Ready, Set, Go

As Chris Floyd prepares for his new role as president of the Insurance Brokers Association of Ontario (IBAO), he is aiming to help brokers ready themselves for the future.

“My theme for next year is going to be, ‘Get ready for tomorrow today,'” says IBAO’s president-elect. “That will cover a gamut of what we need to be doing, how we speak and when we speak to consumers, and how our businesses are structured to be adaptable to what consumers want,” suggests Floyd, a member of IBAO’s board for 10 of the past 11 years.

He will replace Debbie Thompson as IBAO president January 1, 2014. At that time, Thompson will become the board’s chair.

Like companies in sectors such as banking and telecommunications that are offering more services online and outside of normal working hours, Floyd says that brokers also need to adapt. “Brokers who feel that being open 9 to 5, Monday to Friday, is going to be satisfactory two, three, four or five years down the road – I think they are mistaken.”

While it does not mean that brokers need to work 24 hours a day, seven days a week, Floyd recommends they be “more adaptable and flexible around the Internet, around hours of service, around online chatting and around self-service.”

This could mean, as one example, allowing customer service reps to work from home.

As younger Gen Ys “start to become more affluent, their first reaction is not necessarily going to be to pick up the phone,” he says. “So being in a more responsive environment around e-mail, around online chatting – we need to be ready,” Floyd adds.

Another important technology issue is telematics. “As we talk about the subject with insurers and other stakeholders, it certainly is something that is coming,” Floyd says of telematics, which involves installing devices in vehicles to monitor driving behaviour.

Just this September, IBAO announced its subsidiary, Independent Broker Resources Inc., intends to partner with Quindell Portfolio PLC to offer telematics in Canada.

Still on the technology front, brokers are well-advised to learn how to address the Extensible Markup Language (XML) eDocs standard, designed to allow brokers to transmit policy documents directly into their broker management systems. “Since it will have an impact on the broker’s workload and workflow, IBAO needs to be helping develop best practices for brokers to implement (eDocs), once it does come in a more fulsome way,” Floyd adds. 

CLOSE TO HOME

By day, Floyd is president of OTIP/RAEO Insurance Brokers Inc., a wholly owned subsidiary of the Ontario Teachers Insurance Plan (OTIP), which is a non-profit trust directed by a board of eight trustees from four different teachers unions. He has worked there since 1994.

Born in Hamilton, Floyd grew up in nearby Kitchener and later began his career at Cambridge-based Gore Mutual Insurance Company in 1986. “I would fall into the category that insurance found me,” he says. “I had some friends from high school who were working at Gore Mutual, who called me up and said, ‘You should come down here for an interview,’ and one thing led to another.”

While there, Floyd worked in several roles, including claims, field marketing and underwriting. Today, at OTIP/RAEO, he deals with issues ranging from homeowners and auto to life, retiree health, dental and travel.

Floyd also serves on the Board of Directors of the Insurance Brokers Association of Canada (IBAC), which, like IBAO, is a volunteer position. He volunteers for both associations, he says, because he believes they can truly make a difference for brokers.

Being on IBAC’s board offers Floyd a “good perspective” on property insurance issues – such as water damage – across the country, he says.

“What our friends in Western Canada dealt with this year in horrific flooding, and some of the challenges that are happening with wind and hail and things like that, I do not think one jurisdiction is in isolation,” he says.

“We are able to work and learn from one another. It is not just an Ontario issue,” Floyd adds.

One issue of particular interest to Ontario brokers right now, though, is private passenger auto. The ruling Liberal government is seeking a 15% decrease in premiums over two years.

To meet that goal, the Ministry of Finance announced in August that the Superintendent of Financial Services has been given the authority to require insurers to re-file rates, with the aim being to reduce premiums 8% by August 2104.

IBAO has been vocal on the issue and the government timeline. “We have to be very cognizant of the costs and the expense that is still embedded in the (auto accident benefits) system and moving on rate alone is not going to be viable in the long term,” Floyd argues.

“The government needs to, whether through regulation or legislation, take advantage of what is in front of them with the 38 recommendations from the Auto Insurance Anti-Fraud Task Force,” he emphasizes.

Released last November, the recommendations include the following: giving the Financial Services Commission of Ontario (FSCO) the authority to oversee and audit the business and billing practices of health clinics and individual practitioners who invoice auto insurers; providing FSCO with a “range of sanctions” it can apply to violators, such as limiting or stopping a regulated facility from accessing the Health Claims for Auto Insurance (HCAI) system; and adopting a province-wide licensing scheme for the towing industry, including prohibitions on unsolicited referrals to automobile repair facilities or vehicle storage facilities, to be administered by an “administrative authority.”

Floyd acknowledges that some of the task force recommendations “might be more difficult to implement.” These include those relating to both healthcare and towing.

BAD CREDIT

Private passenger auto is certainly not the only issue on IBAO’s radar. A persistent concern has been carriers’ use of consumers’ credit histories, with IBAO arguing that credit scores are not appropriate rating tools.

IBAO’s position is that some consumers are not being properly informed about how the use of credit information may affect insurance premiums. “We feel it puts our members in harm’s way because of the lack of clarity around the consent that the broker is being asked to get from the consumer,” he says.

In June 2012, Liberal MPP Mike Colle introduced the Homeowners Insurance Credit Scoring Ban Act, but it died on the order paper when the legislature was prorogued in October. Had Bill 108 been passed into law, it would have, among other things, made it illegal for carriers to use credit history or rating to decline coverage, or to classify risks or rates, for homeowners’ insurance.

Bill 108 may be gone, but Floyd says the issue of credit scores will “still be topical” while he is IBAO president.