Andrew Janzen (pictured) has seen his fair share of shifts in the insurance industry landscape during his career. He joined his family’s brokerage in White Rock, BC when he was fresh out of university in 1992. Later on, looking for a new challenge, Janzen joined Mardon Insurance as a producer and, eventually, he and his wife had the opportunity to buy out the other partners in the company, which, since September 2017, has gone by Janzen Insurance Brokers.
Some of the challenges that Janzen sees facing his line of work include wildfires – hard to ignore for a brokerage based in a fire-ridden province.
“It seems like it’s a new reality for us,” said Janzen, adding that he has customers buying recreational and secondary properties in regions that are susceptible to fires, which becomes problematic to insure when there’s a blaze only 25 to 50 kilometres away. “We simply cannot bind coverage and it just puts everything in limbo. It’s really been a crazy summer. It seems we’ve run into it more this year than we did last because there’s been so many different wildfires going on.”
Meanwhile, ‘black box’ underwriting has also created issues in the world of insurance, especially for brokers trying to explain to a client why they received a certain rate. More and more insurers are using algorithms to determine rates, Janzen told Insurance Business, which is where the problem starts.
“The underwriters have really no flexibility and sometimes the rate just doesn’t make sense. It’s way too high or it’s way too low, and an underwriter with intuition would look at that and say, that’s wrong,” he explained, adding that it’s especially a problem for clients in the small, midmarket commercial space. “You pump the data into their computer and the computer pumps out a rate, period.”
The concern around this development in underwriting makes sense coming from a brokerage that prides itself on its relationship with clients.
“We recognize that the business of insurance is highly susceptible to cognitive dissonance, or buyer’s remorse, as the client is not likely to see the value until a claim occurs,” said Janzen, who is also a director-at-large for the Insurance Brokers Association of BC. “Our goal is to show value by acting as ‘good stewards of our client resources’ in understanding their needs, giving good advice and advocating personally on their client’s behalf.”
Nonetheless, Janzen also highlighted positive changes in the industry that have had a positive effect on the work of brokers.
“With all of the consolidation in the industry, I have found it refreshing how many insurers have a desire to support a truly independent broker,” he said. “From a technical standpoint, it has been interesting as insurance companies move to ‘black box’ commercial underwriting - the MGAs have done a great job of hiring seasoned experienced underwriters and filling the void.”
