Bringing broker business closer to home

Read more: NFP to open new corporate office in downtown Toronto

To better understand the broker’s growth strategy, Insurance Business spoke with Scott Saddington, chief operating officer for NFP in Canada. For Saddington, the new office is an important milestone for the company, as it allows NFP  to operate as a true “people business” that reaches out to clients by being as close as possible.

Can you give me an overview of NFP’s presence in Canada?

NFP is a leading Canadian insurance broker, consultant and financial services firm. We provide specialized business and personal insurance, group benefits, retirement and individual solutions enabling client success through the expertise of 1,000 employees and 30 offices located across Canada. 

Our purchase of Foster Park Brokers in November 2021 considerably expanded our presence in Western Canada, adhering to our strategic plan of building a unified national platform.

In June 2022, we welcomed the Newport Private Wealth Inc. team to NFP. Newport is a Toronto-based private wealth management firm with approximately $4.3 billion in assets under management. Newport will continue to operate under the Newport brand and is a natural extension to NFP’s US Private Wealth platform under Wealthspire. Newport will also create natural synergies with our Life and Private Client Group businesses.

What are some of your key areas for growth in this region going forward?

NFP attempts to grow by evaluating the areas of our business that are either underserved or not served sufficiently enough, and we see several growth opportunities across Canada.

The formation of our new NFP Alberta Captive Management company to address the new Alberta Captive Legislation is just one example. We are also strengthening our Complex Risk Solutions Group energy team with the recent hire of Rob Scherer (former Aon Head of Energy) in Calgary and will expand our national verticals platform capabilities in the near-term. Notably, the NFP platform provides employees with personal growth opportunities not found elsewhere. The collegial nature of our company where there are no cross-divisional chargebacks is conducive to all employees working together with the sole goal of client success.

We have a saying internally, #OneNFP and we all live it daily. We succeed together.

How does serving the Canadian market differ from serving the US market?

The Canadian market is well established and based on supply and demand ratios, Canada is a very competitive marketplace. We have several veteran underwriter teams that do a very good job in helping establish cost-effective programs for clients.

In terms of market differences, Lloyd’s of London markets, which are always open to quality Canadian business, are also Admitted Insurers in Canada (vs. only 2 in U.S. states) and affords an easier international placement without excise taxes that may be incurred if using a U.S. based insurer for Canadian risks.

In addition, in previous years Canada’s exposure to CAT property risk largely centred on earthquakes in limited geographies as opposed to the U.S. where CAT risk encompassed all major environmental events. This led to premiums typically more competitive in Canada than risks in the U.S. Now, Canada is focused on flood and wildfires pressuring reinsurance costs and imposing limitations on coverage, so the pricing gap has narrowed to some degree.

From a liability perspective, Canada’s litigious environment is considered less onerous than the U.S. and remains an attractive domicile for international underwriters. One exception to this would be in the Province of Quebec where defense cost payments remain outside the limit of liability (for many D&O placements), and this has caused many Canadian and Lloyd’s underwriters to take a closer look at whether they wish to have Quebec domiciled D&O business in their portfolios.

Has the post-COVID period compounded any of these differences?

During the height of the COVID pandemic it became very apparent that long-standing relationships get us through some tough times. The inability to have clients meet with underwriters in person generally affected policy terms and conditions, and strong market relationships were relied on a lot to achieve a quality result.

I do not feel that Canada or the US market differed in this regard. What was highlighted in both markets was the old adage “words can cost you millions” so NFP focused on coverage over price to the benefit of clients. However, on accounts that were worthy and where we could differentiate from clients’ peers, we aggressively pursued premium reductions, but we worked with insurers to achieve an agreeable solution.

In Canada we have seen a rapid growth of new capacity in the Specialty MGA sector, and this has been welcomed by many brokers as some mainstream insurers have refined their underwriting appetite

How did your new downtown office in Toronto come about? How critical is this region to NFP’s growth plans for Canada?

Moving into First Canadian Place (FCP), Toronto is a milestone for NFP in Canada. First and foremost, we are a people business. No computer algorithm can get to know a client and have a discussion on risk transfer exposures (corporate or personal), personal investment advice, or make recommendations on group benefits programs like an in-person client meeting. 

As we continue to expand in all business segments, we wanted an office that was conducive to supporting client meetings. Also key in our planning was to create a space that was inviting and welcoming for teams to share and collaborate. We are a big believer in having clients interact in-person with underwriters and the FCP office allows for this.

The central Toronto business district location, the connectivity onto the PATH (underground thoroughfare) and proximity to transit makes the FCP office the ideal location for NFP clients, staff and partners alike.

Does the company have plans to open offices in other provinces/territories?

We are always looking for opportunities across all our business lines to expand our Canadian footprint. For NFP, it is just as important that any expansion of our business aligns with attracting a similar workplace culture and ‘People First’ employee environment.

We will grow and acquire at a steady pace through the acquisition of companies and teams of people that fit into this NFP strategy. Meaningfully, we will also establish offices in locations to service our clients, as well as potentially consolidating other offices to create Centres of Excellence in various industries.

Next up for us is the September re-opening of our Oshawa and Windsor offices that have been expanded to accommodate our growing workforces in these locations.