Industry Voice: The role of brokers in the Canadian marketplace
Michael Camacho, President of the Travel Health Insurance Association of Canada (THIA), speaks about the need to understand the customer, and the importance of insurance brokers
When I began my career in the insurance industry in 1990, I was taught (the company had a six-week training programme at head office, referred to as ‘new man school’) that “insurance is sold, not bought”. Accordingly, I was provided scripts to memorise and instructed on how to counter objections that might come up during a client meeting.
Today, that paradigm is no longer the case. According to a 2021 article by Insurance Thought Leadership, we are now in a middle ground where insurance is both sold and bought. Customers still rely on advice about insurance but they also begin their searches online, speak with friends and family, read online reviews, and as a result, come better prepared. The pandemic accelerated the move to digital with some customers not speaking with an agent or broker before buying a policy.
This increased influence of advice and expertise has resulted in many companies expanding their travel insurance ‘bench strength’
However, according to a September 2023 McKinsey & Company article, the insurance industry cannot sacrifice the human touch and focus solely on digitisation – insurance customers rank agents as the most trusted source for learning about insurance products.
As President of the Travel Health Insurance Association of Canada (THIA), I have had a front row seat in the important role travel insurance advisers (brokers, agents, licensed call centres) have in offering travel insurance.
Understanding the customer
Travel insurance advisers understand the unique needs and habits of consumers of all ages (single travellers, families, ‘snowbirds’, Super Visa applicants etc.), enabling them to help compare, combine and coordinate travel insurance options to find the right coverage at the right price to meet their personal requirements.
Jeff Pudwell, President of 21st Century Travel Insurance, feels that “unless you are a very savvy consumer, buying a product as complex as travel insurance without speaking with anyone can often result in a purchase driven by price alone. The best deal is often not good value at all if there are special needs that are not adequately addressed by the product purchased. An agent or broker who knows their stuff can help tremendously in finding the right coverage and in providing support with the claims process should a claim occur.”
Since 2020, Canadian consumers have come to rely more heavily on their travel insurance advisers, as many needed advice on how to obtain their insurance coverage during uncertain times – with Covid-19 waves, government of Canada travel advisories, the weather- and airline-staffing-related flight disruptions, to name but a few. The value for consumers is that travel insurance advisers bring choice, advice, and help with selecting the right coverage for the right price. For Canadian snowbirds, this is particularly important as factors such as age, medical conditions, even trip duration all play a part in finding the most appropriate insurance and are where the value of a travel insurance adviser can be most felt.
Will McAleer, Vice President of CanAm Insurance Services, echoed the need for coverage certainty, particularly with those with more health considerations: “While it is important for all travellers to ensure they have coverage for their medical conditions, it is often the snowbird who knows most about their conditions and the need to ensure there is proper coverage in place to address them. For these customers, speaking with an insurance broker who specialises in travel insurance is often the best decision. The last place you want to be checking about your coverage for a pre-existing medical coverage is on the way to the ER!”
The value of expertise
In Canada, we are seeing consumers shifting away from employer, association and embedded credit card plans/coverages to a more direct purchasing relationship from either insurance companies or travel insurance advisers. According to the Conference Board of Canada’s quarterly Travel Intentions Survey (November 2023), of those Canadians who intend to purchase a policy for their trip this winter season, 58% will obtain their coverage from an insurance company or from a broker. This speaks to the fact that travellers want a better understanding of their insurance coverage, likely in response to many of the challenges with travel, both before and after departure.
This increased influence of advice and expertise has resulted in many companies expanding their travel insurance ‘bench strength’. In 2021, the Canassurance Hospital Service Association (which operates as Québec Blue Cross, Ontario Blue Cross, and CanAssistance) acquired SécuriGlobe, one of the largest travel insurance brokers in Canada. “It always makes me smile when I sign up a new broker,” said Joanne Parent, VP National Sales Travel Insurance at Blue Cross. “The fact of the matter is that some of my big MGAs are expanding their call centres with licensed brokers and they want to focus on travel insurance only. People want to speak with people who are knowledgeable; being a broker is a profession.”
In 2023, insurance broker NFP announced that it would begin offering personal travel insurance products across Canada. Meanwhile, Navacord announced several partnerships with Travel Guardian Insurance, AwayCare, and Medi-Quote Insurance Brokers. Further demonstrating its commitment to the travel insurance lines, Navacord announced the newly created role of President, Personal Lines and Travel in August.
Also in 2023, Allianz Global Assistance Canada made the decision to exit its service-only partnerships within the Canadian employee/group benefits space, where it operated as a third-party administrator for travel assistance and claims administration. Allianz is now placing greater emphasis on the broker channel. TuGo’s website outlines five reasons to become a partner, with the primary reason being “(to) grow your book of business … Travel insurance is an integral part of a good cross-selling strategy”. Manulife Financial has a dedicated wholesaler team to support advisers across Canada.
In all of these cases, the key takeaway is to allow brokers to seamlessly scale their travel insurance either as a primary product or as a supplementary product in an adviser’s insurance toolkit. “There are even brokers available to help scale this type of expansion by offering teams of licensed advisers to help manage the volume and ensure coverage questions can be answered,” said McAleer.
Yet… there are challenges
In order to market travel insurance, the travel insurance adviser needs to be licensed at the provincial level – Canada has 10 provinces. In Ontario where I reside, it is possible to be licensed as an agent/agency by the Financial Services Regulatory Authority (an accident and sickness licence for emergency medical coverage and a general insurance licence for baggage loss and portions of trip cancellation/interruption insurance), as a broker with the Registered Insurance Brokers of Ontario, or as an individual (i.e. a travel agent) registered under the Travel Industry Act, 2002. THIA is of the view that there are too many different licences for the sale of travel insurance among the provinces and harmonisation makes sense in order to facilitate greater public access to insurance products while ensuring appropriate oversight of their sale. This is especially important for travel insurance advisers who wish to serve consumers in more than one province.
As with many businesses, attracting and retaining people for a career in travel insurance has been a challenge since the pandemic
Pudwell agrees: “For a company like ours which deals exclusively in the travel insurance space, obtaining and maintaining the required licensing to operate across the country can require a myriad of life, accident and sickness, general insurance and restricted travel agent licences in multiple provinces with varying examination continuing education requirements.”
As with many businesses, attracting and retaining people for a career in travel insurance has been a challenge since the pandemic. Many companies are asking: how do we make sure that we make the travel insurance industry attractive? THIA has partnered with two colleges to offer our TRIP education programme to the next generation of insurance professionals, building a healthy talent pipeline for the future.
Finally, another area that needs to be followed is the advent of digital-only options which have little or no human interaction. Today, many of these offers focus on ‘simple’ enrolments where a medical questionnaire is not required, thereby ignoring snowbird travellers.
According to Statistics Canada, Canada’s population exceeded 40 million people in 2023, retaining its position as the fastest-growing G7 country with respect to population growth. Travel insurance advisers can actively engage, maximise and benefit from this growth as Canadians move through different stages of life.