man-to-man coverage...people have been elected to represent you! oh, and they are just people....

December 2015 - January 2016 Cdn Publication Mail Registration 40018149

ALBE ARTRTTHE

Man-to-ManCoverage

An unprecedented number of rookie MLAs and MPsmake it imperative that brokers arrange face-to-face meetings

2

Co-insurance from aCommercial Perspective

Claims Made vs.Occurrence Coverage

2014-2015Designation Graduates

The Alberta Broker December 2015 - January 2016 3

Annette Hubick

Message from the Editor “Out with the old, in with the new.” That seems to be the overarching theme at this time. Of course, there’s the obvious—we are about to say goodbye to 2015 and hello to a brand new year with its promise of fresh starts and do overs. There’s also the fact that the 2015 pro-vincial and federal elections resulted not only in two new political parties taking power but also in an unprecedented amount of first-time MLAs and MPs being elected. This issue’s cover story, “Man-to-Man Coverage” (page 12), along with “Viewpoint” (page 40) and “Message from the President” (page 4), reference IBAA’s and IBAC’s ramped up efforts to build relationshipsbetween brokers and Alberta’s and Canada’s political decision makers.

the time to further their professional knowledge and stature by pursuing a designation. On pages 44-46, you’ll see the names of those Alberta brokers who achieved their CAIB, CCIB and CPIB designations in 2015. Kudos to all of you! Playing off of IBAA CEO George Hodgson’s “12 Yule Wishes” (page 18),I leave you with this:

May your holidays be happy days filled with love and laughter. And may each day Bring joy your way in the year that follows after!

Uber is still in the news as politicians,regulators and the insurance industrygrapple with the opportunities and pitfallsof this new way of doing business, and it’s the topic of “IBC Insight” (page 36) and “Legal Ease” (page 30). I have no doubt that there will be more stories about the “shared economy” in issues to come. In the “brush up on your technical knowledge” category, “Know E&O” takes a look at the things you should consider when recommending claims-made versus occurrence coverage (page 6) and “Commercial Break” offers information to help your commercial clients avoid co-insurance penalties (page 20). I am in awe of those who, on top of demands of work and family, invest

Publisher and Editor Annette HubickPrinting McCallum Printing GroupDesign and Layout Ron LeckeltAdvertising Michele Schuldhaus 780.448.2890 [email protected]

The Alberta Broker welcomes articles about the insurance industry and its people. Letters to the Editor are welcome.The opinions and viewpoints expressed in The Alberta Broker may not necessarily be those of the association and its members.

Material in The Alberta Broker may be reproduced with the credit to the author and the following: “Reprinted from the Insurance Brokers Association of Alberta’s magazine - The Alberta Broker (date).”Please send a copy to the publisher.

Published six times annually by:

9249-48 Street Edmonton, Alberta T6B 2R9T: 780.448.0936 • F: 780.465.6201E: [email protected]

3010 Calgary Trail, Edmonton, AB T6J 6V4T: 780.424.3320 •1.800.318.0197F: 780.424.7418 • www.ibaa.ca

December 2015 - January 2016 IN THIS ISSUE 3 Message from the Editor 4 Message from the President 6 Know E&O Occurence vs Claims-made Coverage

10 eDelivery Offers Paperless Policies to Customers12 Man-to-Man Coverage An unprecedented number of rookie MLAs and MPs make it imperative that brokers arrange face-to-face meetings.

16 WHL Season Update18 The Advocate 12 Yule Wishes

19 Did You Know? 20 Commercial Break Flag on the Pay

26 Member Services www.ibaa.ca Gets Extreme Makeover

30 Legal-Ease Liabilty Risks and Concerns of Autonomous Vehicles

34 PYIB Perspective Big 1 Conference Notes

36 IBC Insight Adapting to the Shared Economy

38 4 Crucial Questions for Superior Sales 40 Viewpoint Out With the Old. In With the New.

42 Chinook Country Report 44 2014–2015 Designation Graduates 45 Professional Development Calendar

President Robyn YoungChief Executive Officer George Hodgson

The Alberta Broker is the official publication of the

4 The Alberta Broker December 2015 - January 2016

be clear and concise in your points, be sincere and, mostimportantly, remember you are a constituent and these people have been elected to represent you! Oh, and they are just people. Don’t be intimidated because they are in an elected position—they really do want to hear what you have to say. One issue I have touched upon in the last two issues has been Aviva and its decision to market insurance directly to consumers under the Aviva brand. Recently, IBAA sent a letter to Aviva advising that our association does not support ANY company that chooses to market its product directly to consumers under the same brand that is offered through the broker channel. We, along with many of our

partner associations, continueto try to influence Aviva tore-examine and revisit thisdecision and encourage you—if you feel the same way, of course—to do the same. uberX recently launched in Calgary, and there remains a large consumer issue surroundingavailable coverages and costs of doing business for these drivers(again, as I write this). It is extremely important that you are clear with any customers whoapproach you regarding thiscoverage and that you document

these conversations and advise the insurer, lest you expose yourself to a potential E&O that could lead to a “he said, she said” scenario. I am aware of at least one company that either cancelled or let its policies lapse after learning that policy holders were using their vehicles for this purpose and investigating the situation. Until this is figured out, I am certain we will see more of these scenarios! Many events that will have happened by the time you read this: IBAA meetings with CEOs to discuss our industry issues and get their viewpoint on the future of our industry, an Alberta Hill Day on November 25 to meet with as many Alberta MLAs as we can and another holiday season with all that entails. Whatever your preferred celebration this time of year, I hope that you have had a wonderful one surrounded by friends and family. Merry Christmas from my home to yours and I wish you all the very best for a happy, healthy and prosperous 2016.

Robyn Young

Message from the President

It has been a busy fall. One of the more interesting things that you get to do in the president’s role is travel around the country and represent Alberta and Alberta brokers; the down side is being away from home, of course, but the upside is meeting and developing relationships with industry peers. Speaking of developing relationships—as I am writing this, we are getting ready to say good-bye to Prime Minister Harper and hello to Prime Minister Trudeau. Whatever your politics may be, the reality is that we have over 200 new members of parliament that may have little to no knowledge about our industry and its issues. It is anopportunity for you to meet and get to know your new (and returning) MPs and educate them on your roles in your community, the products and advice that you provide to your customers and most importantly—in light of the upcoming review of the Bank Act in 2017—why it is important to continue to protect consumers by not allowing banks to offer insurance products at the point of granting credit. As I have said before, this restriction is not about competition. We are not scared to compete with anyone fairly. This is aboutunduly influencing consumers when they are negotiating with a creditor and vulnerable to making a decision that may not be in their best interests. You also have a similar opportunity on a provincial level with the numerous new MLAs who are in office. We saw the budget come down recently and while it didn’t bring many changes to our industry, it is certainly affecting you as a small business—whether you are considering the tax increases or the increasing minimum hourly wage to $15 over the next few years. Again, it doesn’t matter what your politics are; the issues that you raise should have little or nothing to do with whom you support and everything to do with the decisions the government may, or could, make (think regulation, property insurance reform/regulation, telematics, taxes, credit unions, public auto(!)). I have had the opportunity to meet with close to 20 of our new MLAs over the past few months and have found them to be interested, engaged and willing to listen and learn. It is important to remember when meeting your MP or MLA to

The reality is that wehave over 200 new members of parliament that may have little or no knowledge about our industry and its issues.

6 The Alberta Broker October - November 20156 The Alberta Broker December 2015 - January 2016

Know E&O Matthew Davis and Mary Ellen Martin

CrossroadsRecommending the Right Claims Coverage

CLAIMS MADE

OCCURRENCE

Human beings are fascinated by the notion of choosing between options. Whether in literature (The Lady or the Tiger?), music (Cross Road Blues) or the simple act of shopping (paper or plastic?), we recognize—indeed, we relish knowing—you can’t have it both ways. That perception is even cast in nature, as captured, for example, in Heisenberg’s “Uncertainty Principle,” which famously concludes that you can never simultaneously know the exact position and the exact speed of an object. The reasons are complex, but the implications relatively simple: you have to choose between the two and understand the ramifications of your decision. Insurance brokers are no strangers to this concept as they routinely find themselves at one crossroad or another in the service of their clients. Two paths that, at first glance, seem parallelmay, in fact, lead in very different directions. That concept is absolutely true of deciding between “occurrence” and “claims-made” insurance policies. Put simply, the former provides coverage for loss events that occur during the policy year, while the latter provides coverage for claims that are made dur-ing the policy year. Though the vast

majority of the language contained in the two policies may be identical, a subtle shift in the DNA of one versus the other can lead to very different outcomes. Take it from an E&O pro-fessional: they’re not all good. Most coverages tend to be written on one form or the other, but a few can be written on either. Assume, for example, that the claims-made policy in place provides “full prior acts”coverage, which means that if a heretofore undiscovered error that happened years ago has finally come to light during the current policy period and a claim is made, it will still becovered even though the policy in place at the time of the mistake has long since lapsed. That’s the beauty of claims-made coverage. Now the peril: If an unwitting broker gets a quote on replacement coverage, he may well find that his new market offers a surprisinglycompetitive price. One possible reason: the broker is really good at his job. Another: he failed to note that the replacement policy will switch the insured from “claims-made” to“occurrence” coverage, thereby creating a gap in coverage. “Impossible!” the broker proclaims with certainty, “The old policy expired

at midnight and the new policy began at 12:01. No gap!” Look again. Where the renewal policywould have continued to provide “full prior acts” coverage for past years of mistakes (so long as they are discoveredand a claim is made during that policy period—including some claims for loss events that occur during the policyperiod), the occurrence policy provides coverage for loss events in the currentyear, but none for prior years. As a result, the customer is now without coverage for events occurring in prior years, many of which are still well within the statute of limitations for filing civil lawsuits. One remedial option is to purchase a “tail,” also known as an “extended reporting period,” on the replaced policy. (This typically has to be done within a short time frame.) Bear in mind, though, that many provincial limitation periods run for two years—and perhaps longer when you take into account discovery rules that extend the time period for “hidden” errors—so the tail probably should at least match, and probably exceed, all applicable limitation periods. Plus, the cost of such a tail will likely be considerable—

continued on page 8



Alberta Executive Panel

continued from page 6often several times the cost of simply renewing the prior policy. Add that to the cost of the new occurrence policy and the bargain doesn’t look nearly as good. The same thing can happen when switching from one claims-made policy to a competitor’s. Some claims-made policies will include a “retro date” at inception of the first policy that has the effect of barring coveragefor any negligent acts/losses in prior years even though no claim has been made. Of course the replacement policy is priced lower: it cuts off years of potential liability, which the renewal policy would continue to cover—an apples and oranges comparison if ever there was one. Again, tail coverage is likely available from the current carrier, but that cost really should be added to the would-be replacement policy for a more accurate side-by-side comparison.

Finally, switching from occurrence to claims-made policies can cause problemstoo. In theory, a series of occurrence policies would provide protection for those prior policy years, with a new claims-made replacement policy simply adding to the coverage. What the broker may find, though, is that his customer’s final occurrence policy imposed a time limit on reportingnew claims that would not have been an issue had that policy renewed. Couple that with a claims-made policy that sets a retro date at policy

inception and we’re back to a serious gap in coverage despite the fact the policy periods fit edge to edge with no daylight between. Many know the parting lines of a poem by Robert Frost, reporting that, “Two roads diverged in a wood, and I/I took the one less traveled by/And that has made all the difference.” Odds are, far fewer will recall his shrewd opening observation, that “[S]orry I could not travel both/And be onetraveler, long I stood/And looked down one as far as I could …” Frost studied his options carefully before making a choice, as should you. Rest assured: which road you take inoffering recommendations between policies will make all the difference for you and, especially, your insured. Choose wisely.

Matthew Davis (Claims Manager) and Mary Ellen Martin (Claims Specialist), Swiss Re Corporate Solutions

“Of course thereplacement policy is priced lower: it cuts off years of

potential liability.”


Although many companies have found it challenging to convert their customer base to electronic documentdelivery, as time goes on, more and more customers seem willing to replacepaper correspondence with digital. The fact that over nine million Canadian consumers already have an epost™ account with Canada Post attests to this rising customer demand. CSIO’s eDelivery solution meets this need by enabling brokers and the broker channel to leverage their existing investment in CSIOnet and eDocs to deliver personal lines policy documentsto customers through epost. The P&C industry is already quite familiar with eDocs—the solution enables electronic transfer of policy documents from insurers to a broker’s BMS, substantially reducing the cost and effort of printing, mailing, sorting, scanning, filing and destroying paper documents. Since eDocs debuted in 2012, broker adoption has soared to approximately 80% for personal lines, and its expansion into commercial lines is well under way. Extending that paperless workflow to the insurance customer with eDelivery is a natural next step.

INDUSTRY BENEFITS According to Entrepreneur Magazine,it costs $25,000 to fill a four-drawer filing cabinet holding 15,000 to 20,000 files, and another $2,000 a year to maintain it, not to mention the costof simply sending mail. Postage costs are constantly rising and in January 2016, the rate for domestic letter mail weighing 30 grams or less will rise to $0.90 cents (when purchased in bulk).

Using eDelivery, members currently sending policy documents by mail will be able to offer electronic document delivery to customers registered with epost, providing superior customer service and reducing the operational costs of postage and manual processing.In addition, CSIO has negotiatedfavourable pricing with epost on behalf of the broker channel, reducing the cost and effort of implementation to below that available to companiesapproaching epost individually. Furthermore, mailer volume among CSIO members is tracked collectively, producing more savings as industry adoption grows. epost’s bank-grade security and privacy technology, referred to as “the Vault,” supports and enhances industrycompliance with PIPEDA as well. Along with the obvious legal benefit to the broker channel, all customer data stored in epost resides in Canada and is not subject to foreign privacy laws.

CUSTOMER BENEFITS Paper clutter can become quiteannoying—trash cans and recycling binsfill up quickly, and it can be cumbersometo store and retrieve paper documents. By using an online account such as epost, customers can retrieve their document history at the click of a button. Leveraging epost, customers will have one digital mailbox, allowing them to conveniently receive all their policy documents in one location.

Furthermore, as door-to-door mail has been reduced across Canada, eDelivery means one less document insurance customers will have toretrieve from their physical communitymailbox. epost is also more secure than the average paper filing system that customers have in their home, safely protecting all data while simultaneouslyblocking spam, ads and junk mail. And finally, epost is free to the individual consumer, increasing the convenience of managing financial documentation over paper at noadditional cost.

ENVIRONMENTAL BENEFITS Many companies set the goal to become “carbon neutral,” reducing the overall carbon emissions generated from their operational activities. The greenhouse gas emissions generated by print production are significant (9% of total carbon dioxide emissions*), plus the fuel required to transport mail across the country. Therefore, eDelivery can be part of an eco-friendly marketing initiative, positioning the broker channel as an environmentally sensitive insuranceoption to the 46% of customers (particularly Millennials) who are inclined to patronize green-minded businesses.** For additional information, visit www.csio.com/edelivery.*www.greenpressinitiative.org**www.ipsos-na.com/tools/link.aspx

eDelivery OffersPaperless Policies

to Customers

MICHAEL SPIARMember Engagement &

Communications Specialist,CSIO

Man-to-ManCoverage

An unprecedented number ofrookie MLAs and MPs make itimperative that brokers arrangeface-to-face meetings


By Annette Hubick

Insurance is one of the most heavilyregulated industries so it’s a no-brainer that insurance professionals and businesseswould make every effort to ensure the people who make decisions regardingthe laws, policies and regulations affecting their industry would be informed and aware of ramifications. “When you combine that with the fact that Alberta is in the unprecedented position of having new parties forminggovernment at both the provincial and federal levels, there has never been agreater need for IBAA members to meet with their elected representatives,”says IBAA CEO George Hodgson. Insurance is also unique in that it is an incredibly complex product that almost every one of their constituents purchases. Add to that the catastrophe losses that Alberta has experienced in recent years, most notably the 2013 southern Alberta floods, that thrust the topic of insurance into the lime-light and resulted in changes to many insurers’ products. Although theeconomy is dominating today’s politicalagendas, with the Bank Act review coming up in 2017 and the possible consumer (read voter) reaction to changes to property insurance,insurance issues could figure more prominently. “It’s important that MPs and MLAs know they can turn tobrokers and their association forinformation. They need to understandour position before the situation reachesa critical point,” adds Hodgson.

With over 70 rookie MLAs and 200 rookie MPs elected in 2015, IBAA is sounding the call to its members to establish dialogue with their elected officials. How? The first step is to arrange a face-to-face meeting to introduce yourself, present IBAA’s positions on insurance issues and, just as importantly, get to know them, their priorities, their understanding of insurance issues and how you can help get them the information they need. So, where do you start? Luckily for members, help is just a few clicks away. On ibaa.ca, members can access the “2015 Provincial Advocacy Toolkit.” In it, you’ll find information on how to contact your MLA, the key issues and IBAA positions, a meeting guide and follow up letter. An important component is the feedback survey that you complete post-meeting in order to keep the association informed as to which MLAs have been contacted and their views on insurance issues. Where possible, an IBAA representative can even attend the meeting with you. Two IBAA members, Randy Gregoryof Provost Insurance and Catherine Cake of Drayden Insurance, recently met with their newly minted MLAs, Wes Taylor and Jessica Littlewoodrespectively. Their specific goals? “To introduce Wes to IBAA, to help him become aware of credit unions and the industry concern to same, to open a line of communication and make him aware of brokers in our riding,” says Gregory.

Cake’s focus was on establishing herself as a resource on any insurance matters that may come Littlewood’s way. A key message was “How important we feel it is that brokers are around thetable when discussing matters that will affect our industry and the livelihood of the hundreds of small businesses in Alberta communities that form the broker channel,” Cake says. Although the rookie status of an MLA or MP provides a good impetusto arrange a meeting with him or her, it’s also essential to meet those who were re-elected. Lorrie King ofCompetition Insurance recently met with her MLA, Rick Fraser. “It was important to reintroduce IBAA to Mr.Fraser—to reinforce that IBAA is there working with the insurance broker,insurance companies and government regarding challenges faced in theinsurance industry and by its customers.”

continued on page 14


With over70 rookie MLAs and

200 rookie MPs electedin 2015, IBAA is sounding the call to its members to

establish dialogue with their elected officials.


King reports Mr. Fraser was one of the front-line individuals during the flood of 2013 and was concerned about was being done to help those still affected by the flood and how insurance would help in the future. “It was great timing as we had a chance to talk about the services IBAA provides and what a couple of the insurance companies are now offering withoverland water coverage,” says King. While auto and property insurance areimportant, no other issue dominates the broker associations’ agenda at both the federal and provincial levels than prohibiting credit unions and banks toretail insurance. IBAA’s fundamentalposition is that credit-granting institutionsought not to have the ability to sellinsurance at the point of granting credit. The distinction needs to be made that what brokers are against is the sale of insurance at the bank’s/credit union’s retail level, whether that is a website of a bricks-and-mortar building. Why? The reasons focus on consumer protection and marketplace fairness.1. Banks and credit unions may use “tied selling,” in which loan applicants often assume that they will be denied the loan unless they purchase insurance from the financial institution.2. Information collected and developed for banking purposes, such as credit rating, can be used against loan applicants and policyholders for insurance purposes.

3. Banks and credit unions will be able to bury the cost of insurance in the mortgage or loan by including the insurance within the loan, making it appear that insurance with the financial institution is less costly than elsewhere.4. If the client has a loan with a credit union or banking institution, brokers must provide information about their clients to that institution. Brokers on the other hand do not have access to the same information on credit-granting institutions’ customers. This one-way policy creates an unfair advantage as credit- granting institutions have the opportunity to sell insurance to the insurance brokers’ customers while the insurance broker cannot reciprocate. If you are unable to meet with your MLA, we invite you to send him or her a letter or an email highlighting the industry’s important issues and how these issues impact the consumer.

Your letter should emphasize that you are a business person in the MLA’s constituency serving customers in the community and surrounding area.Other ways to keep in contact with your MLA include staying informed of his/her schedule. Attending events where the MLA will be present creates an excellent opportunity to approach the MLA in a more casual manner than by setting up an appointment. To find out about upcoming events, contact your MLA’s riding office, the local newspaper or IBAA. Anotheroption is to check the MLA’s Facebook,Twitter, or LinkedIn pages. Donations are always a great way of supporting your MLA. Joining your local riding association as a memberof the board of directors or as anexecutive committee member is alwaysan effective way of being involved and having influence. Wouldn’t the fact that IBAA recently held a “Legislature Day,” whereby association representatives met with, presented to and socialized with MLAs, mean that the lobbying effort is handled? Well, imagine an ad campaign that consisted of a single radio spot; how effective would it be in getting the message out? Plus, no voice is as important to a politician as that of a constituent. Make sure your voice is heard.

continued from page 13

FACT: Over 17,500 people are directly employed by the insurance industry in Alberta. Approximately 9,200 of these positions are withinsurance carriers, and 8,300 of

these are with insurance agencies, brokers and other insurance-related

employers.

FACT: The tax revenue contribution of Alberta’s P&C insurance carriers,

agencies, brokerages and relatedservices is $1.002 billion. These are made up of personal income taxes, corporate income taxes, indirect

taxes, insurance premium taxes and healthcare levies.

12 Yule Wishes

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The Advocate George Hodgson

Whether you celebrate the Festival of Lights and Feast of Dedication, the birth of a Saviour, the start of more sunlight, the winter season or each other, the season to celebrate is upon us once again. While this season can be the happiest time of the year, for those who have little and, more im-portantly, for the lonely, it can be the most difficult time of year. For me, it is the season of wishes—not for me but for the association, brokers and others. Here are my 12 Wishes of Christmas:

That the IBAA board continues to provide the inspired leadership that brokers have come to count on from them over the years. These people are truly the best of the best who devote an inordinate amount of their free time to thebetterment of insurance consumers and brokers.

That the IBAA executive committee continues to provide the excellent strategic leadership that brokers and the association have come to expect of them over the years.

That those brokers who are not members of IBAA see all that our association does to ensure the broker channel remains strong in Alberta. Increased membership will only make this channel stronger.

That IBAA, along with its sister associations and IBAC, continues to strengthen its relationshipswith its insurer partners. The strength of these relationships determines how well the association can advocate on behalf of brokers and consumers.

That IBAA and IBAC continue to build and enhance our relationship with the elected and selected federal politicians of allpolitical persuasions, particularly given the election of the new federalgovernment. Well over half of the MPsare new, so most of our relationships have to be built from the ground up. Many of these folks will be hearing for the first time that “credit-grantingfinancial institutions ought not toretail insurance at the point of grantingcredit” and hearing this message at a time when the Bank Act is up for renewal.

That IBAA continues to build and enhance our relationship with the elected Alberta provincial politicians—again, particularly given the election of the new Alberta

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GEORGE HODGSONCEO, IBAA

[email protected]

government. In this case, 80% of MLAsare new and need to be brought up to date on insurance matters such as the minor-injury cap and propertyinsurance issues.

That IBAA’s relationship with our regulators continues to grow and bear fruit for consumers and brokers. Continued conversations and cooperative work needs to be done regarding licensing and regulatory matters.

That brokers, our company partners and other players in the insurance industry continue to develop and improve residential-flood products so that victims of losses have the coverage needed to help them get on their feet again.

That, after yet another busy year, the IBAA staff, their families and friends have a peaceful and blessed Christmas that recharges and enables them to take advantage of the opportunities that 2016 brings.

That throughout the holiday season we all appreciate the comfort of our families and the time that we have with them.

That in the midst of all our riches, monetary and other-wise, we remember those in our communities who do not have the basic necessities of life and those who have everything but are alone this season. Through giving and through our thoughts and prayers, we can make this truly a blessed season for us all.

Merry Christmas and Happy New Year everyone!

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IBAA has a new website? Not only does it look better but it also has way better functionality! You can update your staff information, renew your membership and register for any course online.

President’s tour is coming your way? Every year our localcouncil chairs organize a meeting with the president of IBAA and a representativeof the IBAA office in order to give each area an update. You get the opportunity to be informed of current issues and earn free CE credits!

The level 1 general insuranceexam is changing? IBAA has worked tirelessly alongside with other educators in the province in order to get the general insurance examinations changed in our province. The General Insurance Council has listened, and there will be a new level 1 exam in early 2016.

New government meansrelationship building? We have new parties in power at both theprovincial and federal level. It is importantfor our members and the association to build relationships with the elected officials in power. Please get out and visit your MLA and MP.

Getting your employeesinvolved in designing a rewardsystem could increaseproductivity? Your employees will be more engaged in your business by having them contribute to process building. This is a great opportunity for you to find out what motivates them and then build a reward program around that. If you reward the behaviouryou want to see, the results will be in line with your organizational goals.

Did You Know...


Commercial Break Peter Rogers and Terry Zuber

Flagon the

Pay


Helping YourCommercial

Clients AvoidCo-insurance

Penalties

We all understand co-insurance, but do our clients understand it? Apart from explaining to clients how this clause can significantly reduce claim payments, we as brokers need to help our clients by providing better tools to make sure they never have to face this problem. It is also one of the biggest sources of insurance broker E & O claims—if your clients suffer a co-insurance penalty, they are likely going to sue you for not explaining the co-insurance clause to them properly. For the purposes of this article we arenot going to get into the co-insurance formula and how it applies: this is basicinformation with which you should already be very familiar. Instead, we’ll talk about tools to help better equip your clients to come up with adequate insurance values and thereby not face a potential co-insurance penalty. We will now look at co-insurance under the main forms of coverage where it is found.

1. PROPERTY POLICIES Usually 90% co-insurance applies. We have found over the years that clients don’t intentionally under-insure their values; they tend to overlook whatthey actually have. So, if you providea checklist of potential asset

considerations, your clients are more likely to come up with adequate values.

A. Buildings For the purposes of this article, theassumption is made that replacement cost with full bylaws coverage applies.• Appraisal—Is an appraisal available to support the current rebuilding cost? If not, how can the replacement construction cost be determined?• Allowances—What value has been built in for building demolition, debris removal and possible upgrades to comply with bylaws? • Permanently attached fixtures— examples include attached overhead crane structures, silos and cooling towers. In some cases, these may need to be insured separately. Have a clear understanding between the client and the underwriter as to whether these are to be insured as “building” or “contents.”• Outbuildings/separate detached structures—Are there any that need to be insured?

B. Business Contents Assumption is made that replacement cost applies. Create a checklist that mayinclude, but is not limited to:• owned shop or plant equipment

• owned office equipment• yard equipment• computers• leased or rented equipment• employee tools and equipment• leasehold/tenants improvements• inventory of finished stock• inventory of parts• inventory of work in progress• patterns and dies• property of others held on consignment.• customer goods• specialized equipment unique to business Consideration needs to be given to the impact of the low Canadian dollar and how values may need to be increased substantially to allow for contents imported from the USA. In all of the above, make sure your clients have not just given you book value or simply their purchase price. You need to make sure they are giving you full replacement value. Once you have received all thisinformation, talk to your underwriter to see if you can get a “stated amount co-insurance” clause added to eliminatethe co-insurance penalty altogether. There is a chance you can get this added if you can demonstrate that a thorough job has been done in coming



If your clients suffera co-insurance penalty, they are likely goingto sue you for not

explaining theco-insurance clauseto them properly.


PETER ROGERSChairman and Founder,Rogers Insurance Ltd.

[email protected]

TERRY ZUBERSenior Marketer,

Rogers Insurance Ltd.

[email protected]

up with the values and provide a signedstatement of values. The stated amount clause can also be requested for the building coverage under [A] above, usually when anappraisal has been filed with the insurer.

2. BUSINESS INTERRUPTION (LOSS OF INCOME) RIDERS Various amounts of co-insurance apply depending on the form—100% down to 50%.• Worksheets—Make sure you send out worksheets appropriate to the type of coverage, usually supplied by the insurer, to your client for their completion. Push to get these done because, without them, your clients are likely under-insured.• Payroll Coverage—Pay attention to how ordinary payroll may or may not be covered in arriving at the correct amount(s) of insurance. How does the client want to cover this?• Extra Expense—Does additional coverage need to be purchased in addition to what is provided under the basic business interruption form? Most underwriters today offer a form of loss-of-income coverage that does not include co-insurance, such as an “actual loss sustained” form. Seek these out and see if they are suitable for your client. Additionally, mostunderwriters will allow a stated amountof co-insurance clause for the business income coverage, subject to the filing of a signed statement of values (e.g., the worksheet completed and signed by the client or his accountant.)

3. LOSS OF RENTAL INCOME RIDERSUsually 100% co-insurance applies.• Rentable areas—Depending on the form of coverage, you may need to include all rentable areas of a building whether leased or not (applicable to some rental income riders).• Gross Rents—The biggest mistake in coming up with values is that clients

forget to include building operating costs and only report the net rent; however most leases are triple net. In order to avoid a co-insurance penalty, the gross rental income, including full operating costs, needs to be insured. Often times, the operating costs factor is as much, if not more, per square foot than the net rent factor.

4. CONTRACTOREQUIPMENT RIDERSUsually 90% co-insurance applies.• Type of Valuation—The big thing here is to determine what valuation you are using because you may have the option for replacement cost coverage for equipment of a newer vintage (usually under three or five years old), or, in some cases, you may be able to apply for agreed value. • Leased/Rented Equipment—Has all rented and leased equipment been listed at the appropriate value? What

insurance value does the lease or rental agreement call for?• Attachments—Often times, equipment comes with a lot of attachments; Have these been included in the value to be insured? Finally, above all else, make sure you have documented the explanation of the co-insurance clause(s) to yourclients and how these clauses have the potential to penalize them. One way to do this is to send out co-insurance examples to each and every client.



Member Services

www.ibaa.ca Gets Extreme Makeover IBAA has an awesome new website! We are so excited we can barely containourselves! For years, IBAA staff and brokers have cursed our dysfunctional, archaic website and data system that promised far more than it could deliver. Those days are finally gone. We have moved into the 21st century. Our web address is the same (www.ibaa.ca), but the new site has a clean and updated look, improved navigationand expanded functionality. We invite you to log on, click through to see what’sthere and start participating. Help us make ibaa.ca a timely, engaging place for you, our members, to share, connect and advance your career as an insurancebroker. All the pages have much less clutter.We still have navigation tabs along thetop with drop-downs, but those have been reduced and simplified. No moreendlessly clicking in circles only to give up because you couldn’t find something. Further, the search tool on the home page actually works (a strange claim in the 21st century, but one that makes us giddy after the last five years of struggle with the old system). Here’s a little tour. (Hint: go to the website and explore the sections as you read along.)

The Home Page

The home page has many new features. We love the look of the slide show images at the top, and they’re functional too. They highlight who we are and what we offer. Click them for information on the topic. Check back from time to time because they will change to reflect current issues. The three buttons in the middle of the page (Brokers, Consumers, Students) reflect our main pillars: broker support,consumer protection, and broker education.The consumer page highlights the IBAC video explaining why “The Best Insurance is an Insurance Broker.” At the bottom, you can search the site, open industry advisories, see high-lighted upcoming courses and click more in Courses and Events to see all upcoming courses or filter by category (e.g., licensing, designations or webinars).These links connect directly to registration

(with course and event descriptions attached). The Sign In section allows members and non-members to createprofiles specific to their user type. While the inside web pages replace this area with little quizzes, games or surveys, the sign in (logon) and sign up (create an account) links continue at the top of each page.

About Us

In addition to the landing pagesummary and catchy video about IBAA, the drop-downs include board members, special board initiatives, local council groups, government and industry advocacy efforts, IBAA office contacts and all the industry andassociation news. Did you notice the share links? You canbe part of the news too! If the page isrestricted to members only, it won’t openon social media without member logon.



Membership

Check out all the cool things you get for being a member. If you are already a member, you can log on and get the complete low-down on all our Business Booster Partners.

Education & Events

Did you know we offer this many types of courses (so many ways to get your credit hours and move your career along)? Login to register yourself and others online for courses, the conventionand the fall conference. The registrationform will automatically populate your profile information. If you’re not logged on, you’ll be prompted to do so. No more confusion about registration links that don’t work because you’re not logged on! No more printing offregistration forms! You can pay by credit card or ask to be billed and print off your receipt. You’ll receive automatedemail confirmations. Outstanding! We’re excited—and think you will be too—that you can print off your own CE certificates. That’s right, no more calling us to ask where they are and no more waiting 30 days (unless there is an issue). Once we mark you as attended, you can retrieve your certificate from your profile, where you can also set up notifications.

Resource Centre

This section contains tons of informationand materials. Brokers and consumerscan find cat-risk information and loss-reduction resources. In the IBAA store, members and non-members have varyingaccess to a wealth of educational,informational and marketing materials.You, our member brokers, can downloaddigital and print marketing materials, privacy information and templates and more. You can also read up on current IT issues in the insurance industry and IBAC’s IT initiatives. Maybe you want to download a Bipperfor your brand, a BIP video for your reception area or co-branded insurance information sheets. Maybe you want to order Bipper pins, Bipper decals, Bipper gizmos to give your clients, the Prairies Insurance Directory or the Glossary of Insurance Terms. Maybe you want to download new business checklists (for E&O reduction). Those are all here and more! Browse around.

Your Network

Get social with IBAA’s Facebook page and Young’s Stuff blogs. Post your responses and generate new topics. Network with your industry colleagues. Browse the photo gallery for some of our fun and interesting events. See what IBAA has going on.

Members Only

Just like the label says, here’s where you find all the secret stuff for IBAA members.

Communications

One of the great new features of our system is that you can subscribe to dif-ferent kinds of communications—everything, nothing or somewhere inbetween—it’s your choice. We’ll continueto send you crucial communications from the CEO and ensure you aren’t deluged with communications, but,otherwise, you choose what is importantto you. Manage your email and blog subscriptions in the email or blog. Other notices can be managed in your profile preferences. Watch for upcoming online discussions,groups and communities.

Stay Tuned

Have fun playing around and please let us know what you think—you can even contact us through the site!Stay tuned. We will be sharing some of the other cool things about the site in the next edition of The Alberta Broker.


First Time LogonWe’ve populated the new system with information from the old database. Please go into your profile, review everything and make any necessary corrections.

We sent you an initial Username and password for your first sign-in. Please change your user ID and password for security. If you have any logon problems, please contact us by email ([email protected]) or phone (800.318.0197).

• Broker ManagersPlease check all the information stored in your brokerage profile for accuracy. Now you can manage corrections and updates to ensure your staff all receive IBAA member privileges. You can also renew your membership online and choose online payment or invoice.

• Broker StaffPlease go through your profile, review the information and preferences, and correct any errors.

Legal-Ease Shelley L. Miller and Sara Hart

Risky FutureLiability Risks and Concerns

of Autonomous Vehicles



The world around us and themechanical devices we use and rely upon are becoming increasingly automated. Transportation methods have advanced from travelling on foot, bicycle and horse and buggy to motor vehicle. Music dissemination hasprogressed from records, tapes and CDsto iTunes. Phones have progressed from land lines to cell phones and now to smart phones that function like a mini computer. Our motor vehicles are also becoming more automated. The next development that is starting to cause concerns to insurers andbrokers is the autonomous or self-driving vehicle. Autonomous vehicles are those that operate without a humanoperator through the use of a variety of computer sensors, cameras and GPS that control the vehicle’s path, detect potential dangers and direct the vehicle so as to avoid a collision. While a self-driving vehicle may sound like something from a futuristic movie manuscript, it is not as far from reality as one might think. Google Inc.,(“Google”) one of the main pioneers in this field, has been producing self-driving cars since approximately 2005, with only 11 minor accidents since 2009, none of which were the self-driving car’s fault. Google anticipates that its self-drivingvehicles may be ready for productionand sale in the United States of America as early as 2017 and thecity of Milton Keynes in the UnitedKingdom will begin operating adriverless cab system this year. A fully autonomous dump truck is alreadyworking in the field in Alberta, operatedby Suncor Energy. Multiple car manufacturers are predicting having partially or fully automated cars on the road by no later than 2025. Partial automation by virtue of advanced driver assistance systems are already present in various high-end motor vehicles, including the Mercedes-Benz S-class, which can already automatically accelerate, brake and

stay in the same lane under certain circumstances. Backup cameras, lane assist, self-parking and speeding up or slowing down depending on traffic, along with other computerized safety features, are becoming standard in even less expensive vehicles. The self-driving vehicle is likely to be a reality in the coming years. Autonomous vehicles are predicted to lessen the number of collisions, decrease traffic congestion, lower fuel cost and save time being wasted onextended driving. According to a recent Conference Board of Canada report in collaboration with theVan Horne Institute and CanadianAutomated Vehicles Centre ofExcellence (CAVCOE) titled“Automated Vehicles: The Coming of the Next Disruptive Technology,”autonomous vehicles will shake up transit, urban planning and the job market. Using Canadian statistics, someof the benefits of using autonomous vehicles are stated as follows:• There are 2000 vehicle fatalities a year in Canada, many caused by human error. Self-driving cars would reduce collisions by more than 90%, saving $37.4 billion.• Automated vehicles could eliminate five billion hours per year that Canadians spend behind the wheel of a car driving, worth $20 billion.• Self-driving vehicles could potentially reduce the need for car ownership, saving $5 billion per year in congestion costs.• Self-driving vehicles could also reduce fuel costs by $2.6 billion by reducing congestion and by being more fuel efficient. • Individual households could save $2,700.00 a year through increased car sharing.• There would be reduced demand for parking.• Automated vehicles may make it cheaper and easier for people to travel.

While autonomous vehicles definitelyhave some positive attributes, concerns remain as to how they will be regulatedand how the insurance industry will deal with their introduction. Accordingto annual reports recently filed with the United States Securities and Exchange Commission, four publically traded insurance companies—Progressive Corp, Cincinnati Financial,Mercury General and Travelers Cos.—listed driverless vehicles among the risk factors. As cars become increasingly more automated and controlled by computersand software, the question of who is liable for a motor vehicle accident is becoming increasingly more complicated.Numerous liability questions ariseinvolving self-driving vehicles, includingwho is liable for a self-driving vehiclethat gets into an accident—the individualowner, the car manufacturer, or the software manufacturer? Do all of these entities need insurance policies and if so of what type and what coverage needs to be provided? What occurs if neither vehicle is at fault—does a no- fault-based insurance fund need to be created? What happens if a software, computer or roadmap update is missed resulting in a collision—will there be an insurance policy to cover suchoccurrences?


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Who is liable if an automated car relying on GPS/internet loses a signal when driving into a tunnel and acollision occurs? What happens if a safety system fails? In addition to concerns in relation to how liability will be assessed when a computer is the operator of the motor vehicle rather than a human, how insurers assess premiums and the formulas utilized to calculate insurance premiums will also need to change as there will be no available data on which insurers can predict the accidentrisk of an autonomous vehicle, incomparison to that of a human driver (of known age, place of residence,driving history, years of drivingexperience etc.). Automobile insurers, like record stores before them, are going to have to embrace and adapt to change with the coming automated and digitalage or risk becoming obsolete andunnecessary. Insurers will need to consider who and what they will insureif there are no longer any drivers. Will insurance policies for autonomous vehicles be more focused on product liability and theft? Will there be a need for driver’s licenses? Will minors or intoxicated people be allowed in an automated vehicle? Could an occupant read a book or watch a movie while a self-driving vehicle was operating? Would this eliminate the need forcurrent distracted driving legislation? While according to both the OntarioMinistry of Transportation and the Alberta Transportation Department, there are no discussions at the momentfor regulation of self-driving cars ineither province, insurers need to be aware of these upcoming developments.While it is unlikely that autonomous vehicles will eradicate automobile insurance entirely, they are going to dramatically change the insurance landscape. What type of policies, who they insure and what they insure is

bound to change for all automobileunderwriters. To stay relevant, insurers will need to adapt to change. For now, self-driving vehicles are still in their testing stage and the price tag at the outset of the introduction of thetechnology will make autonomous vehicles unaffordable for the average

purchaser. Our Back to the Futurescenario is not yet reality, but itappears self-driving vehicles are goingto be a part of our present, rather than our future, much sooner than we think.

Justin Pritchard, “Google acknowledges 11 accidents involving self-driving cars in 6 years,” The Associated Press (12 May 2015), online: <www.globalnews.ca>.

Randy Shore, “Roads are opening to driverless cars,” Vancouver Sun (23 March 2015), online: <www.vancouver-sun.com>. Ibid.

Emily Chung, “Autonomous cars could save Canadians $65B a year.” CBC News (21 January 2015), online: <www.cbc.ca>.

Kristen V Brown, “Self-driving cars: bumpy ride for insurance industry?”SFGate (12 April 2015), online: <www.sfgate.com>.

[email protected]

SHELLEY L. MILLER, Q.C. and SARA HARTare lawyers with

Dentons Canada LLP and practice in theprofessional liability insurance area.

[email protected]

“Who is liable fora self-driving vehicle

that gets into anaccident—the

individual owner, the car manufactureror the softwaremanufacturer?”



PYIB Perspective Christina Rankin

“Silence is a true friend who neverbetrays.”—Confucius

Let me start by saying for thoseAlberta brokers who don’t know me,“listen more and talk less” is an acquiredskill—one I am still acquiring. For those of you who do know me, be proud that I am now learning the importance of “silence is a true friend who never betrays.” As a young broker in today’s market, I have been listening to, and learning from, people of different generations,whether the Baby Boomers, Generation Xor my own generation, the Millennials.Listening has given me the ability tolearn all aspects of being a broker, including leadership, sales and customer service. Recently, PYIB representativesparticipated in another amazing learningopportunity at the Big I Young Agents Conference in New Orleans. One of themain takeaways from the conference wasthat regardless of who we are, where we

live and what we do in our daily job, leadership and “action for change” is something we must embrace in order to succeed, expand and develop ourselves and our teams. Throughout this conference we listenedto many different people from many different industries speak on leadership and change. Nick Popoditch, a retired tank com-mander and marine, shared his experi-ences of being injured in Iraq and how he overcame obstacles we couldn’t imagine. When you have been doing the same thing your entire life and only thinking you are good at one thing, life sometimes likes to throw you a curve ball. In Nick’s case it was losing an eye and no longer being able to be a marine. Nick was able to share his amazingexperience of how to apply action for change. Instead of giving up, he chose a new path and graduated Magna Cum Laude from San Diego State University,ran for Congress and wrote a book. You’re probably thinking, what does

Nick’s story have to do with being a broker? Well, let’s put it into context. On a daily basis we face changing markets, clients wanting the flavour of the month policy, maintaining quali-fied staff and the succession quandary. While these issues are in no way asextreme as losing an eye from being hit by a grenade, we can learn from Nick. If what you are doing on a daily basis isn’t working internally or externally for you, STOP. Try a new path and apply action for change. Don’t be afraid of a bad outcome as the outcome you have currently doesn’t seem to be working anyway. As we all know, leadership is a difficultthing to master. Brandie Hinen, founderand CEO of Power House Learning, asked the 75 people in the room to complete seven simple questions:

1. What do you love about being a leader?2. What about being a leader makes you feel like you’re making a difference?

Big 1ConferenceNotes

Listen More,Talk Less

II–Leadership–Action for

Change


CHRISTINA RANKIN,PYIB Vice president

[email protected]

3. If I would have known then what I know now, I would … 4. One of the biggest life lessons I’ve learned is:5. One of my biggest mistakes was: 6. If I had one piece of advice to share it would be:7. What is one of your biggest leadership challenges now?

When we all looked at the results of these questions, the one main thing that came to light was that we wished we would have asked more questions while learning in this industry. Be inquisitive. Be bold. Be persistent. I challenge principals, managers and team leaders to all answer these same seven questions. Take your answers, apply them and support those young people in your office. They aren’t your competition. They are the future of your agency. We all can get valuable lessons by learning from our mistakes andcontinuing to grow in this ever-changingindustry. This conference was something I will never forget. Not only was I able to experience New Orleans, I got to meet some amazing people from all aspects of the insurance industry.

Remember: Listen more, talk less—“Silence is a true friend who never betrays.”


strangers who are willing to rent their homes for a short period of time. At first blush, the shared economy may seem anathema to insurance.Insurers rely on past experience to assess and price risk, but the shared economy is brand new andunprecedented. Insurers value risk management and mitigation, but the shared economy is founded on awillingness by consumers to trust strangers with their safety and belongings. Opportunity in our industry goes hand in hand with innovative risk management; industry players that profit from the sharing economy—insurers and brokers—will be those who see this new disruptive force in the marketplace as an opportunity to be seized rather than avoided. To be sure, the shared economy has resulted in some high profile incidents that cause genuine concern. In San Francisco, a TNC driver struck and killed a six-year-old girl on New Year’sEve in a case that shed light oninsurance gaps faced by drivers of these types of services. And, closer to home, this past May a couple who rented out their Calgary home via Airbnb came home to find the place trashed to the tune of $75,000 after what police called a “drug-induced orgy.” TNCs, in particular, have been a hot-button subject in recent months, generating headlines all across Canada. They are operating in some cities, but not all. Where they are not operating, TNCs are pushing for changes; where they are operating (e.g., Edmonton), taxi companies are fighting for a “level playing field.” Regardless of how these battles end, the shared economy is here and it is unlikely to leave.

So how should our industry respond? IBC responded earlier this year byestablishing an insurance working groupof experts, in auto and commercial insurance, to find insurance solutionsdesigned to protect Canadians, whetherthey provide or purchase a TNC service. A key consideration in designing an insurance solution is that a traditional private passenger auto insurance policy was never designed to cover a vehicle being used for commercial purposes. An innovative solution that responds to the unique needs of TNC drivers is needed: one that recognizes that a commercial policy is also not appropriatebecause a TNC driver is not always “logged on” to accept paying customers.These vehicles are in TNC use some of the time and non-TNC use the rest of the time. Further complicating the questions on insurance coverage is whether the insurance policy taken out by the TNC itself would cover drivers or their passengers. Bottom line: TNC companies have created (or brought to light) an insurance gap in our new sharing economy. IBC’s insurance working group has since developed a framework for a legislative solution. The proposal, which can apply in any province where private companies sell insurance,contains a definition of TNC activity,minimum insurance requirements for vehicles used in TNC operations and a provision to help manage claims involving these vehicles. It also puts an obligation on TNCs to ensure coverageis in place for drivers who use their services. Overall, we believe it provides a framework for insurers to develop new products that cover the new and unique risks facing TNC operations

IBC Insight Bill Adams

“When you’refinished changing,

you’re finished.”—Ben Franklin

It is sometimes said that our industry is not good at innovation. I beg to differ. The Canadian insurance industry has been operating since 1804, pre-dating the telephone, film, cars, airplanes,computers, the Internet, smart phones and social media, to name just a few inventions of the past two centuries. Each of these technological advances (and many others) has, in one way or another, changed how society, includingbusiness, operates. Through this intense period of innovation, insurers and their broker partners have adapted and thrived. One recent innovation that hasinsurers, brokers and many others asking “what now?” is the burgeoning “shared economy.” These are companiesthat use an online-enabled platform to connect paying consumers who need a service directly with those who can fulfill that need. Examples include Transportation Network Companies (TNCs), the most famous of which is Uber, which connects people needing a ride with drivers using their personal vehicles; and accommodation rental sites (e.g., Airbnb), which connect people needing a place to stay with


and, most importantly, continue to provide protection for Canadians— whether they are TNC drivers,passengers or other users of our roads and highways. Finalized just last September, the proposal was recently shared with government officials in Alberta and Ontario. We are hopeful that bydeveloping competitive insurancemarkets for TNCs that eliminatecurrent insurance gaps, IBC’s proposal will be accepted by governments and regulators, and adopted in a consistent way by provinces across the country. Currently, many of the discussions around TNCs are taking place at the municipal level. What we don’t want is a patchwork of rules and regulations on a city-by-city basis.

So how about brokers? What is your role in this change? Well, simply put, it’s another great opportunity for you to show value. Consumers find insurance confusing, and the shared economy makes it even more so. TNC drivers or home rental hosts need to determine whether they have adequate coverage. And if they don’t have coverage, how to get it. These shared economy companies are so widespread I’d be surprised if any Alberta brokerage doesn’t have at least one customer who is a TNC driver or a home rental host, or both. These are customers who need you now more than ever. Do they assume that their auto or home insurance policy covers them? Are they aware of the insurance gaps? They need guidance.They need to know the limitations and the options. Also, how many shared economy participants suspect they don’t have adequate coverage but are not speakingup because they fear the consequence of paying higher premiums? IBC’s proposed solution will help address this for TNCs, but it is still an openingfor brokers to have a frank discussion with customers. Insurers need to know

BILL ADAMSVice President,

Western & Pacific ,Insurance Bureau

of Canada

Industry players thatprofit from the

sharing economy will be those who see this new disruptive force

in the marketplace as anopportunity to be seized rather

than avoided.

if a vehicle is being used for non-standard purposes and if a home isgoing to be rented out or used by people other than the insured’s family.And consumers have the right to knowthat coverage will be there in the event of a claim. The shared economy is still very new and there is little precedent for how tomanage the issues it raises. Consumers,governments and business are figuring itout as we go. Therein lies the opportunity. In a sense, this uncertainty is nothingnew. Technological innovations and changing demographics have always

been a reality in our business. There was a time when the industry had to figure out how to adapt to the inventionof the telephone, not to mention every disruptive innovation since then. Our business model is forever evolving as a result of technology and other market forces. Canada’s insurance industry has a richhistory of adaptation and innovation. I am confident that we will ultimately add the insurance challenges posed by our new shared economy to the long list of hurdles we’ve faced and embraced. The real question is which companies will retrench from uncertaintyand which will capitalize on this new opportunity.


When your customers aren’t sure which of your products or services they should buy, consider this handy tool that not only helps create clarity but also positions you as a trusted adviser.

I’m referring to a time-test sales tool known as SWOT. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. When I do customerservice and sales seminars and speechesfor groups, I often hear this is one of the most useful tools people learn. Here’s how to ask SWOT questions. Explain to your customers that everycustomer is different and you want to come up with a solution to suit their unique needs. Then explain that you’d like to ask them a few questions to help them narrow the field. Now ask these SWOT questions:

S-Strengths

“When you think about other products/services in this category that you’ve used in the past, what have you liked about them?” If, for example, you’re a travel agent discussing vacationoptions with a client, ask them where they’ve vacationed before and what they liked about it. If you’re a hairstylist,ask the customer about the last time they loved their hairstyle and what they liked about it. Starting with strengths about current and past purchases helps customers clarify what’s important to them. And it shows that you are not threatened by discussing the positive aspects of your competitors’ products and services. In your customers’ view, this alone makes you different from other sales people

who want to run-down the competition.It’s a generous way to start building trust at the outset.

W-Weaknesses

“What have you not liked about those previous products/services?” Again, customers are not only clarifying in their own mind what they don’t want, they are also telling you the flaws of the competition—much better that this comes from the customer than from you. Any time you point out your competitor’s faults you expose yourself to three negatives: 1) the customersdisagree with your negative assessment;in which case they no longer trust your judgment. 2) Even if you’re right about your competitor’s weakness, customers may not appreciate you running-down the competition behind their backs. It looks like a cheap-shot. 3) The customers feel like they made a bad decision in the past and that you think they aren’t smart. Not a good thing. That’s why it’s so much more effective when your customers point out the weaknesses. The fact that you already encouraged them to point outthe strengths makes them feel less guiltyabout talking about the weaknesses. That’s one reason why the order that the SWOT questions are asked creates such positive feelings.

O-Opportunities

“What would be a perfect product/service solution in your mind?” With this question, you are asking customersto dream big. People like this. It’s almost like asking, “If you won the lottery, what would you do with the money?” When you ask this question, you are creating an emotional connectionto the product that is exactly right for

them because they are creating the product in their mind. Does it get any better than that?

T-Threats

“What’s prevented you from buying this perfect product/service in the past?” After customers imagine the perfect solution, now is the time for reality. At this point in the buying conversation, the customers tell you their limits and buying objections. They share their budget, or timeconstraints, or that they weren’t aware that this type of solution existed. In other words, the customers tell you what you need to know to help them make a buying decision that’s tailor made for them. What fascinates me about using SWOT is that during this entire part ofconversation, you haven’t begun to talk about your products/services. Instead, you’re focused on the customer’s unique needs. When you do this with customers they realize that youactually get them. When you cross that threshold, you’re no longer a pushy salesperson—you’re a trusted adviser.

Jeff Mowatt is a customer service strategist, award-winning speaker, and bestselling author. For more tips, training tools or to inquire about engaging Jeff for your team visit www.JeffMowatt.com

Influence with Ease® Jeff Mowatt

4 Crucial Questions for Superior Sales

Over the past few months, everyonewas saying and thinking that the comingfederal election would be a significantevent on the political landscape, andOctober 19th certainly met thisexpectation. Canadians voted. More Canadians voted than over the past 20 years, and they voted for change! From the beginning of the campaign in August, polls were indicating that Canadians were looking for a change in the direction of the country. After 10 years in power, the Conservative Party and the prime minister were notviewed as the leaders who shoulddirect the future course for the country.The only question throughout the campaign was where was this “change” going to land?

Viewpoint Lorne Perry

The NDP started the campaign strong, leading in the polls while the Liberals dragged behind them and the Conservative Party. After two months, the tables turned, with the Liberals gaining momentum, the NDP falling dramatically and the Conservatives

maintaining their relative position. In the end, the country voted en masse for change, and that change was embodied in Justin Trudeau and the Liberal Party of Canada. A few highlights: • First time a third-place party in the House of Commons wins a majority• 2nd youngest Prime Minister in Canada’s history• Record voter turnout in over 20 years• Over 200 new MPs, which is a record • As far as vote intentions, comparing the vote count by party from the last election in 2011, the NDP lost 1 million votes, the Liberals gained 4.2 million votes, and the Conservatives lost about 50,000 votes.

They will beapproached by the banks and others making the case that the insurance

consumer is badly served with the prohibition in place on bancassurance.

OUT WITHTHE OLD

IN WITHTHE NEW


LORNE PERRY, CAIBPresident,

Insurance BrokersAssociation of Canada


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What does this shift mean for IBAC and brokers across the country? Well, IBAC has always had a non-partisan approach to advocacy and political outreach. Our issues affectingconsumers are non-partisan; they are issues of fairness, accessibility and affordability; something all MPs understand and support. We have communicated with all parties in the House of Commons, whether they are in government or not. During the last Parliament, IBAC had excellent relationships with MPs and senators from all parties. This will not change with the new government. With over 200 new MPs in the coming Parliament, our profession has a big job ahead of us in reaching out to all the new MPs and explaining to them what it is we do and how we serve our customers, and educatingthem on the issues that federal legislationand regulations impact the insurance- buying consumer. This outreach and education is crucial because most of the new MPs will not have had a background in insurance and will not even be familiar with what an insurance broker does. They will be approached by the banks and others making the case that the insurance consumer is badly served with the prohibition in place on bancassurance.Insurance brokers are the only voice to explain to MPs why this prohibitionmakes sense so I urge all brokers to reach out to their MPs, new or returning, and explain to them that credit-granting institutions ought not to sell insurance at the point of granting credit. We have a new Parliament and a new government for the next four years—and a lot of work ahead of us.

Who? What? Where? Darrell Verbonac

Thomson Schindle Green Insurance(TSG), based out of Medicine Hat and with an office in Brooks, has purchased Pro Insurance in Brooks. These two Brooks offices were merged into one under the guidance of TSG’s Greg Skriver; the former owner of Pro, Brenda Cooley, left the insurancebusiness and is pursuing ventures outside the industry. Keeping with news in the southeastpart of the province, a new broker beganoperations in Medicine Hat under the banner of Sun City Insurance. The new start up is jointly owned by Ray Wallis, who was the Southern Alberta manager for HUB International, and Braden Bosch, the owner of both Centre Street Insurance in Drumhellerand All City Insurance in Calgary. Innisfail-based Freeman Insuranceopened an office in Penhold, just outsideof Red Deer. Leading this office is Roxanne Shaw, who was with Western Financial Group’s Red Deer office. In other Central Alberta news, out in Castor, new to the staff at F.C. Hunt Agencies is Sheena Mogensen, and congratulations go to Danelle Lijdsmanof Lijdsman Insurance in Oyen on the birth of her second child, a daughter, Yvette Trudence, on August 27th. Rod Fox is the new manager of Western Financial Group’s Drumhelleroffice, replacing Amanda Wood who transferred to WFG’s Victoria office. Rod was most recently the provincial MLA for the Lacombe riding and has previous insurance experience as a broker with Sims & Associates in Lacombe, as well as being the Prairiesrepresentative for IFS Financial

Services. In addition to looking after Drumheller, he will also haveresponsibility for the WFG offices in Hanna and Morrin. If that wasn’t enough news on Rod, we also extend congratulations to him on his August wedding to Rachael Bradford, who was with Ing & McKee Insurance in Blackfalds. Out in Strathmore, two new staff members at Action Insurance are Lynn Baxter and Larry Kirby.

IN CALGARYPeople Moves & Acquisitions• Palmer Salmon Insurance purchased KBM Insurance Agencies; KBM will continue business as usual, with previous owner Connie Metka

managing the office. • New staff at Lucas & Wright Insurance are Andrew Chen from Toole Peet & Co, Deirdre Alyward from Sharp Insurance and Christine Ohrn from Wilson M Beck Insurance, while best wishes go to Michelle Cashman who has retired. • At Builders Insurance, joining the staff are Danny Dahms and Brittany Golany. Brittany is the daughter of owners Tom & Cindy Golany and has come from Western Financial Group in High River where she was working in its head office. • Fiona Riehl left Rogers Insurance and joined BFL Canada.• Londa Love also left Rogers to join Renfrew/Arthur J Gallagher, where


[email protected]

DARRELL VERBONAC,FCIP, CRM

Regional BusinessDevelopment Manager

Intact Insurance Company

other new staff include Rachel Anderson and Jodi Campbell. • New at Costen & Associates is Cory Vanderjagt, who came from Klondike Insurance in Edmonton. Leigham Robichaud moved from Link Insurance to Godfrey Morrow Insurance.• Matthew Faulds joined Insurmy from Southside Insurance. • Two new members at Westland Insurance’s McKenzie Towne location are Sarah Rouse and Masimba Mrisa.• Katherine Marko, who was with Western Financial Group in Turner Valley, joined Alpine Insurance.• Other staffing additions around town include Josh Hunt at Bell Davidson Insurance, Yvonne Waiting at Tredd Insurance, Debbielynn Comeau at Collis Insurance, Darwin Burgess at BrokerLink, Kelsie Bowden at Rogers Insurance and McNeil Robb at Beneficial Insurance.

Bricks & Mortar Moves• Pal Insurance Brokers moved office locations, within the same block on 1st Street SW. • Economical Insurance also moved locations, going into the Beltline area at 322-11 Avenue SW. • TD Insurance closed its Calgary call centre, moved the operations to Atlantic Canada and will now only have claims operations here.

HAPPY TRAILS Congratulations and best wishes go to two industry veterans who retired at the end of October: Dirk Moerkens of Toole Peet and Rosemary Visscher of Rogers Insurance. Dirk is relocating to Ladysmith, British Columbia, though he will still continue to do some part time work with Toole Peet, while Rosemary is looking forward to more

time skiing and continuing her world travels.

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We’re very proud of the brokers below whoworked long and hard through a seriesof courses to attain their designations.The designations of Canadian Associate Insurance Broker (CAIB), Canadian Professional Insurance Broker (CPIB) and Canadian Certified Insurance Broker (CCIB) testify to the advanced insurance-broker knowledge and practicalskill that these brokers have attained through these IBAC courses designed bybrokers for brokers. These designationshold national recognition.

Our 2014–2015CCIB GraduateCCIB is the highest national designation attainable and denotes a professional standard of theoretical and practicalexcellence toward which all insurancebrokers may strive. A CCIB designation marks the recipient as an authority for insurance knowledge and skill.

Mary Muir-Stacey, CCIB,Peace River Local Council

Our 2014–2015 CPIB GraduateCPIB is a university-level course thatdenotes insurance-broker specialization and analytic skill in personal lines,commercial lines or brokeragemanagement. CAIB or CIP is apre-requisite.

Kelly Parrott, CPIB,Edmonton Local Council

Our 2014–2015CAIB GraduatesCAIB is the first step (after licensing) toward launching a professional career as an insurance broker. The designation denotes a solid foundation in personal lines, commercial lines and brokerage management.

Honours Graduates

Steven Babcok, CAIB (honours),Central Local Council

Leon Diek, CAIB (honours),Lethbridge Local Council

Nicole Dymond, CAIB (honours),East Central Local Council

Crystal Frost, CAIB (honours),Lethbridge Local Council

Candice Popke, CAIB (honours),Calgary Local Council

Crystal Ronsberg, CAIB (honours), Edmonton Local Council

James Rutherford, CAIB (honours), Edmonton Local Council

Wanda Stafiniak, CAIB (honours),Calgary Local Council

Michelle Wiens, CAIB (honours),Calgary Local Council

Graduates

Tanya Brewster, CAIB,Edmonton Local Council

CONGRATULATIONSto Our 2014–2015 Designation Graduates!

advance your career

Calgary CoursesJanuary 16, 23, 30 & February 6 CAIB 1 Fast TrackJanuary 26–29 Licensing Level 2February 1–5 (exam February 6) CAIB 3 ImmersionFebruary 22–26 Licensing Level 2

Edmonton CoursesDecember 15–18 Licensing Level 2January 11–15 Licensing Level 1January 16, 23, 30 & February 6 CAIB 1 Fast TrackFebruary 1–5 (exam February 6) CAIB 3 ImmersionFebruary 16–19 Licensing Level 2

Webinars & Online CoursesJanuary 14 Social Media & Cyber LiabilityJanuary 19, 21, 26, 28, Feb. 2, 4, 9, 11 Licensing Level 1 Online Lunch ‘n’ LearnJanuary 20 Insurance Solutions for Residential Condo Unit OwnersFebruary 10 PrivacyTuesdays, February 23-April 26 CPIB Claims Management & Administration Online Lunch ‘n’ LearnThursdays, February 25-April 28 CPIB Law & Ethics Online Lunch ‘n’ Learn

More classesat

ibaa.ca

Dec. 15, 2015to

Feb. 29, 2016IBAA COuRSES

Designation ExamsFebruary 10, 2016

May 4, 2016July 6, 2016

December 7, 2016

Matthew Cassidy, CAIB,Central Local Council

Rai-Lyn Chisholm, CAIB,Medicine Hat Local Council

Nichole Chollak, CAIB,Calgary Local Council

Giorgia Ciarrocchi, CAIB,Calgary Local Council

Amanda DeRuyter, CAIB,Central Local Council

Kristen Dickau, CAIB,Central Local Council

Leon Diek, CAIB (honours),Lethbridge Local Council

Kelly Duncan, CAIB,Edmonton Local Council

Nicole Dymond, CAIB (honours),East Central Local Council

John Eaton, CAIB,Edmonton Local Council

Lorrie Fitzgerald, CAIB,Edmonton Local Council

Crystal Frost, CAIB (honours),Lethbridge Local Council

Garnett Germain, CAIB,Edmonton Local Council

Duane Hoffman, CAIB,Edmonton Local Council

Carlye Jakubec, CAIB,Edmonton Local Council

Catherine Lipe, CAIB,Calgary Local Council

Rebecca Longmire, CAIB,Yellowhead Local Council

Katherine Lovegrove, CAIB,Edmonton Local Council

Nicole Lyon, CAIB,Central Local Council

Kimberley Ann Neilly, CAIB,Calgary Local Council

Matt Pedrazzini, CAIB,Calgary Local Council

Scott MacInnis, CAIB,Edmonton Local Council

Erin McAulay, CAIB,Medicine Hat Local Council

Chris McCarthy, CAIB,Edmonton Local Council

Caroline Moffat, CAIB,Edmonton Local Council

Linda Mohns, CAIB,North East Local Council



Lindsay Mones-Stratton, CAIB,Edmonton Local Council

Sarah Nauss, CAIB,Peace River Local Council

Karen Nelson-Hoflin, CAIB,North East Local Council

Sara Nessman, CAIB,Lethbridge Local Council

Amanda Nobbee, CAIB,Edmonton Local Council

Ryan O’Reilly, CAIB,Medicine Hat Local Council

Coby Oslanski, CAIB,North East Local Council

Candice Popke, CAIB (honours),Calgary Local Council

Crystal Ronsberg, CAIB (honours), Edmonton Local Council

Brandis Ruecker, CAIB,Edmonton Local Council

Kristy Rusbourne, CAIB,Calgary Local Council

James Rutherford, CAIB (honours), Edmonton Local Council

Doug Stoker, CAIB,Edmonton Local Council

Leah Sunderwood, CAIB,Edmonton Local Council

Jessica Taylor, CAIB,East Central Local Council

James Thomson, CAIB,Calgary Local Council

Wanda Stafiniak, CAIB (honours),Calgary Local Council

Tara Vella, CAIB,Lethbridge Local Council

Lesley Wade, CAIB,Edmonton Local Council

Michelle Wiens, CAIB (honours),Calgary Local Council

Becky Yurko, CAIB,North East Local Council


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