Light at the Centre of Newton’s Cradle
While Canadian CEOs are optimistic about their companies’ growth in the next year, their outlook on global economic growth remains bleak. Only one in three are confident in global GDP growth, but 100 percent say they’re confident about their organization’s revenue growth prospects over the next three years. This is according to the recently released Price Waterhouse Coopers’ 20th CEO Survey, which also tells us that Canadian CEOs are planning to drive this growth and profitability mostly through organic growth (92%), followed by new strategic alliances or joint ventures (74%), cost reduction initiatives (69%), new M&A deals (54%), collaborating with startups (49%) and outsourcing (28%).But, with a sluggish economy keeping insurance in an economic “grey zone,” as Terri Goveia writes, will organic growth be enough?
We’re in the centre of Newton’s Cradle, it would seem, suffering from economic inertia. So where are the opportunities?
A growing cyber market offers some hope, as does the sharing economy, and of course, cost-cutting through technological investments. Also important: keeping an eye on the geopolitical climate so influential to our national policies and sticking with the U.S. as a growth market. Fifty-nine percent of Canadian CEOs believe more closed national policies will be detrimental to growth and 79 percent rank the U.S. as their most important growth market over the next year.
Where does this leave the broker? In a position where you need to “reprove” your value. That’s why building on the insurer-broker relationship has never been more necessary. Things got heated in Ontario recently when brokers took a stand against directs. In an unconventionally strong-worded release, the Insurance Brokers Association of Ontario (IBAO) suspended its partnership with Aviva Canada following the insurer’s announcement of an exclusive deal offering insurance to Maple Leafs and Raptors fans—this, not long after the launch of its company- branded direct arm. One would imagine that a large multi-national insurer like Aviva, with its competitive pricing and strong product offering, could have easily laughed the matter off. But instead we find a conciliatory tone: a promise that the insurer will continue to invest in and support its Canadian broker channel and work harder at maintaining stronger relationships with its brokers.
The message is clear: a world of economic uncertainty, growing new markets, digital innovation and changing customer expectations is a world in which both directs and brokers can thrive. And starting to think like a direct may even bode well for the broker, as Michael McKiernan writes.
There’s plenty of light at the end of the tunnel, or at the centre of Newton’s Cradle, if you will. Which means that now is the time for brokers and insurers to have each other’s backs.
Speaking of support, I’m pleased to welcome our new associate editor, Tessie Sanci, to the team! I’m sure you’ll enjoy Tessie’s stories and meeting her at industry events. Feel free to contact her with news. We’re always listening!
Copyright © 2017 Transcontinental Media G.P. This article first appeared in the March 2017 edition of Canadian Insurance Top Broker magazine