On October 3, fifty insurance professionals gathered at the Royal Ontario Museum in Toronto to review the results to date of a Study Team at the Insurance 2023 Forum.
What started as a fairly routine set of presentations was quickly interrupted by a large, active conversation which set the tone for the Forum and will continue beyond the day.
We will present more detail on the individual areas in this space in the near future, but we want to highlight key areas which all feel will impact the insurance environment in Canada over the next decade.
Data & Analytics
Greg Purdy from Pathway Partners and Colin Smith from Opta each noted that while insurance has always been an information industry, the coming data world is radically different, and requires active attention.
The amount of data to be handled, the sophistication of the tools that are required to distill information, and the skill sets required to interpret meta trends are not yet understood by many carriers and brokers. Practitioners should have this as a high priority.
Telematics and Usage Based Insurance are driving change in the industry now. Doug Heaman, from the IBAO, and Colin Simpson from the IBAO subsidiary, IBRI, provided an update on the broker-driven telematics initiative (see our recent post on this development). The conversation around this reinforced the consensus that this play has the potential to be a game changer.
Beyond telematics, however, the changes in automotive technology is creating a new environment that could reshape commercial and personal automobile insurance. Catherine Kargas from MARCON provided data which reinforced that autonomous (driverless) vehicles that are in test now will be commercially available as early as 2017.
This could substantially lower the risk profile of the vehicle and shift the need for insurance from the driver to the automobile manufacturer. Combining this with other social and demographic trends could provide continuing downward pressure on rates. (Catherine recently posted on some of the implications in this space.)
The conversation around this scenario was active. No consensus emerged except that these developments will be ‘interesting’.
Advice: Communicate, Communicate, Communicate
Two panels focused heavily on communication. The first consisted of Insurance 2023 Study Team members – Chris Hill – Erb & Erb, Dorothy Josephson -SGI Canada, and Bryan Bedford – Peel Mutual.
This panel noted that insurers and brokers have invested heavily in web based tools and communications technologies, however this may not be enough. Bedford presented data from a recent survey indicating that 79% of Canadian consumers saw on-line access as an important communication channel with insurers, but only 4% felt that their insurer had this facility in place.
The second panel was composed of senior executives looking at strategic considerations from trends discerned by the Study Team. Panelists Chris Hill – Erb & Erb, David Crozier – Everest Insurance, Mark Cairns – RSA, and Doug Heaman – IBAO articulated a number of critical issues.
The one area that was consistent across all was communication. Consumers are becoming more sophisticated and discerning. The insurance industry must look to new products to meet new needs and communicate the value proposition clearly.
Brokers stressed the need for immediacy and use of the consumer’s medium of choice. The insurance buyer is becoming conversant in a variety of media and is used to communicating at any point in the 24 hour clock. We are rapidly reaching the point where she will settle for nothing less.
Insurance-Canada.ca and the Insurance 2023 Study Team are grateful to all who participated and look forward to continuing the conversation. More information from the session will be released and plans for future development and communication will be released.
Meantime, we’d like your thoughts. Are we hitting some of the points you see as trends? What are we missing?
We look forward to you helping this important discussion to continue.