CAA Manitoba: bigger, better, cheaper

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This article was published 30/09/2017 (3052 days ago), so information in it may no longer be current.

If CAA Manitoba used a discount furniture retailer’s advertising agency, its new advertising might include something like “someone left the membership car machine running all night and now we have to sell them at a discount.”

That’s right, in a world where it seems like fee increases are just a fact of life, CAA Manitoba is lowering prices on a range of its membership levels, a move that will mean members will pay close to $1 million less in annual fees.

And not only will members experience a fee reduction starting Oct. 1, but Manitoba’s non-profit automobile association is also enhancing and improving on a range of services.

Oh, and it’s also increasing its workforce.

The changes are all part of the spinoff effect of last year’s merger with the South Central Ontario (SCO) CAA club, which covers the Greater Toronto Area.

While business mergers might lead to financial efficiencies, they rarely create more and better services and almost never generate additional employment.

Clearly, this one is different.

Mike Mager, president of CAA Manitoba, who has been with the organization for 32 years, is effusive about the institutional structure he now gets to work with.

“Going forward, I don’t anticipate we will ever have another fee increase unless something dramatic happens,” he said. “This is only the first year (of the merger). We have not even recognized the maximum potential.”

The merger was finalized a little more than a year ago. It came about after Manitoba had already been tapping the SCO CAA for some of its products, like its range of underwritten property and casualty and health insurance.

Then, as Mager started to plan to replace CAA Manitoba’s sprawling, old, clunky computer system, he realized SCO was in the process of doing the same thing.

Mager already had a growing working relationship with his counterpart, Jay Woo, an accomplished IT executive and noted innovative thinker. (Mager can’t say enough good things about Woo.) A concept for the merger happened quickly.

With about 300 employees — soon to go up by close to 50 — and annual revenue of close to $50 million, CAA Manitoba was a financially strong organization. But with 200,000 members in a small jurisdiction, its membership was not likely to grow that much.

“Being strategic and thinking ahead, every year it was a little harder to make the budget,” Mager said. “Costs go up, and you can only charge so much for memberships before they become prohibitive.”

Not unlike in the corporate world, there is a merger trend in auto clubs across North America. There used to 27 in Canada and now there are nine. Over the years in the United States, the number has gone from more than 500 to 34.

When Mager realized SCO was in the process of redoing its computer system. Mager and Woo talked and decided the new system would be built for Manitoba as well. It became a catalyst for the merger.

“Our reserves are there for rainy days — or cold days, in the case of Manitoba,” Mager said. “We needed a new computer system that would easily cost $3 million to $4 million. We are a not-for-profit organization. It would have had to be done on the backs of our members.”

That new computer system is slated to be installed at the end of 2018. In the meantime, a new roadside assistance dispatching system is also coming on board, as well as call centre technology that will let Ontario and Manitoba staffers help each other out when the call loads get high.

Woo, who is in Europe demonstrating a new machine-learning dispatch system he helped develop that Manitoba will have access to, was unavailable for comment.

When the merger was finalized in June 2016, he said, “Today marks a major milestone in our long and rich history. The combination of resources and expertise will deliver greater capabilities, innovations and advocacy expertise to keep our members and their loved ones safe.”

Don Main was a longtime member of the CAA Manitoba board, a former chairman of the national CAA board and a Canadian representative on the AAA board. He’s also on the newly created board for the CAA Club Group, the name of the merged Manitoba and SCO CAAs.

The Brandon businessman has had a front-row seat for the changes in CAA Manitoba and across the automobile club world. He said leveraging the shared computer system was a significant factor in the merger.

“The board of CAA Manitoba believed that eventually we would not be able to keep up,” Main said.

“The only way we could possibly do that was to become a partner with a larger entity.”

While the merger created excellent opportunities when it comes to capital deployment, the combination has not meant Manitoba had to be subsumed into the Toronto operations.

“We have managed to do it without changing the way we respond to our members here,” Main said. “They are the leaders in the auto club business in Canada. We feel proud to be part of that.”

The way it’s worked out is that CAA Manitoba still exists. It is still just as involved in public policy work here, where it has been a leader for many years in advocating for all things about road safety.

“Nothing really has changed in terms of how we do business,” Main said. “What has changed is our ability to do it at a higher level.”

For instance, that means leveraging technology from Toronto that has already lowered average response times to calls by almost 50 per cent.

It also means membership services have been enhanced. Maximum towing distances for members has been doubled in just about every membership class. As well, CAA insurance is now being sold by one independent broker — Arthur J. Gallagher Insurance in Winnipeg — and a couple more are in the works.

Also, three CAA Manitoba member service locations — including the new one in Kildonan Place — have recently acquired MPI licences so they can now sell Autopac insurance. The plan is that the Brandon location will also acquire an MPI licence.

And Mager likes to remind people that CAA Manitoba members can cover the cost of their fees by using the rewards program with a host of retailers and restaurants, and a new gas partner about to be announced.

martin.cash@freepress.mb.ca