Feud over: MPI will include brokers in online sales of auto insurance

MostManitobanswill be able to renew their auto insurance online intwo years' time and insurance brokers are joiningthe ride.

A new agreement reachedlast month will keep auto insurance sales in the hands of private brokers, even in online transactions.

The decision settles a long-running feudbetween Manitoba Public Insurance (MPI) and the Insurance Brokers Association of Manitoba (IBAM) over the future of online sales.

MPIhad questionedwhether brokersshould still be involved in every transaction, while IBAMsaid therole of its membersin the insurance process shouldn't be sidelined.

The provincial government mandated an end to their dispute by bringing on a conciliator. It worked, saidGrant Wainikka,theassociation'sCEO.

"Rewind two yearswe were not on friendly terms with MPI, butI think that we were able to see areas of commonality,"Wainikkasaid.

'Both sides can live with' this deal

"What happened is that we were able tobuild off of those areas of agreement and to come up with something that isn't perfect for either sidelet's be clear," he said.

"But it's something that both sides can live with, and most importantly, we think, actually will benefit the motoring public of Manitoba."

He added it is good for Manitobans to have the convenience ofonline renewals, and rely on the advice of brokers at the same time.

The five-year agreement, which takes effect in April 2021,saysMPI expects to permit additionalonline transactions on or about April 2023. A spokesperson said online renewal willgenerally be offered to all passenger vehicle owners, except those with a history of defaulting on their payments.

By that point, the insuring of newvehicle will still have to be doneat either a brokerage or MPI service centre.

Some renewals and reassessments could be conductedonline at that point. A MPI customer could log into their account andbe referred to their previous broker. They could also press a button and be handeda choice of four or five brokersgeographically closeto them.

The deal also changes the compensation rate for brokers, which already fluctuates depending on the transaction.

By the end of the deal, brokers receive more for in-person transactions of basicinsurance (4.2 per cent) and less ifdone online(2.3 per cent).

The compensation rate is presently three per cent, according to MPI,whichWainikkasaid is nearly two percentage points lower thanSaskatchewan, a jurisdiction which also has public auto insurance.

He added customers who buy other forms of insurance online regularly call a broker for help.

"The majority of consumers, as we've confirmed by our own research and through other research, don't have a very solid understanding of things like insurable value, of things like third-party liability, of things like vehicle classification, of things like personal injury protection plan limits," Wainikka said.

"These need to be discussed with a professional so that people can understand their own risks and their own liabilities and the coveragesthat they might require."

Customers free to choose: MPI

Curtis Wennberg,MPI's chief operating officer, said customers will appreciate going onlineto handle more of their insurance needs.

"The fair compensation that has been agreed will differentiate commissions to brokers when customers choose to go online instead of in-person," he said in an email. "That said, customers will be free to choose any method of interaction as they see fit."

The clash between MPI and IBAM was sent to a conciliator to resolve in July 2019.

It happened one month before internal documents, obtained by the NDP, showed the corporationfelt it was being pressuredto involve insurance brokers in every transactionbecause of the insistence of the Progressive Conservativegovernment. MPI was worried it would cost more money to involve brokers.

The government has denied any rolebut the NDP's critic for MPI,Mintu Sandhu, isn't buying that.

"This is another one of [Premier Brian] Pallister's backroom deals that benefits his well-connected friends but does nothing for regular Manitobanfamilies. They are trying to pass their interference off as an improvement but even MPI has said this deal lacks value for money," he said in a statement.

One of the principles applied to the conciliation process was that government is "committed to supporting the stability and health of small businesses," the new agreement said.

Minister of Crown Services Jeff Wharton said the government is pleased to hear of the new agreement, which he said in a statement will strengthen the relationship between MPI and IBAM.