From left, Jennifer Reynolds moderates a chat with RBC’s Rino D’Onofrio and Rowan Saunders from Economical at InsureTech North in Toronto May 23.
Consumers are experiencing innovation when it comes to buying cars, clothes, music and more. So when it comes to insurance, they’re expecting the same types of experiences.
But they’re not entirely getting it.
Ontario consumers can buy car insurance online. They can renew it, too. It’s just like doing many other transactions online. But then comes the hassle – they can’t drive their car until the paper pink slip arrives in the mail.
Cue the frustration.
“So now you’ve got 99% of the solution that’s automated and digital, that’s efficient and new age, and you’re putting an anchor in the back,” said Rowan Saunders, president and CEO of Economical Insurance, during a panel discussion at InsurTech North on May 23.
It was an example of how regulations can slow down innovation. As consumers embrace new ideas, regulation can’t keep pace. The red tape needs to be cut in order for consumers to take advantage.
Take, for example, pay-as-you-go insurance. It wasn’t a possibility in Ontario until regulations changed last year. Uber is another example. There was no insurance available for ridesharing services when Uber entered the market. Again, regulations needed to be changed to meet demand.
Insurance isn’t an industry that can flip a switch when a great idea comes to the table. But it’s important to be at the forefront of knowing what changes are coming down the pipe. Collaboration plays a role – insurance companies need to come together in order to push for regulatory changes.
“There’s an element of responsibility from the companies themselves just in terms of interaction and sharing what we’re seeing. Because we are seeing things earlier and faster,” Saunders said.
Regulators also need to act quickly when insurance companies bring concerns forward.
“I think it’s incumbent on regulators to stay close and engaged more as this process moves faster. Otherwise, we will slow innovation down,” Saunders said.
The ability to work with regulators and move quickly will be especially important as growing challenges require more answers, like climate change and cybersecurity.
“We have a lot of cost pressures. We’re trying to get more and more precise and use different data to provide more choice to customers,” Saunders said. “All of that creates opportunities but a different environment that sometimes current regulations lag behind. So that’s why we’re encouraging regulators to be open and think about this.”