June 5, 2018 by Jason Contant
Canadians are less likely than others around the world to buy insurance products from “BigTech” companies such as Amazon, Facebook and Google.
Not that other consumers from around the world are in a big rush to buy their insurance from BigTech.
Just one in three global customers said they would be willing to buy insurance from the likes of Amazon, Facebook and Google, according to a recent report from the global consultant Capgemini, in collaboration with Efma, a global non-profit association of banks and insurers. In Canada, that number dropped about 10 percentage points, to about one in five customers.
Is there any reason why Canadian customers are less likely than the global average to consider purchasing products from BigTech firms?
“It all comes down to trust, positive customer experience with their current insurer, and a generational and tech-savvy split,” Satish Weber, digital insurance leader with Capgemini, told Canadian Underwriter Friday. “When we look more granularly into the data for Canada on customer willingness to purchase insurance from BigTech firms, we can see that for Gen Y and tech-savvy customers, the likelihood to purchase from BigTech is actually on par with or higher than the global average.”
About 29% of Gen Y customers and 39% of tech-savvy customers are likely to purchase insurance from BigTech firms, compared to the global average of 29.5%. “Tech savvy” customers are defined as people who frequently use online and mobile channels to conduct transactions such as purchasing electronics, clothes, food and groceries, paying bills, etc.
“The overall percentage in Canada, however, is brought down by the non-Gen Y and non-tech-savvy customers,” Weber said. Only 19.7% of non-Gen Y consumers and 14.2% of non-tech savvy customers are likely to purchase from BigTech.
“The deciding factor for non-Gen Y and non-tech-savvy customers is that nearly 60% of these customers feel that their bank or insurer can cater to all of their needs, while giving lower trust to BigTechs,” Weber said.
Released in late May, the Canadian results for the World Insurance Report 2018 found that, “though performing relatively better than the average, there is still room for the [Canadian] insurance industry to develop a better connect with customers to be on par with the leaders. Relatively lower positive experience across all demographic segments indicate that insurers have not been able to keep up with the fast rate of evolution of customer preferences and expectations.”
The global report surveyed 10,000 personal lines customers in 20 countries, covering all three broad insurance segments – life, non-life and health insurance. In Canada, 22.8% of customers said that they would consider buying insurance from BigTech firms. This represents a jump of more than 10 per cent from 2015, when only 12.1% indicated such a preference.
I think in reality Canadians will treat insurance companies like they have been treated by insurance companies. They will look at money and only money. So Canadian insurance your reign of terror will soon be over!
My experience dealing with Amazon with any issues I have had with products, delivery, returns refunds, has been excellent far better than any other retailer I had dealt with the the past. They changed the game forcing other retailers to provide better service and prices. As such I welcome a shake up in the Canadian Insurance market especially since there has been so much consolidation (less choice) over the past several years.
BUT, the Canadian insurance market is fairly small, and highly regulated across provinces. It will be a challenge for anyone coming into the market so being innovative is key.
If I was amazon, please offer pet insurance, far more lucrative and more aligned to cross selling products they have already….pet treats, foods, toys, etc. Pet insurance is less regulated, and their are currently few players in the market, cheery on top, people will pay 10x more on associated products.
Big Tech in insurance, yes please