ICBA celebrates 50 years of serving open shop construction this year, and we are looking back every week at some of the significant moments, milestones, and people who helped ICBA become Canada’s largest construction association.
Today, we look at a key ICBA offering that has ensured financial stability for the organization – and prosperity for the industry.
The interviews and other original research on which the ICBA50 series is based were conducted by writer Kevin Hanson. We appreciate Kevin’s work capturing the people, events, and milestones that shaped ICBA’s first half-century.
ICBA established health and other benefits programs for its members within its first couple of years of operation. After a couple of false starts, ICBA entered into an arrangement with Wm. Mercer and Don Weitzel.
Benefits provided some modest but important supplemental income for ICBA, including a small percentage of insurance premiums. Within a couple of years, Weitzel, now retired, says half the membership was on the benefits plan, and “the couple of hundred dollars a month that the ICBA made off the insurance over-ride was enough to keep the wolf from the door.”
But there was room to grow. Early in Philip Hochstein’s tenure as president, ICBA launched the Hour Bank Plan – also known as the Construction Industry’s Benefit Plan (CIBP) – which rapidly proved popular and remains the core benefits service offering to this day.
The Plan grew quickly and became a staple of ICBA member services, and by the early 2000s, ICBA increased its focus on the full potential of this already-important line of business. Bob Fairbank and Kurt Krampl – both of whom would later serve as ICBA chairs – headed a committee that was tasked with taking benefit services to the next level. Roughly three-quarters of ICBA members were part of the CIBP at this time, giving it a good critical mass and helping to ensure stable pricing, but there was a sense that more could be offered.
Fairbank and Krampl believed ICBA needed to enter into the benefits and insurance business more ambitiously and more directly. And in 2006 – the same year the CIBP hit the significant milestone of having more than 10 million hours submitted – ICBA did precisely that by purchasing an insurance brokerage to provide services to its members. “Philip saw that there was a really important link between the benefits and the members both psychologically and also financially,” said Weitzel. “He wanted to take that in house, which I think was absolutely the right decision. If this is becoming the significant revenue generator for the organization, you want control of it.”
Jim Laurence
Jim Laurence, ICBA chair in 2006/07, negotiated the deal. There was a construction boom at the time, he says, and that meant that the CIBP, with its direct tie to number of hours being worked, was performing well and generating a lot of revenue. “But there was always the threat – what happens if the economy takes a dive?” he says. The purchase of the brokerage provided diversification to guard against that risk, particularly due to the significant number of non-construction clients served by ICBA Benefits.
Perhaps even more importantly, ICBA Benefits proved to be the right vehicle through which to design and launch a wider range of other benefit and insurance products, many of them highly tailored to the specific requirements of the company’s construction clients. It has therefore become a key part of the value proposition ICBA offers its members and contributed to remarkably strong renewal rates. “We were able to provide a variety of insurance-related services to our members, that they may not be able to get somewhere else, or not as competitively or with the same service,” said Hochstein. “So it gave people even more reason to remain members of ICBA.”
Today, ICBA Benefits supports more than 300,000 Canadians with benefit plans and services. The main business lines include employee health benefits, retirement plans for both employees and owners, and a wide range of specialized and consulting services. ICBA Benefits also supplies group benefit programs to other associations.
The foundation of ICBA Benefit Services’ success has been well-managed and well-priced products which – beginning with the CIBP back in the 1980s – are tailored to the specific needs of ICBA members and other clients. And while ICBA Benefit Services today is a stand-alone business with its own board, ICBA’s guiding principles strongly influence how it does business. In 2017, for example, when one insurer instituted a temporary ban on funding for oil pipelines, ICBA Benefits scaled back the business it did with it – until the insurer changed its mind.
Staff are aware of the importance of benefit services – both in helping client companies in the competition for talent, and in the quality of life of individual employees. “The fact that insurance is very important on that employee spectrum for compensation, to us that just amplifies even more that we need to make sure that this plan is sustainable, that they get the right benefit programs, and that the administration and customer satisfaction is above normal,” says ICBA Senior Vice President, Benefits, Leah Rennie. “We interact with their employees all the time and we problem solve for their employees. That rich interaction makes us all feel like family, and that’s a big part of the feel of ICBA.”
