Corroon sells Ottawa business

Global broker Willis Canada has divested its Ottawa area commercial accounts to regional broker Binks Insurance Brokers Ltd. in a move industry observers suggest could be a sign of things to come in the commercial brokerage sector. Terms of the deal were not announced, but Henry Binks, president of Binks Insurance, says total premiums after the deal will be about $15 million per annum.

Binks says the accounts that were transferred were medium level corporations and organizations that require insurance placement service and not the integrated risk and consulting services that are becoming the global broker specialty. He suggests the Willis transaction is the result of the rationalization the big brokers are experiencing after a mass of worldwide consolidation. “In some cases, it doesn’t make sense for global players to stay in a small area without a big base of business.” Binks suggests more and more regional brokers will be picking up commercial accounts that no longer interest global players.

Willis Canada vice president of business development Robert Dunn concurs, saying the broker is primarily restricting its business to big economic centers such as Montreal, Toronto, Edmonton and Vancouver. “We’ve been in Ottawa for quite a number of years and we were never able to make much headway there. We decided to retreat sell the business and use the proceeds to invest in other operations.” He contends the move does not signify a general move byglobal brokers to reduce Canadian business, noting Marsh still has a substantial presence in the Ottawa region. Still, like the accounting profession which has expanded their reach into management consulting, he says global brokers are expanding their services beyond the commodity of insurance buying. “We are competing with the Arthur Andersens and Merrill Lynchs now.”

One market insiders observes the Willis transaction could signify a dichotomy where only the big corporations are serviced by global brokers, with the small and mid-level corporations forming a renewed commercial market for regional brokers. “Smaller and medium sized businesses will start insuring directly with carriers or with small brokers. Surprisingly, you might see small commercial brokers actually benefiting from the mass consolidation at the global broker level,” he notes.

Market Watch continues on page 8.

Market Watch continues on page 48.