North Waterloo Farmers Mutual Insurance is celebrating a milestone – 140 years in business. But it is also a year of change for the traditional Ontario farm insurer, as president and CEO Carlos Rodrigues has big plans beyond provincial borders
Insurance is evolving at light speed, and one company has been witness to a transformation from the simple typewriter and humble keypunch operator to mobile apps and e-signature approvals
Insurance Business: Your insurance company is entering its 140th year – what is Farmer’s Mutual planning for the next 140 years?
Carlos Rodrigues: We will continue to build this organization as one that we can all be proud of. Our goal is to become known as the best customer-focused organization in the property and casualty insurance industry in Canada. In doing so, we must not only meet but exceed our customers’ expectations beyond the competition’s reach. To do so, we will need to expand outside of Ontario at some point. As you know, over the past 140 years we’ve only been an Ontario-domiciled insurance company.
IB: This is quite a step. Is expanding outside of the province crucial to your growth?
CR: Not crucial; important. Because we are a farm insurer primarily, we will need to get outside of Ontario to write more farms at some point in time.
There are only so many farms in the province, and although they are getting larger, they are also getting smaller in number.
IB: What changes have you seen in the industry since you started?
CR: The greatest change is technology; technology has surpassed everything. When I started, we had typists and keypunch operators.
And I would say from 2008, there’ve been greater governance requirements on all financial institutions, and this governance has taken up a lot of my time.
Thirdly, I find the expectation of customers is greater than 30 or 40 years ago. They expect more; customers demand more than before – and rightfully so. You must have enhanced customer service to succeed today.
IB: Are the clients better educated today, or has the Internet contributed to this?
CR: It is a combination of both. We’re definitely dealing with a more informed customer. Our brokers are providing greater guidance and service as well.
IB: Where did you get your start?
CR: I was in my early 20s when I started. I started at Royal Insurance as an underwriter, and I worked my way up. Back in those days, we were told to get a job and fall in love with it. The new generation today is looking for the job that they love.
IB: Are you are currently expanding in North Waterloo?
CR: We are expanding the building. The construction started in October and we will be doubling the size of our building. The new building will be ready in August of this year, to celebrate our 140th anniversary. We ran out of room, and our claims department is in another building right now. This will allow us to have all of our staff in the same location. The tremendous success we have enjoyed has resulted in the organization doubling in size in the last five years.
IB: The federal government has been discussing demutualization for years. Do you see this ever happening?
CR: I think they will, because they promised. The federal government promised regulations for demutualization. I think they will keep their promise; it is just a matter of when.
I want to be clear that our desire is that any mutual demutualization regulations must not provide unwarranted short-term financial incentives to demutualize that are not in the long-term best interests of policyholders.
The life mutuals demutualized a number of years ago, and the difference between then and now is that all of the life mutuals wanted to demutualize. Of the property and casualty mutuals, only The Economical expressed a desire to demutualize. (Look in last year’s December issue, Demutualization: Hurry up and wait)
IB: What do mutuals have as an advantage over other insurers?
CR: We have a great story to tell, a rich history and a shared purpose. And we have mutual values with our policy holders. Mutuals are accountable to policyholders, not shareholders. We’ve always taken the longer-term view being well aware that as mutuals, we can all look back at more than a century of history and can proudly say that while competition, products, technology have all changed. We as mutuals still manage our companies according to the fundamental principle of the mutuals insurance industry – a singular focus on policyholders.
IB: What products are hot today?
CR: Our vision is to be the dominant farm insurer. And we have been growing in the farm line of business. To specifically answer the question, business interruption coverage; when faced with loss of income; this coverage insures against such a loss.
Our farm policies and farm products are very flexible, and can accommodate a diversified client that is involved in a variety of businesses.
IB: Where should struggling brokers direct their focus to succeed today?
CR: Personally I don’t think that our brokers are struggling. This is a very competitive business. Our brokers have consistently outperformed the direct writers in results, with significantly superior service to customers than the direct writers, despite all of the marketing dollars that the banks are putting into securing business. With personalized service, our brokers get to know their customers better, and be their advisor, because after all, the product is still very technical and legal in nature.
The client wants to know why you are recommending a particular product or insurer over another. Brokers know the best fit for each individual client.
IB: What is the greatest threat facing the independent broker channel today?
CR: I think the banks using their rich database to select clients based on their financial history. The direct writers are able to deliver their products more economically, but they lack the personalized customer service that the brokers are able to provide.
IB: What is the greatest innovation to come to the broker channel?
CR: Real-time selling. This enhances the customer experience, and gets the sale done with one-stop shopping. The ideal environment is like selling an airline ticket; they give it to you at the same time of purchase.
If I go to book a flight, I go to a travel agency, I pay for my flight, and I get my ticket. That’s the innovation that the property and casualty insurance has gone to in personal lines. It has gone to that level. I can tell you, 25 years ago, you had to wait days or weeks to get your policy. Everything is done in real time now.
IB: Have you learned more from your successes or your failures?
CR: I would say failures, because I reflect every day on what I could have done better. Even the successes can be accomplished in perhaps a more efficient manner. We are always better from the experience. I always ask myself, ‘How can being a part of this organization make me feel better about myself?’ We should all ask ourselves this question.
I feel at North Waterloo we are building an organization that we can all be proud of and say that ‘we work here, and I helped build it.’ For me, I am living my deep, personal values at work, which is to say: to be human first and a manager second. My philosophy is that family comes first, and then our job. It should always be this way. I live by it.
IB: Is your family a large part of your life?
CR: I have three children and one grandchild. My wife and I just celebrated our 40th wedding anniversary. I have been very fortunate to have a caring family.
IB: What piece of advice would you give a newcomer just entering the insurance business?
CR: Live those life values and be professional in whatever you do. Try to be a student of the business; hard work has never killed anyone. Family and integrity; these are our critical success factors. I’ve reminded our staff many times – don’t compromise on our values, because at the end of the day it is all that we have.
This is your one and your own precious life – live it the right way, live it your way.
This feature is from Insurance Business Canada's July Issue #2.3. Please click on the link to read more.
