The Insurance-Canada Executive Forum was once again packed with leading-edge content from the insurance industry. Attended by close to 200 people from the Canadian insurance industry, this one-day event delivered some great insights into the future of digital insurance and if risk really is passé.
According to the industry experts, the answer is resounding ‘no’. Risk can never really be passé, but it is not what it used to be either. Technology has redefined the constitution of risk, and what used to have almost negative connotations is now seen a more exciting light.
Key Takeaways from the Insurance-Canada Executive Forum
Held at the Sheraton Hotel in Toronto, the Insurance-Canada Executive Forum had speakers from the United States, Ireland and Canada. Some of the key takeaways from the forum were
1) Artificial Intelligence is here to stay
While it’s no surprise that insurance companies are competing to incorporate Artificial Intelligence (AI) into their core business models, many are using the terms AI and Machine Learning interchangeably and loosely. To rightly leverage AI, it is fundamental to understand what it can really do for the insurance ecosystem.
Ahsan Siddiqi of X by 2 pointed out how AI has already been facilitating things like storm/hail forecast, fraudulent claim detection, claims scoring and triage, express quotes, and more.
Kanetix Ltd.’s own President & CEO, Andrew Lo spoke about the impact of AI on enhancing customer experienceAI on enhancing customer experience, which further illustrated that AI is not only changing the insurance landscape operationally, but also from a business strategy standpoint.
He shared an example of a pilot AI project that allowed Kanetix.ca to learn more about the motives of high-intent customers which enabled the team to deliver tailored and transparent solutions. The result was an increase in conversion rates 13% and overall spike in the ROI by 2.3X.
2) Data is integral to the digital insurgence
One thing that was clear during the conference was that data is pivotal to any technology implementation in the insurance business.
Some of the key challenges with data today are:
- Distribution of data in two (or more) systems
- Lack of proper data acquisition process
- Sparse data input by users
Evaluating the data early, assessing the materiality, modifying the data capture process and bringing application changes are fundamental to experimenting with new technology.
Doug McElhaney from McKinsey & Company shared that the process of data capturing, storing, and analyzing is becoming more inexpensive, attributed to the explosion of data sources (like ride-sharing, home-sharing, etc.). In fact, he noted that 90 per cent of all data available today is estimated to have been generated in the past two years.
3) Blockchain is still a ‘thing’ but has a long way to go
Bob Tapscott of Blockchain Research Institute admitted that Blockchain is a new phenomenon in the insurance industry. While the opportunity for Blockchain to transform the insurance industry is far more than it is in the financial services industry, it is further away from impacting the insurance industry than the financial services sector.
Tapscott predicted some of the areas where Blockchain can make a significant impact in the future will be to:
- Create real-time insurance products
- Create ‘Smart’ contracts for insurance
- Detect and reduce fraud
- Simplify process integration
- Create online insurance pools and real-time reinsurance
- Support AI and Machine Learning
4) Millennials will impact business decisions in more ways than one
Rain Takahashi from Jauntin reiterated that the Millennials should be taken into consideration while designing business strategies, now that they’re reaching an age where their purchasing power is about to increase. Rain shared some interesting stats about millennials in particular:
- 2 out of 3 millennials (approximately) are willing to share personal data if they receive something in return
- Millennials are willing to pay a bit more for something they see real value in (mobile apps, better user journey, and more)
Mark Dowds of Trov also predicted that majority of workers will freelance by 2027 and millennials are already leading the way. This could see some shift in preference for the various kinds of insurance policies taken out in the future. This could indicate a dip in life insurance perhaps – which comes as a part of a company group policy — and a potential rise in disability insurance, critical illness insurance or extended healthcare.
5) Advanced experimentations with robots, telematics and autonomous vehicles are on the rise
It did not come as a surprise that a lot of speakers talked about the new tests in this space. Examples like, California issuing a driver’s license to a robot to Tesla providing one price for its autonomous cars in future which will include insurance and maintenance – there were many interesting trivia shared. In fact, Sam Kodsi of Kodsi Engineering predicted that by 2040, 60 per cent of driving will be autonomous.
In the meantime, Canadian companies like the CAA are testing telematics technologies like the CAA Connect, which focuses on usage-based insurance, and more insurance companies are leaning towards automation – the first step towards robotics.
Overall, the event was a fantastic symposium of industry experts with compelling discussions and forward-thinking ideas. It provided a sneak peak of what the future of the insurance industry looks like today and will look like tomorrow.
Tanaya Jain is a Senior Marketing and Communications Specialist at Kanetix Ltd. Having worked in the integrated marketing space across Asia, Middle – East, and Canada over the last eight years, Tanaya has some insights on how technology and digital has transformed the financial services space over the last decade. She’s fascinated by art, travel and new experiences.