The insurance industry has had to do something its company executives never thought imaginable prior to the Covid-19 pandemic: embrace technology. Fast.
“The main result of the pandemic on the insurance industry is this significant acceleration of insurance companies wanting to go digital,” says Jim Virtue, president and COO with Toronto-based PPI Management Inc. “We’ve made five years of advancements in the past five months.”
When the pandemic struck, the use of electronic insurance policy applications became crucial for the heavily paper-based insurance industry. Managing general agencies (MGAs) traditionally included in Investment Executive’s Insurance Advisors Report Card (IARC) saw their e-application adoption rates rise to 60%–75% from around 30%–40% .
Fortunately, many insurance advisors had begun adopting e-applications prior to the pandemic. Research from 2019’s IARC found that 82.9% of the 334 advisors who answered the e-application question said they had embraced the process, compared with 66.9% of 350 advisors who answered the same question for the 2018 IARC.
During the initial lockdown period, which began in March, executives reported their application counts dropped by only 9%–20%. Since then, counts have returned to pre-pandemic levels for the most part. However, insurance advisors and MGAs encountered challenges with underwriting policies, since many paramedical companies that provide medical testing were closed.
In response to these closures, carriers waived the need for medical exams on certain policies — although some applications involving older clients and significantly large insurance needs could not be processed. As regions moved into Stages 2 and 3 of the lockdown, paramedical companies reopened and MGAs began processing applications.
MGAs made efforts to keep agents informed of these and other changes. In most cases, MGAs added special sections to their websites to pool information from carriers. Kitchener, Ont.-based Financial Horizons Group Inc. (FHG), for example, created a microsite called Trusted Advice, which gathers information from 22 insurance companies and includes material on various government subsidy programs. According to FHG executives, the site receives roughly 1,500 visits per week.
Insurance carriers also hosted periodic webinars covering topics such as policy requirement changes, e-application training and practice-management tips.
Terri Botosan, CEO of Woodbridge, Ont.-based Hub Financial Inc., began hosting weekly webinars with her executive team when the lockdown began.
“In those very early days, [the executive team] had very empty calendars because we had a tremendous amount of travel booked that just stopped,” Botosan says. “We thought, ‘If we’re not going to go out and see these people, what are we going to do?’”
Those early webinars attracted as many as 300 attendees and attendance has remained strong, although Hub moved the webinars to a biweekly schedule in August.
Says Botosan: “I don’t think there’s anything I’ve done in my time at Hub that has garnered as much unsolicited feedback from our advisors in such a positive manner.”
Despite the pandemic, MGAs are keeping pace with the corporate changes they had planned for 2019 and 2020.
Nick Pszeniczny, FHG’s president and CEO, notes that since last year’s IARC, FHG has introduced a new needs-analysis program called Conquest, hired a consulting firm to establish business propositions for advisors in different points of their business cycle and released proprietary products on retirement living.
FHG is looking to expand its footprint in urban Canada. To that end, the MGA acquired Markham, Ont.-based TORCE Financial Group Inc. and Richmond, B.C.-based Vance Financial Group Inc. in August 2019.
“We’re constantly looking at mergers and acquisitions where there are strategic fits for our growth,” Pszeniczny says.
FHG has revamped its field-management recruitment efforts to focus on advisors who want a more holistic relationship with an MGA while still maintaining their independence. The firm also appointed a new president of its Quebec region in July and hired two regional wealth specialists — one for Western Canada; the other for Ontario and Atlantic Canada — in August. The wealth specialists help advisors develop investment plans for high net-worth clients.
PPI, meanwhile, updated its PPI ToolKit resource in September 2019. The tool, rebranded as PPI ToolKit Direct, now is completely online and includes updated insurance needs-analysis software and practice-management resources.
PPI also boosted its social media offering — an area that had room for improvement after advisors rated PPI a 7.6 in the “firm’s support for using social media” category in the 2019 Report Card. The firm has now launched a tool called Link Between, which allows agents to share articles, videos and simple financial planning tools with clients. About 600 advisors are actively using the platform.
“I think we’ve made substantial headway here,” Virtue says. “We’ve done a lot of work to enhance and build our integrated social media offering.”
Mississauga, Ont.-based IDC Worldsource Insurance Network Inc. (IDC WIN), meanwhile, has adopted social media more slowly than the company predicted in 2019. President Phil Marsillo attributes the delay to the acquisition of another MGA, Boucherville, Que.-based Aurrea Signature Inc., in 2019. That deal closed at the end of last year, and IDC WIN is still in the process of integrating the acquired company.
“We haven’t yet fully put in force what [the social media] offering is for advisors,” Marsillo says, “but that definitely is something that we have on our to-do list.”
In July 2020, IDC WIN hired a national director, banking services; two wealth leaders; and a director of tax and estate planning for Western Canada.
As MGAs mark these and other changes off their to-do lists, the companies probably won’t return to pre-pandemic methods for application submissions and how advisors communicate with clients and prospects.
“I think [the pandemic] has changed everything about the insurance business,” Botosan says. “For a lot of advisors, it will change how they do business forever.”