This week Canada's Finance Minister indicated his intention to restrict online insurance sales by Canada's banks. This appears to be another ridiculous attempt to weaken competition in our financial services market. Even though the current regulations preclude "bank branch insurance sales" (which I believe is archaic), obviously, some politicians do not understand the Web and its many iterations of virtual evolution.
Go to google, bing, or any other search engine and research various general and life insurance options available to Canadian consumers. Thousands of hits! You can actually do comparative shopping on features and rates. The types of Internet competitors are endless. So, what is this nonsense of trying to curtail the banks in this competitive world? The consumer controls the decision making process as to their delivery channels and preferred suppliers from a wide range of choices of familiar and emerging sources.
Look around the world in the financial service industry where all necessary services are offered by companies inside and outside the industry, such as major retailers and manufacturers. Yes, you also find insurance companies offering bank products! In fact, all products are in a virtual universe of competition. It's a shopping experience without borders.
If there are insurance players that find it difficult to compete in today's multiple distribution channels, isn't it time that they re-invented themselves rather than hiding behind political protectionism? We are a country of free enterprise where competitiveness is the key to survival locally, regionally, nationally and internationally. Competition will weed out inefficiencies and uneconomical or non preferred offerings. The marketplace is a better referee than restrictive regulations.
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