The word ‘Amazon’ is like a persistent echo in the insurance industry. Insurance leaders are constantly looking over their shoulders in anticipation of the disruption the e-commerce juggernaut is poised to bring. One sector particularly vulnerable to disruption by tech giants is life and health insurance.
In January 2018, Amazon announced a major tie-up with Warren Buffett’s Berkshire Hathaway and the New York bank JPMorgan Chase, to create a new healthcare company that would help its US employees find quality care “at a reasonable cost.” Fast forward nine months and the tech firm entered the Indian insurance market with a life, health, and general insurance product.
So, what’s next for the Canadian insurance market?
“Insurance leaders are always thinking about the next generation of competition that might come to disrupt the Canadian insurance market, and more often than not, thoughts turn to the major technology companies like Amazon and Google,” said Michael Aziz, chief distribution officer at Canada Protection Plan, a provider of no-medical and simplified-issue life insurance.
“Will the Amazons and the Googles come? Yes, I believe at some point they will start looking at our industry a little closer. Can they offer insurance in seconds? I don’t think the regulators are quite there yet, but they will get there at some point, which is why it’s vitally important for insurance carriers across all sectors to emphasize insurtech and make sure they’re ready for the next level of competition.”
Technology is one of the biggest buzz words in the insurance industry. According to Aziz, carriers have moved on from talking about “technology, technology, technology” and have started “putting their money where their mouth is.” Lots of Canadian insurance firms are hiring technology specialists and investing in new tools to help them progress into the next decade.
Such investment stems from the fact that Amazon and Google are breathing hot down the neck of the insurance industry. Insurers like Canada Protection Plan know they have to issue products faster and offer heightened levels of customer experience if they want to thrive alongside and out-compete the e-commerce giants.
“We’re all in the same race,” Aziz told Insurance Business. “When it comes to life insurance, consumers are tired of having to wait at home all day for a nurse to come and take blood, and then having to answer 40+ questions. They’re even more tired of having to wait months for their policies to be issued.
“We’re focused on issuing the best possible policies as quickly as we can. We’ve reached the point where we’re able to issue a policy within 90 minutes and have it sent out that same day. But we’re always looking at new technology and things like automated underwriting to help us speed up the process further. The thing with companies like Google and Amazon is that they have so much consumer data and information, and they have superior technology infrastructure. It’s going to be really interesting to see if and how they disrupt the Canadian market in the next few years.”