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l COVER FEATURE
Several have queried insurers’ at- tempts to collect personal information such as a client’s email address, for exam- ple. “Where companies cross the line is when they insist on sharing of email ad- dresses,” Rose says. “[Such] companies believe that for retention, they need to get between us and the client. They are try- ing to build a direct relationship with the client rather than go through the broker.”
The issue of sharing email address- es came up late last year, when brokers made reference to a strategy outlined in Intact’s 2018 Annual General Report. In its report, Canada’s largest insurer made known its desire to be actively digitally engaged with three out of four of its customers by 2020.
Intact stresses that it’s voluntary for clients to provide their email addresses. “Our current business practices regard- ing email communications to customers remain unchanged,” an Intact spokes- person tells Canadian Underwriter. “Customers have a choice if they want to provide their email address. For ex- ample, customers may choose to share their email in order to receive various correspondence from us, like updates on claims.”
The company went on to say that “we appreciate brokers’ concerns about the protection of customer information. We are committed to protecting customers’ privacy, especially when it comes to the collection and use of their personal infor- mation. We have updated the language in our broker agreement to reinforce this. Brokers can expect to hear more from their business development teams about this over the coming months.”
To be clear, brokers are not singling out the activities of individual compa- nies when they discuss data collection; their concerns are industry-wide. When asked about what brokers are saying about data collection, Insurance Bureau of Canada (IBC), the trade association representing Canada’s P&C insurers, took no position on the matter, because broker distribution issues fall outside of its mandate.
That said, insurance companies are well aware of the brokers’ sensitivity around data collection. The issue about
“Data itself is just becoming a more important asset in the industry.
At the end of the day, you are down to asking: ‘Are we doing what
we need to do to protect consumers?’ It’s an evolution of our business model.”
whether brokers can trust insurers not to use consumer data in a way that will harm the broker channel came up last October at the IBAO annual convention. Insurers on a CEO panel expressed sur- prise that brokers would harbour any suspicions about such a matter.
“I guess the question would be, why would you [insurers] do that?” Bob Tis- dale, president and CEO of Pembridge Insurance Company, asked rhetorically at the IBAO Convention. “Why would you take data that your broker has given you and then turn it around and use the data against the broker?
“There will be a lot more usage of data to help brokers acquire customers, and help them understand where the best risks are, and the characteristics that create the best risks, the best loss ratios, and the best retention. We’ve done a lot of work on helping brokers understand the lifetime value of the customer; how likely that customer will be to retain; and how much profitability will be in the customer over time. That’s where the focus is; not on how to cut the bro- ker out. If we did that, you would stop supporting us.”
Louis Gagnon, president of Intact Financial Corporation’s Canadian op- erations, noted at the IBAO Conven- tion that Intact sold 20% of its business through the direct channel a decade ago. Now the percentage is down to 10%, im- plying that more of Intact’s business is done through the broker channel.
“We’ve invested $7 billion in the broker channel over the last 10 years,” Gagnon said at the panel. “Tell me how
much I stand to lose if I do stupid things like using your data to promote my own goods? I want you to know, we want to use the data for the right reasons in the channel from which the data came.... There is a fear in this world of data, that we will use data in a way that is not proper. Like Bob [Tisdale] was saying, if that happened, we would be dead.”
Some of the brokers’ misgivings are based on misunderstandings, which points to the need for greater clarity within the industry about data collec- tion and retention policies. In Ontario, IBAO is trying to gather insurers, reg- ulators, tech vendors and other stake- holders around a table to make sure a consumer’s data is protected.
“It’s in all of our interests to ensure that consumers are protected when they come to our industry,” Simpson says. “We’re going to get everyone around the table and have a discussion, under- stand what the issues are, and see if we can come up with some resolutions. As an industry, if we don’t do this, the reg- ulators will enforce something on us, which might not be as palatable as what we could come up with ourselves. If we can come up with processes and proce- dures that protect consumers, hopefully the regulators can support it....
“Data itself is just becoming a more important asset in the industry. At the end of the day, you are down to asking: ‘Are we doing what we need to do to pro- tect consumers?’ It’s an evolution of our business model. If we can do this before the horse leaves the barn, it might be a bit easier.”
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