Quebec-based insurance advisors within the IDC Worldsource (IDC) network can now offer their clients Desjardins' life and health insurance products. Desjardins made this announcement public on Feb. 23, 2024.
The Desjardins products accessible to IDC include market-linked term investments, annuities, and guaranteed investment funds.
"This marks another step in our pan-Canadian growth plan in individual life insurance," said Chantal Gagné, Senior Vice-President, Life and Health Insurance Division at Desjardins, in an exclusive interview with the Insurance Portal prior to Desjardins' public announcement. "Our goal is to increase our capacity. Winning over advisors will be a challenge. The key will be to have great products and excellent service," she added.
Acquired IDC in the first quarter of 2023
Desjardins acquired IDC in the first quarter of 2023 from Guardian Capital Group. The $750 million transaction allowed Desjardins to gain a network of 5,000 independent advisors. Gagné said she did not know the exact number of active IDC advisors in Quebec.
Until now, Desjardins exclusively distributed its products in Quebec through its network of caisses and SFL Wealth Management, a group of franchisees free to choose products from various suppliers. The SFL network is also active elsewhere in Canada under the Desjardins Financial Security Independent Network (DFSIN) brand. Gagné revealed that the SFL network consists of 1,200 advisors across Canada, including 650 in Quebec and 550 DFSIN advisors outside Quebec.
Outside Quebec, Gagné said the State Farm Canada network of agents’ transition to Desjardins was completed at the end of 2019. This network distributes both property & casualty and life insurance products. Desjardins acquired State Farm Canada in 2015. Gagné said that 500 agents, formerly State Farm agents, serve this network.
Continuity Outside Quebec
IDC advisors outside Quebec already had access to Desjardins insurance products, Gagné noted. "We have other agreements in Canada with several managing general agencies (MGAs)," added Gagné.
She explained why, until now, Desjardins had developed its managing general agency network exclusively outside Quebec. "In Quebec, we had the advantage of the extensive coverage of the caisses. To diversify our distribution, we needed to quickly increase our capacity outside Quebec," she said.
According to information available on the Desjardins Group website, the Federation des Desjardins caisses du Quebec consisted of 210 Caisses in Quebec as of Jan. 1, 2023, as well as the Desjardins Ontario Credit Union Inc.
Gagné added that 230 advisors serve the caisses network, which has 7.5 million members in Quebec.
Upon assuming her current role created a year ago, Gagné inherited all business lines in personal insurance, including individual insurance. She was serving as Vice President at the time. She is also responsible for group insurance and retirement savings, support and claims, and sales and distribution networks.
Increasing Quebec footprint
By opening distribution to IDC in Quebec, Desjardins aims to increase its footprint in the province. Denis Dubois, Executive Vice President, Wealth Management and Life and Health Insurance at Desjardins Group, told Insurance Portal in December 2022 that the tide had turned after challenging times.
These challenges, according to him, accounted for the decline in market share of Desjardins Insurance in Quebec, from 15.0 per cent in 2020 to 14.2 per cent in 2021. Desjardins regained lost ground in Quebec in 2022, increasing its market share in Quebec to 15.2 per cent. These figures are drawn from the Insurance Journal’s annual reports on the market share evolution of Canada's largest insurers.
According to Gagné, Desjardins had already begun paving the way for IDC Quebec. "To prepare for a more sustained growth plan, we invested over the last three years in really improving our product range, the quality of our service, and our tools. We want to be a key player in individual insurance in Canada, and acquiring IDC is part of this ambition," she said.
Gagné added that Desjardins' sales through managing general agencies in 2023 represented 12.5 per cent of its total sales in Canada, and 30 per cent of its sales outside Quebec. "Desjardins' total growth in individual insurance in Canada in 2023 reached 19 per cent. Desjardins' pan-Canadian growth plan in individual insurance aims to double our individual insurance sales by 2032," Gagné revealed.
"One of the additional levers to reach our growth targets is to increase the number of people who can distribute Desjardins products," she emphasized.
Expanding to other MGAs in Quebec
Desjardins plans to extend the distribution of its products to other MGAs in Quebec. "In the coming months of 2024, we will start with partners with whom we are already working outside Quebec and who are national," specified Gagné. She chose not to name them, stating, "there are several." It's well known that Financial Horizons, Hub Financial, and PPI are among the other major pan-Canadian MGAs.
Gagné explained why Desjardins is carrying out its plan in stages. "We only get one chance to make a good impression. We want to progress at a gradual pace to maintain high-quality service for advisors."
"The partnership with IDC helps us better understand the needs of the MGA market and ensure we're making the right improvements to succeed with independent network advisors," she said.
In Quebec, Gagné anticipates reactions from regional players. "For the 2024 game plan, we're starting with IDC and our other national partners. In 2025, we'll see. The plan for regional players is not yet decided. Opening to IDC and other national MGAs represents a lot of internal capacity and potential new advisors. We don't have an official number, but our estimates reveal that we have enough for this year's order book," she said.
Managing competition between networks
How will they manage competition with the SFL network in Quebec? "We were already experiencing the same situation outside Quebec with our DFSIN network. DFSIN has MGAs around it that can offer Desjardins products. Both networks can sell Desjardins products. In Quebec, IDC is not a new competitor for SFL, as it already has its client base," Gagné explained. "We have spoken to our top SFL advisors, and they see this as a logical continuation of the IDC acquisition."
Gagné added that there would be no referrals between advisors serving the caisses members and those from MGAs. "These are two distinct networks," she underlined.
She said she aims to ensure harmonious coexistence between the networks, "and continue the growth started in the last two to three years with our current networks. "We don't want to shift opportunities, but create new ones," she stated.
Making its mark
The acquisition of IDC previously stirred discussions in the independent network. "In reaction to the acquisition, we saw 55 per cent growth in sales in the MGA market outside Quebec last year, because we acquired the largest MGA in Canada. This solidified our intention to make our mark in the independent network," Gagné highlighted.
Following the IDC acquisition, some MGAs raised questions about the independence of the independent networks acquired by insurers. At the time, Phil Marsillo, President of IDC, countered that there would be no imposed quotas on selling Desjardins products.
Gagné assured that the same would apply to IDC in Quebec. "IDC Worldsource will not have quotas to meet in distributing Desjardins products," Gagné confirmed.
Desjardins Financial Security's distribution capacity in numbers
IDC Worldsource
- Unknown number of advisors in Quebec
- 5,000 advisors in Canada
SFL Wealth Management
- 650 advisors in Quebec
- 1,200 advisors in Canada
Caisses network
- 230 advisors in Quebec only
State Farm Canada (Desjardins Insurance)
- 500 advisors outside Quebec only