Canadian Underwriter

Amazon aspirations

November 4, 2019   by Adam Malik, Managing Editor

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Marketing, sales, tech, and business gurus expend a lot of energy telling the property and casualty insurance industry how it should be more like the Amazons of the world.

Common advice to the industry includes:

  • put consumers first;
  • make it easy for customers to buy insurance online;
  • create “a great customer experience,” by providing consumers the insurance product they want, how and when they want it, and at the price they want;
  • deliver the product quickly and efficiently.

Google and Amazon are great at dealing with customers, so the gurus say, and so the P&C industry should mimic what they do to succeed. But buying a T-shirt from your smartphone while you are about to go to bed is different from buying an auto policy. There are many more factors to consider when purchasing insurance. So how can the P&C industry be expected to offer its services in an Amazon-like manner? Is it even possible?

To be or not to be…Amazon

The answer isn’t so simple. Brokers, for example, dispense advice. So, although they might want to replicate some aspects of the so-called Amazon sales experience, it would be a mistake to try to imitate everything, some brokers say.

“I would challenge the assumption that imitating Amazon or Google would produce the ‘best’ experience for an individual looking to understand their various insurance options,” says Brenda Rose, vice president at FCA Insurance Brokers in Toronto.

One common catchphrase heard in the P&C industry is to “make the customer the centre of everything you do.” This is frequently cited as the thing that makes companies like Amazon and Google so great.

Certainly, brokers do need to think about how to do that, and doing do requires several key elements, says Rick Orr, owner of Stratford, Ont.-based Orr Insurance.  “The great experience that the customer is looking for is access, responsiveness, understanding, and professionalism,” he explains. “Look after me the way that I want to be looked after. If I send you a text, respond to my text. If I send you an email, respond to my email. If I call, pick up the phone and have a conversation with me.”

Amazon does those things quite well, the gurus say, but it also operates as a 24/7 shopping experience. There is some debate within the broker community as to whether brokers must work 24/7 to deliver the insurance product. Last year, fewer than half of brokers in Canadian Underwriter’s 2018 National Broker Survey said “meeting with prospects after-hours” constituted a best practice. In this year’s survey, the number went up to 55%.

Even if brokers don’t necessarily need to adopt the 24/7 model, some adjustments need to be made, Orr says. “I think brokers need to figure out a way to expand their hours and be more accessible to the public. In today’s world, just having a staff with cellphones means they can text, email and respond [to customers]. I think satisfies a lot of customer demand.”

Buying insurance is a complicated process and can’t be done with a few clicks of the mouse, Rose says. “The critical element is the availability of advice for the client, whether before they make a purchase or at any point afterwards.”

Amazon’s self-service model

Sonnet Insurance is an example of an insurance company that could be likened to the Amazon/Google sales model, at least in personal lines. Its raison d’etre is to sell insurance by asking the fewest questions possible. It uses data in its back-end systems to fill in the rest of the blanks. When the company launched, it looked at Amazon, Google, Apple and other major players who are considered the standard of customer service and aimed for those levels.

“We know what the standard is, and we know the new and evolving expectations that customers have,” says Sonnet’s vice president of customer experience, Carolyn Beatty. “How can we apply that to insurance? How do you empower that customer, and how do you make insurance something that they can understand?”

Leaders in non-insurance industries have valuable wisdom to impart to the P&C insurance industry, she adds. “You have to simplify the experience of accessing and buying insurance, as well as the actual product set itself. I think that’s what a lot of these major players have done within their particular sectors.”

Buying insurance may never be as simple as buying a shirt from Amazon, but buying home insurance is not that far off, Beatty notes. It may be only “four or five clicks away” for the average consumer with Sonnet. “It’s easy for them to get the quote,” she says. “It’s easy for them to understand what the quote contains.” At that point, they can test different types and levels of coverage they need, and they can see the impact those changes make on their quote in real time, she adds.

Amazon and Google are designed to be self-serve, which is also Sonnet’s goal. “What feels important to me about what we’ve done is that we’ve made the quoting and purchasing simple for the customer, but we’ve also made the product as simple as possible to understand,” Beatty says, acknowledging that there are inherent limits to simplifying the insurance product. “You’re never going to completely be able to articulate accident benefits for auto in Ontario. But I don’t think even auto regulators necessarily understand it all.”

The more complicated the product, the easier it is to make a mistake. But fixing a purchasing mistake is an area where the insurance product significantly differs from other consumer products, as brokers point out.

For example, buying the wrong T-shirt can be easily remedied, whereas buying the wrong insurance policy can’t be fixed easily. Orr believes this is an essential reason why it’s risky to cut down the number of questions asked of customers. Similarly, it’s risky to have customers who don’t know about the product, or who don’t know exactly what they need, buying insurance on their own.

“We can actually talk to and educate a customer, while Amazon’s going to sell you the cheapest T-shirt every time,” Orr says. “You may end up with a T-shirt that doesn’t fit, is the wrong size, and is of poor quality. That’s not the [experience] that we want to deliver,” Orr says, especially when it comes time to deal with a claim.


The broker full-service model

Buying commercial lines insurance can get even more complicated, since coverage is typically customized to the particular needs of the business.

The advice of brokers in this space becomes crucial, as brokers are well-positioned to gain an understanding of the individual needs of the business and then match those needs with the specific insurance coverages that are available.

As Rose puts it, most people are educated enough about T-shirts that they know what they want when they’re shopping online. They know their size and what colours they like. But arranging insurance for a small business?

“Unless I’m an insurance professional, I am likely going to want to discuss what kinds of protection are available and make some informed choices,” Rose says of a commercial client’s needs. “I want, and need, a different kind of experience, even if the dialogue takes place through an electronic exchange.”

By “electronic exchange,” Rose refers to digital communications options, which give clients the option to speak with a human or a chatbot about

insurance. “It is becoming common for consumers to be able to start quotes — and in some cases compare results and complete purchases online — with help buttons available to ask questions,” she says.

Commercial lines insurance isn’t as commoditized as home and auto insurance, and so the self-serve business model isn’t quite as applicable (although some insurers are moving in this direction by exploring self-serve insurance options for small business owners). Nevertheless, by exploring online service options, brokers in all lines of business are looking to improve access and responsiveness, as per Orr’s earlier remarks. Being more accessible thanks to technology helps create that Amazon-like experience.

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