Insurers urged to re-think business models related to technology changes

Insurers need to fundamentally re-think business models rather than simply change technologies to expedite service the way it has always been done, insurance company executives told people attending a luncheon sponsored by the Conestoga chapter of the Insurance Institute of Ontario.
“Companies are spending hundreds of millions of dollars to replace their legacy systems,” Gore Mutual Insurance Company president and CEO Kevin McNeil told more than 100 people attending the sold-out luncheon. “The problem, I think, is that they aren’t replacing their business model as they replace that technology.
“They’re looking at replacing legacy systems with systems that do what they’ve always done, except do it better.”
Instead, McNeil said, insurers need to re-think their business models for delivering service to their customers.
He said the business model remains the same as it has for countless decades — basically, delivering policies and bills to consumers.
But in an age when people with handheld devices such as BlackBerries and iPhones are engaged with social networking media like Facebook, it’s time to re-think that traditional business model, McNeil said. 
Maurice Tulloch, executive vice president and chief operating officer of Aviva Canada, said the new technology model should reflect the consumers’ demands of self-service.
“Consumers are going to want to be able to get an update on their first notice of loss, and they’re going to want to be able to check exactly what it will include on the list.
“And why is it that I have to carry a pink [insurance] slip in the glove box, [of my car], but when I go into the airport — and [the airline industry] is generally not a leader in technology — I can get my boarding pass on my BlackBerry?
“We need to change those things.”
Tulloch and McNeil both said there is no reason why the insurance industry can’t come up with simple, point-and-click service delivery methods for consumers.
Like McNeil, Tulloch challenged the industry to become completely paperless — including, for example, digital policies for consumers.
If insurance companies are not able to pull this off, Tulloch said, competitors could easily take advantage by offering similar services.