It’s been a year since BMO acquired AIG Life of Canada and going by what Peter McCarthy, president and CEO, BMO Life Assurance Company, has to say, it is a marriage made in heaven.
“It’s been a very good acquisition both for the bank and for those of us at the insurance company,” says McCarthy. “Insurance is one of the pillars of a good financial plan, protecting your assets and protecting your families.”
He says the difference between the two organizations lies mainly in their respective cultural backgrounds.
“Both companies were large international companies operating across the world. In this marketplace the scrutiny of public companies is high, so while there was a cultural difference – mostly American versus Canadian as opposed to corporate – I’d say it was much more similar than you would imagine,” he said.
The adjustment, he says, “has been very good” and the “acquisition enjoyed a very high support throughout BMO.”
Acquisitions, at best, could be a complex process fraught with surprises and thorny challenges arising from a clash of corporate philosophy and the need for rebranding. Not so in the case of BMO and AIG, says McCarthy.
“There weren’t that many challenges really, except rebranding the company. We had to change an established brand and rebrand it and build the relationships with independent distribution that we deal with for the new brand,” says McCarthy. “BMO’s understanding of insurance was much higher than what we expected, and that was the one big positive surprise. Negative? There were none.”
BMO has a clear vision of where it wants to take AIG.
“We are going to continue to leverage BMO’s product expertise and capital to expand our market share in term of insurance, critical illness insurance, high-net worth markets, and continue to offer unique investment options,” says McCarthy. “Our products historically have the largest selection of investment products in Universal Life, and we plan to continue to expand upon that and keep our leading-edge place in the market.”
McCarthy concedes the area that took most time and effort was rebranding.
“That was actually a lot of work. It took five months to rebrand thousands of documents, letters of correspondence, consumer website, advisors website, and internal documents. Even golf shirts we give to our advisors,” he added.
In addition to opening a whole new segment of insurance market, the acquisition also brought BMO valuable human capital.
“Of course, we did get some very good people with insurance expertise and complete manufacturing and administrative capabilities for insurance,” he says. Because BMO didn’t have an individual insurance operation, practically all of the management team and people were kept, he says. “So the expertise in the former company now resides at BMO and that has served us very well in supporting our independent advisors.”
McCarthy says integration of teams and tools has been seamless. “It couldn’t have gone better. Our employees are very happy as a group, as are our independent advisors who continue to offer our products as a choice to provide solutions for their clients.”
McCarthy says organization’s future financial plans will incorporate insurance. “Going forward, there is opportunity for our independent advisors and others within the bank to make sure financial plans include insurance for all of our customers.”