A.P. Reid Featured in Globe and Mail: October 17, 2016

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Halifax-based broker goes nationwide by adding zip to insurance business

A.P. Reid combines bricks-and-mortar firm with on-line service for tenants

Most people think of the insurance business as solid, steady and sedate. Jamie Reid, president and CEO of A.P. Reid Insurance Ltd., however, is finding leading-edge ways to reach more customers.

“We’re trying to break the mould,” Mr. Reid says.

Headquartered in Halifax since its beginning in 1980, his company has been building a nationwide network by acquiring brokerages in New Brunswick, Quebec, Ontario and Alberta, as well as establishing an online business that provides insurance to tenants across the country.

“Fewer than a quarter of tenants buy coverage,” Mr. Reid notes. “Every time there’s a loss [without coverage], it’s a huge burden to the tenant, it’s a huge burden to the landlord, and it’s a huge burden to the community.”

Society is better off if, after a fire, “instead of the Red Cross showing up with shelters, you have insurance companies showing up with cheques,” he says.

“The best example is Fort Mac [Fort McMurray, Alta., which was devastated by wildfires earlier this year]. So many houses were damaged, and most of those people bought insurance. So we have tents situated just outside of town full of claims adjusters, helping people get their lives back together.”

The goal of his on-line brokerage, ZipSure.ca, is “to solve the problem offering people a different experience,” Mr. Reid says. “We developed this model to be on-line only to make it more accessible and to keep the price down.”

ZipSure.ca partners with landlords who provide information in advance about their properties, so that tenants don’t have to fill out extensive forms about their individual apartments.

“Three out of the country’s five largest landlords are in the test phase with us, in terms of providing their information,” Mr. Reid reports.

ZipSure.ca also lets tenants take out month-to-month policies, since many people don’t always rent the same place for a whole year. “We want to deliver insurance not just through traditional channels, but [also] through multiple ones,” he says.

His on-line brokerage has been growing quickly from its modest beginnings, with sales increasing from approximately $10,000 last year to nearly $40,000 this year, and with expectations to hit $100,000 quickly. Building an on-line presence is just one aspect of A.P. Reid’s plan for marketing and consumer outreach, though.

“Everything that we do has a technical flair,” Mr. Reid says. “We take multiple brands, roll them out and look for new opportunities in the marketplace.”

The firm’s national plan included the acquisition earlier this month of an Edmonton firm, Robinson Insurance Brokers, which A.P. Reid will bring under its brand on November 1. In 2014, A.P. Reid acquired the Ontario-based Robert C. Davis Insurance, and last year it purchased two group auto and home insurance portfolios and established another office in Edmonton.

While the differentiator for the online insurance products is ease of use for consumers, A.P. Reid takes another approach for its bricks-and-mortar business – specializing in group insurance and niche products and policies.

“We’re really doubling down now on group and other strategic types of [insurance] programs rather than depending on retail walk-in business,” Mr. Reid says. “For example, if people enroll in a group plan and then they want to add, say, a pet product or a medical product to their program, we can provide it.

“We’re also working with large employers on discount programs for employees for their home and auto insurance. The infrastructure we’re building in terms of buying brokerages is not just to consolidate them but to leverage them.”

What this means is that A.P. Reid is not just expanding for expansion’s sake or to take over other brokerages and downsize them. “We’ll buy a brokerage with five people, and then we’ll add three more. We’re not buying to cut costs, but to have equity to build on,” he explains.

“We’re buying to get bricks-andmortar in different territories. We use this to put our people face-to-face with different organizations – universities, business organizations and so on, to see if they can jump on board with some of the national insurance programs we’re building.”

The combination of on-line and physical space is comparable to the banking sector, Mr. Reid says. “You may not go into your branch every day, but you know there’s one there if you need it. Our contact centre in Halifax is also there to help.”

A.P. Reid has established its own sales, marketing and design teams that fan out across the country to help its brokerages in different regions build the national brand. An important business tool is the firm’s use of electronic funds transfers (ETF) – direct payments, enabling customers to pay their premiums regularly every month.

“Every single policy we have is a monthly one,” Mr. Reid says. “Our studies show that if we let you pay for a full year, we’ll lose you next year.”