31 January 2018 11:14
David Morin, Bernard Chagnon and Diane Joly | Photo : Denis Méthot
TheAlliance for a stronger brokerage fort suggested Tuesday, a parliamentary committee, the creation of a third business model in the brokerage sector, the firm in damage insurance affiliated with an insurer.
It is a real cry from the heart than the president of the Groupe DPJL, Diane Joly, has launched to mps and the minister, Carlos J. Leitão during the study of bill 150. The portrait she has drawn of the situation of brokerage firms in Québec is dark. Citing data collected by the Journal of insurance, it noted that the market share of brokerage in damage insurance rose from 66 % to 41.8 % between 1993 and 2015.
Promote direct insurers
«Not to recognize the modern way to operate brokerage firms within the Act is the equivalent to facilitate direct insurers who are concentrating their jobs in call centres in Montreal and Quebec city, she argued. We ask to be able to fight on equal terms with the insurers in order to regain market share that we lost over time. «
Jean-François Desautels | Photo : Denis Méthot
In a separate presentation, Jean-François Desautelssenior vice president at Intact Insurance, has added a layer. He said that in the home insurance, the brokers have seen their market share go from 65.9 % in 1993 to 35.4% in 2015. Over the past seven years, MSA Research has found an overall decline of the brokerage by nearly 6 %. Due to the development of efficient technologies for direct insurers, there is concern that a similar trend in insurance business in the short term.
«The future prospects represent a major challenge for brokers. The current legislative framework, the limit is unjustified in their desire to modernize their businesses, » said Mr. Desautels.
A net decrease
The Alliance for a stronger brokerage strong claims that bill 150 would lead to net declines for the brokerage industry. According to its representatives, it will ensure that family-run businesses that are built with the parameters of legislative and regulatory initiatives would become, overnight, not in accordance with Law. Change the rules of the game at this point their appears to be inconceivable.
Diane Joly | Photo : Denis Méthot
The market consolidation of insurers has had a direct impact on the size of the firms, recalled Diane Joly. With bill 141, which will supervise and will lead to growth of the distribution of insurance via the Internet, direct insurers will have free rein to make massive investments on the Web, anticipates it.
«A balance between direct insurers and the brokerage must be found in order to ensure the strength of the distribution network by the brokerage,» she ordered, noting that the brokers want to get the latitude to modernize their structure, which includes partnerships with insurers direct.
The solution : the broker affiliate
The Alliance has already developed its own solution to ensure its survival and succession : the affiliated broker. Diane Joly has clarified its guidance in these words to the elect : «The affiliated broker is still a broker, because he has access to multiple insurers and products to its customers, but he made the choice to concentrate to a certain degree from an insurer for goods and generalists, as well as having access to a share capital flexible in order to respond to the challenges of entrepreneurial succession «.
The affiliated broker would supplement in the market the firm of independent property and casualty insurance agency which has an exclusive agreement with an insurer. According to Diane Joly, the title of affiliated broker reflects the modern practice of real estate brokerage, and its reality. It, therefore, has pressed elected officials to recognize this form of offer of products.
«This proposal should be absolutely chosen by the legislator, because the current provisions of bill 150 will force us to transform us into agency, to reduce our services, and to give up a significant portion of our customer «, she predicted.
Christopher Johnson | Photo : Denis Méthot
Not support the RCCAQ
The proposal of the Alliance does not, however, have not obtained the support of the Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ). Interrogated by the minister himself, its president, Christopher Johnson, has refused to get wet.
«How do you see the emergence of a new designation, that of affiliated broker «, asked Carlos Leitão ?
«The government has proposed a bill that clarifies the role of brokers and agents, he replied. Our colleagues have chosen to propose another way. We think of the RCCAQ that the government is free to consider this option. If he thinks that it is good for the consumer, the RCCAQ is willing to discuss it with him. But I think that we need to take our time over this way. We are here to discuss the government’s bill 150, which speaks of an agent and a broker. «