Since the mid-2010s, insurers have been vaunting their advancements in risk underwriting made possible through artificial intelligence, enabling instant coverage for an increasing number of clients.
The desire for immediacy will force the industry to modernize even faster, revealed four panelists at the Regard sur l'avenir (Looking to the future) round table, held at the 2023 Insurance Convention on November 20 at the Palais des congrès de Montréal.
"The pace of change will continue to accelerate," predicts Chantal Gagné, Senior Vice President of Individual Insurance at Desjardins Group. She explains that clients, already familiar with the speed of technology in many industries, expect the individual insurance sector to adapt. "The advisor’s role will be crucial," says Ms. Gagné.
"People expect almost immediate responses, and for the advisor or insurance company to always be there," adds Pierre Vincent, Senior Vice President of Distribution at iA Financial Group, who was also present at the event. Mr. Vincent notes that many advisors have seen their client portfolios grow over the years and believes they must use new technologies for more efficient service, partnering with the right companies to do so.
The ChatGPT turning point
The launch of the conversational robot ChatGPT by OpenAI on November 30, 2022, shook the world. Since then, advisors have been using it to handle administrative tasks and even chat with clients when they are busy on calls or in video conferences.
In a snap survey by the Insurance Journal at the Convention, an MGA revealed that advisors regularly use ChatGPT. One survey participant mentioned using ChatGPT for research on complex topics, while another uses it daily for tasks like email rephrasing, planning digital marketing campaigns, or generating programming code.
However, many fear the disappearance of advisors in favor of robots. Mathieu Charest, panelist and Head of Products and Pricing for Individual Insurance at Manulife, thinks otherwise. "The advisor's role will not disappear. Insurance is sold, not bought," he says, echoing a common industry sentiment. "Technological changes won't alter this," asserts Mr. Charest. Instead, they will allow advisors to focus more on their clients and business growth.
Christian Mercier, CEO of UV Insurance, concurs. "Many companies are working on direct distribution without intermediaries. Whether this will be effective in life insurance remains to be seen. The web offers plenty of information, but not advice. Advice will remain a cornerstone of success in the coming years, underscoring your role," he states.
Universal group insurance
The rising cost of medication has been a hot topic in the specialized press covering private group insurance for years. The federal government believes it has found a solution to this burden affecting not just public and private plans, but also uninsured or low-income individuals. However, the industry has heavily criticized its proposal for a national pharmacare plan, especially the Canadian Life and Health Insurance Association (CLHIA).
The government reignited these criticisms by establishing the Canadian Drug Agency (CDA) on December 18, 2023. This new milestone towards a single-payer universal Canadian system aims to improve the pharmaceutical system in Canada.
A month before the federal announcement, the Canadian Institute of Actuaries publicly called for a greater role for the private sector in the national plan. They believe the plan could help private insurers leverage better prices from pharmaceutical companies for their clients.
Expensive Medications
Meanwhile, there are no signs that medication expenses will decrease in 2024. A global study by consulting firm WTW at the end of 2023 revealed no indication of a downturn in global healthcare costs. According to the Global Medical Trends Survey, insurers expect a 9.9% cost increase in 2024, slightly below the record 10.7% in 2023.
In Canada and around the world, expensive drugs are a significant cost driver. The CompassRx report by the Patented Medicine Prices Review Board (PMPRB), published on December 12, showed that the 10 most expensive drugs reimbursed by Canadian public drug plans are for rare diseases, costing over $250,000 annually per patient.
According to the report focusing on certain public plans in Canada, prescription drug spending increased by 6.8% in the 2021-2022 fiscal year, totaling annual expenditures of $13.2 billion. Insurance Portal will soon publish a more detailed article on this report.
New biologic drugs continue to emerge on Canadian plans' radar. On January 3, 2024, Health Canada approved Pfizer's gene therapy for hemophilia B. This exceptional drug will impact 700 individuals in Canada.
Treatment misuse
Medications originally intended for common diseases have also contributed to rising costs due to their misuse. For example, Novo Nordisk's Ozempic, intended for diabetes, surged in popularity due to its beneficial side effect on weight loss.
Organized by the Insurance Journal Publishing Group, the 2024 Congrès Collectif (Group Insurance Convention) will dedicate a day to group insurance issues. The opening session will focus on National pharmacare and the private sector's role. Another session will clarify the explosion in costs: myth or reality?
Special attention will be given to solutions that could stem the growing mental health crisis affecting an increasing number of people and workplace morale. A session will also examine ways to adapt plans to demographic changes. The event will take place at the Palais des congrès de Montréal on Tuesday, February 20.
