Looking Outside the Classroom

After decades serving education unions, Ontario Teachers' Insurance Plan is expanding beyond its home province and opening new markets by acquiring new businesses and approaching other employee groups

Chris Floyd
Chris Floyd

Chris Floyd’s goal for his organization is simply this: he wants the Ontario Teachers’ Insurance Plan (OTIP) Insurance Brokers Inc. to become the largest independent group-personal-insurance broker in Canada. However, in the notoriously volatile and competitive world of personal insurance, he knows climbing to the top is easier said than done. So, to actually get there, Floyd is implementing a new strategy that sounds paradoxical: he’s taking OTIP across Ontario’s borders.

Floyd has seen many highs and lows since he entered the property and casualty insurance market in 1986. He came to OTIP in 1994 and has worked as a broker ever since, starting as a customer-services manager and working his way up to general manager, then vice president, and then, ultimately, president of individual insurance services. He says the member-owned organization has better products and services that come with value-added benefits focused on the customer.

Founded in 1977, OTIP is a nonprofit directed by a board of trustees consisting of two representatives from each of the four education affiliates in Ontario. The organization began by offering group long-term disability insurance to education members and has since grown its suite of insurance products to include both group and individual offerings that meet the specific needs of education employees and other union members. It’s from this education community at the core of OTIP’s existence that Floyd and the nonprofit’s executive team have decided to branch out.

OTIP became a national organization by taking on two other insurance brokerages: TW Insurance Brokers Inc. and Canadian Labour Insurance Services. They offer products to noneducation groups. “We’re taking the skill and knowledge we’ve developed through working with education unions and introducing it in new areas,” Floyd says, explaining that the strategy took root in 2007 and that he reaffirmed it with his board of trustees in 2014. “We are independent, so we can give the best advice to help our clients through any process, but we need the size [created by our additional brokerages] to negotiate with insurance companies on behalf of our customers.”

How are you growing?

“The clear strategy for our group of companies is growth, and we’ll achieve that by focusing on retention, acquisitions, and organic growth in our targeted areas. Continued growth is vital to our long-term sustainability as an independent broker.”

Overall, OTIP focuses on expansion for all its businesses, and according to Floyd, the growth will come via retention, acquisition, and organic means. Insurance customers are loyal, but operating in a heavily regulated environment means that OTIP needs to dominate. The government is rolling back auto insurance rates by 15 percent over the next two years, for instance, and Floyd has to sustain business so growth can continue despite the new obstacle. While premium volumes are likely to decrease, the size of the overall business, thanks to Floyd’s strategy of expansion, can grow to help OTIP weather the storm. According to Floyd, government messaging is “creating confusion with consumers,” but he says OTIP is delivering renewals with lower premiums to encourage retention.

Floyd, a lifelong learner, remains passionate about the evolving business of insurance and is investigating ways to change its delivery methods. Nine-to-five brokerages that only reach clients in person or via telephone face challenges. “In the modern era, brokers need to rely on a number of different channels,” Floyd says. “If you’re not talking to your customer, someone else is.” He is working to make products available on the customers’ terms, offering them in person and over the phone but also via e-mail, online chat windows, and other platforms.

As customers adopt new technologies, their preferences will continue to change, so OTIP continues to pore over research related to the issue as it works to differentiate its service. “No one has the perfect answer yet,” Floyd says, “but you better have a good online presence, you should probably look at nontraditional hours, and you better offer an accurate quote in less than five minutes.”

Sometimes it can seem like challenges come from all angles at once. Not only must Floyd navigate government intervention and shifting consumer behaviour; he’s also challenged by the fight against fraud and the continuing introduction of user-based insurance or telematics in Ontario. As insurers seemingly look to cut out the middlemen and go directly to the consumer, OTIP is anxious to work with the Insurance Brokers Association of Ontario and take advantage of the association’s broker-owned telematics capabilities to make sure its own model remains relevant.

Brokers and insurers, Floyd says, need to collaborate to compete against huge banks with seemingly limitless resources. “It’s David versus Goliath,” he says. “But we like our chances.”