From his company blog, David Burnie shares the first article in a three-part series on the future of P&C insurance in Canada and how the sector is evolving within. The series explores distribution, pricing and underwriting, and claims.
For many years, the insurance sector had been notoriously slow to evolve. Customers viewed insurers as difficult to do business with, while insurers saw little need for change. Products were largely commoditized. To “win,” many insurers had to form stronger relationships with brokers than customers to get a bigger piece of the pie, while sufficiently maintaining these key relationships to promote positive risk selection and maintain profitability.
What has changed in P&C insurance?
Over the past five to ten years, insurers reached a tipping point where fundamental change was inevitable. Legacy policy administration platforms were ageing and no longer supported, which exposed the sector to increased risk; insurers could no longer ignore the need for updated technology. Although the motivation for this transformation was to stabilize the business for continuity purposes, modernizing technology offered ancillary benefits in the hopes of creating more nimble and efficient organizations, supporting customer-centric cultures, and accelerating the pace of overdue innovation and change sector-wide.
Changes are the most apparent in the way insurers serve their customers. Customers can now interact with insurers in ways that they hadn’t been able to do in the past. Digital quotes are now virtually ubiquitous amongst carriers, and brokers and aggregators are evolving to enable digital purchases, though this is in its infancy in Canada. Moreover, insurers are beginning to offer customers the ability to service their policies online or through their mobile apps. Perhaps the most significant changes are emerging out of claims groups that are now starting to offer a complete end-to-end digital experience, which we will elaborate on in the third part of the series.
Insurers were late to the game, but they are beginning to meet the minimum expectations of customers in an ever-increasing digital world. Though many large-scale platform implementations are completed or underway, we’ve only reached the tip of the iceberg since many of these implementations are still going through growing pains for myriad reasons, such as:
Large-scale programs have been descoped in this age of minimum viable product (MVP) to get the core system off the ground and meet time and budget constraints.
Add-on technologies such as CRM and/or specific Insurtech products that will unlock benefits by integrating with core systems but were not included in the initial business case and require their own independent cases to get off the ground. In many cases, these have stalled or have their own long-term implementation time-horizon.
Insurers continue to adapt their long-standing processes to new ones to meet the out-of-the-box configuration offered by vendors or pre-configured cloud-based system integrators.
The transition from legacy to modern platforms is challenging. Moreover, converting policies from old to new is not without errors and inefficiencies when teams must work in two separate technology environments.
Key points include:
- Distribution and service
- Cost savings
- Digital innovation
Read the full article, The Future of PC Insurance in Canada – Part 1 – Distribution, on BurnieGroup.com.
Umbrex is pleased to welcome Sharad Elhence. Sharad is an experienced business strategist and innovator. Most recently he was the founder and CEO of a social impact startup to create a Netflix-like digital platform for the arts & culture ecosystem. Earlier, in his consulting career with McKinsey, i2 Technologies (now BlueYonder), Infosys Consulting, and North Highland he has successfully launched and run consulting practices.
His domain expertise includes Operations Improvement (Supply Chain & Procurement), Data Analytics, and Value Assurance across several industry verticals including Retail, CPG, Distribution, and Technology. He is known for taking on complex challenges and turning around failed or stalled projects. He is based in Dallas, TX but enjoys global travel.
Umbrex is pleased to welcome Jonathan Schwartz with Schwartz Consulting. Jonathan leads performance improvement strategy and execution efforts and manages large, complex programs/projects in manufacturing, distribution, and service operations. Since leaving McKinsey as an Engagement Manager, he has led operations improvements, lean implementations, and large programs/projects at several manufacturing companies, Bank of America, a tech start-up, a healthcare communications firm, etc. He often works with private equity portfolio companies and was a VP and Lean Champion at American Capital. Prior to McKinsey, Jonathan spent 7 years in manufacturing leadership roles with Motorola and Hewlett-Packard and was a Fellow in the Leaders for Manufacturing Program at MIT. Jonathan lives in Atlanta, GA with his wife and 2 teenage daughters.
Eric Hiller’s company blog takes a look at the strategy and growth probability of the Ride-hail market from the perspective of the Lyft CEO.
Summary for Lyft CEO
Ride-hail is not going away, but it must to get profitable. You can try to ‘grow to profitability’, but as we have learned in the past, that is a risky proposition.
Uber is expanding, but it is already bigger than Lyft. Is that strategy profitable, and if it is, is there enough room for two players in it. Simultaneously, the path to profitability is getting harder with cities pushing back on Lyft and Uber, and as Lyft and Uber attract new customers, they may be less profitable riders. Consider another option: an alternative targeted and differentiated strategy:
Lyft should double-down on a long-term strategy of letting Uber attempt to own the market… but in reality, building the interstate for Lyft to toll
Continue to build cultural allegiance driver, rider, and city — which will differentiate and win in a commodity market in the longer-term, as Lyft captures share in an increasingly regulated environment
Follow to profitable geographies
Long term invest in autonomous public transport, leveraging massive experience with app / software and routing vehicles to individuals.
Read the full article, Lyft vs Uber – What if You Are Driving Lyft as a Company?, on the Hiller Associates website.