April 11, 2014 by Angela Stelmakowich, Editor
Understanding consumer wants and needs – sometimes driven by technology – is critically important for the insurance industry in future, Sharon Ludlow, president and CEO of Swiss Re in Canada, suggested during the CIP Society Symposium in downtown Toronto Thursday.
“We can’t quite staff all of our organizations with everyone under the age of 14,” Ludlow quipped.
That said, “if you really want to get into the minds of the consumers as they will be in the future, either for home and auto or on the life insurance side,” she said, “you need to understand how the consumer buys, what their behaviour is, what they need, what they want at various stages of life.”
Addressing consumer needs is also essential on the catastrophe front, noted Denis Dubois, chief integration officer and general manager for Ontario, Atlantic and Western Regions at Desjardins General Insurance Group.
“In Desjardins’ mind, it’s not reducing the product to make money. It’s finding a way to address the consumer need at the end of the day,” Dubois told attendees.
But “the solution cannot just be an industry solution,” he emphasized. “A situation like the floods we had – both in Toronto and Calgary last year – is a significant financial strain on the industry, so you need to have some form of government involvement,” he said.
With regard to consumer wants, Ludlow suggested there is a “need to broaden our thinking to not just selling a product, but in fact, figuring out how and why the consumer wants to use it.”
What needs to be done? she asked. “We need to think about innovation. How do we do that? We need to think about the risks and where they’re going, and we need to find the people, the right types of people, who can think broadly about those risks so we make sure we’re there and viable in 10 years,” she said.
Among the risks sure to evolve over the next 10 years, Ludlow noted, are cyber security, which demands being “very, very clear on what it is we think those risks are,” and driverless cars, which requires determining how they will be insured.
Dubois also sees as a big trend the influence that vehicle features will have on reducing the frequency of accidents.
The effect of the increasing number of severe weather events and the new vehicle features must be considered in terms of the business mix, he suggested.
“So when you look at what auto insurance represents in your company today, what property insurance represents in your company today, 15 years down the road it’s going to be completely different,” Dubois said. “That’s a big change that will have influence on how we need to manage our organizations down the road.”