June 18, 2019 by Adam Malik
The insurance industry needs to figure out how to leverage technology and ride the waves of change that other industries are seeing. From there, issues like finding talent will become easier, a panel recently told young brokers.
Problem is, insurance doesn’t operate like many of the high-tech high flyers in the way business is done. Uber and Airbnb, two companies that have spent much of the last few years doing leveraging technology to create disruption, operate much differently than an insurance company or brokerage, said Jamie McDougall, vice president of business intelligence and analytics at Gore Mutual, during the recent Insurance Brokers of Ontario’s Young Broker Conference as part of an executive panel. They’re an intermediary, connecting users with vehicles to take them places or with homes to rent while on vacation.
“Insurers cannot do that. Insurance is the process of providing cash. We provide capital so that if your house burns down, we replace it, repair it, fix it, whatever happens. It’s very hard for insurers to be exponential organizations in the traditional sense,” McDougall said.
That makes innovation a bigger challenge in insurance. “You have to find different ways to be innovative and grow because, at the end of the day, that’s why a bunch of new startups are all in the intermediary space and other support tools,” McDougall said, aruging that Tesla will never offer insurance despite all of its talk. “They’re just going to provide the connection point to someone who is providing the capital.”
No one’s found the silver bullet but companies are seeing technology budgets grow by double digits as they try to figure it out, said Chris Reid, vice president of digital distribution at Intact Insurance, as part of the panel.
“There’s no question that we’re just scratching the surface. I think as an industry, comparatively, we’re behind,” he said. “I think the challenge for many companies is that we’re still going through this internal transformation to fill the platforms to be able to enable the future that I think we all want. I think there’s no question that it’s happening.”
And the lack of available talent is playing a key role in how the modernization process plays out. How can the industry attract talent when the likes of Google and Uber are also pounding the pavement for skilled young minds? Other companies and industries have the ‘cool factor’ working in their favour, while others are trying to piggyback on it, like the automotive industry, which is trying to leverage the attraction of self-driving technology to bring in talent.
“How do we attract the right technology talent into our businesses to really advance them? It’s incredibly difficult,” Reid admitted. “We’re out there recruiting against companies like Google and Uber. I like Intact, but those companies sound pretty really cool. So it’s incredibly difficult. Bringing people in is no easy task, but once we get through it, I think we’re going to see a dramatic leap.”
How does the industry “get through it?” Respond to the customer. The industry knows what customers want, so it’s important to deliver in a timely manner, Reid said.
“The real challenge is, how do we invest [and] how do we speed up to really respond to those consumers in ways they’re expecting? We’re getting there, but I think the question is how quickly can we get there?”