October 17, 2024
Brett Boadway—COO, IBAO
On July 26, 2024, the Ontario Government published proposed amendments to Ontario’s Insurance Act impacting our auto insurance product. On September 9, after extensive consultation with brokers, legal counsel, technology providers and insurers, IBAO replied to the government with our comments.
In our response to Ontario’s Ministry of Finance, we highlighted three areas of significant concern:
- The complexity of the new product
- The time required to update technology systems to support consumers through the proposed changes
- Creating a system of documentation to allow brokers to uphold their fiduciary duty to clients and limit errors and omissions
At the time of writing, no formal regulations surrounding Ontario Auto Reform have been confirmed or published by the Ontario Government. But let’s consider an environment where legislation does pass. And let’s assume it passes in a manner where the new product and process are similar to what was initially proposed in July.
Med Rehab Coverage Remains a Required Component
The most widely accessed component of the Statutory Accident Benefit Schedule—Med Rehab—continues to be mandatory, meaning if your customers are injured in a car accident, they’ll have access to medical treatment. It’s not something they can opt-out of in an attempt to save a few dollars.
Brokers Will Remain the Best Source of Advice
As Scott Galloway says: Choice is a tax on consumers. They don’t want more choice; they want to be more confident in the choices presented to them. That’s the basis of the category of retail.
This message should be front and centre in broker training and consumer messaging. Loudly and boldly, the broker channel needs to communicate that brokers are the trusted source of information to help consumers choose the coverage right for themselves. Brokers are the only source of a broad selection of the options available.
Tech is Limitless
Rather than being frustrated by technology and its limitations, let’s embrace the possibilities it offers. The innovation and tools we need are already within reach. It’s simply a matter of time, collaboration and determination to bring them to fruition.
This Isn’t Our First Auto Reform
Brokers have gone through auto reform before, and our market share sustained. Personally, this is my third auto reform—the lessons behind what worked and what didn’t in 2010 and 2016 are embedded in IBAO’s muscle memory. We’re ready to execute with comprehensive tools to support you this round.
There Will Be More Reform to Come
For better or worse, the auto product will always be a political hot potato, which means the product will always be under scrutiny. This won’t be the last round of reform—opportunities to amend what isn’t working are always on the table.
The product choice and optionality being proposed certainly bring complications to consumers and broker operations. Anything that relies on consumers being more thoughtful and makes sales transactions more complicated can feel quite hopeless. But that’s just me being petulant.
Here’s a more optimistic take.
Brokers live in a world of complication and complexity. You’ve survived by your continuous evolution in an environment of nuanced product wording overload. The best predictor of future behaviour is past behaviour. Based on yours, I know brokers will handle these reforms with resiliency and success.