The following notes were taken at Forum 2017, the annual convention of CPBI (Canadian Pension and Benefits Institute) held June 5-7 at the Delta Hotel in Winnipeg with the theme: “Thriving In a Climate of Change”.
Presenter: Lisa Callaghan, Manulife
Key Points
Disruption is coming to the group benefits landscape in the form of platform-based exchanges offered by technology companies rather than insurance companies.
Insurers are typically well-established, stable, and low in volatility. Insure-techs (tech companies offering insurance platforms) are none of these things, which gives them a potential opening to be nimble and innovative.
Insurers offer a risk pool and price their products via underwriting. Insure-techs look to offer choice to market places and are comfortable with upsetting the risk model.
The Canadian healthcare market sees healthcare as a right and the insurers govern themselves accordingly. Insure-techs see only consumers and seek to disrupt the current paradigms.
Consumers are beginning to warm to platforms and are starting to have e-commerce expectations. Insure-techs are looking for ways to offer choices.
Investment in Insure-techs by VCs has grown 7-fold over the past two years. Big changes are coming.
Insure-techs look to enter the market in the following ways:
- micro-insurance / on-demand insurance (e.g., insure your camera for the ten days you go to Thailand for a vacation)
- peer to peer products
- leverage data to unlock efficiencies. EG use AI for underwriting and risk profiles.
- low-margin / high-volume
- automatic administration
- digital platforms to reach consumers
- B2B P&C packages
- corporate platforms (instant quotes / no need for advisors / automatic enrollment / HR integration / member payments / member inquiries and communications via Smartphone)
One drawback of platform products is that more choice is not always better, and informed choice is more difficult to attain as people often choose based on price not value.