerns. «When we launched our product to the flooding, our priority was to meet the needs of the client. The environment is still extremely dynamic in terms of damage insurance. The industry is evolving much more towards the customer. One lives and the consequences of climate change.
And the mandate that Guy Cormier, president of the Desjardins group, has appointed Denis Dubois is the same as that of Sylvie Paquette : provide financial products and services that meet the needs of customers. «Insurance is a vector of growth for Desjardins. It is also a sector with a high-performance, both in Québec and outside Québec. «
Desjardins is working on many initiatives to streamline its ways of doing business. «We have to make our organization more productive and more efficient. «
He gives as example the case of Geico and Progressive in the United States, which have expense ratios below 20 %. (Editor’s NOTE : In life insurance, we consider this ratio deficit from 30 %. In Quebec, several insurers believe that to have a ratio below 25 % is an excellent performance.) Over the past three years, the ratio of expenses Desjardins has shot around 27 % to 28 %, while the industry average hovers around 31 %, according to the reinsurer Scor in its report 2016 on the financial results of property and casualty insurers.
«We don’t know what the world will look like in five years. We live in a consolidating market. The size remains a key element. It takes a profitable growth, both organic and through acquisitions. It wants to remain a leader in the canadian market. «
Focus on prevention
Another axis on which Desjardins Insurance is a lot of emphasis is prevention. Ajusto and Alert are two heads of the bridge. Mr. Dubois emphasizes that the whole is transforming its teams in compensation. He stressed that his company’s rule now 65% of its cases of complaint in a single call, and this, across Canada.
«Have a client focus and forces us to deal more quickly and more simply. It has changed our approach to support, but also the way in which we inform the insured. And it’s paying off ! Our net rate of recommendation has been a jump of 13 points in three years. The everything speed up really. «
Programs, Ajusto and Alert ensure that Desjardins Insurance has a daily contact with its customers. «We are well positioned. We have the ability to adapt. The key is the focus. What is done with Ajusto and Alert enriches the relationship. It opens up possibilities. It is a fundamental standpoint. «
Special use : still room to grow
Even if the battle is intense personal insurance in Québec and Desjardins occupies an enviable position, Mr. Dubois that he still has room to grow. «Our share there is currently 22 %. You can go to 30 %, or 35 %. This is not an issue. This is attainable. «
The everything passes to both organic growth and acquisitions. «Our market share is growing every year since 2010. It is always necessary to evaluate our model to grow. Acquisitions are one way that need to be considered also. We also introduced a new concept : partnerships. With the assurtechs, we see new technology organizations see the light of day. It creates a third mode of growth. It is not clear what that means, but it is an axis that will develop in time. It’ll bring us to accelerate our growth. «
Accelerate the growth of its importance in relation to the size of the company. According to Mr. Dubois, the insurers cannot dodge this question if they want to know the success. It is expected that the portrait of the insurance industry of damages is similar to that of life insurance. The difference has been that consolidation has been more long the side of the insurance, while it is made in ten years on the side of life insurance.
Mr. Dubois said to believe that, as in life insurance, the first three players will each have a market share of 20 %. In current figures, this means that these players have each a volume of$10 billion.
Concerning the consolidation, Desjardins is always raised as the purchaser. Mr. Dubois agrees that his company has been less active at this level given the efforts required for the integration of State Farm. It is, however, clear on one point : that Desjardins will not realize small acquisitions.
«Acquire an volume of$ 100 Million or$ 200 Million is not worth the trouble for us. This is the figure that we will find in organic growth each year. It doesn’t look for to buy a insurance brokerage, and even insurance companies, » he says.