The insurance industry, as most know it, does not have evolutionary offerings, right? Wrong! For decades, individuals and brokerages have been offering financial solutions for retirement and emergencies as a one-time service. However, this transactional, one-size-fits-all approach is unhelpful for almost half the Canadian population. Fortunately, this is changing.
Tailored products for customers
Because of the realization that financial planning and protection is a life-long journey, including multiple decisions throughout different phases, the need for diversity in shopping experiences has become crucial. And it will continue to become the norm as we move forward.
There are many variables beyond income that impact one’s decisions- family size, acquired assets, retirement preference, health, lifestyle, etc. As a result, a transactional, in-person shopping experience will only deter customers from eliciting guidance from finance professionals who don’t seem to understand their unique needs. To keep up with the changing demands, the insurance industry needs to amplify its efforts to produce curated products and packages for customers. This is especially true as millennials who make up the largest populations, strongly value personalized experiences. Therefore, the demand for being able to meet consumers’ unique needs is driving investment and strategic initiatives related to an enhanced consumer experience and tailored product offerings.
Automation and machine learning
Distribution as a functional category is the leading category in Canada. My prediction is that it will continue to grow over the years to come. Customers are looking for more convenient ways to perform and address their financial decisions. Again, millennials and Gen Zs are highly tech savvy and grew up in a world where digital was always first. Thus, more digital-friendly and easy-to-use options for consumers to shop for and manage their finances, including purchasing insurance, is fundamental. Insurers need to catch up as the pandemic only accelerated this need. Surely, the virtual setting we all moved to is here to stay.
Increased funding
Between 2011-2020, a total of $1.158 billion of funding (that we know of) has been raised by 67 InsurTech startups in Canada. My prediction is that this will continue to grow exponentially. You see, the pandemic has driven and accelerated online activity within such a short period of time. Customers, globally, have learned and become more comfortable with doing their day-to-day tasks- even groceries- behind a screen at the comfort of their own homes. At this point, it’s kind of too late to turn back. We all got a sweet taste of the convenience that the virtual world has to offer. And we’d be lying to ourselves if we thought this is leaving anytime soon. So, as this demand increases, the pressure for companies to cater to this need is real. And therefore, investors and subsequently funding startups is increasingly significant and growing, too.
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