“We believe very much in the future of the independent network and want to support it.” - Jean-François Chalifoux
Groupe Cloutier and Beneva have entered into a financial partnership under which the insurer becomes a minority shareholder of the managing general agency (MGA). Groupe Cloutier says it wanted financial backing from a solid investor to accelerate its growth.
The two partners say they share the desire to support the independent distribution network. Groupe Cloutier has a sales force of some 1,000 active independent advisors, spread across six financial centres, including Trois-Rivières, which is also its head office. The others are located in Montreal, Quebec, Sherbrooke, Saint-Hyacinthe and Ottawa. The company has 170 employees.
The MGA affirms that it will continue its day-to-day operations independently under the direction of its current management team. The firm adds that the deal will not change the way it does business with advisors.
Why Beneva?
Groupe Cloutier’s independence was also at the heart of the deal, stated Patrick Cloutier, President and CEO of Groupe Cloutier, in an interview with the Insurance Portal.
“We have been thinking about it for the last two years. We have shown excellent growth for several years. We thought it would be nice to find a way to accelerate this growth even further. The search for a financial partner began at that time, and we were the ones that approached Beneva,” explains Cloutier.
Jean-François Chalifoux, President and CEO of Beneva, also participated in the interview. He stated that the partnership will help support the insurer’s development in life and health insurance in Quebec.
Chalifoux explained that the insurer has multiple distribution channels: the direct channel, its network of affiliated agents and its network of independent advisors, which he considers key to promoting Beneva's offering in Canada. “We believe very much in the future of the independent network and want to support it. We have had a relationship for several years with Groupe Cloutier. It’s only natural to continue in this way,” says Chalifoux.
Chalifoux clarified that the financial partnership does not change anything in its distribution agreements with other managing general agencies.
Vow of autonomy
In recent years, MGAs like Groupe Cloutier have taken the shareholder route, with different outcomes: Financial Horizons was acquired by Great-West Lifeco (Canada Life) in 2017; PPI was acquired by iA Financial Group in 2018; Desjardins Insurance acquired IDC Worldsource Insurance Network at the end of 2022.
“It would have been simple to go the same way,” agrees Patrick Cloutier. But for Groupe Cloutier, “it was essential for our family to remain the majority shareholder, and above all to maintain autonomy in management, as well as total independence in terms of the products offered,” he says.
Beneva will, however, have a voice on Groupe Cloutier's Board of Directors. As to who will fill this seat, Patrick Cloutier says this has yet to be finalized.
A family affair
He asserts that family members “have it in their blood” to manage the company founded in 1978 by their father and Chair of the Board, Gilles Cloutier. “We want to continue to grow it on our own,” he adds.
In addition to Gilles and Patrick Cloutier, Groupe Cloutier's senior management team includes two other family members. Claudine Cloutier is Vice President, Living Benefits, and Karine Cloutier is Vice President, Marketing and Corporate Development. All four are partners in the company.
New markets
Growth will accelerate due to the stature of its new partner, says Cloutier. “We have a solid, credible partner who will take us to new heights,” he says. In his view, Groupe Cloutier can achieve growth in new markets.
Expanding outside Quebec, however, is not in its plans. “We think there's still quite a bit of growth and consolidation to be had in Quebec, through acquisitions or recruitment of firms and advisors. We are in a position to offer the most competitive range of services and products on the market every day,” stresses Cloutier.
The responsibility for this growth will rest with Groupe Cloutier, added Chalifoux. “It will be up to them to ask for it, not us,” he maintained.
Encouraging the next generation
Patrick Cloutier says he heard about the collaborative Codesign thinking event organized by Insurance Journal Publishing Group on September 5, 2024 in Montreal. At this event, 30 industry leaders brainstormed together about life insurance distribution issues. Among them, why is the industry struggling to recruit?
Cloutier responded to this question. In his view, the fact that recruits are paid too little is a key issue. “We are aware of the industry's succession problems. Does the industry discourage the sale of $250,000 Term 10 life insurance, because there are too many formalities to complete? We have to live with these realities. Until the industry relaxes its methods a little, it will be less attractive to sell small policies,” he says.
Patrick Cloutier also deplores the end of certain remuneration methods in group savings, which make it difficult for new recruits to establish themselves by buying a clientele.
“When you start out in the industry, you don't have equity, you have a high mortgage and you haven't yet managed to accumulate enough savings to guarantee the purchase of a clientele,” explains Cloutier. According to him, banks don't understand why they should advance a loan to an advisor to buy an intangible asset like a clientele.
He points out that Beneva offers a solution to this issue. The insurer has long financed the acquisition of life insurance and investment fund clienteles. “An insurer understands very well that the value of a book of clients lies in its renewal income and assets under management. Beneva's program has helped us and other MGAs attract new advisors to the industry,” he says.
Jean-François Chalifoux has retained the program, which he inherited from SSQ Insurance. “It's all about the survival and longevity of the life insurance industry. We look at it differently from the banks, and we offer advantageous transfer conditions,” explains Chalifoux.
He declined to reveal how often this program is used. For his part, Patrick Cloutier says he systematically uses it for advisors in his network. “There are more and more clientele transfers. We want to keep them with us and facilitate their retention.”
