Federal Government to stop banks from selling insurance online

[macker]

http://ca.news.finance.yahoo.com/s/0...line-says.html

I am not so sure the banks are any good at selling insurance online anways. Didn't PC Financial try getting into this only to realize that they weren't any good at it and or couldn't make any money at it?

[Bobblehead]

The banks are still allowed to keep selling insurance through their subsidiaries, they just can't do it through their banking websites. Unless I'm reading this wrong, the Bank's insurance companies (for example TD Insurance = Meloche Monnex) can still operate and have a website, they just can let TD Bank's website sell TD Insurance.

It seems like this is reasonable - Banks aren't allowed to sell insurance in their branches, this is just extending the policy.

[macker]

This is the low lying fruit for the banks and likely accounted for a lot of their growth strategy into insurance. If you take for example TD Bank, I think they sell the most critical illness insurance out of any company offering it in Canada right now and much of these sales came from the cross selling that goes on through their website. On a per capita basis Canadians own the second most insurance after the Japanese so it will make it harder for the banks to get to the pie.

[Finny61]

It's easier to get the pie if you offer all your products online in a speedy/convenient/cost effective method without the interpersonal aspects. When most insurance companies operate in opposite fashion. I know auto has expanded into more of an online market however I think the basis of the insurance transaction has always been the customer/agent relationship and the general insurance companies likely wish to protect that and avoid being in a weak position. Really the banks could strangle the general insurers, they have massive capital and a solid book of business to work off of (their own banking clients). Not guaranteed success however, ING has proven that.

[macker]

Most if not all bankers are not licensed to sell insurance. Next time you are talking insurance to a banker ask them and I think you will be surprised with what they tell you. There is a reason that they won't go anywhere near commercial insurance.

[starseed]

So I can no longer buy travel insurance from my bank through the airline's website?

[Slava]

The reason that TD sells so much Critical Illness is actually because they offer it on all of the mortgages that they write. Its not the equivalent product to what is offered through the major life insurance companies in Canada, as there are many more limitations and exclusions, but they do sell a lot of it.

Most insurers do not offer insurance online for the reason that there is a lot more to this than just inputting a credit card number and answering a few questions. Whether you agree or disagree with them (I largely don't care for them) some policies offer investments within the policies and can be very, very complex.

Most people likely don't realise this, but there are a number of different types of life, critical illness and disability coverage. Its a contract that should be completed with a licensed agent and after some consideration of the options; in many cases these decisions are worth hundreds of thousands of dollars to the average guy.

[Slava]

Originally Posted by starseed

So I can no longer buy travel insurance from my bank through the airline's website?

No you have to go to my website instead!

You can still buy the travel coverage online. This is just for life, disability, critical illness and long-term care coverage.

[macker]

[quote=Slava;2081349]No you have to go to my website instead!

You can still buy the travel coverage online. This is just for life, disability, critical illness and long-term care coverage.[/quote]


And for property and casualty (general insurance) and quite possibly travel insurance as you also need an accident and sickness license to sell travel insurance and it sounds like Flaherty is referring to all classes of insurance and much of the 33,000 people lobbying for these changes are from the p&c side which includes travel insurance brokers. http://www.financialpost.com/story.html?id=2078593