What Brokers and Carriers Look for in an LEI Partner

You are listening to The Legal Solutions Podcast with ARAG, exploring legal expense, insurance, and protection beyond the policy.

Pete Tessier: 

Hey everyone, welcome back to the Legal Solutions Podcast with ARAG. I’m Pete Tessier, sitting here with Curt Wyatt, and we have a couple great guests today in our third installment of this series. And we’re talking to Alex Manning, who is the VP of Corporate Partnerships, and we also have Kelly Callachan, who is the Director of Broker Partnerships. And we’re getting into how this product is distributed and sold with two of the people who know this ecosystem the best. Right, Curt? 

Curt Wyatt: 

Yeah, absolutely, Pete. And the stories they tell today kind of reflect how they themselves try to educate the industry around what legal expense is doing. And we’ve touched on some really key points here today in the interview. And I think everyone’s going to really enjoy the idea of what these two professionals offer to the industry when it comes to understanding and developing a strategy as it relates to educating a client about why this coverage is needed. Let’s face it, it’s very different than your standard personal lines, commercial lines, liability type insurance. And so, this is why we’re talking about it on the show. It really has a lot of legs and it’s something that the industry needs to spend more time thinking about, Pete. 

Pete Tessier: 

Yeah, absolutely. And I think what’s really interesting is we’re not just looking at it from a sales standpoint of here’s an endorsement. Alex specializes on the corporate stuff, the small, medium enterprise and larger. And Kelly specializes on the broker partnerships and more of the retail personal side of it. And what we’re going to be getting into is a lot about where those gaps are, the resources that they give brokers to sell this. And, you know, we’re going to ask them, how do you differentiate your product from all the other products that brokers have to sell and talk about? What makes this product, the legal expense insurance, stand out from the other noise of a myriad of endorsements and stuff? And I think that’s going to be a really interesting tell about where they’re finding success because this product is growing. And Curt, the other thing I think is interesting is, how does this legal expense product fit into your cost to doing business as a business, because it’s a different kind of hedge. 

Curt Wyatt: 

Yeah, you’re right, Pete. It is a different hedge, and small business owners, SMB operations out there are always in a boat where they’re looking at the bottom line. There’s usually sometimes more month than there is money. And if you can manage your business better by bringing in experts who can help you understand what your opportunities are as it relates to costs and overhead, I think this is a terrific idea. It makes your insurance become part of your active business, which is a very different thought process when it comes to purchasing commercial insurance. 

Pete Tessier: 

Yeah, 100%. So, what, Curt, we can talk about this forever, but let’s get the answers from the experts. And that’s Kelly and Alex, and we’ll bring them in and get into the thick of things now. 

Pete Tessier: 

Welcome in Alex Manning, who’s the VP of Sales and Corporate Partnerships, and, of course, Kelly Callachan, who’s the Director of Broker Partnerships. So, hey, guys, welcome to your podcast, and thanks for jumping on with us to discuss things. 

Alex Manning: 

Thank you, Pete. Good to see you and Curt and to get to see a peek behind the curtain in how this podcast is produced. Been a listener for a while, so happy to be here. Kelly? 

Kelly Callachan: 

Yeah, thanks for having us on the show. Happy to be here, too. 

Pete Tessier: 

Well, we’re great. We’re happy to have you. So, look, let’s talk a little bit about what you guys focus on compared to our past episodes and content. We’ve learned about the company, Legal Expense Insurance, and how claims are handled. Kelly, when it comes to selling insurance, what do you want to work with when it comes to the broker partners that you have and the issues and, sort of, aspects of the nuanced side of legal expense compared to the regular products? 

Kelly Callachan: 

Thanks, Pete. LEI is largely complementary to other coverages. A lot of standard liability coverages, cover damages owed to others. I think what’s special about LEI is that it covers your own legal costs so you can pursue or defend a claim on your own behalf. 

It really equips policyholders to react or respond to legal events in their life and gives them avenues where they can understand their options and possible next steps. Not even at the claim level, but just in a place where they can exercise and understand all of their rights, which every Canadian should possess. 

And it’s not just about protecting your assets—which a lot of standard insurance coverage is intended to do. It’s really more about protecting your rights. 

Alex Manning: 

Yeah, I think that Kelly’s nailed it there. The key thing for me is that there’s a lot of research out there. Justice Canada has a sustainable goal for 2030, and access to justice is one of its key metrics. So there’s a lot of research and lots of organizations out there trying to provide and enable access to justice for Canadians. And there’s a big problem for Canadians—whether it’s individuals or businesses—in obtaining access to justice. Our coverage, our helpline, and the ease of access that ARAG provides is part of the solution for that. 

So, Kelly’s right. There’s a lot of emotional toll around having a serious legal dispute. An example would be a lot of Canadians are losing their jobs at the moment, which is heartbreaking to see because of the issues that are experienced with the trade war. Seven out of 10 businesses report in the CFIB [Canadian Federation of Independent Business] that they are having issues as a result of the trade war. And that’s impacting on their levels of hiring. It’s also impacting on their levels of performance as a business. All of that trickles down into the personal covers we provide. And that’s part of the, if you like, unarticulated legal risk, which exists in Canada. 

Curt Wyatt: 

That’s really interesting, Alex and Kelly. It’s Curt here. So ARAG, obviously been around for a while, works through the insurance channels that we know in Canada, and which, for the most part, as consumers, we’ve been fortunate to be served by brokers who rely on MGAs or brokers who rely on insurance companies. 

And so as you facilitate the needs of the Canadian consumers and business owners, and you work with these various insurance companies and MGAs, how does that, sort of, change your approach to how you talk to those distribution channels? Alex, I think you focus a little more on the domestic carrier side. How is that different than what Kelly would do when she’s talking to, say, brokers or MGAs? 

Alex Manning: 

Yeah, that’s a really good question, Curt. Fundamentally, we are talking about an access-to-justice issue, but how we might relate that to the challenges which the markets have or the portfolios have is relevant. So let’s say I’m talking to a carrier. We would know, because of the research which is available, that if you had a portfolio of 100,000 policyholders, that there would be a certain percentage of those—a large amount of those, in fact—that would experience a legal issue every three years. 

So the way that we would start to discuss that is that there are carriers out there, lots of carriers out there that are always seeking to take on merging risks on behalf of their policyholders, especially in the mutual space. So our message is around educating those carriers, making sure that those carriers understand that even though it may not be articulated, that their policyholders are experiencing these problems. 

And these problems, as Kelly’s already mentioned, can be as stressful as a standard P&C claim, a car accident, or a fire. So the legal issues that their clients are experiencing exist, and we try to make sure that they can understand the benefit of how we can plug that gap. So I think Kelly might have mentioned filling in the gaps already. That is a key phrase that we would use, both with my market and with hers. 

Pete Tessier: 

Kelly, when you think about the difference in markets between more of the corporate partnerships versus the brokers, what do you hear from brokers when they’re trying to learn about the product? Where are some of the things that you’ve come in and helped them with when it’s helping them provide solutions to their clients? 

Kelly Callachan: 

I mean, it’s a very broad, I think, level of knowledge about LEI in the industry. Obviously, some of our partners are very well versed. And then some of them are in more of an education phase. We really find when working with our MGA and our broker partners—and, sort of, the difference between the corporate stream and then the broker MGA stream—is how we can tailor solutions for our partners. 

So we do a lot in the broker and the MGA space where we’re standing up as part of a program they’re putting together for a group or an association or a specific industry. We do very bespoke coverages. If there’s a specific risk that, that industry or that association faces that they’re trying to mitigate, we can put something tailored together for them. So I would say that’s the biggest difference between what Alex and I do when we approach this, those two strains. 

Pete Tessier: 

Program business is something that brokers are increasingly focusing on for their niche classes, serving different industries that they may have specialization in when it comes to networking a large client base. 

Is that something that you’re helping them educate, or helping educate them with, Kelly, as to how to bring legal expense into a specific program? Because there’s a lot of upside to brokers who can own a program in a segment. And is legal expense being seen now as a vital part of that, of those programs that brokers develop? 

Kelly Callachan: 

Absolutely. And we’re seeing it more and more as time goes by, which is, I said, our mission is access to justice for all Canadians. So that increased awareness and seeing it more and more and having brokers ask for it more regularly on their programs has been really inspiring for myself and for the team. 

Curt Wyatt: 

That’s very interesting. And, as Pete said, it’s ever-evolving. And to the point that you’ve got Canadians that either work in or for a business that’s needing legal expense or they carry it for their own personal coverages as they represent themselves [inaudible 00:07:26], their home, or their seasonals, or what have you. 

Is sort of, can you describe what type of sales techniques that you suggest to the channel when it relates to outside of building a product, like Pete said, but ways that the client could better understand how to, or why they should, I should say, purchase this product? And, I don’t know, Alex or Kelly, which one of you are more familiar with helping train the distribution channel, I guess, in some ways? 

Kelly Callachan: 

We do a lot of our sales through storytelling. I think that’s still the most impactful way for us to articulate either to our partners or for them to chat with their clients about the product and the coverages and how it will benefit them. I do think that there’s some situations where clients might not even understand that it’s a legal issue. 

And so just being able to share some of those examples with them—whether it’s an issue they’re having with a contractor or a service provider, or something that they have or have not agreed to do with a neighbour. So it might not always occur to someone that what they’re going through is a legal issue and that there’s support available for them. 

So we do use storytelling a fair amount, and some of them are very straightforward. Everybody…you…say you’re being audited. Everyone’s like, “I understand. I would like help with that. That will be fine.” But then there’s other coverages that are a bit more nuanced. And so we would use claims examples or detailed stories to be able to convey how that would be of benefit. 

Alex Manning: 

To supplement what Kelly said there, we recognize that one of the…our roles and responsibilities as ARAG in the marketplace is to raise awareness as to the issues relating to access to justice and to be potentially part of the solution. So we run webinars very consistently, really well-attended national webinars. We’ve got some excellent hosts, and these are accredited. So these are available to everybody in the industry across the country. We run those regularly. 

If you are not on our mailing list for that, I’d encourage listeners to get on the mailing list for it on ARAG.ca. The tools are also available on the website. There’s some self-serve tools, including the filling in the gaps, illustration, and a lot of other examples. So, to supplement what Kelly said, there’s a lot of self-serve information on the website. So there’s a lot of specific work, which we’ll do our own programs, but we also recognize that we need to raise awareness as to the fact that there is a solution for this access-to-justice issue out there. 

And that’s where we’re trying to raise the watermark of knowledge, trying to raise the rising tide, floats all boats, as it were. We want the awareness to come up, firstly, in the professional routes to market via the brokers, the MGAs, and the insurers. And through my experience in England and across Europe, that, in turn, means that it becomes more aware in public culture. And then you start to get the pull, which is clients wanting what clients are asking for. 

Curt Wyatt: 

And how have the insurers in Canada responded to that? And, I mean, you, Alex, work directly with the insurance companies, and so this awareness is becoming more and more social mainstream. 

And I’m sure there’s a lot more dialogue happening when you guys search the channels that are out there that relate to the need for this. So when you’re speaking to them, do they, are they becoming more aware? I imagine, at one time, you have to sell this to them as a product. Is there more of a, “Hey, come on, we need you as part of our organization today”? 

Alex Manning: 

Definitely. I think that the…because of our product being sold as a supplementary product alongside P&C, we still need to make sure people are aware of our existence and what the value proposition is. So that’s the baseline. But certainly in the time that I’ve been here, since 2012, the conversations have definitely changed. Awareness has increased. I would say, Curt, nobody in Canada has thought what we are talking about, and the potential to ensure these types of things, is a crazy idea. 

Everyone that we talk to, whether it’s product development or brokers looking to set up a program, they think it’s a good idea. Trying to enable that, trying to digitize that, that’s the journey we’re on. We’ve got to make sure that we can provide that, meet the market where they need to be met, which is part of the reason why Kelly and I head up different sales channels because we want to make sure that we can service the market where it is ready to engage with us, whether it’s via a carrier or via a broker or an MGA. 

Pete Tessier: 

When we think about the idea of selling and what it means to, sort of, move a product by a broker— because insurance is sold, not bought—how do you differentiate the product from other endorsements and options that are being put in front of insurers, whether it’s on a personal lines or whether it’s with a commercial account? 

It’s an increasingly competitive and noisy market. How can you help brokers, or differentiate LEI, when they’re presenting a value proposition and make it stand out compared to the myriad of other things they’re sometimes required to sell, or are being, sort of, told to sell? 

Kelly Callachan: 

That’s a great question. Thanks, Pete. I mean, a lot of our broker partners are well versed in how they want to go to market with our product, but certainly, when we have those discussions with them, we do talk a little bit again about how it’s a legal risk management tool. It’s not designed for asset protection. And so articulate to them to share with their clients, again, the importance of equipping them to have that access to justice if they’re ever in a situation where they need it. 

On the personal line side, on the commercial side, even for SME, I think we’ve talked about it a little bit before. People don’t expect legal disputes, but when they happen, they can be devastating for people. And so to be able to have a product where not only will we support you through the process, but we help you from the moment that it happens. And so I don’t know if anyone who’s listening’s ever been in a legal dispute. Some of our clients say one of the most stressful things is finding a lawyer. How do you go through that process? 

You want to make sure it’s the right lawyer who has experience and will be successful for you. And so, being able to just call one number and then have this, and have us, as a company, take it over, assign an experienced professional in that area of law, and then just walk you through it from beginning to end. I still think that’s one of the most valuable sales aids for us in terms of you can buy a variety of different coverages from us. But I think that piece of expertise and support and guidance and just relief to give our customers peace of mind is still one of our most powerful selling tools. 

Alex Manning: 

Yeah, totally agree. I think Kelly’s got [inaudible 00:14:47] on the nail there. The amount of unsupported litigants that go through the Canadian court system is at an all-time high, so they are self-representing. That harms their chances of success. It harms their access to justice. Now, the reason they’re self-representing is that they are intimidated by the cost of the lawyer. They don’t know who to call. 

And, as Kelly’s already articulated, they’re quite often in a really stressful situation. So to be able to overcome those three issues which exist in Canada today daily, to be able to overcome those by providing the legal helpline, by providing access to people in their city that are able to help them with their legal problem, and then at the backend to be paying for that legal service, that support via the insurance product is massive. That’s a really powerful proposition, I believe, a compelling proposition. 

So just to build on what Kelly said there, all of the evidence and all of the landscape, the Canadian landscape around access to justice, once people understand that—and you have more curious people that are building—you want brokers and product development teams that are curious that [are] prepared to ask the second question. If you were talking to those folks, then it can become very clear, very quickly to them, as Kelly said, that’s done, the product makes sense. They can then articulate it to the clients. 

Pete Tessier: 

Alex, that’s really interesting. I have one follow-up for you there. When people are working in the commercial space, the SME space, when it comes to selling, do they need to, maybe, talk to someone else within the organization about the benefits of Legal Expense Insurance as opposed to, maybe, a traditional entity or person who is responsible for insurance? 

Sometimes you go up the food chain. [The] larger the company, you may have a risk manager. But is legal expense seen as a different option for someone else in the organization who might say, “Wait a second, I didn’t know that existed”? 

Alex Manning: 

Yeah. 

Pete Tessier: 

How do you find that person who makes a decision? Because it might not be the same person who’s purchasing the regular insurance product. 

Alex Manning: 

Yeah. I mean, the glib answer, which you may want to edit out, is you’ve got to know your client. The way that you hope to get close to your clients and understand their risks is 101. What I would say, though, is the work that Kelly and her team and my team, the work that ARAG does, the work that ARAG does across Canada is to try to arm the brokers—who are still predominantly the channel that are educating people on this product—arm the brokers with enough knowledge to be able to ask those questions. Kelly’s already mentioned the client may not know that they’re having a legal risk or they’re having a legal challenge. The SME sees the debt they are experiencing and the contract problem they have with someone that’s saying they fulfilled the contract incorrectly. They see that as a cost of doing business. 

They see the problems they have with hiring and firing staff as a cost of doing business. That’s an insurable risk with a whole wealth of risk mitigation tools that Kelly’s touched on that surround that insurance. So being able to open the door to that conversation is the…is like the golden ticket. That’s the thing. That’s the conversation. You want the broker to be able to touch on the unarticulated legal risk, articulate it, and then the light bulb will go on for the client. 

And yes, that might mean that it’s not the CFO. It might be the head of HR. It might be the risk management person. It could be the CEO who knows that the contract that they are renewing is worth half of their turnover, and it’s in a critical state. That little bit of knowledge can really make a big difference. So that’s what we try to do. We try to make sure that we are educating the brokers to ask those additional questions and probe appropriately with the clients. 

Curt Wyatt: 

Hey, thank you both. This has been extremely interesting, and passing along your experiences, passing along what the industry is seeing in a format like a podcast, I think, will continue to bring the audience, the insurance audience, to the table so that you guys can continue to have those important conversations that highlight where this type of coverage is so critical in our industry as the country we live in. As Canada, Canadians, we need coverage for all sorts of types of events. And what you’re doing is a critical part of that. So thank you both for coming on the show. 

Alex Manning: 

It was a pleasure. Thank you, Curt. 

Kelly Callachan: 

Thanks, Pete. 

Alex Manning: 

Thank you, Pete. 

Pete Tessier:  

Curt, they delivered because I learned the things I didn’t know beforehand. And I loved, we’ll start where we ended and then sort of go backwards on this. But I love the idea of how the legal expense product actually is a hedge and helps lower the cost of business for SMEs because they’re dealing with a problem that’s maybe not seen in the traditional risk vector of insurance. And there’s an expense to businesses with legal expenses that they can now use a product from ARAG to help with that cost and bring in in-house expertise. And I think that’s a very fascinating point of the value proposition of legal expense. 

Curt Wyatt: 

Yeah, Pete, there’s no question. This product’s been around long enough. The industry can see the benefit, and bringing this show into the Canadian Underwriter channel has, again, highlighted why we can talk about products, but really it comes down to the people, right? And you can see today on this episode, the quality of the people in the organization and their commitment to the broker. And hey, let’s get out there and let’s educate the consumers on what this product is. 

Pete Tessier:  

Yeah. And you know, I like the other part where Kelly brought up a little bit about the importance of program business and why adding legal expense in can help your strengthen your program. And we know in this marketplace now, brokers are trying to own program segments for different classes of business. They want to take those programs regionally, test them, grow them and then take them nationally. And I think adding in legal expense can also be a key differentiator when you’re trying to build a program to grow your business and your expertise along with your reputation for industry. 

Curt Wyatt: 

For sure, Pete. And hey, let’s take this into the next gear. Coming up soon, we’ll have another episode with ARAG, and we’ll keep talking more about what their products are and what they have to offer. 

Pete Tessier:  

Yeah, we’re going to close this out in episode 4 soon, and we’ll have the conclusion and bring this all together to show you why legal expense is going to be such a great opportunity in your insurance repertoire. 

That was The ARAG Legal Solutions Podcast. Thank you for listening.