There’s a long overdue technology wave coming that will change the insurance industry dramatically, and it’s coming fast.
The insurance industry is massive — in Canada alone it is worth $50 billion. Yet much of the industry remains mired in outdated, manual processes.
The legacy technology systems that are in place were implemented 20 years ago, and the old tech, which is difficult to replace in large, behemothic companies, doesn’t make it easy to transact insurance business in a way that meets the expectations of modern consumers.
Making the situation worse, the industry faces a looming talent and personnel shortage, with half of the current workforce set to retire in the next few years.
Making the insurance buying process better
In order to get an insurance policy in place, the consumer typically has to contact a broker, who will collect application data — in a paper or PDF application — and then shop it to underwriters at various insurance carriers to get quotes.
The broker often has to add or clarify information for the underwriters, and it may be several weeks before the broker has collected all of this information and comes back to the consumer with their options. Once the consumer has reviewed their options with their broker, they have to pay for the entire policy year in one lump payment, typically by cheque.
This is a big pain point. Businesses need proof of insurance documents to lease space. Personal trainers need to show insurance before they work in gyms, and contractors need it before they begin work on job sites. Often the process of obtaining insurance holds business up — particularly small businesses that are less experienced or don’t have the financial firepower to expedite this process.
Meanwhile, the expectations of modern consumers are rapidly changing. Most people expect to be able to find what they are looking for, purchase it, and have it delivered to their door within a day. Most financial services have already started modernizing. Online banking, while still a long way from being perfect, makes it much easier to digitally manage finances than before it existed.
Technology eliminates human error and makes instantaneous service possible. Brokers using the Apollo Exchange are able to quote, buy, and issue policy documents in real time, moving what was a weeks–long process down to just a few minutes.
Brokers are still integral to providing the advice and counsel that their clients need to make complex financial decisions, but now they’re digitally enabled to process insurance in line with what consumers expect.
Rather than the continual back and forth between clients, brokers, and underwriters, costing massive amounts of time, clients are able to buy and get their proof of insurance immediately, and brokers are able to better serve their clients.
The changing workforce
Part of the reason for this is that insurance companies, which provide the risk capacity that is sold by brokers and agents, are large bureaucratic machines that are not able to respond quickly to buyer expectations.
On top of that, there is a massive talent shortage in the industry. Not only will half the current workforce retire in the next 14 years, but only four percent of millennials are even interested in a career in insurance.
No doubt, much of this is due to the industry’s slow adoption of technology, which has been shown to aid in employee attraction and retention.
Rather than hiring someone straight out of post–secondary — who has quite possibly never used a printer before in their lives — to do data entry and file paperwork, brokerages using technology can offer a rewarding career in helping businesses by providing valued counsel on risk management.
Insurance has a long way to go, but progress has started towards an industry where technology does the work so people can focus on building relationships.