It’s moving online incredibly fast
As we have seen in banking and investing, technological advancements in insurance are reaping huge customer rewards. Recent advertising efforts by State Farm and the Insurance Brokers Association of Canada (IBAC) clearly indicate that online insurance options in Canada are gaining market share every month. State Farm recently launched a high-profile commercial with professional athletes and famous actors to promote their personal touch, as online offerings powered by bots are gaining market share every day. The IBAC started a campaign warning Canadians about purchasing insurance online and launched a website and advertisements advising them to go directly to insurance brokers rather than online.
We can credit State Farm for the humorous advert and for focusing on the personal touch aspect that some customers might appreciate. The IBAC has taken a different approach by provoking uncertainty and fear, the long-time insurance sales tactic, to prevent Canadians from looking online for insurance.
Billions of dollars have been invested globally into bringing insurance online with a huge focus on improving the customer’s experience, so we want to look deeper into the IBAC’s message and see what’s going on;
- Advocacy or My broker shops for me. While they can and should be, the reality is that most Canadians receive their home, auto, boat, trailer and other renewals directly from insurance companies and not from the broker. You are likely paying directly to the insurer; the renewals come directly from them.
- My policy is customized. The customization of insurance occurs long before the quote, as insurers themselves have created off-the-shelf custom packages for home, business and auto insurance. Insurance companies have worked hard to develop leading packages, resulting in very simple policies that are only subject to a relatively standard list of exclusions. The final touch to customize a policy is to ask good questions about the client, whether for business or personal insurance, which can be accomplished easily and much more efficiently with online systems.
- Online insurers don’t pay claims. Online insurance is a different division of the same insurance company you might already be dealing with. Claims handling and behaviour from these insurance companies will be consistent with both channels. Buying online is not any less reliable, and it certainly does not mean that your claim won’t be paid.
- Online insurance is without expert advice. Online insurance industry leaders like Obvi Inc. and Zensurance have something important in common: they are brokers who provide expert advice. Customers still have access to live insurance agents or brokers who can provide guidance throughout the entire online process. With an online chat, a customer can also ask for a transcript of the conversation to document any advice received that influenced their decisions.
- Lower premiums equal less coverage. It is very common for one insurer to offer the same coverage at a lower rate than another insurer. What makes the online world more competitive is how efficiently products can go to market and how claims are opened and tracked, which can create substantial savings for customers. Just because insurance is cheaper online doesn’t mean it isn’t as good, if not better.
Are some people still renewing insurance in person? Maybe. Does this mean you have to buy insurance online? Not at all, but the online world is everything the traditional market fears. It’s quick, easy, and convenient and allows consumers to effectively manage a very important product that is a noticeable household expense. What kind of insurance is available online? Here are your options:
- Home Insurance
- Auto Insurance
- Extended Warranty for your vehicle
- PET Insurance
- GAP insurance
- Personal Umbrella
- Life Insurance
- Small and medium-sized business Insurance
- Travel Insurance
Canada should be excited about online innovators that have re-imagined the insurance industry and the benefits available. The online insurance world is starting to open up in Canada, and it’s something to embrace rather than fear.