Mutual Understanding

In his new role as OMIA president, John Taylor draws on his experiences growing up on a farm and in the insurance industry.

For John Taylor, becoming president of the Ontario Mutual Insurance Association (OMIA) was a homecoming of sorts.

Taylor is quite comfortable talking about the deep-rooted principles that underpin the work of the OMIA, including the tradition of neighbour helping neighbour. He paints a portrait of the association standing on the threshold of a major cultural shift that will undoubtedly affect the way in which the consumer purchases insurance (if this shift already hasn’t occurred). As he does so, he envisions the association drawing on its core principle over the next decade and allowing neighbour to help neighbour.

The road won’t be an easy one, he admits. Mutual insurers will have to make major investments in technology, and they will have to spend a great deal of effort pinpointing exactly what future consumers will demand of them. At the same time, mutual insurers are relatively small in scale, making them naturally more nimble to adapt and change with the times, he says.

ROOTED IN MUTUALS

Taylor grew up in a family composed of third-generation farmers near Fergus, Ontario. When he was young, his father obtained his agent licence and sold insurance to supplement his income. Eventually Taylor’s father purchased his own mutual agency.

“I grew up around both the farm and the insurance business,” Taylor says. “The insureds came to the house to pay the premium, and buying insurance was a very personal transaction around our place. I grew up around it. When it came time to decide what I wanted to do with myself, I wasn’t really sure that farming would be where I ended up.”

Taylor went on to study business at Wilfred Laurier University, where he took part in the co-op education program. The program, delivered in conjunction with the Insurance Institute, allowed him to get an insurance-related job as part of his work term. He was able to take Institute courses at the same time, accelerating his immersion into the insurance industry.

By the time he graduated from school, he had already begun working with a small adjusting firm in Kitchener, Ont.

Over the course of the next 22 years, the adjusting firm morphed, eventually being acquired by Crawford & Company. Taylor remained with the firm over the years, working his way from adjuster to vice president of human resources at Crawford. He only left the adjusting business earlier this year to assume his new role with OMIA.

“I was familiar with the mutual insurance business, I knew a lot of people that worked for mutuals, I had done work for mutuals before and I had, through my family, a bit of a background with mutuals as well,” he says. “When the opportunity came to lead OMIA, it was something that really appealed to me.”

Taylor takes on his new role at an interesting juncture for the insurance industry. Events surrounding the financial crisis in 2008 “made every insurer look at the way that they do things, and investment income and underwriting results,” he says. “One of the lessons that we’re still learning from 2008 is that to be successful insurers, we all have to be successful underwriters. I think as mutuals, for us, that’s particularly important.”

The mutuals’ relatively small scale creates an opportunity for mutual insurers to gain a complete understanding of both the policies they write and the insureds buying the policies, he continues. Nevertheless, mutual insurers need to focus on adapting to the changing demands of consumers.

As technology changes, insurers will have to find ways to ensure they remain competitive and maintain their knowledge of how consumers want their insurance delivered.

“I think as a small company it can be challenging to get your head around some of the things that need to get done,” Taylor says. “By the same token, I think small companies can be very flexible. I think they can make changes because their management structure…is relatively straight forward. Decisions can be made quickly and acted on relatively quickly.”

For mutuals, as with other companies, it’s important to challenge on an ongoing basis the assumptions about how the consumer wants to buy insurance and how consumers perceive the product, Taylor says. “Particularly with mutuals, we tend to grow at a relatively constant, measured pace,” he adds. “The idea of integrating technology into a relatively conservative growth strategy is always interesting.”

OMIA launched an initiative in 2008 to rebrand the association. “It was a new look and advertising approach in terms of making sure that our message was current and up-to-date,” he continues.

The association has also reexamined its approach to the traditional marketing channels. Taylor says the next phase of the initiative will be to look at alternative marketing channels, including online social media.

“We’re pretty sure this new, mysterious [future] generation will be different than the current generation, but we’re not sure how it will be different,” he says. “A lot of times we have insured families for years and generations and we value that continuity. And we think our policyholders value that continuity. We want to make sure that the next generation of policyholders are lined up so that we can reach them when we need to.”

OMIA is not just looking inward though, Taylor says. Although the vast majority of the trade association’s members are located in Ontario, many of the mutuals’ success stories come from across the country and around the world. By establishing a Mutual Leadership Task Force, Taylor hopes to learn from those success stories in order to help OMIA to grow.

The task force also involves the Farm Mutual Reinsurance Plan and the Canadian Association of Mutual Insurance Companies. “Along with OMIA, these organizations are opening up and leading the dialogue on the future of mutuality and promoting the best aspects of mutual insurance,” he says.

“We think mutual insurance is the best way going, but we want to make sure that we’re looking at all of the global success stories and all of the things we can do together to keep that agenda moving forward.”

He says a strong sense of collaboration and cooperation exists within the mutual insurer system. “When we have meetings as an association, it’s really gratifying to see members openly sharing good ideas and openly talking to one another and sharing experiences, when in fact they are competitors.”

While no one is swapping trade secrets, “by the same token, they understand that if the mutuals all do well together, everyone does well individually as well.”