The 2023 EY Global Insurance Outlook reveals that insurers are gearing up for a transformative year ahead. Faced with market headwinds and changing consumer demands, insurers are prioritizing digital transformation and recruitment revamp to stay competitive.
Janice Deganis, EY Canada insurance leader, emphasizes the need for insurers to reinvent their business models in Canada with an innovative and human-centric digital approach. In the report, she highlighted the importance of adapting to a deteriorating economic outlook and addressing the evolving needs of customers.
The report noted the impact of senior demographics, particularly retirees, who seek a hybrid approach to insurance education and advice. Insurers must strike a balance to cater to different generational demands. Cloud technology emerges as a crucial tool, enabling real-time data feeds to meet the preferences of younger clients who prefer online channels and digital service experiences.
Jennifer Baziuk, EY Canada partner and business consulting insurance leader, outlined the benefits of real-time data flows, including the opportunity for insurers and their partners to co-create in the cloud. This helps expand customer service offerings without the need for additional expertise, which is especially valuable in a workforce where talent acquisition and retention are challenging due to demographic shifts.
ESG considerations are another key focus for insurers in Canada. Approximately 60% of insurance companies in the country factor in ESG practices for underwriting and new product development. Insurers are also working on increasing accessibility to insurance by developing incentive programs and providing coverage options for individuals and properties that were previously uninsurable.
The report also revealed that Canadian insurers are actively engaged in outward-looking ESG priorities. Many are developing socially responsible fund options aligned with ESG goals, and most have defined emissions targets for their operations. The potential for further reductions is particularly highlighted in property and casualty claims operations.
Baziuk emphasized the significance of the Canadian insurance industry's role in climate-related and societal changes. While progress has been made, she noted that more work needs to be done to harness the true financial value of ESG initiatives for companies across Canada.
"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," added Baziuk.
