Penncorp becomes La Capitale Financial Security in move to drive expansion outside Quebec

By Hubert Roy | January 28 2014 06:17PM

With Penncorp becoming La Capitale Financial Security on Jan. 1, the insurer is pulling out all the stops in an effort to increase support for the subsidiary among its network of managing general agents, which has been its traditional source of strength.La Capitale acquired Penncorp in 2006, but the effort to develop its independent network really only began two or three years ago. Now the Quebec-based insurer wants to accelerate the development of this network with its subsidiary in Mississauga. It believes that relying on a single brand rather than two is a wise decision.

Why promote two brands when you can just use one? “We wanted to generate a return on our investment in trademarks and simplify our lives,” said the CEO of La Capitale's Insurance business, Steven Ross, in an interview with The Insurance and Investment Journal.

Ross says that La Capitale has achieved the exposure and critical mass it needs to market all of its subsidiaries’ products under the same name across Canada.

The timing was also propitious because La Capitale has fully integrated Penncorp into its individual insurance division. “We have the platform to develop La Capitale outside of Quebec and we have experienced significant growth,” comments Ross. “In 2012, we were the 12th largest insurer in Canada, while we were only 20th seven or eight years ago. In Quebec, we have moved from 14th to 7th during the same period. In addition, 20% of our group insurance business is now done outside Quebec.” Ross also points out that Penncorp was ranked sixth in Canada in terms of market share of wage loss insurance.

Brokerage channel

La Capitale says it wants to reinvigorate the brokerage channel and take a serious look at what it can offer. “The entire line-up for independent advisors is on the table. Products for this network will be reviewed and improved. The first new items will be presented in the spring,” reveals Ross. Development teams across Canada are working on it, he adds.

Since it was founded in 1971, Penncorp has worked in the income protection niche, offering coverage to blue-collar, self-employed workers such as farmers and truck drivers. Its mission is to provide manual workers with products that are of an equivalent value to those offered to traditional white-collar professionals.

“We offer disability insurance products that provide benefits for life, which is very rare in this market,” says Ross. “Our products contain no limitation with respect to back pain and ligament problems (strains, sprains). They require no integration with public plans. We also have an excellent reputation for claims: we issue a first cheque as soon as the insured qualifies and only after that do we proceed to the analysis and evaluation of the claim.”

La Capitale Financial Security will remain in its specialized niche, but Ross says it will cast a wider net. “We will target not only blue collar workers, but also the AA and AAA classes, such as translators and journalists,” he explains.

The Penncorp name will not disappear completely. Its branch network will continue to carry the Penncorp Insurance and Financial Services name. Because of its excellent reputation, the name remains an asset to the insurer in its relationships with advisors, especially outside of Quebec, comments Ross.

Moreover, efforts to support the independent channel do not detract from the branch network, says Ross. “We will also continue to develop the career network.” The Penncorp career channel is traditionally seen to be a strong one, both in Quebec and in Canada.