Western Perspective

December 5, 2020 | Last updated on October 1, 2024
6 min read

Meet Clint Smith, chief operating officer of Manitoba-based Andrew Agencies Ltd., which recently acquired several brokerages in Saskatchewan. Smith gave us his take on the challenges brokers face in Western Canada, the response to the COVID-19 pandemic, and the inside scoop on his brokerage’s digital strategy.

cu | How is the integration of recently-acquired brokerages going?

The integrations are going very well. We have a fairly strong acquisitions team that has been involved in our integration process for some time now, and we follow a pretty strict playbook. The outliers would be the mapping of data from different broker management systems into our system, but thankfully the IT team at Custom Software is very competent. We have not had any challenges that we have been unable to resolve. The real key is the dedication of the staff in the acquired offices. We have been very fortunate to acquire some first-in-class insurance professionals; that makes the integration much easier.

cu | What trends are you noticing in property insurance pricing?

Pricing has been tough over the last couple of years. There continues to be a steep increase in pricing in all lines of business. It has become a big challenge for brokers because the consumer is very price-conscious right now. Obviously, not all companies make price adjustments at the same time. As brokers, we need to be able to explain to our clients that they need to look at the ebb and flow of market pricing over a longer period of time.

The hard commercial market is really taking its toll on clients and on brokers. At a time when a lot of businesses are already struggling with the effect of COVID-19, it is really becoming a challenge for clients and brokers.

cu | Is it taking a lot longer now to renew policies or to approve applications for new business?

It seems to be that way, not so much in personal lines, but definitely on the commercial side. Insurers are being more selective in new business that they’re quoting. We’re also finding that they are being selective in what they are keeping and renewing. We’re starting to see carriers say of certain sectors, “That is not a line of business that we want to be in anymore.” This can even happen on renewals of clients that have been with the same insurance carrier for 10 or more years. So, it is a hard market in terms of our ability to quote.

In some cases, we’re finding that we’re getting renewals very close to renewal date. In those situations, it is really tough for us to have a thorough review with the customer prior to renewal. That is not all the fault of the insurance companies: We need to streamline things a lot more. A lot goes into underwriting, and a lot goes into assessment of risks, assessment of clients, and assessment of segments. I think we’re going to find that certain brokers are probably going to start to limit what they are capable of doing. I think the bigger brokers are going to be able to supply more specialized types of products, while some of the smaller, individual shops will find some of those products are becoming too specialized; they just don’t have the staff or capability to deal with it. For these reasons, you are going to see consolidation among brokerages and acquisitions go on for a little while yet.

cu | What are you observing in the hospitality sector?

The policies for hotels and bars have really been a problem. It seems to be a segment of the economy that every insurer is getting out of covering right now. Using our own organization as an example, I think we’re down to maybe one or two markets that will even look at it. A lot of those older hotels and bars had association policies and even the associations are walking away from those risks. I think a lot of older hotels are having a real problem finding insurance coverage right now. Restaurants have always been interesting. Some restaurants are managed very efficiently and are very clean and organized, while others are not so much. So a fair bit of work goes into underwriting restaurants, and I can understand why insurers are scrutinizing those risks a little bit more. COVID hasn’t helped either, especially with the restaurant and hospitality segment being hit really hard by social distancing policies arising from the pandemic. I think some of those companies are even having a hard time paying their bills.

cu | How has COVID affected western brokerages?

COVID has had a tremendous impact on Western Canada. I think the insurance industry has been somewhat insulated so far, because property and auto customers still need insurance. But we have definitely seen the market shrink, with many companies selling assets and vehicles, laying off staff, and looking for cost savings anywhere they can find to stay afloat.

Initially, there was the fear factor: “What is going to happen? How quickly is going to happen? What protocols do we need to put in place?” For customers, we wanted to make sure they felt comfortable coming to our offices. We wanted to facilitate over-the-phone transactions and the opportunity for our people work remotely. We did not want to be offside [of public health regulations] by not putting proper safety protocols in place. The initial adjustment in our offices was a bit of a challenge. We were able to adapt to working remotely from home fairly quickly and that helped us out.

Our main goal was to keep as many of our staff working as possible and not lay anyone off. We were very fortunate that we were able to keep our people working.

Managing anxiety levels for management, staff, and customers was — and will be — a key component to this as we move forward. With the talk of second waves and about 5% of businesses failing in the next 12 months, we still have challenges ahead.

cu | On that note, a recent  estimate said 5% to 7% of small businesses in Canada could disappear following a second wave of COVID-19. Are brokers in Western Canada concerned?

It is concerning, especially out here in Western Canada. A predominant industry out here is oil and gas, which has really been impacted significantly, especially in the last couple of years. That has had an impact not only in Alberta, but in Saskatchewan and Manitoba as well. We have seen a lot of that industry going backwards. We have got to come to a realization that we’re going to have to work together on addressing climate change over time. If we chop off the head of oil, it is going to have a huge impact, especially on the western economy. I don’t think the east understands how much impact it’s going to have on the entire country.

cu | How are brokers using technology to serve consumers, taking into account the preference — and sometimes, during COVID lockdowns, the necessity — to shop online?

A lot of the brokers I am talking to out here in Manitoba, Saskatchewan, Alberta, and British Columbia are looking to build a better client interaction. We want to use technology to develop platforms within our brokerages that will allow us to interact with our customers the way those customers are interacting with other types of industries.

Everybody wants to do their business digitally. In the small towns, you can see at the local post offices and FedEx depots that people are buying products online through Amazon and other online sites. A lot of people want to do business with insurance brokers that way.

Some brokers are building customer-facing portals with a vision of providing clients with a self-serve environment to quote insurance coverage, bind coverage, view policy documents and wordings, obtain a pink card, file a new claim, view claims data and progress reports, pay bills and do policy changes.

Right now, that is where our journey is at. Within our organization, we’re building a customer-facing portal to allow our clients to log in securely and conduct business without having to actually come into our brokerage office, if they wish to do business online.


Clint Smith

Title: chief operations officer, Andrew Agencies Ltd.

Industry experience: More than 20 years with Andrew Agencies in various capacities, including broker, investment advisor, branch manager, vice president and chief operations officer.

Education: CAIB accredited