A new Reuters Events report entitled, Insurance Product Strategy: Powering Human Touch & Profitability, looks at how industry experts view innovation as a crucial part of Canadian insurance companies' future products.
The report was released ahead of Reuters Events: The Future of Insurance Canada 2023, which takes place in Toronto on November 15 and 16.
The report dives straight into the need for updating regulation and risk management to match advancements in artificial intelligence (AI).
“This represents a call to action for our industry,” says Gourami Kakhadze, vice president and chief compliance officer at Combined Insurance. “We know that technology is always moving much faster than legislation and regulatory oversight, so we must challenge ourselves to innovate risk management practices in accordance with the new market realities.”
The report also talks about the importance of the human touch in insurance.
"We are a promises’ business to be there on your best and worst days and technology can come across as cold and inhumane in these critical moments," says Brady Aarssen, vice president of group retirement and innovation with Canada Life.
In the report, industry experts also shine a light on the dilemma of data collection, privacy, and personalization.
Canada’s insurance industry depends on rich and growing sources of internal and external data, but Canada Life’s Aarssen says the reality is that behavioral data can be skewed.
While these programs are useful for creating customer engagement and affinity, "we likely overstate their effectiveness because some of the ‘gamification’ both at the consumer and the carrier level,” Aarssen adds.
Anna Foat, design literacy and education strategy specialist with Sun Life’s global marketing suggests that product teams take a step back and ask who their products are for, why consumers buy and what challenges the products solve for.
In terms of product innovation, the report also points out the need for product innovation by larger carriers for small businesses, which is traditionally a consumer section best served by small direct-to-commercial businesses.
"To fill the gap," however, Aarssen says Canada Life is using new and cost-efficient technologies, like AI-driven automation, to offer affordable policies through employer-employee enrollment programs.