After 20 years’ experience in the technology industry ‒ 15 of which have been spent in the financial and insurance sectors ‒ Frederic St-Jean Mercier has relished the challenges presented by his most recent role as CIO at Canada’s most respected MGA.
GroupAssur was founded in 1993, servicing the specialised insurance needs of brokers and customers across Canada. The company provides underwriting services for complex insurance policies on behalf of Canadian insurance carriers, international insurance carriers, and Lloyd's of London insurance syndicates.
Headquartered in Montreal, GroupAssur has always been actively involved in new technical innovations and strategies, and, early last year, merged with Evolution Insurance, an MGA and wholesaler specialising in complex risks that offers its facilities, programmes and services to Canadian brokers. The move has ushered in a number of changes, alongside the company’s own technological evolution.
St-Jean Mercier, who joined GroupAssur in 2021, is well-versed in the process and has extensive experience with the transition from traditional technology stacks.
“Last year, I joined GroupAssur, I felt their vision to pivot to a technology driven company, combined with their size was a natural fit based on my experience in both large financial enterprises and smaller, nimbler SaaS technology companies. My role is essentially to create value through technology within the organisation and foster a culture of innovation.”
St-Jean Mercier says GroupAssur has taken a unique approach to its technical transition, in that its teams are redesigning the business first and then putting technologies in place to fit that need.
“We're actually rethinking, reshaping our business model and our operating model based on what we can do with technologies, so I work extremely closely with the other executives to really understand their challenges,” he says. “We share the same objectives and KPIs.
New marketplace offerings and a robust reputation
GroupAssur is the largest Canadian owned MGA in P&C insurance in Canada. The company mainly provides commercial insurance products, and has a wide range of products, from General Liability to property. The merger with Evolution Insurance has been a symbiotic move.
“We had very complimentary products, so that made us the number one Canadian owned MGAin the country,” St-Jean Mercier says. “Our goal is to create a world-class MGA and expand through the United States.”
Part of this journey is the deployment of new technologies that are set to further enhance GroupAssur’s wide portfolio of commercial products. The innovations are adding value to broker services. GroupAssur will be the first MGA in the world to be going live on Guidewire ‒ the world-renowned cloud native, P&C platform for insurers.
It's just one of the aspects that already sets GroupAssur apart from the competition. St-Jean Mercier explains: “Most MGAs are pretty niche. We are different because we represent most of the national insurers and we do so through several different insurance products - which we design - and build partnerships with them.
“This allows us to offer a very broad and diverse range of insurance products, enabling us to cover very complex risks that most insurance companies would not be able or willing to cover themselves..”
GroupAssur is, in his opinion, able to assemble a completely different type of insurance offering. Another competitive advantage is the company's financial resources. As Canada's largest MGA, backed by reputable investors, it has the ability to invest in technology at scale, in a way that very few other MGAs can.
Technology adoption in commercial insurance
The demand for more streamlined and digitised commercial insurance is high, but a limited number of traditional industry players have chosen to adopt the latest technological innovations. Instead, they have tended to focus on personal lines products.
St-Jean Mercier explains: "This has created a gap between the state of technology for personal lines insurance and that for commercial insurance.". Then COVID came, and drastically changed the landscape, so now customers' expectations are even higher when it comes to the digital and self-service marketplace. This puts even more pressure on insurance companies to invest more into personal lines and will most likely widen the gap further when it comes to digital offerings in the commercial lines sector.
This situation has provided GroupAssur with the opportunity to be at the forefront of entities investing next-generation services in the commercial lines sector.
“Commercial insurance is our core business, this is what we're focusing on. We're investing in these technologies so that we can bring serious benefits and disruption to the industry through the use of tech in a way that no-one else has done before.”
Core values in a changing industry
As agile strategies and new technologies rapidly transform the mechanisms and procedures offered by GroupAssur, the company is intent on making sure it retains its core values, which are based in respect and integrity, excellence and unity..
“This is really the bedrock of our company. We operate in the financial sector, so our clients and our partners need to trust us. We need to be respectful and have integrity at all times. This is non-negotiable.”
“Excellence translates into the quality of our work, both for what we provide to our brokers and how we represent our insurance carriers. Our KPIs are driven around excellence, as well as the value we can bring to our partners.
“This is where the innovation aspect comes in. We deliver experience through technology and innovation. There's no other way to do it. There's a limit to how you can scale using manual processes, pen and paper and people. So excellence is the driver of technology for us.”
The final core value for GroupAssur is unity, which is applied to the company’s internal operations as much as to its customer products and services.
“We share all the same objectives,” says St-Jean Mercier. “Whether you're in technology, operations, underwriting or business development, there are the same objectives across the board. We win together because we're all accountable together. It's very important for us.”
Digital transformation and going cloud native
GroupAssur is currently in the process of transitioning to a cloud native model on the Guidewire platform. The integration process will be completed soon, making the insurance provider the first MGA in Canada to operate in this way.
“Guidewire is at the centre of the core insurance operations ecosystem that we are developing. But around this we're implementing a lot of different technologies ‒ some of which is AI-driven and some of which is centred around automation, data and analytics, as well as business intelligence,” continues St-Jean Mercier.
As part of the transition, GroupAssur’s team built a Data Lake featuring data from across the company’s entire landscape of legacy systems to provide a unified dimension which AI algorithms will leverage to help the business make decisions.
“A lot of our transformation is not around replacing the humans ‒ it's around three things. Speed, efficiency, and insight.
Foremost, speed is of the essence. We look at the speed at which a case moves through our pipeline, eliminating any kind of clerical or data entry work for our employees.
“This allows them to focus on doing actual underwriting work without having to go and search for all of the data that they need to make a decision. It's really about simplifying their operation; we're not removing the human from the equation, because we are an underwriting business.
“We also think that technology is not at the stage, for the foreseeable future, where it can make underwriting decisions. Those are too complex, especially in the commercial sector. Instead, what we're doing is making sure that our technology routes the right case to the right underwriter ‒ the one who is the most qualified to perform that case extremely efficiently.”
GroupAssur’s new processes are made possible through its partnerships and new APIs. The company has forged several alliances with data providers that are already integrated into Guidewire’s platform. The AI-driven solutions extract the information from the different channels that receives submissions. They then feed that straight into Guidewire along with some of its own inferred analysis & insights ‒ thus completely removing the data entry and clerical work portion of the labour.
The availability of insights is also essential, says St-Jean Mercier, because it guides all management decisions in the company’s strategy.
“We have already built a live business intelligence hub that tracks all of our KPIs, all of our performances, our markets, our brokers’ performance throughout the years, month by month. We can slice it anyway we want and go back as far as 10 years. It contains unified data from all the different legacy systems that we have, and we designed it so that it can scale with acquisition, because part of our strategy is around acquisition.”
Within just a few short months, GroupAssur can bring a legacy system from an acquisition onto the data lake and begin migrating it over to the Guidewire platform. Ultimately, they aim to complete the post-merger integration of the entire system within three-to-six months following a transaction.
“That's the gist of our transformation,” St-Jean Mercier says. “So, what kind of value does it bring to our stakeholders?
“If I'm an insurance company and I see that GroupAssur's technology allows faster and more efficient quoting to their brokers - at no additional cost to them and with a loss ratio equal to or greater than the current ratios, than it's a no-brainer for these companies to partner with us and create more programs. . “
“From the broker standpoint, It's all about giving them flexibility and speed. They don't want to have to enter data on a portal for six different MGAs and four different insurance carriers for every quote. That's not sustainable. So we want to make it easy for them to send cases to us, and we want to make it easy for them to conduct their business, even when it is a very complex risk
“Finally, when we talk to potential companies that we want to acquire or merge with, in addition to the broad range of insurance products and expertise that we bring, we bring technology that they don't have and that would be very expensive to implement. Their expertise and product range, combined with our competitive advantage, makes it easy for them to choose to join GroupAssur.
“They bring us their expertise and their products, and we bring them our tech, o ur products, our expertise. It's a win-win for everyone.”
Key Performance Indicators driving strategy
GroupAssur's expansion strategy is guided by key performance indicator (KPI) data that directs our strategy and drives our growth.
St-Jean Mercier explains: “Our two primary KPIs are our loss ratio and our time-to-quote. When you do underwriting, you want to make sure that you do it right ‒ that you check every box ‒ that you cover every angle, because you don't want to have a bad risk. You can't rush the process, but you still need to be fast. So our time-to-quote KPI is counterbalanced by the loss ratio. We want to have a loss ratio that far exceeds anything that insurance companies have because it's important for them.
“We represent them, so we have to perform better. Ultimately, one primary KPI is enabling the business to quote faster and provide them with all the data and the insight they need to quote something very efficiently, allowing them to make the right decision at the right rate, using the right facility.
By managing the KPIs efficiently and scaling fast, GroupAssur has implemented an ambitious growth strategy that will enable it to enter the US market soon. “We want to expand to the US market, we're actually currently looking for MGAs over there that want to partner with us in this venture.
St-Jean Mercier says that, within 3-to-6 months ‒ depending on the original technology stack and processes ‒ an MGA that was relying on legacy systems will be in a position to switch, in its entirety, to a wholly new digital proposition.
Challenges facing the insurance industry
While technology is busy transforming legacy companies to slick, digital operators, it's easy to believe the process has been challenge-free. This is not the case, according to St-Jean Mercier, who emphasises the fact that the war on talent is a very real stumbling block to the insurance industry in general.
“It's very hard ‒ and like anyone, we're facing the same challenges. Labour shortages, especially in tech, are really hard because the pace at which technology is evolving has accelerated. You have a hard time finding talent, but a year later you have to find more talent for newer technologies , which complicates the challenge."
GroupAssur is managing the situation strategically by designing its core tech team to be composed of high performers with high accountability that are mainly geared toward architecture and business analyst roles. The team conceptualised and designed the high level architecture and then built the roadmap. They have a firm understanding of the company’s strategy and objectives. They are also well-versed in a diverse spectrum of technologies so that, if the need arises, they can be paired with a digital partner to execute a new project.
The digital ecosystem has become a key driver for all of GroupAssur’s scaling plans ‒ indeed, St-Jean Mercier describes it as critical. “There's no way we could have delivered Guidewire in such a small amount of time if it hadn’t been for the support of our ecosystem partners. We partnered with Ernst & Young Canada. They have a phenomenal team, and I’ve been so impressed with how much expertise and talent they can pull in at scale.
“This is a prime example of how, when you’re facing a labour shortage, a partner with international scale can pull talents from all over the world and build an insurance application software practice in record time. It’s been eye-opening.
“We're talking policy centre, billing centre, producer engage portals, customer engage portals, replacing four different legacy systems, on-track and under budget in under a year ‒ that is just phenomenal.”
The other partner GroupAssur has come to rely on is SIA Partners. The French fintech company has headquarters in Canada and has a robust reputation for AI and data science. SIA manages the coding and algorithm building required by GroupAssur as the company continues to scale and enter new markets.
“We think it's a really good team. We've been working with them for the creation of knowledge and the first iteration of our AI algorithm, which is currently running in production. So those are just two of the many great partners we have. But I would say that those are the two primary ones.
New horizons for GroupAssur
The future is certainly bright for this forward-thinking company that has embraced innovations and technologies, not only to drive their own processes, but to transform the offerings of their stakeholders and customers, too.
“In terms of the future, the three areas of focus for us will be completing the transformation that we're already well into, and then pivot
to become a technology-driven insurance company,” enthuses St-Jean Mercier. “After that, we want to leverage innovations to revolutionise the commercial insurance and MGA Industry. That’s our primary focus for the future, as well as consolidating our leadership in Canada.”
The move into the US is another big step, and an expansion that is being actively worked upon. St-Jean concludes: “We want to expand that to a point where we become unreachable by the competition. We're actively looking for other MGAs in the US that want to bring their expertise to us, while we bring our technology and expertise to them. The US is a very important milestone for us in our future, and the first ”