January 11, 2017 by Angela Stelmakowich
Canada’s property and casualty insurance industry must look farther ahead in its strategic planning than it may be used to ensure it fully grasps developing conditions and can address related changes, Philip Cook, CEO of Omega Insurance Holdings Inc., suggested during his Industry Trends and Predictions: 2017 presentation Wednesday.
Long-term strategic planning and thinking for the p&c industry is usually about 18 to 24 months, Cook told those assembled for the annual event hosted by the Insurance Institute of Canada. “But I really think at this point, we have to start trying to vision a farther horizon than that,” he recommended.
“Certainly for planning purposes and implementation, 18 to 24 months is still probably a pretty good target. But I think we’ve got to start saying what will we look like in five years’ time, and perhaps more important, what will we look like in 10 years’ time,” he said.
“If we don’t have a vision of that and start planning around it, we might find ourselves left in the dust,” Cook cautioned. “It might be too late by the time we see the changes.”
Most people acknowledge that there are limitations to predictive modelling – something clearly demonstrated with both Brexit and the recent U.S. election.
“I think, generally, the predictive models used by our industry are a little more reliable, but they’re still flawed and I think we need to recognize that,” Cook emphasized.
The industry cannot simply project what a result might look like, he maintained. “We have to go outside of that and start thinking about what is the vision for our industry, what will it actually look like, what will its consumers look like, how will we get to those consumers or how will they get to us?”
It is essential to regard a trend as an action or activity, Cook advised (pictured left). Strategic planners can “miss the point” of a trend if they do not also consider why it has developed.
“If we just look at the trend itself, we miss the point. We need to look behind the trend to determine what’s causing it because that’s really the future for our industry, and most other industries, in terms of designing product that’s attractive to the consumer. We need to address their needs, not just their wants,” he pointed out.
“Once you start to look at what’s causing them, you can start drilling down into what sort of products and services going forward we may need to supply to our consumers,” Cook suggested to attendees.
No longer should climate change, economic uncertainty, consolidation, social media, aging population, telematics, predictive modelling, increased regulation and cyber risk be viewed as trends, he said. “They’re realities,” Cook emphasized.
His 10 predictions for 2017 and beyond are as follows:
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