January 2, 2019 by Canadian Underwriter
Canadian Underwriter approached Canadian P&C industry executives with two questions:
1) What is the single most important change the industry must make looking forward into 2019?
2) How might this change be brought about?
Their answers, featured in our 2019 Executive Outlook, may provide you with insight as you set your own agenda for change.
Mike George, President & CEO, Trisura Guarantee Insurance Company
Given the challenging state of the Canadian P&C marketplace today, the list of priorities for the industry as we head into 2019 is long indeed.
Selecting the top priority in an industry in which insurers are struggling with both profitability and achieving reasonable returns on capital is difficult.
Perhaps the most important change required for insurers and brokers is a willingness to embrace change itself. In my opinion, for the business model to thrive and remain dominant, there should be a collective mindset that the model must improve. The status quo is not going to be good enough, nor is it sustainable.
The traditional insurer-broker model is an expensive one due to inefficiencies that currently abound, particularly when it comes to commoditized products. That’s one reason why there has been so much excitement around insurtech. Everyone is racing to build silver-bullet solutions that reduce costs, improve efficiency or drive sales; some are considering disruptive direct-to-consumer approaches.
Insurers and brokers need to work collaboratively to discover and implement ways to reduce costs and improve efficiency while greatly improving the customer’s insurance buying experience. These savings can then be passed onto consumers, who might then begin to enjoy their dramatically improved insurance journey.
It is imperative for us to acknowledge that our true competition is not only the established players in our industry today, but disruptive market entrants that could literally be here tomorrow. Consider the difference between taxi companies versus other taxi companies, for example, and then taxi companies versus Uber. If we don’t correctly identify our true competitors, we may wake up one morning to find out that we have been disrupted by a direct-to-consumer innovator who delivers an enhanced customer experience at half the cost.
The biggest change needed in 2019 is for those living the traditional insurer-broker model to realize that our business model must improve and transform through greater industry collaboration, or else it will be transformed for us, not by us.