RAPID consolidation in the Ontario broker channel is expected to continue this year, leading to larger, stronger and increasingly technology-based entities.
Colin Simpson, ceo of the Insurance Brokers Association of Ontario, said that in 2016, 5% of IBAO members sold their businesses — 85% of whom sold to an independent broker and 15% of whom sold to an insurance company.
Statistics from 2017 are still being analyzed but the consolidation trend from 2016 is expected to be comparable.
“The increased pressure to modernize the broker-consumer relationship coupled with increased pressures in the marketplace are expected to drive these business sales,” Mr. Simpson said.
He said the association believes broker- consumer relationships are best supported through evolving technology.
“Often, (financial technology companies) are broker shops and the IBAO works with them to promote the significant influence that younger brokers have within our industry,” he said.
“Consumer expectations continue to evolve and the IBAO is committed to ensure that brokers have access to the tools necessary to remain at the forefront as the first choice for consumers in Ontario.”
While technology and consolidation will continue to dominate IBAO’s mission in 2018, regulation remains as important as ever for the trade association.
“The IBAO expects to see a swell of regulation changes in 2018 and auto insurance will undergo some major changes,”
Mr. Simpson said.
Those changes are evident in new provincial auto insurance legislation based on the report of government auto insurance adviser David Marshall and the creation of a new regulator, the Financial Services Regulatory Authority.
“We are already seeing the emergence of auto insurance as a key issue in the 2018 provincial elections,” Mr. Simpson said.
He said the IBAO is also working with the government as it rolls out laws con-nected with marijuana legislation.
“With all of these changes, the voice of the broker will be a key resource to both the consumer and the regulators,” Mr.
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