Standing Tall in a Hard Market

In the global business of insurance, Canada may represent a small portion of any company’s book of business, but right now “we may be 90% of their problems”, says incoming Insurance Brokers Association of Ontario (IBAO) president Jim Hawryluk. The reason, he explains, is losses in the auto insurance market. And, with Ontario representing the largest chunk of this business, tackling the market’s blues has become mission critical for insurers.

VIABLE FORCE

Brokers too are joining in the fight, and through their provincial association are lobbying hard for change. “Most of the brokers in Ontario have been in contact with members of the legislative assembly,” says Hawryluk. “We have a network of brokers that knows pretty well every MP and MPP in Canada and Ontario. They are a viable force.”

Lobbying is going to be front and center on the IBAO’s agenda as Hawryluk takes the reigns at the end of the year (normally IBAO presidents take office at the association’s fall conference, but this system has been changed so that the transition coincides with the association’s fiscal year).

Hawryluk notes that an era of cooperation is taking place between brokers and insurers, despite the market withdrawal currently taking place in Ontario personal lines. “Some brokers are disenchanted with specific companies but there is a mutual understanding of the problems.”

Truly brokers are dealing with a difficult market. Not only are they trying to sell rate increases to their clients, but market availability has become a crucial issue. With the failure of Markham General and Canadian Millers Mutual, the withdrawal of Lloyd’s from personal lines, and the transfer of business from Zurich to ING and from CGU to Pilot, some brokers are having trouble finding a home for accounts. “The problem is the capital is so scarce,” says Hawryluk, “and the lack of future capital is perhaps worse.”

Even if action is taken by the government to address issues in the Ontario auto market, he notes that will likely be too late to lead to insurer recovery this year. “The CEOs are telling us that this leaves them two and a half years from recovery.” As global companies allocate capital for 2003, without product reform Ontario is not as an attractive market.

Despite the promised biennial review of Bill-59 when it was introduced six years ago, no such review has taken place. Insurers say they have been hampered by a system that has led to rising healthcare claims costs and has handcuffed their ability to institute needed rate increases. Attention has therefore turned to Ontario auto in the legislature with the introduction of a private member’s bill, Bill-166, from MPP Rob Sampson. Insurers are backing the bill’s provisions, which include a “file and use” rate system, and additional tort access for healthcare claims. Brokers, too, are pushing MPPs to back the bill, and Hawryluk says they are “praying” that politicians will listen and act quickly.

CRITICAL MASS

Another top item on the IBAO agenda in the coming months will be the impending launch of the Centre for the Study of Insurance Operations (CSIO) broker/insurer intranet portal. The project is currently beta testing with 3 brokers with an anticipated 15, and in late September the first live demonstration with upload and download to the broker management system was planned.

Getting a critical mass of brokers to the portal is crucial, and IBAO will be “helping 100% with the promotion”. Once at the portal, the first 60 days of usage is free of charge. The goal is to get 50 brokers a month nationally onto the portal to obtain critical mass by January 1, 2004. The association and CSIO are acting hand-in-hand to offer member brokers a 50% discount on portal dues. Not only is this intended to bring brokers to the portal, it is also hoped that the portal will act as an incentive to bring more brokers into the association.

Membership is high on Hawryluk’s “to do list”. He notes that numbers have remained status quo for the past three years. Despite a drop in the number of member offices due to consolidation, individual membership has remained steady at around 8,200, or about 62% of the province’s broker force. To increase membership, the association is looking to new brokers. Drawing people to a career in insurance is part and parcel of drawing them into the association. Insurance should not be a tough sell in a difficult job market – for each graduate of an insurance program there are about three jobs available. “We have to capitalize on that,” says Hawryluk.

The IBAO has produced a career guide to attract new candidates to the industry, and the association is working on strategies to develop this guide in conjunction with colleges. The goal is to offer insurance as an option to those who might never have considered a career in the field. The association will also be looking to its own “Young Brokers Council” to provide insights into how to encourage new recruits into the profession.

ACCESSIBILITY

Perhaps the most obvious route to attracting new members is stressing the services the association offers, with education as the highlight. Several new programs are aimed at offering new education alternatives to members to complement existing programs such as the School of Insurance in Toronto and offsite education. With the support of insurer sponsors Dominion of Canada, Economical, Pilot and Royal & SunAlliance, the IBAO is striving to make education more accessible for members.

The profession’s new senior designation, the “Canadian Professional Insurance Broker” (CPIB) is well underway and receiving very positive feedback, says Hawryluk. The first course, “Law & Ethics”, began this August with over 45 students in Ontario, and two additional courses being “Claims Management & Administration” and “Advanced Personal Lines” were introduced in 2002. Courses to be added next year are “Advanced Commercial Lines” and “Business Strategy”.

Online learning is also taking off, with 54 online courses now launched. The goal is to reach brokers in remote regions, such as northern Ontario. An added benefit is offering a potentially more convenient way for brokers to learn at their own pace and time regardless of where they live.

POLITICAL BACKGROUND

As Hawryluk steps into the leadership of an association with a heavy lobby agenda, he is well suited to the role. In his hometown of Chatham, he served as a municipal councilor for 14 years. He was a finance chair for seven years and also deputy reeve and reeve of the Township of Harwich. He also served on Kent County council and is presently the chair of the environmental liaison committee for Chatham Kent. He was involved with the Chatham Kinsmen at the local and national level, and a member of the Chatham JCs, as well as sitting on several local committees.

After attending Sir George Williams University in Montreal his career in insurance began in 1966 when he joined Rowlands Insurance Brokerage Ltd. in Chatham. In 1969, he founded Hawryluk and Associates, which has offices in Chatham and Florence, Ontario.

A member of the IBAO since 1966, Hawryluk has held several posts within the association, most recently as chair of administration and finance. He will juggle his duties as president with hobbies that include a variety of sports, particularly golf. Insurance runs deep in his family as well, with wife Mary and daughter Robin both RIBO licensed brokers. In addition to his daughter Robyn, he has a son, Michael, who has made the Hawryluk’s proud grandparents of a granddaughter and most recently, a grandson.