Prompted by COVID-19, more than one million Canadians shopped for life insurance last year, according to new LIMRA LOMA statistics. And while the bulk of shoppers know they need to get the protection, they made it clear they don’t want to go back to the old way of buying insurance and they want their life insurance advisors to back them up on this.

What Canadians do want, said John Carroll, corporate vice president, Member Relations and Sales with LIMRA LOMA, is better technology but with a human, physical touch, what’s come to be known as the “phygital” method of selling life insurance.

Carroll told the LIMRA LOMA Canada annual conference in mid-May that recent studies with Canadians indicate they want an underwriting process that is less about blood and fluids and more about using artificial intelligence (AI) and data and the ability for insurance companies to issue policies in just minutes.

More than 60 per cent of Canadians who already own life insurance have it through their employer as a workplace benefit. But, said Carroll, it’s probably not enough and probably not portable, creating a false sense of security.

Half of the people responding to a recent Canadian poll were between the ages of 30 and 50 – the prime age group for life insurance. Canadians know they need the life insurance, even over financial products like mutual funds, seg funds, other investments and other kinds of insurance.

Heightened awareness

Citing new statistics from a study by McKinsey and Company and LIMRA, Carroll said 96 per cent of those in the survey said they were more aware of the need for life insurance last year because of the pandemic. And, since COVID-19 hit, 11 per cent of Canadians now have a more positive view of life insurance, prompting more than one million to shop for life insurance.

“That’s a very open market place that’s out there right now.”

People already considering buying life insurance continued to search for the option that suited them best as COVID-19 became worse, a result that was specific to Canada, he said.

“It’s never going to go back…We made 10 years of progress in one.” - John Carroll

It’s up to advisors now to come up with solutions for clients, some of whom still want to meet virtually or form teams, but also to deal with those who would rather have most of the background work done online.

“It’s never going to go back,” said Carroll. “We made 10 years of progress in one. It shows insurance companies need this. As an industry we were generally behind the curve on some of these things.”

He predicted many insurers will continue to invest heavily in technology, perhaps to replace legacy systems or outsource to experienced providers.

“The industry is going to be very different in ways we just don’t know yet.”

But not only will some products change, so will advice, said Hugh Moncrieff, executive vice president, Advisory Network and Industry Affairs at Canada Life.

Quality advice

It’s important, said Moncrieff, that all Canadians, regardless of the size of their wealth, be able to access certain products and be able to rely on quality advice.

Moncrieff said not enough people own insurance products and it’s up to the industry to ensure clients receive the right information they need to determine what is best for them.

Clients are looking for plain language and simplicity and want help in prioritizing their goals and how to leverage technology to make that easier, he said.

Online is a big thing too. The recent LIMRA study indicates Canadians are having a closer relationship with their mobile devices – with one in five clients buying items on the internet and one in three on their phone. Clients are increasingly telling insurance companies that they would like a digital first experience. 

“Products matter, but the experience almost matters more in terms of how they interact with us,” said Moncrieff.

The cost of innovation

While digital is a major theme, insurers are concerned about how this will translate into cyber attacks and how they can protect their clients. “We want to grow, but there are costs with growth and innovation. It’s a cost of our new reality.”

Defining the best kind of customer experience (also known as CX) is an evolution that takes into account the fact that clients may have multiple financial services, such as insurance and mutual funds, said Alex Watson, Canadian Insurance Lead at Capco, a management and technology consultancy dedicated to the financial services industry.

Product-agnostic approach

Watson said those who want to prosper in the new reality also have to take a “product-agnostic” approach to claims servicing. The end goal of companies is to eliminate services that are no longer required – such as wet signatures, he said.

Each company is going to have to proceed at its own speed and what it deems to be the most important issues, he said. Watson said customers are demanding more from their financial institutions so firms must start with their strengths and then add in new offers or products that they hadn’t put as much emphasis on in the past.

While CX looks after the client, digital transformation, or DX, is the name of the game for the company itself.

Digital claims

Carl Capato, senior vice president, Strategic Risk Management Partnerships at FastTrack based in Bedminster, New Jersey, said the industry has to bring in new tools such as a digital claims portal to help customers submit their claims online.

Capato said very few U.S. carriers currently have this specialty, which includes any number of smart technological tools. As examples, he cited “automatic lift data,” which captures typed and handwritten data on forms; “machine learning technology,” which captures unstructured data, such as a death certificate and “robotics process automation,” which notices if material like a signature is missing.