April 18, 2018 13:30
Photo : Freepik
The need to evolve the business model in insurance is the primary engine of innovation, » says Louis Régimbal, vice-president, strategies and innovation at SSQ Insurance. Technology companies that offer solutions and can become potential partners, he pointed out during a debate bringing together representatives of the financial markets Authority, an insurer and a startup company, held on the occasion of the event InsurTech Quebec.
In the ecosystem formed by the insurance industry and the startup companies who are developing applications and platforms, the partners must find a balance in their relationships to make innovation relevant for insurers. Ultimately, the relevance of the tool will be determined by the customers.
Evolve the business model
Lawyer and analyst for the distribution practice within the Authority, Mélissa Perreault closely follows the evolution of the business models that rely on new technologies in the financial sector. It is involved in the thinking about the regulation of distribution through the Internet or by mobile applications.
Stressing the excitement of technology companies, Ms. Perreault hopes to contribute to make the closest possible collaboration between young entrepreneurs more nimble with the technologies and the traditional insurers who were able to establish a relationship of trust with the customer.
Creating value is the essence of startups
For his part, Scott Loong, lawyer, founder and CEO, Covera, a platform fully digital insurance broker in Quebec, considers the need to create more value for the consumer is the foundation of all the startups in the insurance industry. «Gradually, we are trying to establish in financial services, the same technologies that make us life easier in other aspects of our daily lives,» he says.
In terms of innovation, the approach of the Authority is well received by the entrepreneurs, according to Melissa Perreault. They believe that the regulator is quebec shows more openness and fosters a culture of innovation. Taking advantage of its status as an integrated controller, the Authority receives proposals from the community. Sixty experts, who are drawn from all the directorates within the Authority, are collaborating in the work of analysis of fintech within various working groups.
«We are told that the support that we provide is appreciated. We have an approach focused on understanding issues and finding solutions, » she said.
Ms. Perreault also emphasizes the existence of the advisory committee on technological innovation, which includes a dozen of external experts. They provide advice to the regulator on specific issues.
Investments in distribution
Mélissa Perreault notes that the majority of the investments in the technologies in insurance, are devoted to the distribution of products. Contractors, and their clients at the insurers are already ready to automate all the business processes as soon as the legislative framework and regulatory permits.
All the development is focused on the customer experience, she adds, and even if the sector of damage insurance is already upset by the emergence of new platforms, fully automated, Melissa Perreault score a breakthrough similar to the insurance side of people.
More efficient processes
The process of underwriting and claim are also rendered more effective and fast thanks to the new technologies of transmission of documents. «In all cases, it is the improvement of the customer experience is at the heart of innovation «, she notes.
Scott Loong said that in 2016, it has been able to obtain financing in venture capital to hire the staff it needed for Covera. Enter into distribution contracts with insurers has been an exercise much more difficult. It took him six months of intense discussions with the insurers of the Toronto, Montreal and Quebec city. «Even if you distributed via the Internet, if you have nothing on the shelves, you’re not very advanced,» he says.
The market is difficult to access, but consumers are receptive to messages and new approaches. «It has the advantage of novelty,» says Mr. Loong.
To distinguish themselves by marketing
«The competitors have resources substantially higher, then it is necessary to distinguish also by the way of marketing the digital platform. As a result, the young shoot must look for segments that are poorly addressed and clients underserved by traditional insurers «, he suggests.
«It is necessary that the difference is in our DNA as a company. We can get the attention of a customer at a cost lower than that of a bank, » he continued.
Within five years, Scott Loong believes that while the distribution network will be significantly altered by the emergence of companies such as Covera. He adds that the brokerage network will still exist, but brokers will have to find a way to digitize their service offerings if they want to continue serving the new consumers.