Who is the broker representing

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pelmet
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Who is the broker representing

#1 Post by pelmet » Tue Oct 10, 2017 2:24 pm

I have been using COPA insurance for the last several years. While I have not encountered any difficulties, my general lack of knowledge about this subject bothers me.

The broker is a company called the Magnes Group. From what I understand through internet searches, the broker sells, solicits, amd negotiates the insurance for compensation. So The Magnes Group makes money doing the above which is fine.

As well, from what I read on the internet, "an insurance broker works for you rather than an insurance company. Brokers use their professional knowledge and experience to help you properly assess your insurance needs, shop for the best value in insurance coverage and help you in the event of a claim".

So my question is....concerning the COPA situation, is the Magnes Group really there to do their best for me or their best for COPA(ie keeping me using their policy). Will they tell me of a better deal somewhere else, if it exists?

Does COPA actually make money on the whole insurance thing or are they simply using their resources to give me a good insurance option?
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Re: Who is the broker representing

#2 Post by photofly » Tue Oct 10, 2017 3:09 pm

The broker works for you. If you have doubts, call a different broker and see what they can find for you.
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Re: Who is the broker representing

#3 Post by pelmet » Tue Oct 10, 2017 4:36 pm

photofly wrote:The broker works for you. If you have doubts, call a different broker and see what they can find for you.
Thanks. So does this mean in theory that I should be able to call Magnes and ask them if there is an alternative that has "better" coverage? Should they be coming to me without asking and saying that they feel that what I have is the best coverage?
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Re: Who is the broker representing

#4 Post by photofly » Tue Oct 10, 2017 4:39 pm

They should be offering you the best coverage for you, period. If the COPA deal is better for you that's what they should offer; if it isn't, they shouldn't.

This crops up a lot in investment advising; bank reps have to make it clear that they're getting a commission for selling you the bank's products and are salespeople, not your advisors.

I've found the Magnes people straightforward; in reality I'd just ask them if they get anything out of the COPA deal.
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Re: Who is the broker representing

#5 Post by pelmet » Tue Oct 10, 2017 9:25 pm

photofly wrote:They should be offering you the best coverage for you, period. If the COPA deal is better for you that's what they should offer; if it isn't, they shouldn't.

This crops up a lot in investment advising; bank reps have to make it clear that they're getting a commission for selling you the bank's products and are salespeople, not your advisors.

I've found the Magnes people straightforward; in reality I'd just ask them if they get anything out of the COPA deal.
Or does COPA get anything out of the Magnes deal? I am not complaining, just interested but I kind of doubt that the person on the phone knows all the details of how this works in the background.
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Re: Who is the broker representing

#6 Post by photofly » Tue Oct 10, 2017 10:01 pm

You know I'm an advocate of just calling up and asking; both Magnes, and COPA. I've dealt with two people at Magnes - Simon Mahary and before him Kevin Gosden. I think they would both know the answer, from the Magnes end.

I'm not a COPA member but I do use Magnes, and have done for the last 6 years, because they've got me the best rates, and they worked hard to find me unusual coverage when I needed it.
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Re: Who is the broker representing

#7 Post by ScottS » Tue Oct 10, 2017 10:36 pm

You aren't buying a COPA Policy. Magnes is a broker selling you an AIG policy (the underwriter). In theory, a broker works for you by finding you the best deal from an underwriter. In this case, the broker is selling you a set deal from an underwriter. COPA has already negotiated a deal for the policy based on the access to the COPA membership market.

You need to do some shopping for yourself in this case because Magnes probably isn't going to offer anything better than the COPA deal. Talk to another broker to see if you can get a better deal than the COPA one. If not, then Magnes is offering the best deal.

We work through Air1 Insurance in Pitt Meadows. So far they seem to find us a better deal than the COPA program. That said you need to actually compare policies between underwriters. Some are cheaper for a reason as they may not be covering all risks or have exclusions to cover their risk exposure.
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Re: Who is the broker representing

#8 Post by pelmet » Tue Oct 10, 2017 11:56 pm

ScottS wrote:You need to do some shopping for yourself in this case because Magnes probably isn't going to offer anything better than the COPA deal. Talk to another broker to see if you can get a better deal than the COPA one. If not, then Magnes is offering the best deal.

Thanks for the info. If what you say is true, is Magnes really still acting as a broker for me anymore or are they really a seller for someone else? Example...Let's say AIG happens to be the best deal for me today but tomorrow, another big insurance company shows up with a heck of a deal in order to break into the market. Can I expect Magnes to call me up to let me know of this new, much better deal seeing as they "work for me"?
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Re: Who is the broker representing

#9 Post by photofly » Wed Oct 11, 2017 4:54 am

They’ll find you the best deals at the time you ask them to. Then you choose one, and buy a year’s coverage. Rinse and repeat, annually.

Each underwriter gives them a specific quote based on your details (provided by your broker) and the type of risk the underwriter wants to take on at that particular time. It’s not an off the shelf product that has a price independent of you, and no, nobody’s going to call you outside of you asking them to search the market for a new policy.

Is this really not familiar to you?

By the way the underwriters’ prices are pretty much what they are. There aren’t many underwriters operating in the Canadian market. Competition between different brokers is based on commission and service, and margins are pretty slim.

Four years ago there was a new entrant to the Canadian GA underwriting market, at the time I was looking for a new policy, and yes Magnes got me a great deal with them as they sought to buy market share, much cheaper than the previous year.
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Re: Who is the broker representing

#10 Post by ScottS » Wed Oct 11, 2017 10:19 am

photofly wrote:
By the way the underwriters’ prices are pretty much what they are. There aren’t many underwriters operating in the Canadian market. Competition between different brokers is based on commission and service, and margins are pretty slim.
Exactly. The insurance industry is huge, but there are actually very few underwriters. Pricing is pretty much fixed upon the statistical amount of risk the underwriter is assuming (nobody invests more in statistical risk modeling than insurance industry). What varies the price is actually the coverage and limitations in the policy. i.e. an insurance policy that is half the cost for the same financial amount of coverage, probably has more exclusions that halve the risk for the underwriter.

It works the same for ALL your private insurance (house, boat, car, life etc.). A broker that is working for you should be comparing policies every year for you with out you even having to ask. For example, I had a claim on my condominium insurance, and the next year my broker informed me that she had found me a better deal with another underwriter when considering the claim. Saved me hundreds.

Magnes will still work for you. If they find you a better deal based on your risk picture, they will probably offer it to you because they will still make a commission.
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Re: Who is the broker representing

#11 Post by Beefitarian » Wed Oct 11, 2017 11:47 am

When I try my best to make a perfect burger, it's because I work for you the customer. Many of my colleagues work for the company. That's why your burger often is mangled in the bag and most of the fries spilled out of the box to the bottom of the bag.

We are both paid by the company after you give them the money. It's just that some of us care.

That goes for insurance brokers too. I found switching car insurance companies, every second year used to save me money, since they tend to give you a better price to get your business, then creep it up if you stay. Once I had a broker that did it for me, a few years later the employees that replaced him did not.

I have been very pleased with our home insurance for years now even though they keep being bought out by different companies it continues to be great service and they have often lowered our rates after we phone to tell them we replaced the roof or something.

Is plane insurance like that? Never be afraid of asking if they can give you a better price.
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Re: Who is the broker representing

#12 Post by pelmet » Wed Oct 11, 2017 3:42 pm

Perhaps I would have more confidence in the belief that Magnes was working for me if they sent me an annual statement sayin that they have done their annual review of all the policies available to me and have decided that I should stay with my current policy. Their review might say might give examples of how another policy is similar and is better in this way but not as good in that way.

As well, examples of reasons that insurance payouts were not made after an accident happened and the reason(s) why would be helpful as well. Then we could analyze for ourselves whether the company we are with is the company we want to stay with.
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Re: Who is the broker representing

#13 Post by photofly » Wed Oct 11, 2017 4:25 pm

A policy is a year’s contract. You don’t “stay” with it; after a year it’s over, and you buy a new one. At that point your broker should check the market to see who’s offering the best deal for the next year.

Pelmet, I’m really confused about your level of mistrust here. Ultimately Magnes will - every year - have you fill in a form with your details and which coverage you want, then call you a couple of weeks later and say something like “I can get you underwriter A for $2300, B for $1950, or C for $1800. Same coverage for each - one pilot (you), hull at $85k all risks, $1m liability, Canada, US, and Caribbean. Which one do you want?”

You can pick any one, or none and go find another broker, who in all likelihood will get exactly the same quotes from exactly the same underwriters and mark them up by the same commission.

Now if you have specialized requirements then a broker who will go the extra distance to find you coverage is a great boon. One that will make the difference between flying or not.
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Re: Who is the broker representing

#14 Post by gwagen » Wed Oct 11, 2017 4:34 pm

So far magnes hasn’t been able to come close to c-plan quotes through the eaa. The broker is Nacora.

You have to be an eaa member.

Worth checking into.
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Re: Who is the broker representing

#15 Post by photofly » Wed Oct 11, 2017 4:49 pm

I did some sums on the last few years coverage through Magnes.

In 2012: $500 for public liability + 2% hull value all risks
2013: $500 + 1.8%
2014: $500 + 1.62%
2015: $500 + 1.3%
2016: $500 + 1.15%
2017 (two airplanes and a second pilot) $1000 + 1.04%

There’s also a no-claims bonus of about $200 annually that comes back to me, so you can subtract that.
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Re: Who is the broker representing

#16 Post by pelmet » Wed Oct 11, 2017 4:52 pm

photofly wrote:A policy is a year’s contract. You don’t “stay” with it; after a year it’s over, and you buy a new one. At that point your broker should check the market to see who’s offering the best deal for the next year.
That is one of the things I am curious about. Whether they do search the market. Of course, I have been told to call them and ask but I tend to like an independent opinion. That is why I thought that I might ask here. Like I said, I haven't had any problems, more just curiosity on a subject where I find my knowledge lacking.
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Re: Who is the broker representing

#17 Post by photofly » Wed Oct 11, 2017 5:03 pm

Going back to your original question about for whom are they working: when I had some unusual aviation insurance needs a few years ago Kevin Gosden at Magnes spent a *long* time putting together a detailed package of coverage for me that nobody else wanted to touch. There didn’t seem to be any doubt then about whether he was working on my behalf or not. I’m still grateful for it.
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Re: Who is the broker representing

#18 Post by pelmet » Wed Oct 11, 2017 5:16 pm

photofly wrote:Going back to your original question about for whom are they working: when I had some unusual aviation insurance needs a few years ago Kevin Gosden at Magnes spent a *long* time putting together a detailed package of coverage for me that nobody else wanted to touch. There didn’t seem to be any doubt then about whether he was working on my behalf or not. I’m still grateful for it.

Thanks for the info. But...you specifically went to them and asked them, which sound like very good service. Can I expect them to come to me if they become aware of something significantly better than my current policy. Or is there a particular reason why they would prefer me to stick with what I have.

In other words, is it up to me to search for a better policy or can I count on the broker to be always doing that in the background, the way my stock broker supposedly does(but somehow always seems to angle me toward funds which I think give him a nice commission).
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Re: Who is the broker representing

#19 Post by photofly » Wed Oct 11, 2017 5:35 pm

pelmet wrote:Can I expect them to come to me if they become aware of something significantly better than my current policy. Or is there a particular reason why they would prefer me to stick with what I have.
Fewer phone calls and therefore less work on their part, if you’re happy to renew with the same underwriter, I guess.

Like I say, if I was particularly concerned I’d make a point of checking with another broker for quotes, and play one off against the other. Insurance is a commodity product, after all.

Two things to note: firstly my insurance has got cheaper year on year without any prodding, and secondly I don’t shop around for car or house insurance much either, so probably I’m the wrong person to raise to ire on the subject. I like Kevin; he likes flying and aviation, he always has time on the phone for me, and if it costs me a few extra dollars to keep him as part of my “team” it’s a good investment. I also have the feeling that if I ever had to make a contentious claim he’d go to bat for me. I’ve never had to test it out, but that’s my feeling.
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Re: Who is the broker representing

#20 Post by peterdillon » Wed Oct 11, 2017 8:59 pm

I buy and sell airplanes and don't know how many times Kevin Gosden has save my customers big money. Always helped get through checkout requirements for buyers. Been working with him since he came to Magnes years ago. The guy and the company are first class. Had a beaver cut down a tree and land on my 185. They handled it all no problem.
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Re: Who is the broker representing

#21 Post by pelmet » Wed Oct 11, 2017 9:27 pm

photofly wrote:
pelmet wrote:I also have the feeling that if I ever had to make a contentious claim he’d go to bat for me. I’ve never had to test it out, but that’s my feeling.
That is something we just don't know about until it happens. If anyone has any experiences on that matter, their input would be welcome.
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Re: Who is the broker representing

#22 Post by ahramin » Thu Oct 12, 2017 8:14 pm

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Re: Who is the broker representing

#23 Post by pelmet » Thu Oct 26, 2017 9:26 pm

gwagen wrote:So far magnes hasn’t been able to come close to c-plan quotes through the eaa. The broker is Nacora.

You have to be an eaa member.

Worth checking into.
What is better in the EAA insurance policy?
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Re: Who is the broker representing

#24 Post by gwagen » Mon Jan 29, 2018 9:40 am

pelmet wrote:
Thu Oct 26, 2017 9:26 pm
gwagen wrote:So far magnes hasn’t been able to come close to c-plan quotes through the eaa. The broker is Nacora.

You have to be an eaa member.

Worth checking into.
What is better in the EAA insurance policy?
Sorry for the late reply.

The EAA policies have been cheaper when I’ve compared to other hangar mates with similar planes and experience.

They also have less restrictions in their policies specifically when lending your aircraft to someone else. With EAA if the person meets their total hour and recency requirements YOu approve them and they are insured in your aircraft.

Magnes you’ll have to add them to the policy and in my very recent experience when I tried to borrow a friends plane by the time they approved it my trip had been missed.

It’s worth getting a quote from both and comparing for your self
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