The results of the 2004 Insurance Advisors’ Report Card are proof there’s more than one way to the top. Ratings were up for almost all the national insurers and independent advisors surveyed this year, although the winning strategies of the two top-ranked firms — Equinox Financial Group Inc. and State Farm Canada — reveal there is no single formula for positive results.
The two front-runners in the Investment Executive survey are a study in two distinct approaches to doing business. Equinox, the Toronto-based firm that saw an impressive turnaround from fifth place in 2003, is entirely made up of independent agents. The self-proclaimed “super MGA” acts as an intermediary between agencies and suppliers, providing services that include contracting, compliance and compensation.
Although it does not manufacture products, its relationship with AIG Life Assurance Co. of Canada, Standard Life Assurance Co.,
RBC Insurance and Manulife Financial Corp. gives advisors access to a full line of products and services.
The combination of an independent sales
force, top-notch front-office technology, ongoing training and product availability resulted in Equinox’s IE rating of 9.0. The firm pulled in nine first-place ratings this year, eight more than in 2003.
It’s a different story at State Farm, which trails Equinox in the IE ratings by only 0.1 point. The insurer has 450-plus captive, or career, agents in Alberta, Ontario and New Brunswick, and the company owns each agent’s book of business. Top marks in sales support, advertising, client prospecting materials, strategic focus and corporate image boosted State Farm’s overall rating to 8.9, besting last year’s first-place score of 8.2. The company took first place in 10 categories, more than any other firm surveyed this year.
But just what makes a winning company? According to State Farm agents, the formula is simple. “Good solid brand, good solid firm,” says an agent in Alberta.
At Equinox, a Toronto agent credits “service, service, service” for the company’s success.
Whereas State Farm agents praised the company itself — its ethics, its image, its strategic focus — Equinox agents gave high marks to what the company provides its agents: training, wide product selection, Web tools and freedom. As far as business models go, the only thing the two firms seem to have in common is happy advisors.
The heads of each company give their own reasons for the boost in morale.
“It’s exciting,” says Daniel Dessureault, Equinox’s general manager. “Change seems here to stay.”
Dessureault is referring to two changes in particular. The first and most recent was Manulife Financial Corp.‘s acquisition of John Hancock Financial Services Inc., the parent company of Maritime Life Assurance Co., then-owner of Equinox. Concerns over Equinox’s fate were put to rest in April, when Manulife announced its intention to retain ownership of Equinox and operate it as a subsidiary. The decision was greeted with great relief by Equinox advisors,
Dessureault says. “Now they know what the situation is, so they can get back to working on their business instead of worrying about it,” he adds. “They know Equinox is here to stay.”
The second change is the general trend toward supplier consolidation, an ongoing phenomenon that has seen 30 or more manufacturers whittled down to less than a dozen in the past decade, creating what Dessureault calls a “concentration of
business.”
“It’s more balanced in terms of the power of the distributor over the power of the companies,” he says. As a result, he adds, there’s a growing inclination toward partnership relationships between suppliers and agents rather than the constant movement by the advisors from supplier to supplier when a product changes or fails to deliver.
Although it has taken time to adjust to the changes, Dessureault insists getting used to them is the only option. “I think those who want to adapt will have a bright future,” he says.
Equinox advisors seem to agree. “It’s a prestigious corporate environment that includes complete independence and autonomy in dealing with clients,” says an enthusiastic Vancouver agent.
“I’d be an absolute idiot not to give it an eight or a nine,” agrees a a Equinox rep in Winnipeg.
State Farm career agents are similarly upbeat, if for different reasons. The firm’s well-recognized name was cited repeatedly as its best aspect, which was reflected in a top mark of 9.2 in the image category.
“[State Farm is a] strong company with a strong, growing brand,” says an Ontario agent.