20 December 2018 11:00
Photo : Freepik
As 2018 nears, the Journal of insurance proposes to you to discover the predictions of its journalists about the challenges that the insurance industry will face in the coming months.
It is the consumer who decides !
In Quebec, the adoption of bill 141 has shaken the industry for two and a half years. Some aspects of the new law have enabled the industry to take big steps, and others less so.
A great step forward has been taken with the authorization to sell insurance on the Internet. This has put the insurance industry in line with other economic sectors. And to “democratize,” or make them more accessible to the insurance.
Yes, now the consumer — a percentage — will be able to purchase the contract of insurance they need on the internet. Brokers and advisors who were concerned about that, consider that this portion of consumers who will buy on the internet did before, but using the bids received by the marketing direct and other carriers who did not use an intermediary.
There is more : in business, it is necessary to make clear that it is the consumer who decides. He decides to buy, and what, with who he wants, and now, with the explosion in digital commerce, he decides when he wants to buy. And this is not new ! Contrary to what many advisors and brokers think.
Already in may 2000, that is 18 years of age, of the insurance Journal reported the results of a study that the president and chief operating officer of DLLA (today Desjardins Insurance), François Joly, had agreed to share with our reporter. The institution had to decide to sell insurance in the caisses populaires in order to replicate its success of sale of the property and casualty insurance.
How to do it ? Through the advisors of SFL or employees of DLLA ? Torn, the institution conducted a survey of canadian consumers to understand their behaviors.
The finds ?
- 26% of consumers preferred to buy all their financial products and services in a single location, either their cash, rather than through an intermediary.
- 23 % preferred a personalised service and wanted their recommends products and services through a representative.
- 23 % were looking for a personalized service and wished to be advised while not having a preference for a mode of acquisition.
- 20 % considered themselves to be autonomous. They wanted to retain the initiative and take an active part in the process by the documentation from sources they considered credible.
- 8 % were receptive to offers by way of postal, telephone or via the internet.
Still up to date ? Subsequently, other studies have increased the accuracy and the relevance of these data.
And probably that many institutions have conducted, but have kept the results as tools in development of their marketing strategy.
Purchased without an intermediary, these contracts will be adequate to cover the needs of the consumer ?
It is up to ALL actors of the industry to audit : thefinancial markets Authority, the companies, advisors and brokers. How ? It’s called competition !
A parallel can be created with the life insurance mortgage. Is this enough to protect a family after the death of the one income family ? Certainly not. This is a first step, however. It will be the work of competitors, or the institution that sold it to you, demonstrate it to customers.
The Journal of the insurance intends to bring his grain of salt in 2019 with new information tools.
All this just for that
The other major component of the bill, the organization of the structure of the industry, does not merit a passing grade.
Two and a half years of heartbreak, of denigration and assertions never proven to have caused confusion, doubt, and undermined the confidence of many consumers in the insurance industry and finance. However, because the industry offers intangible services, trust is what matters the most to fulfill its mission to protect Canadians.
Even the ex-minister of Finance of Québec has sown the seed of doubt in the minds of consumers on the integrity of the system by declaring to a parliamentary committee, in June 2018, he hoped that no citizen would be penalised by the refusal to improve current oversight, including in situations where this double framing could not allow it to block sufficient funds rapidly in case of fraud.
Personally, I’ve never seen this in 30 years of journalism !
Licensees have even been penalized by their code of ethics to be brought about relating to denigrate or cast doubt on the work of others in the industry. Some politicians had not read the code…
It was at the heart of the desire to see disappear from the Rooms. The reason for this ? “There is an overlap of responsibilities. “However, there is not. Everything is well defined in the law. A lot of lawyers and industry executives are there to say, but on an anonymous basis : they are afraid of reprisals from the Authority.
The single hang point, real occurs in the case of investigations.
A firm is at fault : it is under the jurisdiction of the Authority.
A consultant or broker is at fault : it is under the jurisdiction of the Chambers. In the case of life insurance, there is an exception. The Chamber of damage insurance has the mandate to monitor the firms 24-certified and less. We do not find this exception in the insurance of persons.
Hanging or the overlap ? It happens when a survey is opened on the case of a firm : you must investigate the firm and, by the force of things, on the individuals who run it and who are holders of a permit. Authority and the Rooms are so interpelées all the two.
How many cases per year ? 10. On the 46 000 licences in Quebec, financial services and insurance combined.
Instead of having torn the industry for two years and a half, we would have done better to talk to find a common ground.
It will remain, in 2019, to ensure that the application of measures adopted in 141 on the definition of a broker is respected in the industry. This issue was raised many passions.
Collaboration : a culture in deployment
To the Authority, there is now what looks like an opening to bring people together with the creation of several advisory committees.
This is the right way.
Reconcile rather than divide.
Our speaker Réal Jacob has strongly defended the Day when the property and casualty insurance march 2018 : the cooperation creates value. The absence of cooperation, collaboration and openness creates barriers, conflict. She opens the door to monopolies of power in which only the ideas of the leaders are good.
To achieve its optimum efficiency, in a system, whatever it is, nothing, absolutely nothing, is not worth a power-sharing arrangement
Instead of a regulator, it is necessary for regulators, but it is important that they speak. Even better, they work together.
As Monique Jérôme-Forget has said, “fathers and mothers” of the structure of the industry, at its inception, wanted to share power for improved efficiency.
It is advancing an industry. In the words of the african proverb, only it goes faster, together one goes further.
The human above all
Challenges are not lacking in assurance. Tightening of the market, climate change, Internet sales and customer experience to improve are marked with uncertainties.
An insurance broker damage, I was reminded that none of these issues is more important than the ability of the industry to attract the workforce.
Damage insurance, you may be pleased to draw heavily on the milléniaux. They make up almost 40 % of 126 000 people it employs in Canada, as reported by theinsurance Institute.
The end of the man with the suitcase
The Coalition for the promotion of professions in the property and casualty insurance has worked to break the image of the man in the tie who goes door-to-door with her suitcase. The industry is perceived as an attractive environment. Its entry level wage, an average of $ 40,000, also plays in its favour.
Several industries envy that was built for property and casualty insurance in Quebec. Only the aerospace has done the same. A proof of this capacity of attraction is that the majority of hires made in Québec aims to encourage the growth of a business, and not to compensate for the retirements.
And in life insurance ?
What is it in life insurance and collective ? Leaders of general agents trust me not sleeping at night wondering who will be their distributors. The workforce is aging and succession planning is rare. If falls under there, does it have affinities with the clients in place ? Not always…
In spite of the transfer of wealth that announcement, several advisors have not developed links with the children of their customers who found it convenient to put it in the bank.
Life insurance attracts yet of the workforce. The model of several companies focused on training in sales, you can even create superstars ! But the failure rate is great… These people leave the industry and do not come back. Damage.
The need to transform
Many entrepreneurs trust me that the only constant that there is in the conduct of a business, it is change. You just can’t escape. It is even fully adhere !
My first stripes as a journalist, I’ve acquired to Maniwaki, in the Journal The Gatineau. Several people of the place read them as some read the Bible. Enter in a restaurant of the place, at 6 o’clock on the Friday morning, and see 25 people read in absolute silence makes humble, believe me !
Despite its popularity and the importance that this venerable institution has acquired, it has closed its doors after 62 years of existence. The reason for this ? She was not able to adapt.
For those who find that the insurance industry is changing fast, look at the side of the media. The fall in income has forced many media companies to close their doors.
This wave has not hit insurance. The industry is immune ? No. But how to show to consumers the value-added of its product to cease to hear : as we know well, the insurers do everything they can to not pay ?
A nice challenge indeed !
The business model of the advisors, under pressure, in 2018 and in the years to come
The business model of advisors is shaken by the turbulence in demographic and technology that is sweeping the insurance industry and financial services, revealed a survey conducted by the Journal of insurance submitted to the Congress of the insurance in November 2018. Our forecast : the high pressure system will increase in 2019 !
The insurance industry and the investment exchange ; and is the business model of the advisors. To serve all the needs of their customers in a single point, they become surrounded by more and more professionals. The mortgage broker now exceeds the carrying in popularity (62 % of advisors make him call or hold themselves the right to exercise, compared to 50 % for accountants).
The business model of advisors is pluralize and diversify under the pressure of several factors. The aging of the population, of course, but also the needs of the younger generations, both in insurance as in life insurance and in investment.
Thinking as an entrepreneur
However, there is still a long way to go before asserting that the councillors see themselves as entrepreneurs, as an advisor on two works without the assistant. This is 57 % of advisors in life insurance who are without assistant. The proportion reached 66% of the women councilors. Advisors mutual funds make a good figure : only 37 % of them are working without assistant.
The advisors of the independent network, who are working alone and who have not redesigned their business model will be eventually pushed towards the exit by several socio-economic trends.
The customer at the heart of the equation
Under the thrust of the millénaux as that of babyboumeurs who are moving away from large-scale the golf course for the cycling and the marathons, the industry has understood that it had to offer the customers what they ask for, and not a template one size fits all, designed to treat diseases rather than prevent them. The subscription and instant online claims, the connected health and prevention are placed at the forefront of the activities of insurers, as a guarantee of a personalized follow-up.
Manulife has surprised the industry by year-end, extending its Vitality programme for the group insurance. Smaller insurers, are not of rest. On the floor of the Congress of the insurance on November 13, 2018, Humania Insurance has launched 5575, a product that specifically focus on the babyboumeurs without group insurance
The advisors are more than ever in his technological advances. As we recently shared Richard Payette, president and chief executive officer of Manulife Québec in respect of Vitality during his lecture at the Congress, this kind of platform enables advisors to increase exchanges with their customers, and thus strengthen the relationship they have with them.
The technology : between fear and confidence
However, the participants in the survey of the Journal of the insurance industry have expressed many concerns related to the robots-advisers, and to the sale of insurance via the Internet without a representative. Surprisingly, these concerns have emanated from both youth counselors as of old.
Even in the anxiety, the participants gave many messages of hope. The expressions of human relationship, value the advice, expertise and skills are returned the most often, hundreds of times. We remember especially this message of an advisor on the robots-advisers : “The robot can replace the human relationship and emotional ! “Or this one on the sale by the Internet :” My clients are especially looking for advice and want to discuss their situation, their projects and want to ensure they make the right choices. The Internet is too impersonal ! “
The general agents are taking action
In 2018, the independent network has responded. MICA financial Services has taken a 50% stake in a start-up to launch Emma.ca. At the turn of 2017, Aurrea Signature has led to the creation of Karma Insurance, to serve the hardliners who do not want to deal with a counselor in person.
The artificial intelligence in 2019
According to our sources, the artificial intelligence will continue to grow at breakneck speed because insurance companies and the distribution network to understand that this technology does better than any other to refocus the business model on the needs, the dreams and aspirations of the customers. They will grow back again the limits of the risk and speed of execution.
Now freed of the bitter debates that surrounded the adoption of the draft law 141, the advisers will look to the future, further diversifying their activities and by integrating more and more practice with the tools of technology that you want to offer them. However, the counselors should keep in mind the trend of regulation increased, and never substitute a technological support to their professional obligations.