Technology transforming insurance, broker channel, IBAO Convention hears

Insurers are falling further and further behind the current technology and digital capabilities and will require a major transformational improvement, speakers suggested on Thursday at the Insurance Brokers Association of Ontario’s (IBAO) Convention 2015.

Speaking during the CEO Panel at the Sheraton Centre in downtown Toronto, Karen Gavan, president and CEO of Economical Insurance, suggested that insurers’ legacy platforms and technology have “perhaps precipitated some of the decline in the brokers’ prominence in the personal lines marketspace.” Gavan (pictured below) added that Economical has an advisory council of broker representatives for personal lines to help design their systems not to replicate what’s been done in the past, but to challenge the way things are done.

“Our back office systems have been so horrible to deal with,” she said. “I think everyone up here is making huge investments in current technology and we really have to challenge the way we do things in the business. Technology has been a huge ball and chain for this industry and I think we have to think outside the box and not just incremental improvement, but major, major transformational improvement.”

Another panellist, Jean-François Blais, president of Intact Insurance, told convention attendees that for Intact, technology used to be a back office function. “We used to use it as a large processing machine, but today technology is changing the customer experience,” Blais said. “This is very difficult to forecast, but it’s going to happen and we will have to adapt and we will have to leverage it to make it a front office function.”

Rowan Saunders, president and CEO of RSA Canada, argued that technology has created so much more power for the customer and that he believes that they “get disappointed when they interact with us in the P&C industry because their last transaction, if they’ve being using an Apple smartphone, is just an amazing experience. Even some of the financial services, like doing your banking online is a far easier, simpler process than interacting with us.”

RSA Canada is modernizing their entire technology platform, Saunders (pictured left) added, whether that’s tools for brokers’ interactiveness or policy administration systems. He acknowledged that technology is a big investment for insurers, but something that pays off in the end. “When I look around at brokers that I think I am very impressed with, [brokers] that are gaining share and that are evolving quicker than the channel generally, one of the things they do is they have a huge customer-centricity focus and they are technology saavy and investing,” he said.

Greg Somerville, president and CEO of Aviva Canada, also agreed that investment is important, saying that his company is “looking to digitize our entire business, which includes providing the solutions that we think customers are looking for to the independent broker channel across Canada.”

For Duane Sanders, president and CEO of Travelers Canada, the pace of change is no longer linear, it’s exponential. “It’s going to impact everything from transactional friction to how you sharpen your acquisition model to how you communicate with your customers, but at the same time, customer asset protection is going to be looked at differently, I think, as well,” Sanders suggested. “The things they want to protect, how they want to protect it, how you stay connected with them, is all going to drive, again, in a broader scale change, but probably technology-driven.” Added Somerville: “We can’t do what we want to do to digitize in a multi-distribution channel without investing in technology.”

Sylvie Paquette (pictured right), president and CEO of Desjardins General Insurance Group Inc., told attendees that technology will impact customer interaction, transform the items being insured and affect future competition. Even social media may impact the insurance industry, she said. “Facebook knows so much about all of us, so that might be a future disruption within our industry.”

P&C insurers are insuring things like cars and homes, and “they are being connected,” she went on to say. Technology is even as far-reaching as having cross-border implications, she said, using the example of a policyholder with a GPS-enabled car crossing the border. “You know that your insured is crossing the border,” she said. “You can send them a message saying, ‘You are now in the States.’ Either you say, ‘Don’t be afraid, you have all the coverage’ or ‘I am adapting your policy so you will have full coverage.’”

More coverage of the IBAO Convention 2015

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IBAO continues efforts to maintain restrictions on banks selling insurance

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