Companies to Watch - November/December 2010
Company: High Road Warranty Canada Inc.
President: Adam Hill
Year Founded: 2010
# of Employees: Six, so far
Public or Private: Private company under the umbrella organization of Possibility Holdings
Premiums/Year: Start-up company. Possibility Holdings wrote approximately CDN$50 million in premiums in 2010
High Road Warranty Canada Inc. is the brainchild of Adam Hill, founder and CEO of Omni Companies, headquartered in Vancouver. For 10 years, Omni has been providing administrative services to the finance and insurance industries, now under the umbrella organization, Possibility Holdings. One of those firms, Omni Warranty Corp., is known across the industry for its extended product and automotive warranties.
High Road Warranty seeks to capture an enormous pan-Canadian market previously ignored: the four million car owners who no longer have access to a factory warranty on their vehicles.
“There are 21 million registered vehicles in Canada,” Hill says. “Currently, extended warranties on automobiles are only available at time-of-purchase through an auto dealership, yet more than 50% of vehicle transactions are privately traded.”
Reason to Watch:
With High Road Warranty, cars as old as 13 years with up to 200,000 km on the odometer will qualify for an extended, no-hassle warranty to cover mechanical breakdowns and repairs. The 12-month renewable product will be available to consumers exclusively through insurance brokers, with premiums starting at $35 per month.
The company is engaging in a push-pull marketing campaign, bypassing the brokers to target consumers directly. If it’s successful, High Road Warranty will eventually be to brokers what Intel currently is to PC manufacturers.
“We’re confident there’s consumer demand for the product,” says Hill. “We want to make sure consumers realize that this extended warranty is available so they will go to a broker and ask specifically for this product.”
High Road Warranty is entering the Canadian market as an entirely new product, without competition. The company has already partnered with British Columbia’s largest broker network and has dozens of pilot brokers established in Ontario and Quebec. The goal is to have the pilot well underway before year-end, with a hard launch scheduled for mid-January.
“Brokers haven’t had a lot of options when it comes to supersizing an auto insurance package,” says Hill. “Now, when a client comes in for an annual renewal, they can ask, ‘Why not spend another $500 per year against mechanical breakdown?'”
Besides offering full support and training to partner brokers, High Road Warranty has also streamlined the application process. Completely paperless, brokers simply have to go online to view options, qualify the vehicle, and purchase the product.
“Customers don’t even need to get an inspection on the vehicle to qualify,” says Hill. “The way we deal with pre-existing concerns is to wait 30 days and 2,000 km before the warranty kicks in. It means an agent can sell on the spot.”
There is a stigma around extended warranty products in Canada that High Road Warranty knows it must overcome to be successful. The name of the company itself is part of a branding campaign to change consumer perceptions. And with High Road Warranty being renewable on an annual basis, Hill believes consumers will quickly begin to realize that this is not the non-transportable, inescapable, time-of-sale, dealership warranty of the past.
“Put quite simply, if we deny a claim in the first year, the consumer won’t purchase it again,” says Hill. “So rather than dealing with a limited repair warranty, we’re offering a comprehensive, fairly priced warranty product on a short term. As long as we’ve priced it properly, we can say yes more often to the repairs consumers need and they will be more likely to renew.”
Because every province has different regulations about auto insurance, High Road Warranty also anticipates difficulty achieving recognition as a national product. In Quebec, only 50% of car owners currently use a broker to purchase or renew auto insurance. At the other end of the spectrum is British Columbia, where every auto insurance transaction legally must go through a broker.
“It’s another reason that we’re marketing directly to the consumer,” says Hill. “In five years, we believe High Road Warranty will be a household name and that consumers will seek out brokers in order to purchase our product.”
© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the November/December 2010 edition of Canadian Insurance Top Broker magazine.