Editor’s Note: On Friday July 21, 2023, Canadian Underwriter sent out an e-newsletter with an incorrect subject heading, implying that Zenith pulled out of auto insurance in Alberta. In fact, Zenith has only canceled a contract with a brokerage that wrote auto for Zenith, and is still writing auto insurance business in Alberta. Canadian Underwriter apologizes for the error in the subject heading.
Zenith Insurance Company has terminated its relationship with an Alberta brokerage that was selling its auto insurance, with Alberta’s Finance Minister suggesting the move was related to the province’s rate pause.
“Zenith Insurance Company made the decision to end our relationship with one of our personal lines brokers in Alberta, impacting a small number of customers,” a Zenith Insurance spokesperson told CU. “We remain committed to serving the personal automobile insurance needs of customers within the province and across Canada through our other partners.”
Due to privacy reasons, the company cannot comment on the name of the broker.
Zenith has a market share of 0.43% for Alberta private passenger vehicles, according to the Approved Automobile Insurance Rate Board Filings.
Across Canada, the company’s total auto claims ratio was 85.77% in 2022, although on the personal accident (auto benefits) side, it was 119.52% — meaning the company lost about nineteen cents for every premium dollar it brought in on the personal accident side, according to MSA Research stats published in Canadian Underwriter‘s 2023 Annual Stats Guide.
“We recommend that any questions regarding Alberta’s automobile rate pause or reform efforts be directed to the Insurance Bureau of Canada [IBC],” Zenith Insurance’s spokesperson said.
Insurers are facing increased vehicle repair costs and surges in legal fees. These factors — coupled with the rate of pause — are challenging insurers’ ability to remain viable, Aaron Sutherland,
successful insurance brokerage?”/
Working through a hard market can be tough but a satisfied client should be top of mind
In the wake of a hard market, with stricter capacity and an emphasis on existing books of business, building a solid relationship with insureds is more vital than ever.
“As a family-owned, independent brokerage, customer service is something that is baked into each client call or business transaction,” said Filip Ambroziak (pictured), who joined his mother’s company, Ambroziak & Rao Insurance Brokers Inc., nine years ago .
“You can’t have a successful brokerage without authentic client relationships, which is something that I cherish when working with my insureds.”
“I am very into leveraging our business through search engine optimization methods, specifically targeting Mississauga through local keywords that are relevant to our customer base,” Ambroziak said.
Throughout 2023, he wants to bolster the company’s identity through these specific marketing tools but recognizes how costly and resource intensive these initiatives can be.
“Doing thorough and effective marketing for small businesses is tough,” Ambroziak said. “One click for an insurance broker or ‘insurance’ as a keyword costs around $20, which can get very unaffordable when prioritizing that kind of marketing. They may not have the budgets like the big players.”
As a result, Ambroziak predicts that more acquisitions may have to occur for smaller brokerages to be
With one out of every eight drivers in the US uninsured, according to statistics from the Insurance Research Council, can digital technology play a role in reducing this percentage?
Technology makes it possible for independent agents to get closer to the capabilities of the large insurance companies, for firms to develop appropriate and flexible auto insurance products, address coverage lapses, and more readily provide advice about coverage, according to Bryan Davis, executive vice president , head of personalized strategy and business development, and leader of the VIU product for Hub International Midwest Ltd., the fifth ranked insurance brokerage globally.
“There’s an opportunity for independent agents to make big capital investments to digitize the broker experience so customers can get that ease of doing business and getting advice,” he said. “That’s the big opportunity – for distribution partners to make the investment that carriers are making in digital, because that’s how customers are used to functioning now.”
Independent agents, once equipped with greater digital resources, can offer more options – especially for drivers who fall into the “non-standard” market because they let their auto coverage lapse,” Davis explained. “It’s harder for those consumers to get coverage and the price goes up,” he said.
Digital capabilities make it possible for insurance brokers to shop multiple carriers for auto coverage, on behalf of uninsured or underinsured drivers. Digital technology makes it possible to cover drivers only when they are active, so if a driver is only using their car for three out of every nine months, they won’t be paying to be covered in those other six months, Davis noted.
“There’s an option to float between regular insurance and telematics coverage,” he said. “Being able to do that easily is the opportunity. Most carriers are not making products that way.