Insurance tops Desjardins CEO’s prioritiesBy Hubert Roy | December 06 2017 07:00AM
Guy Cormier (Photo: Normand Huberdeau) and Denis Dubois (Photo: Denis Méthot)
As the Desjardins Insurance brand is poised to replace State Farm outside Quebec, Guy Cormier has announced lofty ambitions for Desjardins Group in property and casualty insurance and beyond.
The Insurance and Investment Journal interviewed Cormier, Desjardins Group’s president & CEO, the day after the brand transition was announced on Nov. 21. Denis Dubois, president of Desjardins General Insurance Group (DGIG), also participated in the conversation.
This move paves the way for the Group to offer a host of products via what Cormier describes as a new distribution network for Desjardins. He adds that the agents in the network are ready and want to offer their clients products other than P&C insurance. In the future, he is counting on this network to promote Desjardins banking products, along with the wealth management offer and other services. “We want to expand our specialties outside Quebec. We can have a multiproduct approach and advice, plus a presence in the community.”
Cormier is targeting three main lines of growth for Desjardins Group outside Quebec: P&C insurance, wealth management and the gamut of payment services.
In a media release, Cormier describes the brand transition of State Farm to Desjardins Insurance as “an exciting step.” He says that “Since its inception 117 years ago, the Desjardins Group has built a network of over 1,000 points of sale, 300 credit unions In Quebec and assets of over $276 billion. We are now adding about 500 points of sale outside Quebec, all of which will display the Alphonse Desjardins name on their storefront, from New Brunswick to Alberta, including Ontario. It is very impressive to see a Quebec business doing this. I am convinced that Alphonse Desjardins would be proud to see his brand span the country.”
Cormier and Dubois say they received a warm welcome from the State Farm agents. They met them in person to announce the transition. It will officially begin on May 1, 2018 and will end in late 2019, when the five-year period that Desjardins Group is permitted to use the name State Farm in Canada expires.
“The State Farm brand was very important for these agents. Also, we noticed that clients were also buying the relationship that they developed with the State Farm agent, along with their involvement in the community,” Cormier says.
Denis Dubois adds that his organization has transformed this integration risk into an opportunity. “We have already demonstrated our ability to offer the two brands simultaneously. This is why this transition is being done over a 12-to-18 month horizon,” he explains.
For Cormier, this slow integration, on the human scale, was the right approach. He mentions that between 90 per cent and 95 per cent of the State Farm agents have remained with Desjardins. “They could see the strength of our values. We gave ourselves the time to do things. The agents recognized this,” he says.
Despite all the integration efforts, the State Farm network grew in 2017. Its volume of $1.7 billion has edged up since 2016, marking the end of years of decline (in 2011, the volume of the State Farm network was $2.2 billion).
Cormier is also counting on his network outside Quebec to boost business insurance volume. “This is a strategic element of our Canadian development. Our leadership in auto and home insurance is evident. All the same, we would truly benefit from introducing business insurance products. Agents want them. They clearly expressed their interest in meeting more needs,” he explains.
Cormier adds that agents outside Quebec have brought Desjardins one million clients. “These people have needs beyond P&C insurance. It’s an expansion avenue for all the products we manufacture,” Cormier adds.
Cormier is proud to be expanding the group’s P&C insurance activities. “It is one of our subsidiaries that innovates considerably both in its industry and within the Group. Just take the Alert and Ajusto services, for example. I’m proud of them because all our members benefit from them.”