Manitoba insurance brokers sponsor event headlined by MPI official they're trying to win over

The Insurance Brokers Association of Manitoba sponsored a breakfast Thursday morning where the headline speaker was someone whose actions, they argue, may threaten their businesses.

Grant Wainikka, the insurance brokers' CEO, introduced Ben Graham, CEO and president of MPI, at a Manitoba Chambers of Commerce breakfast — and took the opportunity to plead his case for keeping auto insurance sales in the hands of private brokers.

"We don't think it's fair, reasonable, acceptable or appropriate to ask a small business broker … to compete against a $1.3-billion Crown corporation," Wainikka told the business crowd.

The insurance brokers worry MPI's push toward online services — which may allow basic transactions like renewing auto insurance to be done online, instead of in person with a broker — would sideline insurance agents.

Wainikka argued brokers are critical to Manitobans' understanding of the complicated insurance system.

No shot across the bow: MPI

"Our members are the proverbial David fighting against the proverbial Goliath."

Despite the Manitoba government mandating a negotiated end to their months-long feud, IBAM sponsored the breakfast event in which MPI's CEO shared his vision for the future.

Wainikka took his chance on stage to convince the business crowd, and Graham, that brokers shouldn't be cut out of the equation.

Graham said afterward that he doesn't see Wainikka's introduction as an affront. 

"I wouldn't think it was a shot across the bow at all," Graham said, after his own speech. "I think we've both got opinions on where this probably should go, and they're well within their right to say that." 

No decision on the future role of insurance brokers has been made. The conciliation process between the two sides is expected to start shortly.

Wainikka said insurance brokers are not against online services, as they already embrace them while selling home, personal liability and other forms of insurance.

Wainikka said turning MPI into a direct seller of insurance, and excluding insurance brokers, empowers a monopoly that should be regulated.

"Our fundamental belief is that MPI and government do not make good retailers of insurance, and if MPI and government want to go that way, this is going to result in layoffs, it's going to result in business shutdowns and it's going to result in service degradation as well," he told reporters.

Insurance brokers receive a three per cent commission on basic auto insurance, which is cheap compared to other jurisdictions in Canada, he said, and they cannot afford a reduction in their revenue. 

"Tell me how that's improving the quality of life of Manitobans?" he asked. "We're very concerned about that." 

In response, Graham said he has no crystal ball to gauge how service delivery will change, but it must evolve with consumer demands.

Expensive and bureaucratic

Graham said forcing customers to drive to a brokerage for a simple transaction like changing the address on a driver's licence, for example, is inefficient. 

"Just because we're a monopoly," he said, "it doesn't mean we have to tell you how to deal with us."

In the 20 months Graham's led the Crown corporation, he's tried to settle MPI's financial picture and modernize how auto insurance options are offered to consumers.

Before the speech, MPI went around the room asking people for their impressions of the corporation, and the words they heard included "monopoly," "reliable," "expensive," "bureaucratic" and "slow,"  Graham said.

"There are some [words] there that are factual, and some there that are a little bit more opinionated," Graham said, "but I can't really disagree with all of them." 

Graham said they're making progress, and they'll reduce the rates whenever they can. MPI is asking the Public Utilities Board for an average 0.6 per cent reduction in auto insurance premiums next year — the first reduction since 2012. 

He said brokers are entrenched in the community already, and that won't change, but it's about giving consumers a choice in how they buy insurance.

The status quo must be evaluated, he said. Maybe customers should pay their rate by the number of kilometres they drive.

Five years down the road, he hopes MPI is humming along in the background of most Manitobans' minds.

"I'd like almost MPI to be invisible, if that is actually possible in this province," he told the business crowd. 

"What I mean by that is our rates would be so stable and our services would be so seamless and tailored to our customer needs that there's no second-guessing."