THE RIGHT STUFFChief Executive Officer George Hodgson 3010 Calgary Trail, Edmonton, AB T6J 6V4 T:...

Cdn Publication Mail Registration 40018149October – November 2013

How to Attract and Hirethe Best Person for Your Team

How PYIBDirectors WereRecruited

Are You Hiring aTEAM PLAYER?

PropertyInsurance

Forum Recap

THERIGHTSTUFF

THERIGHTSTUFF

Page 20

Publisher and Editor Annette HubickPrinting McCallum Printing GroupDesign and Layout Ron LeckeltAdvertising Michele Schuldhaus 780.448.2890 [email protected]

The Alberta Broker welcomes articles about the insurance industry and its people. Letters to the Editor are welcome.The opinions and viewpoints expressed in The Alberta Broker may not necessarily be those of the association and its members.

Material in The Alberta Broker may be reproduced with the credit to the author and the following: “Reprinted from the Insurance Brokers Association of Alberta’s magazine - The Alberta Broker (date).”Please send a copy to the publisher.

Published six times annually by:

9249-48 Street Edmonton, Alberta T6B 2R9T: 780.448.0936 • F: 780.465.6201E: [email protected]

The Alberta Broker is the official publication of the

President Gord EndersChief Executive Officer George Hodgson

3010 Calgary Trail, Edmonton, AB T6J 6V4T: 780.424.3320 •1.800.318.0197F: 780.424.7418 • www.ibaa.ca

October - November 2013 IN THIS ISSUE

The Alberta Broker October - November 2013 3

3 Message from the President 4 Message from the Editor 6 The Right Stuff How to Attract and Hire the Best Person For Your Team

11 Did You Know? 12 Know E & O Planning for the Unexpected

14 Broker Response 2013 Southern Alberta Floods

16 Viewpoint Usage-Based Insurance

17 Brokers Meet with Canada’s Leaders

18 PYIB Perspective How Young Brokers Got Their Start

20 The Advocate Something to Talk About

26 7 Facts That Will Breathe Life into Your Business 32 Legal-Ease No Signature, No Contract?

36 Will Your New Hire Be a Good Team Player? 37 WICC Update 40 Professional Development The Value of Training

41 IBAA PD Calendar 42 Chinook Country Report 44 Commercial Break A Crisitunity

catastrophe will have a long tail, given the size and complex-ity of the damages. The next item to consider is the message. Many wouldlike to take aim at our direct writer competitors whoseactions paled in comparison to brokers’ actions and to our underwriting companies’ responses. A negative PRcampaign generally does not reflect well on anyone,especially those who are delivering it—in fact, it can often have the opposite effect of what it was intended to do. Brokers traditionally have been the voice of reason and common sense. When others panic, we know what to do. Consumers recognize this and expect it from us. It’s what we advertise and, in surveys and focus groups, broker clients and non-broker clients alike tell us that’s who we are.

Gord Enders

Message from the President

continued on page 4

One of the summer responsibilities of the IBAA executive and the senior management team is to review the five-year strategic plan. In mid-August, we gathered to evaluate items for relevancy, check our progress and update with any new points that may have arisen throughout the year. One such point was communications and marketing in order to best leverage brokers’ efforts during the flooding. Let’s face it—brokers really stepped up when it mattered most. Being independent business owners, we want to take advantage of the difference our channel makes and we want to do it fast! But there are a few things to consider. First, timing is critical. A lot of people lost their homes, businesses and, in some cases, loved ones. The wounds are still fresh for those who are still rebuilding lives and will be for some time. This

means all of us as insureds) grapples now with the impacts of such disasters and looks for ways to address the changing physical, market and regulatory environ-ments. To that end, and true to the intermediary and advocacy role of the profession it represents, IBAA organized a property insurance forum in September to kickstart a dialogue amongst stake-holders. IBAA CEO George Hodgson gives a detailed report on the forum in his “The Advocate” column (page 20). While the property insurance forum was an attempt to tackle the effects ofdisasters on the insurance industry from a “big picture” approach, many brokers have been responding to the floods’ effects with their impacted clients and communities. We’ve invited you to share your stories and Lundgren & Young was the first to accept. Read about the ways they resolved their desire to “do some-thing” (page 14). Whether it’s about how your brokerage pitched in to help the floods’ victims or accounts of how actual clients were affected and how you dealt with those situations, feel free to send me your stories and pictures [email protected].

4 The Alberta Broker October - November 2013

Message from the President continued from page 3

“The right stuff ” could also be used to describe the directors of the Professional Young Insurance Brokers—up-and-comers who not only have their sights set on a successful career in this industry but are also willing to devote their time and energy to leading the way. What was it that attracted them to the insur-ance profession and, more importantly,what drew them to their current em-ployer? PYIB president Mitch Holst polled his board peers to discover the answers to these questions (page 18). The waters may have subsided from this summer’s disasterous floods but its effect will be felt for a long time to come. Of course, those attempting to salvage and rebuild their homes and businesses will feel it most viscerally but the entire insurance system (which

Annette Hubick

Message from the Editor The old saying “Good help is hard to find” is heard very frequently in business circles, especially in Alberta. However, there is also the assertion that whatever “truth” one focuses on becomes reality. So we thought we’d focus on informa-tion to help brokerages attract and hire bright, capable, productive insurance professionals—those with “the right stuff.” Dictionary.com defines “the right stuff ” as: “the necessary or ideal qualities or capabilities, as courage, confidence, dependability, toughness, or daring.” Sounds just like who you’re looking for, right? Human resources consultant Christine Nealon offers her expertadvice for how to attract and hire the best people for your team (page 6).

If you’re going to advertise highlighting the broker response, stress the positive, important things brokers did and empha-size the leadership role broker underwriting companies tookduring the days and weeks following the flood. Talk about the donation response brokers provided through IBAA and the personal hours donated by so many brokers. Tell them “Brokers were there when consumers needed us most … and we continue to be there.” And of course, use the Bipper some-where in your ad. It lets consumers know that we’re part of the solution.

Some of the most dedicated broker responders to the flood were PYIB members. They were out working on cleanup crews, informing consumers about what to do via Facebook and giving updates on Twitter. PYIB members are valuable assets to our and to ourcommunities. Smart, educated, talented and tech-savvy, these

individuals are the future principals of our businesses and leaders in our society. When paired with a seasonedinsurance broker for experience and given the responsibil-ity and authority to make a difference in your brokerage, they’re able to help grow your business in the new business world where everything is constantly changing. PYIB is hosting the IBAA fall conference in Edmonton on October 24–26. This is a great opportunity for front line staff to get some first-rate education, sit in on theAlberta executive panel featuring leaders from major insurers’ operations, and get an update from theSuperintendent of Insurance. It’s a fantastic chance toexperience some of the big picture of Alberta insurance and learn more about the great industry in which they work. Visit www.ibaa.ca to register today! By now the property insurance forum has taken place—look for a special report in this issue of The Alberta Broker by CEO George Hodgson giving you an update on this historic, first-in-Canada, broker-led meeting! See page 20. Until next time, keep up the great work taking care of your clients and making our industry one of the best!

Some of the most dedicated broker responders to the flood

were PYIB members.


By Christine Nealon, CHRP

Why is it that the insuranceindustry seems to faceunique challenges whenit comes to attractingtalent? Well, when askedabout what they want tobe when they grow up orwhen they finish school,have you ever heard peoplesay, “I want to be aninsurance broker”? Thereality for the insuranceindustry is that it’s not aprofession people aspire tobe in; it seems to be onethey “fall into.” I’ve oftenheard it referred to as a“family affair”—candidates typically enterinto the professionbecause a relative or afamily friend is in thebusiness. To see how accurate this statement was, we conducted an informal poll of the PYIB board of directors in August. One question we asked was: How were you recruited into your first job at aninsurance brokerage? The results provided a strong indication that the insurance business indeed seems to be a family affair. Ten of the 12 respondents stated they entered the business because a family member or friend recruited them. This article will cover two topics of the recruitment process: attracting and hiring. But before you can hire the right person, you need to attract talent.

BE ATTRACTIVE To attract potential candidates (and garner referrals from your employees!)

you need to understand what differenti-ates you from everyone else and be able to clearly communicate why someone would want to work for you and what makes your brokerage more attractive than another. The first step is to think about your corporate culture and leadership right through to the employment perks. The information you define and offer here can make the difference in whether or not a candidate determines whether your brokerage is more attractive than your competitors and chooses to submit a resume. Compensation is only part of what attracts top talent. In fact, surveys have shown that salary is only an effec-tive method to meet an employee’s base needs—the culture, perks, opportunity, growth and learning are equally important.

A few items to consider are: At a minimum, compensate atindustry standard. Compensation is only one component of what people look for; however, it is the first element they consider when applying for aposition. You don’t need to identifyactual dollar amounts but you should indicate if the position is salaried, strictly commission based or acombination of both. What and how you communicate is important so use phrases such as “a competitive salary” or “highly competitive commission” to describe the pay. Create a culture of recognition. Employees want to be noticed and recognized for their achievements. This doesn’t mean you have to have a huge budget; it can be as simple as offering

THERIGHT STUFF

How to Attract and Hirethe Best Person for Your Team


continued on page 8

a “thank you,” a “good job” or a $5 gift card. Don’t underestimate the power of simple and immediate recognition. Keep a number of small denomination gift cards on hand from places like Tim Horton’s, Starbucks, Chapters, Second Cup, 7-Eleven and gas stations. It goes a long way when you make a person feel uniquely important, especially if you personalize it. Giving a $5 Tim Horton’s gift card to an employee who prefers Starbucks coffee isn’t as impact-ful as giving them a Starbucks gift card. A public “thank you” will motivate an employee who likes the attention more than a private “thank you”, however; a public thank you to an employee who prefers to receive appreciation quietly and in private can have the reverseeffect. Phrases such as “recognition is an integral part of our culture” or “we are an employer who puts people first, recognizing employees who…” commu-nicate the importance of recognition in the corporate culture. Provide strong leadership and real-time communication. These ‘soft’ but important tools include coaching, regular performance feedback,collaboration and an open doorenvironment—all solid strategies that cost little or nothing to implement and only time to maintain and run. You can communicate this type of information using a phrase such as, “At (brokerage) we have exceptional leaders who coach, guide and support you.” Perks such as flex hours or the ability to telecommute, have little bottom-line impact but can be the game changer for a potential employee.

Offering perks that are either covered by you, cost shared or even paid 100 percent by the employee are importantto consider—things like employeebenefits, licensing costs, requiredcontinuing education credits (cost and/or the opportunity to complete on company time), employee appreciation events and employee referral programs. Phrases such as “At (brokerage) we believe in flexibil-ity for our employees and offer options to telecommute ...” or “We cover the cost of required continuing education for our licensed employees” can be used to describe perks you offer.

Provide career advancement oppor-tunities. Employees want to work for a company that supports ongoing learning and development, and has clearly-outlined career paths. Advancement has been identified in surveys as an important criterion for a person choos-ing where to work. Communicate this information clearly, for example, “We value our employees and support their development and career goals by.” If you are thinking that the items I’ve brought forward are similar and linked to retention, then you’d be correct. Though you can develop individual pro-grams for attracting talent and hiring in isolation of each other as part of your

recruitment process, it is more beneficial to have a talent management strategy(everything that is done to recruit, retain, develop, reward and make people perform) that connects the individual programs to benefit the business. I’ve mentioned a few ideas to start you thinking about what you can do in your efforts to attract talent for your own brokerage. Be creative with incentives you are able to offer to differentiate yourself, communicate that informationon your website and on your career ads, and you will have greater success attracting talent. Remember that since most people are introduced to the industry by family or friends who work in the business, the best recruitment strategy is to be a referable employer.

DEFINE THE BESTCANDIDATE If you have employees, there is no single task that is more important to your business than hiring. Yet, despite the strategic importance of hiring, most people approach it as a stand-alone administrative task that is tedious, time consuming and only important tocomplete when there is an immediateneed. To be successful, you need to clearly understand who the best people are and the key accountabilities for each position. You must regard hiring as a high priority and have a disciplined recruitment process that is followed consistently no matter the hiringcircumstances.

Since most people areintroduced to the industry by family or friends who work in the business, the

best recruitment strategy is to be a referable employer.


continued from page 7

Firstly, do you know who the best people are? What characteristics(attitudes and behaviours) are you looking for? Is the best person the one who will produce, the one who is customer service focused or the one who will quietly do the job with the fewest complaints? What are the required skills of the job? These include experience, knowledge of the industry, licensing, software proficiency, etc. If you can’t immediately recite the characteristics and skills that define who the best people are, you need to put some time and effort into fully understanding what you want and need because knowing what you are looking for will help you know the best candidates when you see them. Secondly, can you clearly identify the key accountabilities for the position? These are the reasons the position exists—they impact the business and must be measurable. They are items that are

essential and typically take up 80% of the employees’ time. There is no required set number of accountabilities for aposition but generally you’ll have as few as three to as high as six or eight depending upon the position. As an example, you may have specific product ratios, minimum sales requirements, renewal percentages and customer satisfaction targets listed as key account-abilities for a sales position. To define who the best people are and key accountabilities, talk with a number of people to get a comprehensive per-spective. At a minimum, speak with:• The manager or supervisor who oversees the position—she knows what needs to be done, what type of person has worked out well in the position before and what type of person has not worked out well. • The employee who currently holds the role—he can provide some valuable insights and often has a different perspective than his manager/ supervisor.

• The person responsible for the culture and future of the business—she would have a specific type of person in mind as well. The characteristics, skills and keyaccountabilities will be, slightly tosignificantly different for each positionin your brokerage, and you should complete this exercise for each one. As an example, the skills and key account-abilities for a receptionist position will have significant differences to that of a commercial sales position. This infor-mation should be captured in the work profile, job description or whatever you call the document at your brokerage. It should also be transferred onto a one-page criteria document that can be used in the interview process to assist in making the interview process easier. Once you’ve determined what you can offer and who the best candidate would be, you can get the word out that you are hiring.


GET THE WORD OUT The most effective medium you could use to advertise your job opportunities is your own staff—they are the greatest asset you have in attracting qualified candidates. Employees are also recog-nized to be one of the most effective sources because they typically only refer candidates they feel will do a good job and who are a fit with the corporate culture. To fully utilize your employeesgive them the information you’vegathered on who is the best person and the key accountabilities for the position.Having a culture of recognition and an employee referral program pays off here. In most cases, the people your employ-ees recommend will be a good match and already have a more accurate picture of the company because your employee did some of the “selling” work already. Since you have spent minimal time on attracting candidates and your recruiting dollars are budgeted, it is no additional cost to pay an employee via the refer-ral program. In fact, it is most likely

cheaper than the cost for career posting on a job website: a win-win situation for everyone involved. Though the most effective strategy, you can’t rely solely on your employees so utilize other approaches like postingon your and the Professional Young Brokers websites, networking at industry events, engaging professional recruitment agencies, utilizing the local college or university job boards, the career connec-tions on the Insurance Institute website and posting on recruiting sites such as insuranceworks.ca, workopolis.com and monster.ca. You could also conduct your own resume search on LinkedIn. There is also the traditional route of placing a newspaper career ad; however, this can be costly and hasn’t demonstrated very successful results.

INTERVIEW AND SELECT Interview and selection tools, such as the criteria document, are important because when there is a lack of clarity for what is needed and what a candidate brings to the table, the people hiring tend to opt to hire a person they like. There are a considerable number of tools available to aid in your hiringdecision and you should select, or develop, the most appropriate based on the recruitment process you use in your brokerage. At a minimum, you should use a standard list of interview questions and a rating document. These items should be filed under a position title and copied each time you hire for that position to ensure consistency in hiring practices. A simple version of a rating document is one that has the criteria listed (behaviours, attitudes and skills) down the left side of the docu-ment and each candidate’s name listed across the top. You can use any point scale to rate. One that is quick and easy

All too often people are hired for skills and

fired for attitudes.

continued on page 10


continued from page 9is a four-point scale with 1 being “no knowledge” and 4 being “proficient.” Be mindful to write all the criteria required for the position on the rating sheet and to have interview questions that address each item. During the interview, focus on getting to know candidates and their experi-ence, knowledge, skills, attitudes, and behaviours. Capture your comments and thoughts on the candidate’s interview questions sheet and leave the rating document to be filled in after the inter-view is over and the candidate has left. As all candidates’ rating information is on this one sheet, at no time should it be viewed by any of the candidatesbeing interviewed. When the candidatehas left, take 10 or 15 minutes tocomplete the rating document. If you are having difficulty rating a candidate,go back to the interview question docu-ment and review the responses to the questions and your comments. It is important to be accurate and honest in your rating, keep to the criteria and not allow for any bias.

At the end of all your interviews, you will have a completed rating document, with each of the candidate’s scores, that you can use to determine your selection based on highest rating. You may have some wide gaps between the ratings, which make it easier to select and you may have some close ones that will make the selection more difficult. If you have close scores, you need to determine which of the criteria is most important for success in the position. Be mindful that you don’t just answer that technical skills and knowledge are most important because all too often people are hired for skills and fired for attitudes (soft skills) and you just might find yourself starting the recruitment process all over again.

RECRUITING IS HARD WORK The insurance industry is already faced with challenges that are only goingto get more difficult. Demographic research studies conducted by theInsurance Institute indicate that “look-ing in the usual places won’t be enough and that recruiters are going to haveto be more creative, inclusive and

aggressive in the immediate future.” Recruiting is hard work and a skill that takes time and practice to be good at. It is a function that can be handled internally, externally or in combination and there are benefits to each method. One thing we do know is that recruiting is critical to your business and if you determine it is a function you want to handle internally, you need to commit to developing the expertise, following a process and allocating appropriate resources in order to ensure your team has the right stuff to propel your busi-ness’s success.

Christine Nealon, CHRP, is president of Verge Leadership Group Ltd., offering professional human resource services: team building, talent management, compensation, employee engagement,facilitation, rewards & recognition. Christine has over 25 years of experience in human resources with12 years in the insurance industrymanaging the staff development function.Christine can be reached at 780-231-1829 or [email protected].


Did You Know...In September, IBAA hosted a PropertyInsurance Forum that includedrepresentatives from insurance companies, regulators, government and other industry partners? This was a fantastic opportunity to geteveryone in the same room and start talking about what the possible solutions are for property insurance in the future.

Watching a scary movie burns up to 200calories, more than any other movie genre?Just think how many calories you would burn if youattended the upcoming IBAA Fall Conference—It is all about scary things in insurance. Those are definitely more frightening than a horror film. Come and join us to learn and get in shape!

The first known mention of trick-or-treating in print in North America occurred in 1927 in Blackie, Alberta? Who would have thought that small town Alberta was the first to coin the phrase in print that is so publicly used

today. I guess it just goesto show that all goodthings start in Alberta.

Glass is 100%recyclable?When recycled, glassdoes not lose itsdurability, quality,or purity during theprocess.

No two lionshave the samewhisker pattern?Just like snowflakes,human finger prints and human ears,lion whisker patterns are unique to each individual.

Sources: IBAA, IBC, Statistics Canada, National Geographic and the Internet. Compiled by Rikki McBride.


Know E&O David Holt

Insurance brokers operate on dead-lines. Policies come up for renewal. Prospective clients need timely quotes to decide whether or not to move their coverage. Clients have projects that require insurance to be in place before they can proceed. Even under normal circumstances, getting everything done on a timely basis can be a challenge. But what happens if circumstances are not normal? It is no surprise to any insurance broker that fires, floods, tornados,hurricanes and earthquakes change normal circumstances and disruptbusinesses. It is also no surprise that errors and omissions claims against insurance brokers are often made as a result of a lack of insurance coverage for an event like a fire or flood that disrupts a client’s business. However, an event like a flood or fire can also disrupt an insurance broker’s business, and that interruption could lead to an errors and omissions claim being made against the broker. Consider what happens to Acme Insurance Brokers. Mr. Acme heads to

the office one morning and discovers his office has been destroyed by a fire. Of course, the brokerage had adequate building, contents and business inter-ruption coverage. However, there were significant delays before the brokerage was back up and running. The broker’s paper files and computers were alldestroyed in the fire and the brokeragedid not have any copies, so trying to recreate what the brokers and CSRs had been working on at the time of the fire was a real problem. The brokerage had to locate temporary office space, get new computers, and load the necessary systems on the new computers.Inevitably, deadlines were missed. Some of Acme’s clients andprospective clients recognized that their broker had not obtained coverage for them and went to another broker. Those business opportunities were lost by the brokerage, but at least coverage was put in place. However, one commercialclient was not able to close on aproperty sale because of a several week delay in obtaining property insurance, and the other party ended up cancel-

ling the transaction. The Acme broker received an angry letter from that client threatening litigation for the failure to obtain the necessary insurance by the closing date. Another Acme client’s homeowner’s policy had not been renewed and the home was without coverage for several weeks due to the brokerage’s disrupted operations. In the interim, the home had a water loss for which there was no policy in place. The Acme broker was contacted by the client’s attorney instructing the broker to report the claim to its errors and omissions insurer. Of course, the broker’s primary defense against these errors and omissions claims would obviously be that delays in obtaining insurance were not the result of any negligence by the broker but, rather, were due to the fire interruptingthe brokerage’s business operations. However, a creative plaintiff ’s attorney might argue that the brokerage should have taken precautions so that it could better maintain business continuity in the event of a fire, flood or other disaster and could inform clients of the

Planningfor theUnexpectedGuard againstE&O claimswith abusinessinterruptionplan

“I love it when a plan comes together.” – From the TV show The A-Team

interruption. Such a plaintiff ’s attorney might ask questions such as did the brokerage have a business continuity plan to implement in the event of a fire, flood or other interruption? Did the brokerage backup its computer hard drives on a frequent basis and store the backups in a safe location? Did the brokerage maintain a client contact database so that it could communicate to its clients in the event it suffered a business interruption? Did the broker have a plan by which employees with laptops would take them home at night so they could continue to work in the event they could not access the officelocation? Are long-term records stored offsite in a safe location? To what extent has the brokerage moved to electronic data management, and to what extent does it rely on paper documentation? One would expect that a judge would be sympathetic to a broker who hassuffered a fire, flood or other disaster, even if a client ended up with anuncovered loss. Nonetheless, if a plaintiff ’s attorney could provide evidence of a complete lack of advance planning, or that planned protective steps were not actually taken, and that there were long and unnecessary delays before the brokerage was back up and running, then a judge or jury might be persuaded that the broker was negligent in not obtain-ing the coverage or informing the client it could not obtain the coverage. Every brokerage is different and the reasonable steps a broker can take to plan for a possible disruption will differ from one brokerage to the next. However, it makes sense for any broker to think about those issues in advance and make plans that are reasonable for its size, location, nature of business and other factors. The bottom line is that planning in advance for the possibility of a disruption to an insurance brokerage is not just good business, it may help protect the broker against the possibility of errors and omissions claims should the unexpected happen.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the

information contained or referenced in this article. The information containedor referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice.

©Swiss Re. All rights reserved. Reproductionof this article in whole or in part is onlypermitted with the permission of Swiss Re.

DAVID HOLTClaims Expert / Vice-PresidentSwiss Re Corporate Solutions



By Robyn Young

Lundgren & Young was very lucky during the recent flooding in Southern Alberta; all of our offices were safe and unaffected directly and, even more amazingly, none of our staff weredirectly affected. Sure, we had a couple of people who were temporarilyevacuated but no one suffered from any major damage or flooding (Thom and Val Young had some flooding at their RV site but just land damage). We were very lucky.

We struggled as a brokerage as to what we could do to help out. It was a very overwhelming time for everyone and felt a bit surreal, like you were watching a movie at times. This stuff just doesn’t happen here, right? We, like everyone, had family and friends who were directly impacted and watched them struggle to cope and help in the recovery.

Feeling like we had to do something, we picked up about 50 pizzas and went downtown to deliver them to volunteers who were working on the cleanup. The devastation was incredible but the spirits of people were amazing.It was wonderful to see people just helping their neighbours and asking for nothing in return—made me very proud to be a Calgarian.

2013 Southern Alberta Floods: BROKER RESPONSE

The Lundgren & Young Story

Rob Siroishka, who is a an ex-broker and a friend, wanted to do somethingtoo. He got in touch with me as theacting IBAA representative for Calgary, and we donated some funds to purchase some cleaning supplies including some spray bottles, cleaning solutions and sundry supplies. Rob and his son McKenzie labeled all of these with the Bipper and delivered them to the community of Bowness. (There are photos of this on the IBAA Facebook page.) AJ Young and I were still struggling to think of what we could do as abrokerage. We knew we wanted to do something, but what? Rob to the

McKenzie Shiroishka withhis Dad, and ex-broker, Rob.

Some of the Bipper-branded spray bottles that were donated to theclean up effort.

ROBYN YOUNGIBAA Vice President

[email protected]


If you’d like to share your story about how

you were affected by and responded to the

2013 floods, please sendan email to

[email protected] resolution photos

welcome.

rescue again—Rob spoke with the spray bottle supplier and got us a pretty smoking deal. The IBAA local council purchased 500 spray bottles and Lundgren & Young purchased 1000. Richards Packaging threw in several thousand face masks and rubber gloves to also distribute. Several of our staff at Lundgren & Young, along with Rob, spent a couple of hours labeling all of these with Bipper, Lundgren & Young and Richardson stickers and AJ, his kids, a couple of our staff and I dropped off these supplies at the High

River Rodeo grounds to be distributed to the people of High River for their cleanup. In addition, the staff at Lundgren & Young choose a charity each month and can donate either $2 per day or $20 for the entire month in order to wear jeans for the month. These donations are matched by Lundgren & Young and will go to flood relief . We don’t have a tally for that one yet but on average, it is a couple of hundred per month.

We also had a 50/50 draw during our Stampede breakfast and the winner went unclaimed, so we donated $350 each to the Canadian Red Cross, Build It Forward Foundation and the Calgary Foundation for flood relief.


rating, they have the right to know what factors are used in determining their risk status and how variables may impact them. Consumers have the right to challenge the veracity ofinformation collected about themselves and must be provided the opportunity to correct or stop the collection of information at any time. These ideas closely mirror the concepts already established in Canadian law, under PIPEDA and similar legislation. The second principle is that inform-ation must not be collected and used for any purpose other than that for which it was intended. Consumers must be guaranteed that informationcompiled for one reason, such as assessing insurance risk or credit granting, will not be used for any other purposes, as such practices could put them at a disadvantage. Similarly, data used to evaluate a consumer’s driving profile for risk management purposes should not affect that same individual in the event of a claim. And the third precept, which wehold to be true with respect to telematics or any other insurance model, is that consumers have the right to choice, to qualified and objective advice and to autonomous advocacy. Personal information used for risk assessment purposes should be conveyed in a common standard format in order to facilitate consumers’ control and understanding of their data. The use of telematics to establish a driver’s risk profile has significantimplications for the auto insuranceindustry. The traditional manner in

which insurance is provided to consumers may, in fact, be changing. The fundamental premise of insurance, that the larger population funds the claims of the few, needs to be balanced against the interests of the individual. As data becomes morereadily available, insurance companies will have greater capabilities to tailorproducts specific to individuals or groups of individuals. IBAC willcontinue to monitor developments in this area across the country and toadvocate on behalf of consumers who may potentially be affected by them.

STEPHEN HALSALL,CCIB, CPIB

President, Insurance Brokers Association

of Canada

Viewpoint Stephen Halsall

Technology keeps onchanging within the insurancesector in Canada at anunprecedented pace. The pastfew years have seen thedevelopment and rapid growthof an underwriting toolknown as telematics or UBI(usage-based insurance). The term refers to the capture of information about the specific characteristics of a risk and the electronic transmission of that data to another location. UBI most often relates to auto insurance and the recording of people’s driving habits and patterns, with this data used by underwriters to price risk. This is used widely in the US and we have all seen that it is starting to be used in Canada by several carriers. As the consumer advocate forinsurance, the Insurance Brokers Association of Canada (IBAC) is monitoring this development and how it may impact Canadian consumers. As with any new development in the marketplace, there are certain consumer worries we share, and we have agreed on a set of principles that we are con-vinced the entire sector should follow to protect consumers. IBAC is sharing these principles with our insurerpartners, regulators and suppliers. The first principle that we believe to be fundamental is that consumershave the right to the control and ownership of data relating specifi-cally to themselves, their families and their businesses. It is a consumer’schoice whether or not to share person-al information with an insurer or any third party. Further, consumers who do opt to share their data must have the freedom to educate themselves, to mitigate their risks and manage their risk profile based on any data collected about them. Consumers will expect that any conclusions drawn will be transparent and that they will have the opportunity to modify the assessed risk profile by amending their driving behavior. In the context of insurance


Every summer, the members of the Council of the Federation, Canada’s 13 provincial and territorial premiers, meet in person. To support its advocacy efforts, IBAC sponsored the event’s opening social reception held on July 24, 2013, in Niagara-on-the-Lake. As the event’s sponsors, representatives from provincial brokerage associations across the country were invited. IBAA president Gord Enders and CEO George Hodgson attended on behalf of Alberta brokers.

On its website, the Council of the Federation describes its objectives, which are to:• Promote interprovincial-territorial cooperation and closer ties between members of the Council, to ultimately strengthen Canada;• Foster meaningful relations between governments based on respect for the Constitution and recognition of the diversity within the federation;• Show leadership on issues important to all Canadians.

Established in 2003, the Council enables premiers to work collaboratively to strengthen the Canadian federation by fostering a constructive relationship among the provinces and territories, and with the federal government. The reception provides a uniqueopportunity for brokerage industry representatives to talk face to face and foster relationships with Canada’s political leaders.

Brokers Meet With Canada’s Leaders

Ontario Premier Kathleen Wynneand IBAA President Gord Enders

IBAA CEO George Hodgson, IBAA PresidentGord Enders and Alberta Premier Alison Redford

IBAA CEO George Hodgson, IBAA President Gord Enders IBAC CEO Dan Danyluk and PEI Premier Robert Ghiz

IBAA CEO George Hodgson andSaskatchewan Premier Brad Wall


ne of my favourite parts about the insurance industry and about my job as an insurance broker is that I get to deal with people. Each day, I have the pleasure of talking with people about their lives andbusinesses. I have noticed that one com-mon theme amongst business owners and managers is how difficult it is to find and attract “good people” to their business. Here in Alberta, something always seems to be going on that keeps people busy, whether it is in farming and agriculture or the oil patch. The high job availability in these industries is great and allows our province to thrive, but at the same time, it lessens the number of people available for hire. So in keeping with the cover story of this issue of The Alberta Broker, I thought about how I was attracted to the insurance industry. As I have told in previous articles, I was working as a manager of a trucking company here in Taber and knew that I wanted to do something different. I needed some-thing that was more family friendly and allowed me more freedom. At the same time that I was having these thoughts, Mike Saunders (my uncle and currentemployer) came to me and said he wanted me to come to work for him. He presented a plan that would giveme basically all the things I had been looking for. I would have more time with my growing family and have the potential to make more money. Need-less to say, it was an easy decision—one

made easier by the fact that, at the time, four other family members worked for the same brokerage. Looking back today, I am very happy with the decision I made and the opportunities that have come my way in the insurance industry. After thinking about my own entry into the insurance industry, I wondered if others had a similar experience? I know there are a lot of family brokerages in the province, but I wondered how my peers had chosen this same path? Well, what better way to find out, than to ask them? So I sent out an email to the current Professional Young Insurance Brokers provincial board members with the following questions:

1. How were you recruited into your first job at an insurance brokerage? Why did you decide to say yes?

2. If you have since moved on to another brokerage, how did that brokerage find you? What did it offer that was moreattractive than your previous employer?

Here are their responses.

Fraser Clarke I was recruited by my father. He has been in it for years and has asked me since I was 18 to work in the field. It just took eight years of it to sink in. I was getting tired of shift work and working long hours away from home.I have not moved on to anotherbrokerage.

Caleb Maksychuk I had just finished teaching and was vacationing in Italy. Sitting around a table with my family, we were discussing various aspects of teaching. Jim (Harris, my father-in-law) was outnumbered by

teachers. I was contemplating changingcareers. Maybe trades, maybe a new school, not sure at that moment. It was five years ago to the day that Jim said, “Why not try insurance?” I said, “That is a marvel idea.” The rest, as they say, is history. I enjoy the freedom and flex-ibility in my job and that the harder you work the more you receive internally and externally.

Steve Evanson I was brought into the industry by my father Steve Evanson, Sr. Moving on: I was referred by a friend of the brokerage owner who was looking for someone to fill an open position. What it offered to me was a chance to be in charge of my own success as I was boxed into my current position at my old brokerage with no real promotions in sight. In hindsight, it was the best decision of my life, but it was a hard one at the time as initially it was a step down as far as pay goes.

Jonathan Brown I was not recruited to a brokerage; I had been a district manager for a life and disability insurer and wanted to make the switch to general insurance, so I went looking at brokerages and I chose the one with the best training program. I left my first brokerage as there seemed to be no room to advance my career there as they did not promote based on merit or experience, and I chose to move to my current brokerage based on the opportunities in this organization and their growth strategy, as well as the advancement that they offered me.

Christina Rankin I wasn’t recruited into insurance. I’m what you like to call an insurance brat; I went into the industry as my family is all in the insurance industry. I switched brokerages a year ago now. I went seek-ing out a new opportunity and received a few offers from different offices. The offers I received were similar in salary, and other benefits, but what made the offer I accepted more attractive was the promise of growth and advancement in the industry.

PYIB Perspective Mitch Holst

How Young Brokers Got Their Start

O


MITCH HOLSTPresident, PYIB

[email protected]

James Delegarde I was an underwriter. An underwritingco-worker had moved to a brokerage that I was assigned to. After a few years, we started talking and they convinced me to move into the brokering world. Yes, I moved on to another broker. I found them. The reasons for the move:location, complexity of accounts, inter-national presence and salary.

Irfan Manji My brother-in-law, who owns a brokerage here in Alberta, originally introduced me to insurance. When I was in Vancouver and I would come to Alberta, I would sit with him and tag along when he would visit clients, pres-ent offers, etc., just generally watching him be a broker. One time I specifically remember watching him close a large commercial account, and it seemed really interesting—a dynamic industry overall, not as boring as I thought insur-ance sounded. I moved from Vancouver toEdmonton to become a broker, I was working for a direct writer BCAA— similar to AMA, and they didn’t give me much room to grow. As a hungry, young, driven individual, I like to be constantly challenged. I find if I am not learning, I am becoming stagnant, which I cannot cope with. I moved to Edmonton so that I would gain the knowledge of working in a brokeragesetting and have the ability to sell several lines of insurance, including commercial.

Amanda Nobbee I wasn’t exactly recruited to work at an insurance brokerage. It was my only choice at the time. My husband was transferred to a smaller city where I had the choice of doing claims, becoming a broker or working for a direct writer.I came from the “big city” on the company side (underwriting) so the three were my only options. Since I had already tried claims, I thought why not attempt the broker side. I have been doing it now for three years and have no

regrets. I have learned so much about insurance by being on the broker side.

Ryan O’Reilly A friend of mine, who is in the insur-ance industry, told me about it when I got laid off years ago from the oil field. It sounded like a good job that I did not need to go to college for. I wanted to get to a job that had regular work hours and weekends off. Also, I was intrigued by the ability to have my own book of business that I could take care of myself. I moved almost a year ago even though I loved the place I was at. It was mainly for the bigger office where my tasks were concentrated on insurance only and not administrative tasks. As well, I was given a much larger book of business.

Scott Macinnis I was recruited by Karen Dyberg. She asked me if I would like to start as a part-time personal lines CSR, whichs was a perfect fit for my first job in the industry as I was still playing junior hockey in St. Albert. After I was finished playing hockey, I began my career as a commercial CSR and now a commercial producer. I took the job originally because I saw the potentialfor professional growth and knew thatDyberg Insurance would provide me with great support from staff and ownership, which would allow me to succeed. I have continued to work at Dyberg Insurance for over six years and

expect to stay here for the remainder of my career because I continue to see personal growth and opportunity in this industry. (Sky is the limit!)

Shayne MilliganI was recruited by my father. He advised that I take the Grant MacEwan courses to see whether I would like it or not. I found insurance to be a broad range of learning. I chose to stay on the broker side because it’s never ending learning and you never know what sort of chal-lenge you’re going to be faced with from your day-to-day operations.

Once again, I think this little experi-ment of ours has proven for the most part something that we already know about this industry, and shows why, I believe, it is such a great industry: Our relationships with the people around us are the most important key to success in insurance. Whether it is dealing with clients, working with underwriters and our broker peers or, as we see here, recruiting employees and new members to our offices, building strong relation-ships with great people will only help us to become more successful.

any intent on regulating property insurance in Alberta, government intervention is not outside the realm of possibility down the road. Moreover, while no one can predict when we would reach that possibility, all seemed to agree that once the tipping point is reached, government action could come very quickly. Effectively, the old idiom is at play here: “I don’t know where the line is, but I will know when I have crossed it.” Against this backdrop, represent-atives from seven broker-channel insurance companies, IBAA, Insurance Bureau of Canada (IBC), adjusters, Alberta Insurance Council (AIC), the Office of the Superintendent ofInsurance and the Institute for Catastrophic Loss Reduction (ICLR) entered into a discussion on property insurance problems in Alberta. Everyone was aware that the “elephant in the room” was flood


There was no one with a Harry Potter-like magic wand in the room to create an insurance utopia, and no one was under any great illusions that the property insurance conundrum would be solved in Alberta and Canada. In any case, on September 12, 2013, IBAA hosted a property insurance forum to start the discussion. The discussion at the IBAA convention in May 2013 brought together many stakeholders from Alberta and across Canada—13 participants and a further 70 invited observers from every facet of the property and casualty insuranceindustry and beyond. As brokers represent the consumerto both government and insurance companies, we wanted to facilitate this meeting of minds. The timing, and the need for resolution, is pressing. Although the provincial government representative participant made it veryclear that no one in government has

The Advocate George Hodgson

insurance but that this forum was to deal with property insurance as a whole, of which flood is an element. The forum was very ably chaired by IBAA Past President Dean Bailey.Participants included:• Tom Reid, Aviva• Gavin Brown-Jowett, Economical• Jennie Moushos, Intact with Barry Zalmanowitz, Dentons Canada LLP• Diane Brickner, Peace Hills• Gord Giles, SGI• Chris Sayer, The Dominion• Keith Hartry, Wawanesa• Gord Enders and Dean Bailey, IBAA• Marla Saper, Canadian Independent Adjusters’ Association/Kernaghan Adjusters• Ron Gilbertson, AIC• William Adams, IBC• Paul Kovacs, ICLR• Mark Prefontaine, Superintendent of Insurance At the outset, Barry Zalmanowitz, a competition law lawyer whose services were provided to the forum through the generosity of Intact, reminded the participants about the restrictions imposed by the Competition Act (Canada) on competitors’ ability to collaborate. The timing of the forum could not have been more appropriate because of its proximity to the Southern Alberta and Toronto-area floods. As PaulKovacs pointed out, according to ICLR research, this catastrophe (and any catastrophe, for that matter)provides us with a 24-month window after the event, when discussion, in this case about property insurance, will capture the public’s and the govern-ment’s attention after which, attention will very likely move on to another issue of the day. Three broad topics were up fordiscussion: affordability, availability and sustainability. After all threetopics were covered, a period of time was devoted to questions andcomments from the observers. The forum ended with discussion on where we should go from here.

Something toTalk About

IBAA Hosts Property Insurance Forum


AFFORDABILITY Affordability was considered from two main perspectives: premiumpricing and deductibles. Manyemphasized the need for publiceducation about insurance, its costs and preventative measures. Thesemeasures would tend to minimize risk and will contribute to a more affordableproduct. It was generally acknowledged that insurance companies have for several years continued to supply a product in Alberta at a loss. While that may be considered commendableparticularly from the perspective of competition, others felt it puts the industry in the unenviable position of playing catch up. An increase inpremiums will cause a significant sticker price shock to consumers, while a large increase in deductibles effectively delays a difficult conversation until claim time, when that conversation will become even more difficult. The industry seems to have created consumer expectations that it can no longer live up to. Building and repair costs have increased substantially as homeowners have built costlier homes, with finished basements complete with expensive electronics and furniture but premiums and deductibles have remained constant. The materials used to repair damage caused by hailstorms, fires and flooding do not usually mitigate future losses from a similar incident. For example, vinyl siding and asphalt shingles that are shredded in a hailstorm are often replaced with vinyl siding and asphalt shingles only to have the event reoccur in a couple years with the same results. While it is true that the consumer has little or no incentive to replace vinyl siding and asphalt shingles with something that is more resilient to hail when the deductibles are at $1,000, it is equally true that many consumerswill feel that they cannot afford a $2,500 deductible much less afford the extra cost of better building prod-ucts. An increase in deductibles from

$1,000 to $2,500 is a 150% increase. Few consumer items increase by that much over the course of a year. Insurers are telling brokers to expect that substantial increases in weather-related claims and repair costs could mean substantial increases in pricing or deductibles or both. The brokers, who act as intermediaries between the insurers and the insured, question the wisdom of these increases, sometimes advocating for more modest adjust-ments over a longer period of time. Consumer tolerance for large increases in pricing and/or deductibles would likely be very low. In the end, when it comes to afford-ability, we, through our choices, may have some influence over what the consumer does, but we do not controlconsumer choices. What we cancontrol though is our own actions.

AVAILABILITY Availability of the property insurance product (the flipside of affordability) was an equally difficult subject matter.If the product is not priced to earn a profit, it will likely not be offered in Alberta. Perils-based underwriting with postal code territories and other forms of risk mapping is becoming more common. This practice changesthe original concept of insurance whereby the premiums of the many pay for the claims of the few. As the discussion centred on a com-petitive marketplace, the availability questions will boil down to thecompetitive question. In order for consumers to make informed choices, we need to ensure that consumers are adequately educated about options that will likely expand. When insurance is unavailable, whether due to limited options from insurance companies or unaffordable premiums and deductibles, government intervention becomes the alternative. Once public insurance arrives, it rarely, if ever, reverses itself. The ultimate goal of this forum was to avoid or minimize

such government intervention. One of the great saving graces is that the insurance industry has shown itself to be innovative. It can come up with a product or a basket of products that works with everything and everyone. Inherent in this is the broker channel,whose strength has always been choice: choice of supplier and choice ofproducts. ICLR provided encouraging infor-mation from extensive studies on property insurance and building codes. These studies conclude, in part, that affordable homes that will surviveserious floods, hailstorms, hurricanes and category 2 or 3 tornadoes are possible to build. In the end when consumers have a choice between good and better, we have the obligation, particularly at claim time, to explain the long- and short-term benefits of the better choice in building materials and construction.

SUSTAINABILITY The sustainability of propertyinsurance in Alberta relates to the long-term stability of the product. While governments have provideddisaster relief, the number and severity of disasters are increasing, leavinggovernment coffers at risk. Thediscussion centred on solutions and incentives to consumers to use building materials to improve structures and to educate consumers about the advan-tages of investing in their homes. As discussed earlier, the window ofopportunity for such education iscurrently open but will not be open forever. We need to capitalize now. Long-term sustainability is gener-ally about changing consumers’ habits and expectations—prevention is the key to success here. This takes time and effort. The example that the ICLR used was Quebec City where it took three letters to convince consumers to distribute rain from eaves troughs onto their lawns rather than into the sewer



GEORGE HODGSONCEO, IBAA

[email protected]

system, thereby alleviating some of thepressures on the system and reducing the likelihood of sewer backup. This process of informing the consumer cannot be short circuited. The public at large needs to hear something anumber of times and in a number of ways before entrenched habits are changed. As well, consumers need to be educated on the true risks they face and what is covered and what is not. An interesting statistic that was pre-sented is that 70% of Albertans think they are covered for flood and 50% do not think they are covered for wildfire. Information and education can com-bat these misconceptions. In general, consumers often do not read theirpolicies until they have a potential claim. Most consumers do not have a clue as to what is covered until a loss happens. The crucial message to get acrossto consumers is that preventativemeasures are key actions to mitigatingrisk. Some of these measures can be achieved only at the individual property owner level, while others are accomplished only by municipalities.For example the Municipal RiskAssessment Tool (MRAT) will assist municipalities dealing with excess precipitation that overtaxes infrastructure causing flooded roads, homes and businesses. Many municipalities do not know what needs to be fixed until a flood proves what is broken. The MRAT tool will help municipalities see where infrastructure failure will occur.

WHERE DO WE GOFROM HERE? This perhaps was the most important question that was asked at the May conference and, unfortunately,probably received the least amount of time. Let us be frank: either theinsurance industry finds a way to make the product work or change will be foisted upon us from the outside—most likely from the government.

The ice storm in 1998 was Canada’s largest catastrophic loss up to that point in time. Since then, little has changed in the industry. The Kelowna fire in 2003 destroyed hundreds of homes, with millions of dollars in property lost. Again, since 2003, little has changed in the industry. In 2011, the Slave Lake catastrophe will likely have similar impact, or lack thereof. Keep in mind that, were it not for the Southern Alberta floods, we would have heard much more about hail-storms in Lethbridge and Medicine Hat. Add hurricanes, tornadoes and flooding from spring runoff, and you have significant losses occurring on an ever more frequent basis. While changing weather patterns account for many of these catastrophes and their resulting costs, not every-thing can be attributed to this. Urban creep into wooded areas, inadequate infrastructure, inadequate construction and other factors also contribute. Someone said that the key to ward off government intervention is to keep our politicians informed. While that is true, it is far from enough. All of the catastrophes discussed above in one way or another cost the federal,provincial and municipal governmentsbillions of dollars. Most of these expenditures are impossible to budget for. If property insurance becomes ei-ther unaffordable or unavailable, even greater financial pressure will come to bear on our governments. As has been said in the past, “There is only one taxpayer” and politicians are loath to go to the well too often. The question is how long it will be before governments say, “Enough!” to bailing out people and businesses for incidences that the insurance industry will not cover or for coverage that consumerscannot afford to purchase. When that happens, no matter how much we inform MLAs, MPs and senators, the understanding that the voting publicis angry will supersede all other

knowledge. That is the true tipping point when the greatest likelihood of government intervention will occur. Therefore, this forum must be the beginning of a process that cannot take long. The timeframe for action is short. More open and more frank discussion must take place. The op-portunity for immediate action is there for thebroker channel to take. Our chan-nel is the intermediary between the consumer and the insurer and also the effective intermediary between the property and casualty insurance indus-try on the one hand and the govern-ment on the other. Through persistent effort over the years, the IBAA has established a great relationship with all levels of government. We also have a substantial trusted relationship with the insuranceconsumer. We must utilize those relationships. Consumers and our insurer partners could benefit greatly from crucial information, especially from organ-izations such as ICLR, that they either do not seem to have or have not paid attention to. We have a greatopportunity to get that information into the hands of the consumer in particular. Moreover, our relationships with our insurer partners and elected politicians afford us a great opportu-nityto serve as intermediaries and take on a leadership role in finding solutions to the property insurance problems of today as well as those issues that are on the horizon and beyond. Inaction is not an option but rather an invitation to intervention and regulation.

Doomed from the start. If you’re anentrepreneur or entrepreneur-hopeful, it’s probably difficult to keep those four words from causing you to second-guess your every move as you plan and run your business. They become especially hard to ignore when you consider the fact that less than 30 percent ofbusinesses last more than 10 years, and most failures happen within the first few years of operation. The truth is, many things could go wrong: an ill-conceived business idea, poor planning, lack of capital, ineffective leadership and more. In the high-stakes world of running a business, those are the facts. But there are other important facts about business ownership. Facts that could help you avoid the mistakes and pitfalls that trip up so many others, and go on to achieve the success you’ve dreamed of. I call them the “Facts of Business Life.” Of course, there are a variety of skills owners need to know in order to make a business work. But after many decades of running my own successful businesses,

and learning how other successful own-ers have created success, I have come to the conclusion that these facts are the seven essential concepts needed to create a successful business life. Now, don’t get me wrong. There are no guarantees for entrepreneurs—and to add to the challenge, each businessis one of a kind, in terms of how it competes, its constraints and how it operates. But what you can do is tilt the odds in your favor. If you’re ready to build a strong, lasting foundation for your business, then read on for an overview of my tried-and-true seven facts of business life:

Fact 1: If you don’t lead, no one will follow. At first, this statement seems mind-numbingly obvious. But often, “leadership” is one of those words that are thrown around by people who haven’t given much thought to what it looks like in action. Good businessleadership begins with defining thedestination and direction of yourcompany and deciding how the business

should look and operate when it arrives. But it doesn’t stop there. It also involves developing and continuously improving on a set of skills in order to move your business from where it is today to where you want it to be tomorrow. What’s important to understand is without effective leadership your man-agers or employees have no idea what is important to the owner, what to manage or what success and failure look like. In other words, in order to have effective employees, your business first has to have effective leadership, which has to include defining success and failure based on the eventual destination. Another important aspect of being a good leader is developing a company culture that’s expectations-based andrewards those who meet and exceed those expectations. The good news about leadership is that the mostimportant aspects can be learned, and it’s essential that owners do so.

Fact 2: If you don’t control it, you don’t own it. Control is the


Just as there are facts of life that affect us personally,there are facts of business life that affect us as entrepreneurs.

In honor of National Small Business Week (October 20–26, 2013), I share what I have learned over the course of a successful career to help you avoid common mistakes and steer your company in the direction you want it to go.

By Bill McBean

FACTS THAT WILL BREATHE LIFE INTO YOURBUSINESS7



owner’s management reality. If you don’t control your company by defining key tasks, dictating how they must be handled and practicing “inspect what you expect,” then you don’t truly “own” the business because all you are is a spectator watching others play with your money. There are two overriding or macro concepts successful owners understand that their unsuccessful competitors don’t. First, great procedures and processes need controls, and these in turn create great employees. This happens because procedures and processes operate the business, and employees operate the processes. This is one of those business basics that owners must understand to be successful. Secondly, don’t stop at pointing out what should be done and how. Also clearly state and emphasize that there will be consequences when standardoperating procedures and processes aren’t followed. If you don’t do this, you’ll be “leading” a group of individuals who follow their own rules and judgement, rather than a cohesive company working toward a common goal. Once again, this is one of those business basics owners can’t ignore.

Fact 3: Protecting yourcompany’s assets should be your first priority. Were yousurprised because this fact didn’t instruct you to first protect your company’s sales, profits and growth? If so, you’re not alone. But the truth is, assets—which include both tangible and intangible assets—are what power sales, profits and growth. Usually, owners and soon-to-be owners understand the need for insurance onassets like their buildings and equipment.In fact, bankers insist on insuring specific assets they lend money on like facilities, equipment and sometimes even insurance on an owner’s life. However, successful owners don’t stop at protecting obvious assets. Theyunderstand the importance of every asset because assets represent invested cash, which should be managed to produce exceptional and maximized profits.

Ignore this business fact and your com-pany will underperform—if it can even survive the continual asset write-offs and write-downs, customer abandonment and employee indifference. I believe protect-ing both tangible and intangible assets to be one of the most underrated and under-appreciated ownership issues today, and, if mismanaged, can be one of the most damaging. The key is to understand what all of your company’s assets are and then guard them closely

and work to maximize the profits they represent. Because if you don’t, they will haunt your business and cause financial pain when you least expect it, or want it.

Fact 4: Planning is aboutpreparing for the future, not predicting it. Nobody knows what tomorrow, next week, or next year will bring for your business. But you can make educated guesses based on the




most current, accurate information available as well as your own pastexperiences, and this should be an on-going process. Effective planning is a mix of science (gathering pertinent information) and art (taking thatinformation and turning it into a plan that will move your business from “here” to “there” over a specific time period). Being able to plan better than your competitors can give you a significant competitive edge in the market. Ford Motor Company is a great example. In 2008 and 2009, its competitors, GM and Chrysler, ran out of cash and needed taxpayer bailouts to avoidbankruptcy. But not Ford. Years prior to the credit crunch, Ford began torestructure its debt and raised billions as it continually added to cash reserves. Was this luck or good planning?Industry insiders will say good planning. The point is Ford knew, as you should, that planning is important because itfocuses owners on what’s important and it prepares them for what lies ahead.

Fact 5: If you don’t market your business, you won’t have one. Maybe working to market and advertise your product isn’t your cup of tea. Or maybe you believe your product is so great that it should speak for itself. If so, too bad—you’re going to have to do it anyway. The bottom line is, if people don’t know about your product, you won’t be successful. New business owners especially are nervous about marketing because money is already so tight at this stage. But again, if marketing isn’t done, very little good will happen. You have to make the necessary effort to connect consumers to your company. And when you do, you’ll begin to see marketing as the investment it actually is, rather than the expense that less successful competi-tors think it is.

Fact 6: The marketplace is a war zone. Every company hascompetitors, and if it doesn’t and it’s

successful, it soon will. Successful ownersknow they have to fight not only to win market share but to retain it as well. That’s why I insist that you must develop a warrior mentality and maintain it for as long as you’re at the head of your business. That’s because selling and sales in any industry is serious business. It’s take or be taken from. If that isn’t a business war zone, then I don’t know what is. In other words, in order to be success-ful and remain that way, you have to continually focus on the market, react to it, and fight for what you believe should be yours. If you don’t, your competition will win the war. The point is that great marketing has to be followed up byhaving your company “on its game” in order to capture every customer your marketing attracts.

Fact 7: You don’t just have to know the business you’re in; you have to know business. Yes, of course you need to know the

inner workings and nuances of yourparticular industry if you want to be successful. But you also need to under-stand the various aspects of businessas it is more broadly defined, such asaccounting, finance, business law,personnel issues and more, and howall of these impact each other and the decisions you make. Having tunnel or limited vision as far as business knowledge is concerned is akin to dropping out of high school. In doing so, you limit your possibilities for success and how great your success could be. But at the end of the day, what is most important is not how much you know, but what you know and what you do with that knowledge. For example, it’s important to know what’s goingon in your market, but it is just as important to know what to do with that information and how you can translate it into more sales and gross and net profits—something that can’t be done


APPOINTMENT NOTICEDarrell Blenus, President of IFS Financial Services Inc., is pleased to announce the appointment of Brenda Brelis as Business Development Manager, Western Canada. Brenda joins IFS with 17 years experience within the insurance industry. She has worked on both commercial and personal lines as a CSR and most recently as manager of a brokerage.Brenda will be responsible for business development with IFS’s commercial and personal brokers and MGA’s in Western Canada. Her territory includes the four western provinces and she will be stationed in Strathmore, just outside of Calgary. IFS is Canada’s largest private premium financing company serving brokers for 35 years. IFS provides a number of premium financing options for brokers and their clients, offering easy payment terms,flexible rate structures and a very simplified online processing system.

Brenda BrelisToll-free: 1.877.389.9009E: [email protected]


with limited business knowledge. And remember, it’s an owner’s responsibilityto make sure what you’re learning iscorrect and relevant. Ultimately, I don’t believe that any entrepreneur can succeed—or at least reach his or her full potential—without knowing, understanding, and applying these seven facts of business life. It’s equally important to understand how these facts are interrelated. For instance, being able to develop strategic plans or market your productwill mean little if you don’t have a good grasp of business in general. But I promise, if you commit yourself to understanding these facts while being prepared for their implementation to change as your business goes through its inevitable life cycle, you’ll be creating a best-odds scenario for success.

About the AuthorBill McBean is the author of The Facts of Business Life: What Every Successful Busi-ness Owner Knows That You Don’t (www.FactsOfBusinessLife.com)—now available at Audible.com. McBean is currently a

featured contributor for The Huffington Post and Business 2 Community. A graduate of the University of Saskatchewan and Mount Royal College, McBean has owned several successful businesses including auto dealerships in Canada and the U.S.


Legal-Ease Shelley L. Miller and Terry J. Williams

The rapidly evolving businessenvironment for insurance brokers and the introduction of new businessmodels has recently given rise to a number of legal disputes as the parties work through these new relationships. A recent Ontario case is an example. Rick Jaitley (“Jaitley”) was anexperienced insurance agent who had had a long career with AllstateInsurance. In September 2007, he attended a meeting put on by Prolink Broker Network Inc. (“Prolink”) which was seeking to recruit insurance agents into the Prolink Network. Prolink’s services include access to insurance company contracts, back office services, errors and omissions insurance and providing a designated person forregulatory purposes. In addition,brokerages receive access to TheAgency Management System (“TAMS”),the computer system that allowsbrokerages to do accounting, admin-ister human resources administration and write business with insurancecompanies. The network also provides access to CompuQuote, a system that allows brokerages to obtain quotes from insurance companies. In exchange,Prolink would take a 25% share owner-ship interest in each brokerage andreceive 7.5% of commissions. The brokerage would have the right to purchase the shares from Prolink after three years. On November 5, 2007, Jaitley signed a “Letter of Intent and Non-Disclosure Agreement” that indicated Jaitley was a candidate to join Prolink and that the parties were in the process of negotiating a joint venture agreement in order to forge a business relationship.

Discussions between Jaitley and Prolink continued through the spring of 2008 and Gerald Roberts, Prolink’s president, emailed Prolink’sstandard partnership and shareholders agreements to Jaitley for his review. In March of 2008,Jaitley incorporated My InsuranceBroker Corp. (“MIB”) and MIB issued 25% of its shares to Prolink.In addition, Prolink supplied an individual, Joe McCabe, to be MIB’s design-ated person forregulatorypurposes. McCabe was then made adirector of MIB. In April of 2008, aseries of emails wereexchanged that indicated Jaitleyintended to continue with the process of joining the Prolink Network. On July 28, 2008, AXA Insurance made an offer of an insurance contract to Jaitley, provided he obtained at least one other insurance market. That letter allowed Jaitley to proceed with regis-tration with the Registered Insurance Brokers of Ontario (“RIBO”). On

August 1, 2008, an associate of Jaitley sent back a copy of the Prolinkstandard agreements with someproposed changes. On August 4, 2008, Roberts emailed Jaitley stating, among other things, “I am extending tacit agreement to all of your requirements” and “Welcome aboard.” On August 8,

No Signature, No Contract?



2008, Jaitley signed an “AdditionalEntity Supplement” insuring MIB under Prolink’s master errors and omissions insurance policy. On August 13, 2008, MIB was registered with RIBO and became an operational broker within the Prolink Network. After that date, MIB secured contracts directly with insurance companies, obtained quotes for policies using the CompuQuote system and wrote busi-ness using TAMS. As of December 31, 2008, MIB had earned $85,108 in commissions. However, neither the partnership agreement nor the share purchase agreement was ever signed. On February 18, 2009, Roberts sent an email to Jaitley regarding their business relationship. Roberts’ evidence was that Jaitley had not sent copies of motor vehicle records or the fees that were owing to Prolink. Roberts’ email also raised the issue that the agreements had not yet been signed. Discussions continued through March and April of 2009 but by the end of April 2009, lawyers were involved.Prolink ultimately sued Jaitley and MIB for breach of contract. The main issue at trial was whether or not the parties had entered into a bindingcontract even though the final agree-ments had never been signed. Prolink thought it had a binding contract. Jaitley and MIB did not. The trial judge stated that the essential elements of a contract are an intention to create a legally binding relationship and agreement on all of the essential terms. The trial judge observed that in his August 4, 2008, email, Roberts indicated that he was extending “tacit agreement” to all of Jaitley’s requirements. The trial judge found that although other points in the agreements were changed back and forth, none of those were essential terms. The trial judge stated that an intention to be contractually bound can be manifested by words or conduct, and the requirement of a signature can sometimes be a mere formality.

[email protected]

SHELLEY L. MILLER, Q.C. and TERRY J. WILLIAMSare lawyers with

Dentons Canada LLP and practice in theprofessional liability insurance area.

[email protected]

The trial judge concluded that the actions taken by Jaitley and MIB were consistent with an acceptance of the essential terms of the contract. Those actions included the issuance of shares to Prolink, the appointment of Joe McCabe as a director of MIB and MIB’s designated person for regulatory purposes, the fact that MIB was given access to TAMS and CompuQuote and the fact that Jaitley and MIB were added to the Prolink E&O policy. The trial judge found that Jaitley and MIB repudiated the agreement on March 6, 2009, and that Prolink accepted that

repudiation on May 7, 2009, thereby bringing the contract to an end. In the result, as compensation for its shares, the trial judge awarded Prolink25% of two times MIB’s earnings between August 13, 2008, and May 7, 2009. (The shareholders agreementprovided that the brokerage’s fairmarket value was to be calculated as two times annual earnings based on a minimum premium volume of $2.5 million.) Prolink was also awarded 7.5% of commissions for the same period. In addition, Prolink was also awarded a further 7.5% of commissions to the date that MIB ceased using the TAMS and CompuQuote services provided by Prolink. This Ontario case is a good example of how the law will sometimes find a binding contract or other legal obliga-tions even though the final documents may not have been signed.


An intention to be contractually bound can be manifested by words or conduct.


Interview Tips to Make Sure the Answer Is Yes

In a global economy,even the most brilliant individual can’t compete with a cohesive, high-functioning team.

Bruce Piasecki offers a handful of tips, tricks and insights for making sure your next hire is team-oriented, coachable and loyal.

Today’s workplace demands high-functioning teams. In the globaleconomy, collaboration and innovationare how work gets done, and the

complexity of that work necessitates a dizzying array of skill sets. In this kind of environment, it’s not surprising that what I call “fierce individualists” are becoming all but obsolete. That’s why when it comes time to add to your team it’s critical to make sure you hire good team players and not future MVPs. Invest in coachable hires. Manycompanies make the mistake of hiring high performers who are talented but perhaps not team-oriented and loyal. What they fail to realize is that even the most brilliant individual is less powerful than a cohesive, well-orchestrated team—far less powerful, in fact. The near future will be all about inno-vation for sustainable value creation, led by teams. The days when a larger-than-life personality is allowed to steamroll over the rest of the company are over.

This destroys morale, which destroys results. (And without the ability to get results—and quickly—no company can survive in a swift and severe world.)Companies can’t afford to make bad hires. They have to be able to distinguishteam-minded individuals in the inter-view process. Here are some hints on the qualities you should look for and the questions you should ask:

Conduct interviews in a team of four or fiveleaders and colleagues.

This will replicate the dynamics of the team setting the new employee will be working in. Good team players tend to do well in settings of four or five people asking an avalanche of questions.


Will Your New HireBe a Good Team Player?


Look for an intrinsicability to “bond” withinterview team members.

Even more important than dress, training or résumé is the candidate’s ability to “bond” instantly to at least three to five members in the interview team. This doesn’t merely mean an affinity for small talk or schmoozing. The bond we’re discussing here must translate to action in a “reliable, sus-tained way” with those people—and it will reveal itself in the specific points the candidate makes.

Look for a comfort level with the rapid-fire give-and-take of the interview team.

People who work well in teams do certain things well in interviews. For example:• They don’t get ruffled. They answer your pointed questions with calm and precision, without being terse. Like a captain, they do not have performance anxiety. They demonstrate grace under pressure, know when to exert force and overall provide your team with a sense of respect and fascination for more. If you feel they have nothing to say to the team, they should not be your finalist.• They enjoy interviews that involve more than one “boss.” The true team player, the true potential project leader or the true divisional captain is someone who shoots straight but understands the culture. That is, they know precedent, but they demonstrate an ability to work fast and past the impediments of budget, rules and competition.• They relate one person’s question to another, and they answer to the group by relating the questions as “pieces of an overall composite” of a whole. Team players know individual questions are merely a part of the

continued from page 36 mosaic of the culture that runs a firm. They are looking to get a sense of that culture and articulate how they anticipate fitting into that culture and how they wish to perform within its norms. In other words, team players under-stand that the group asks questions in a sequence for a reason, and that the questions are not arbitrary but often related to a larger issue. They seem to understand that what you’re really ask-ing is: Are you trustworthy? Can you work for our benefit? Will you share shoulder strength? Their answers will reflect this deeper understanding. They show respect for the team they are seeking to join. Fierce individualists might focus on how they did it at their previous job, how well it worked and why you should try it at your company. Team-oriented candidates, on the other hand, will never display such arrogance. Team players understand the legacy of the team, the coaching approach and the reasons to improve in the current season. They live with the past legacy before them and demonstrate respect for it. They demonstrate a desire to work with you for a long time. As a player in your industry, your quest is to generate revenue through respect, relationships and long service. That kind of well-paid loyalty requires a team player. You are always looking for a longer-term player, someone who is coachable in a matter of seasons, not just individual project events. Fierce individualists tend to make their mark then move on. But in our swift and severe world, we need people who have a deep craving for the kind of team connections that grow stronger over the years.

Good team players look for feedback.

In fact, they long for it. It’s not that they want the praise but that they want to get a feel for the path of improvement available to them. They will expect a

two-way conversation whereby you are able to interact with their responses, not just a Q & A session. The way they behave in the interview will mirror the way they’ll behave on the job.

Be sure you have a“captain” making the final hiring decision.

Captains, as opposed to plain old“leaders,” are skilled in the art of team-building. While an entire book could be written on the subject of captains, in general they have the ability torecognize key capabilities in employees, to put the right people into the right roles and to create a certain “magic” that transforms a group of individuals into an interconnected whole. You may never have a candidate who does everything on this list ‘right,’ oranswers every question the exact way you want it answered, but if you approach your interview with an awareness for a teamwork attitude, you probably won’t go wrong.

About the Author Dr. Bruce Piasecki is the author of Doing More with Teams: The New Way to Winning and president and founder ofAHC Group, Inc., a management consulting firm specializing in energy, materials and environmental corporatematters, whose clients include Suncor Energy, Hess, FMC, the Warren Buffett firm, Shaw Industries, Toyota and other global companies in his corporateaffiliates training workshops.


WICC Update Amy Foggin

Choosinga ResearchProject

AMY FOGGIN, B.F.A., B.Ed.Program Manager,

CKR Global RiskMitigation & Investigation

[email protected]

WICC Alberta raises funds that go directly to support specific cancer research projects. We work particularly hard to ensure we have chosen projects with an aim toimpact ALL cancers. WICC is not in support ofresearching women’s cancers only! The Women inInsurance Cancer Crusade Alberta Chapter is funding the $185,000 Innovation Grant which is a two-year grant awarded to Dr. Jirik, pictured here. The work funded by the grant is focused on investigating a new approach to increase blood flow to tumours and thus better administer treatment.

Did you know? WICC has a new and improved website? Please watch www.wicc.ca where you will find an Alberta page and updates on WICC events near you. We are looking forward to our donors having easy access to electronic payments and news like

WICC being nominated by the Canadian Cancer Society as 2013’s Philanthropic

Group at the Association ofFundraising Professionals Generosity

of Spirit Awards 2013!

Save the Date:Our 2014 Gold Flame Award Luncheon willbe held in Calgary on January 23. Please mark your calendars and watch for ticket notices from your WICC AB committee members. Join us in celebrating amazing WICCsupporters like our winners from this year pictured to the left.

Doing Great Things to Fundraise:What a great year both Edmonton and Calgary Intact offices experienced in their annual Hooray Hooray the First of May fundraisers! Calgary raised $13,616.16 in staff events and an additional $1,300 in cheques to WICC. Edmonton raised $8,276 in staff events and an additional $4,395 in cheques. Intact corporate offices matched staff efforts to the tune of $15,000, resultingin a whopping grand total of $42,587. Nowonder Intact continues to be a topcontender for The Gold Flame Awardspresented every January!


Professional Development Karen Bushie

A critical item that a potential employee will look for in an employer, whether a small business or a large organization, is the training offered to employees. New employee orientation and onboarding training helps the new employee to both understand the com-pany and network with new colleagues. An introduction to other staff members and a brief explanation of roles helps the newly hired understand how the business works. Introductions should be made by a key employee who will work closely with the new employee within the first few days. Solid orientation and a warm welcome build trust and loyalty for both new and existing staff.

There are various benefits to training to your employees:1 They will be better equipped to answer client questions, therefore boosting client satisfaction.2 Risk of errors and omissions claims will be reduced.3 Employees will be more satisfied in their jobs due to the knowledge they have and will be more confident in relaying that knowledge to others.4 There will be a reduction in staff turnover.5 Employee morale will increase.6 Cross-training employees to sell more than one product will promote flexibility and efficiency.7 Companies that provide training will be more attractive to a potential new employee.

8 Recruitment costs will decrease due to lower staff turnover. Training can takeseveral forms: atraditional class-room setting,webinars or online train-ing (such as watching videos or completing onlinetutorials). Itcan also be inthe form ofcoaching or mentoring. Once an employee has had initial training, remember thatmaintenance and follow-up coaching or mentoring is critical for continuedsuccess in the employee’s career path. Every organization must under-stand that training does not stop with orientation of the newly hired. In order to ensure ongoing success, training is required throughout the career path of all employees. It should be relevant, meaningful and add value to their roles. Employees should always walk away with information that can be applied directly to their jobs. According to an article on Jouta.com, “The Real Top 5 Reasons Employees Choose to Stay,” career growth, learning and development are key reasons why employees remain with an organization. Further, “commitment is directly related to opportunities for employee develop-ment, so by offering training you are cultivating commitment. When you are looking for that right candidate, do you advertise thatemployee training is one of the benefits of joining the team? Do you foster a lifelong learning environment within

the business? IBAA is here to

help. Feel free tocontact us anytime to help

come up with some training-goaloptions for your staff to continue their knowledge within their career paths. We welcome any course suggestions that you may have and would like to see offered in your area. Check out our upcoming fall 2013 line up for courses that will extend your staff ’s knowledge. To inquire about in-house seminar options or seminars and webinars in general, feel free to contact Cherie Boucher, training coordinator for seminars and webinars, at [email protected]. For questions relating tolicensing and designations, feel free to contact Joy Turchanski, trainingcoordinator for licensing anddesignations, at [email protected] As a result of member feedbackobtained through brokerage visits,starting in 2014, we will focus onoffering more commercial lines courses, as well as offering more webinars.

KAREN BUSHIEDirector of Professional

Development, [email protected]

The Value of Training

Commitment isdirectly related toopportunities for

employee development, so by offering training

you are cultivatingcommitment.


General License Renewals Deadline Coming Soon October 31, 2013: The deadline for 2013 general license renewal, with its continuing educationrequirements, is quickly coming upon us. The 2013 IBAA Fall Conference, sponsored by the PYIB, is a great way to obtain up to nine credits, stay up to date through talks and sessions and network with other brokers, insurance company representatives (trade show) and others in the insurance industry (including a talk by the Superintendent of Insurance and a company executives panel). The conference will be held at the Edmonton Westin Hotel. Registration and further information are available on the IBAA website. The license renewal date will change in year 2014. The Certificate Expiry Penalties and Fees Regulation AR 125/2001 has been amended to adjust the renewal date for all certificates of authority. The new renewal date for all certificates will be July 1, with the year running July 1 to June 30 of the next year.

For more information, please visit the Alberta Insurance Council website at www.abcouncil.ab.ca.

IBAA Professional Development Calendar

Bullet-Proof Manager Series Edmonton, November 13 Calgary, November 14

Boiler and Machinery Edmonton, November 14

E & O Edmonton, October 10 Calgary, December 4

CGL Wording and Policies Calgary, October 15 Edmonton, October 16

SEMINARSCYA and Other Perksof Commercial Umbrella October 15 Sponsored by

Personal Liability Umbrella October 17

Getting Started inCommercial Lines Series November 19, 21, 26 & 28 Sponsored by

Time Management December 10

Tax Planning December 17

WEBINARS

LICENSING COURSESLevel 1: Calgary, October 21–26 Edmonton, November 18–23 Calgary, December 9–14Level 2: Edmonton, October 22–24 Calgary, November 19–-21 Edmonton, December 17–19

CERTIFICATIONSPSIB (Professional Selling for the Insurance Broker) Edmonton, October 29–31 Sponsored by

For more information on upcoming courses or self-study options, please check us out at www.ibaa.ca

CAIB DESIGNATIONImmersion: CAIB 2 Edmonton, November 4–9

Fast Track: CAIB 4 (Edmonton and Calgary)

Oct. 26, Nov. 2, 16 and 23. (Exam Dec. 4)


Who? What? Where? Darrell Verbonac

BROKER NEWS

Wild Rose Insurance in Brooks has a new manager; Natash Pardy is now looking after the office following thedeparture of previous owners Jeanette Hycha and Norm Reise who sold the operation to Palliser Insurance (which is part of the Westland Group out of British Columbia). In other moves down in that part of the province, all involving Western Financial Group (WFG), Miles Wright moved from the WFG Morrin office to Medicine Hat, and Barb Robinson, who was in Taber, took over management of its Lethbridge office. Also, Mark Dutton, who was WFG’s Southern Alberta VP, moved to Victoria to head up Coast Capital Insurance Services, which was bought by WFG earlier this year. Replacing Mark is Blake Reichert, who came over from Allstate. In Red Deer Jim Warkentin joined Clarke Insur-ance, having come over from WFG’s Olds office, and Marg Ouimet left Ing & McKee Insurance to join Mooney Insurance.

In Calgary• Staffing changes include Shallin Brown leaving Northgate Insurance for Godfrey Morrow Insurance, Jenny Zhang leaving Palliser Insurance for Aon and Margaret Stewart joining Lanes Insurance. Rahim Tejani is new at BFL Canada, coming over from Talisman Energy.

• A new broker opened its doors; Burns & Wilcox started operations in Bankers Hall under the guidance of Alex Boyd, who was with Jones Brown in Vancouver. Burns & Wilcox is a Detroit-based wholesale broker and underwriting manager with offices in the U.S., U.K. and Canada. • Meanwhile, Quadrant Insurance Services, which was an exclusive broker for XL Insurance Company handling only professional liability, merged with Lloyd Sadd Insurance. • Gallagher Energy Risk Services moved into new premises leaving its digs in the BMO Building on 6th Avenue SW for new ones at 520 5th Avenue SW. • Hub International has about doubled its south east office size by taking over more space next door and adding a financial services component to its operation.• Lundgren and Young opened two new offices—one on 17th Avenue SW under the management of Amjad Nazir and one on Crowchild Trail NW under the management of Simon Guan. • Link Insurance did some rearranging of its operations in the northeast with Kulwant Sangha opening a new Prairie Winds office and Harvinder Kalon opening a new Martindale office.

COMPANY NEWS

On the company side, EconomicalInsurance VP Rob Gow took atransfer east to assume the same role within Economical’s Ontario division.

Replacing Gow is Chris Weber, who was the Economical’s VP of Analyticsin Ontario. Lynn Butters left Gold Key Insurance in Strathmore to join Ecclesiastical Insurance and Fawn Mah is the new marketing rep for Western Direct Insurance.

INDUSTRY PARTNER NEWS

Brenda Brellis is the new westernaccount representative for IFS Insurance Premium Financing and Sal Ismail isthe new director of business developmentfor Direct IME, which provides independent medical services for the insurance industry.

IN SYMPATHY

There a couple of passings to report. Retiree Tom Meagher, who had worked on the company side with Travel-lers, Firemans Fund and Wellington as well as having been a partner in long ago brokerage Harding Hall and Grabourne, died in August. Also,Richard Kivol, who had worked for WFG in Bow Island, passed away last December; however, I only heard about this recently.

CONGRATULATIONS& BEST WISHES

Congratulations to Lynne Fawcett of Intact Insurance on being part of the winning foursome at the 2013 Blue Goose Convention golf tournament in Quebec City in July. Other members of the team were Michael Sherban of Servicemaster Edmonton, John Bishop

[email protected]

DARRELL VERBONAC,FCIP, CRM

Regional BusinessDevelopment Manager

Intact Insurance Company

of Halifax, Nova Scotia and RyanMaloney from Wisconsin, U.S. Best wishes to a couple of retirees: Jim Connors retired July 30 afterforty years with RSA, mostly inCalgary, but also with a stint in Red Deer. John Taylor retired from April Canada after a long career in the business in Calgary, Edmonton and Toronto. The summer saw a number of wed-dings and births, and congratulations are in order to the following:• Robyn Howerton of Western General Insurance on her June 30 wedding to Ryan Legros in Osoyoos• Reston Paquette of BFL Canada on his July wedding• Daphne Lai of Intact Insurance on her August 10 wedding• Lauren Bruce of Intact Insurance on her August 17 wedding• Susanna Grabowski of Canyon Insurance on her August 17 wedding

• Andrew Zagorski of Bell Davidson Insurance on the birth of a son, Alex• Terry McGrath of Northbridge Insurance on the birth of his daughter, Elizabeth Emily, on May 28th.



Commercial Break Karen MacWilliam

A CRISITUNITY‘‘ The combination of CRISIS and OPPORTUNITY

has presented itself for insurance professionals toMAKE PEOPLE’S LIVES BETTER as we

move forward into the new normal.’’


As I write this, Southern Alberta continues to toil away, dealing with the consequences of heart wrenching flood-ing. It will take far longer than any of us wants to accept that we are now forced to deal with a “new normal.” My thoughts are with everyone who experienced and endured unimaginable damage. This column is not intended to inflict more pain. My parents taught me that every disappointment and negative outcome in life tends to offer up lessons and challenges. To quote HomerSimpson, “This is a CRISITUNITY.” Yes, the combination of crisis andopportunity has presented itself for insurance professionals to make people’s lives better as we move forward into the new normal. Canadians have now heard Peter Mansbridge and his cohorts discuss some of the technicalities surroundingflood and sewer backup coverages. “Overland flooding” is a peril notinsurable for homeowners, we were told.

The media has moved on, but many of our friends are still in the midst of the consequences. I offer up some reminders in a commercial insurance context to refresh the memory:

1 No two insurers will define a “flood” event in the same manner. Look at

the definition in EACH policy carefully, and review it with your commercial clients. I expect that some insurers will modify their definitions in light of the summer of 2013, so pay carefulattention to modifications that insurersmay introduce. New mapping andmodeling technology will drive the underwriting process.

2 Some clients will have a flood exposure, but will not be exposed

to sewer backup risk. Others will be exposed to sewer back-up risk, but not flood. Review each coverage with your clients to make sure they know what they’re buying.

3Flood coverage may have asub-limit, a higher deductible than

other perils and may have an annualaggregate limit. These may all berelevant to your client. You may want to have a strategic renewal date, so that a spring flood and a summer flood do not happen in the same policy year.

4Your clients may not be exposed to water perils, but their supply chains

might. For example, a client may be in High Level but may rely upon goods orservices from Southern Alberta.Make sure that contingent business interruption exposures include coverage for perils that will impact your client.

5Examine the service that clients have received from insurers during

this disaster. Which insurers provided good service? Educate clients that you often get what you pay for with insurance and the cheapest insurance may not be the best solution.



[email protected]

KAREN MacWILLIAMis an insurance and risk management consultant

6The job of the adjuster is to interpret the wording that the

policyholder has purchased, not to be a benevolent saviour. As a broker, if you know that a loss is likely not covered, do not make the adjuster the bad guy or gal. Prepare your client for tough news before the adjuster arrives on the scene so the client has some idea that coverage may be questionable.

7Don’t forget all of the coverages that become relevant: extra expense,

business interruption, realistic indemnity periods, contingent business interrup-tion, ordinary payroll, replacement cost. Have a dialogue with your client to understand whether rebuilding on the same site would even make sense. All of these things can be modified before a loss. Explore coverages such as: lack of ingress due to order of civil authority and sue and labour, which may provide some additional coverage even if there’s no direct damage.

8 It’s not just about buildings, stock, and equipment. Think about all of

the vehicle damage that we saw due to the rising water.

9Remember that it’s not all about insurance. Advise clients regarding

risk control: the importance of siteselection, not keeping electronics and process control systems in the basement, having emergency plans in advance,being able to notify staff and customersabout the current status of business operations. Make sure that businesses have plans for evacuating staff and keeping everyone safe. You can replace stuff, but you can’t replace people.

10 Insurers are bound by the conditions of their reinsurance

coverage. They can’t arbitrarily “read in” coverage when losses are excluded, as this action may lead to a breach of their contract with the reinsurer. The reputationof the insurer and the quality of its reinsurance are important factors in the

quality of service that your clients are likely to receive. Canadians from all points empathized with our friends, colleagues andstrangers in Southern Alberta. I wasastonished by the strength and resiliency of everyone whose life was impacted. The insurance industry will help many displaced home and business owners get back on track. My eleventh point is that as insurance professionals, we need to contribute to

and facilitate long-term insurance and funding solutions for water perils and other natural disasters. It’s a crisitunity. Get involved.


THE RIGHT STUFFChief Executive Officer George Hodgson 3010 Calgary Trail, Edmonton, AB T6J 6V4 T:...

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