COVID-19 has “forced” companies in Canada and the U.S. to accelerate digital transformation efforts, and property and casualty brokerages are no exception.
According to Ernst & Young (EY), this sudden accelerated digitization has been “forced” on Canadian companies “in ways that few could have expected” – from remote work to the rapid ramp-up of ecommerce capabilities.
Research from Applied Systems has shown that Canadian P&C brokerages have been making headway in adopting technology. Nearly 30% of agencies and brokerages reported they use data analytics applications – a 26% year-over-year increase.
Applied Systems’ 2020 Digital Technology Adoption Survey of independent brokers across Canada, the U.S. and U.K., found that 71% of agencies and brokerages use cloud-based software, up 9% year over year, while 33% use self-service portals (up 50%), and 52% have extended mobile technology to their employees.
Brokers realize that digital transformation is becoming increasingly important in relationship-based industries like insurance, Sovereign Insurance said in a recent blog post on how brokers can adapt to rapid changes in technology.
“To stay competitive, brokers have to figure out what tools and technologies can enable them to better meet their clients’ needs, as well as benefit their own businesses,” the article says.
So what’s still holding brokers back?
While technology adoption continues to trend upward, it’s still a major challenge for many brokers. In last year’s Canadian UnderwriterNational Broker Survey, brokers cited technology changes as number four of the top five challenges. In addition, adopting new technology came in as the fifth “strong challenge” to their business.
“There is a myriad of reasons why technology keeps brokers up at night,” says Sovereign, citing some common challenges that brokers need to overcome as:
Rapidly evolving pace of technology
Limited resources and budgetary pressures
The big talent gap of new skills in areas such as data and analytics, AI, mobile, cloud etc.
Associated cybersecurity risks
On the life insurance side, a recent study of 71 Canadian and U.S. life insurance companies by Limra and McKinsey and Company showed how the pandemic led most of these companies to speed up digital transformation efforts, such as automating underwriting and mobile insurance shopping. Life insurers reported moving up digitization efforts planned for 2025 and beyond, to this or next year.
While 74% of life insurers planned to boost self-service, most were looking to provide more services including e-signatures, digital applications and online digital quoting. Nine in 10 believed consumer expectations will demand such efforts continue post-pandemic.
The recent EY Global Capital Confidence Barometer shows that 68% of Canadian companies plan to increase strategic focus and investment in digital transformation, with 74% of executives reporting this is already underway. Digital transformation remains a top priority, right behind growth through acquisition, on most Canadian executives’ post-pandemic growth agenda.