- Cloud innovation and a refreshed talent agenda are top priorities for insurers
- 60% of insurance companies consider ESG in underwriting and new product development practices
- The majority of respondents have clearly defined emissions targets for their operations
The 2023 EY Canadian Insurance Outlook reveals that insurers plan to prioritize digital transformation and refresh their approach to recruitment in the year ahead to remain competitive and keep pace with growing consumer demands around digital experiences.
“From a deteriorating economic outlook to disrupted supply chains and ongoing geopolitical conflict, insurers are exposed to a plethora of market headwinds,” says Janice Deganis, EY Canada Insurance Leader. “Layer in spiking interest rates or inflation and it becomes clear that in order to survive and sustain a brighter future, insurers need to reinvent their business models in Canada with an innovative and human-centric digital approach.”
Diving into cloud innovation
The outlook finds that senior demographics are bringing their own distinctive set of factors. Retirees, in particular, are looking for a hybrid approach to accessing education and advice on product offerings and are seeking solutions that address intergenerational well-being or wealth saving strategies.
“At a time where Canadians are becoming more thoughtful with their product selection, insurers need to strike a balance in operating capacities to meet different generational demands,” suggests Deganis.
To do this, the report demonstrates how cloud technology can support real-time data feeds that allow insurers to maintain relevant among younger clients who shop for policies through non-traditional, online channels and expect similarly digital service experiences.
“These real-time data flows are also creating opportunities for insurers and their partners to co-create in the cloud,” explains Jennifer Baziuk, EY Canada Partner and Business Consulting Insurance Leader. “This expands customer service offerings without necessarily needing to bring new expertise into the business itself — this is particularly helpful in a workforce where demographic shifts and other factors are making talent harder to attract and retain.”
A fundamental focus on environmental, social and governance (ESG)
About 60% of insurance companies in Canada consider ESG in underwriting and new product development practices. At the same time, they’re looking to increase accessibility in insurance overall by developing incentive programs to allow members to access better rates and by ensuring individuals or property that were previously uninsurable, now have access to coverage.
The report finds that insurers in Canada are also focused on outward-looking ESG priorities – almost all insurers in Canada are developing and launching socially responsible fund options aligned to ESG goals and most have defined emissions targets for their operations, with P&C claims operations highlighted as a having high potential to achieve further reductions.
“The Canadian insurance industry is at the forefront of climate-related and societal changes that will inevitably impact business, but there’s more work to be done – especially if we want to see ESG drive real financial value for companies across Canada,” adds Baziuk.
