Cal LeGrow is getting out of the personal home and auto insurance business.
Company president and CEO Jeff LeGrow confirmed the company’s personal lines of business have been sold to Nova Scotia-based Macdonald Chisholm Trask (MCT).
While part of the reason for the sale is a desire to focus on maintaining and strengthening its position as the largest independent commercial broker in Atlantic Canada, it also has a lot to do with the challenges presented in the personal marketplace as a result of technology.
“You need certain depth and size and you need to invest in technology because the customer is demanding a different experience these days and they want to do it digitally and through other ways and means,” LeGrow said.
“Those are big, big investments and we thought it was time for us to divest from that business and focus all our attention on our commercial clients, which represents a larger portion of our business in terms of size.”
The company, which was founded in 1984, currently insures one of every five businesses in the province.
LeGrow calls the decision to divest one of the toughest he’s ever had to make.
“I’ve been here since 1986. It’s like family, and most people I’ve worked with for a long time,” he says. “It’s a very difficult decision for sure and it never came lightly.”
A report released last fall by the Institute of International Finance indicates new technologies across a multitude of industries are enabling new ways of measuring, controlling and pricing risk, while also allowing new ways to engage with customers, reduce costs, improve efficiency and expand insurability.
While this creates incentive for current insurers to modernize, it has also allowed industry incumbents to wade into the waters in effort to snatch up customers by meeting unmet demands and providing new services, and bigger companies to undertake more direct writing, as opposed to farming out work to brokerages.
With the sale, about 20,000 Cal LeGrow customers become customers of MCT, which is part of BrokerLink, a subsidiary of Intact Financial Corp.
It also means employees handling personal policies are getting a new employer, but LeGrow insists there will be no job losses, layoffs or office closures.
“I feel good about the stability for our people. No one is losing their job, the customers of MCT are going to be served by the same people exactly the way they were served yesterday, and all our people are going to remain in the same locations during the transition period.
“I feel pretty good about how our clients are going to be treated and certainly how our employees are going to be dealt with, because they were the most important things to me.”
In an effort to better serve its commercial clients, LeGrow says the company will launch a dedicated special personal lines unit for those customers.