Expansion will enable property and casualty insurance professionals to enter the digital world

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2019 Insurance Digital Experience Study | J.D. Power

Property and casualty (P&C) insurance companies have shown marked improvement in many of their digital offerings—particularly mobile self-service functionality—but still have work to do to meet customers’ rising expectations. According to the J.D. Power 2019 Insurance Digital Experience Study,SM released today, specific areas where insurers come up short when compared with mainstream digital consumer companies are with ease of shopping and servicing their policies, household-level policy management and inconsistent use of social media.

“Digital has become so important to the modern insurance company by delivering two essential characteristics consumers seek from carriers: ease and accessibility,” said Tom Super, Vice President Property and Casualty Insurance Intelligence at J.D. Power. “In many cases, mobile apps and insurer websites are the primary faces of these consumer brands. As consumer behavior continues to evolve, insurers must keep pace as part of their overall distribution strategy or run the risk of irrelevancy.”

The study, now in its 8th year, evaluates digital consumer experiences among P&C insurance shoppers seeking quotes and existing customers conducting typical policy-servicing activities. The study examines the functional aspects of websites and mobile apps based on five factors (in order of importance): ease of navigation; appearance; availability of key information; range of services; and clarity of the information. The study was conducted in partnership with Centric Digital, the leader in digital intelligence and includes Centric Digital’s DIMENSIONSTM measurement of insurers’ digital strengths, weaknesses and overall digital maturity.

Following are key findings of the 2019 study:

  • Mobile apps gain traction as preferred account servicing channel: Satisfaction with account servicing experience is higher among customers who use the mobile app channel than among those who use a desktop or smartphone website to interact with their insurance company. Overall satisfaction with mobile app service experience is 12 points higher (on a 1,000-point scale) than last year. Currently, 74% of insurance companies evaluated in the study offer the ability to access and manage policy and claims information via a mobile app.
  • Insurers’ digital maturity stunted by lack of resourcefulness: While most companies’ websites are highly responsive and meet brand standards, they fall short on delivering the types of expanded self-service tools, integrated digital communications functionality and contextual insurance information that would put them on par with leading websites in other industries.
  • Watch for insurtech partnerships in the months and years ahead: Insurtech start-ups are affecting the traditional insurance marketplace by providing customer-centric digital solutions and money-saving process efficiencies for insurers. Many traditional carriers, such as Nationwide, American Family and Allianz, have already partnered with insurtech start-ups—and more collaboration is expected.

“It cannot be overstated how important it is for brands to deliver digital experiences that meet or exceed cross-industry consumer expectations,” said Peter Smith, Chief Strategy Officer at Centric Digital. “This measurement and analysis show there are still many opportunities for P&C insurers to improve the consumer digital experience. While we’ve seen improvement over the past year, many insurers still have a long way to go when it comes to delivering world-class digital experiences.”

Study Rankings

GEICO ranks highest in the service segment with a score of 874. Allstate (862) ranks second and Farmers (857) ranks third.

MAPFRE Insurance ranks highest in the shopping segment with a score of 811. Progressive (803) ranks second and Erie Insurance (798) ranks third.

The 2019 Insurance Digital Experience Study is based on 11,151 evaluations and was fielded from January through March 2019.

For more on the Insurance Digital Experience Study, visit https://www.jdpower.com/business/resource/us-insurance-digital-experience-study.

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power has offices serving North America, South America, Asia Pacific and Europe.

Centric Digital provides industry leading solutions to measure and navigate digital transformation. Powered by proprietary platform DIMENSIONS™, Centric Digital has benchmarked hundreds of brands, designed multi-year transformation strategies, unlocked and managed $2+ billion of investment roadmaps. Centric Digital is headquartered in New York City, with offices in Chicago and Mendoza, Argentina. Visit centricdigital.com to learn more.

 

Insurance Companies Use Emerging Technologies & Business Models to Shake Up Competition

Led by insurtech disruptors, novel business models are causing disintermediation in the insurance industry and altering power dynamics. The rise of technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and smart devices is placing the spotlight on flexible services based on usage-based insurance, on-demand insurance and Prevention-as-a-Service models, which are redefining the role of insurance in people’s lives. These models will especially appeal to Millennials and Generation Z, the newest buying groups.

Lines of business such as liabilityproperty, and casualty will especially gain from models such as Prevention-as-a-Service,” said Lauren Martin-Taylor, Visionary Innovation Principal Consultant at Frost & Sullivan. “Even though insurtechs and start-ups are leading in addressing shifts in social, mobility, and technology trends by pioneering innovative business models, traditional insurers often back them or play an integral role.”

Frost & Sullivan’s recent analysis, The Future of Insurance, analyzes emerging insurable markets and business models, evolution in operations and the value chain, as well as disruptors and opportunities in various lines of insurance. It also covers technologies such as AI, augmented reality/virtual reality (AR/VR), blockchainwearablesimplantsself-healing materials, and automation. An overview of the trends and challenges in each market is presented along with industry best practices, notable activity, and case studies.

Forward-thinking insurers will look to realign their business strategies to tap the growth opportunities presented by:

  • Medical advances, wearables, and growth of the elderly population.
  • Rise in urban population density, particularly in Asia and Africa.
  • The largely untapped low-income demographic in developed countries, which holds huge potential for microinsurance and automation advances.
  • Biological augmentation technologies, which can transform the markets for life insurance and reinsurers.
  • High levels of digitization, increasing data breaches, and cyber threats.

“The auto insurance industry will be one of the most affected by the rising adoption of advanced technologies, as connected and autonomous vehicles will generate real-time data and improve underwriting accuracy,” noted Taylor. “In due course, the focus will shift from insuring drivers to insuring the vehicle, systems, and technology.”

The Future of Insurance is part of Frost & Sullivan’s global Visionary Innovation (Mega Trends) Growth Partnership Service program.

About Frost & Sullivan

For over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success

Minimum Capital Test for Federally Regulated Property and Casualty Insurance Companies

Source: OSFI

Subsection 515(1) of the Insurance Companies Act (ICA) requires Federally Regulated Property and Casualty Insurance Companies (property and casualty companies) to maintain adequate capital. Subsection 608(1) of the ICA requires foreign property and casualty companies operating in Canada on a branch basis (foreign property and casualty companies) to maintain an adequate margin of assets in Canada over liabilities in Canada. The Minimum Capital Test (MCT) Guideline is not made pursuant to subsections 515(2) and 608(3) of the Act. However, the minimum and supervisory target capital standards set out in this guideline provide the framework within which the Superintendent assesses whether a property and casualty company maintains adequate capital pursuant to subsection 515(1) and whether a foreign property and casualty company maintains an adequate margin pursuant to subsection 608(1). Notwithstanding that a property and casualty company may meet these standards, the Superintendent may direct the property and casualty company to increase its capital under subsection 515(3) or the foreign property and casualty company to increase the margin of assets in Canada over liabilities in Canada under subsection 608(4).

This guideline outlines the capital framework, using a risk-based formula, for target and minimum capital/margin required, and defines the capital/assets that are available to meet the minimum standard. The MCT determines the minimum capital/margin required and not the level of capital/margin required at which property and casualty companies must operate.

Foreign property and casualty companies are reminded that the MCT is only one element in the determination of the required assets that must be maintained in Canada by foreign property and casualty companies. Foreign property and casualty companies must vest assets in accordance with the Adequacy of Assets in Canada test as prescribed in the Assets (Foreign Companies) Regulations.

Severe hailstorm in Moose Jaw causes more than $71 million in insured damage

Insurance Bureau of Canada (IBC) reports a severe storm that swept through Moose Jaw, Saskatchewan during the third week of July has resulted in more than $71 million in insured damage according to Catastrophe Indices and Quantification Inc. (CatIQ).

On the evening of July 22, a cold front caused severe thunderstorms across the southern parts of Saskatchewan. A particularly severe storm formed over the north end of Moose Jaw, SK and pelted the city with large hail.

“The Prairies experience more hail each year than almost any other part of Canada,” said Bill Adams, Vice-President, Western and Pacific, IBC. “It is important that Canadians understand their insurance policies and what’s covered. It’s also essential to have an emergency preparedness plan and know what to do before, during and after bad weather strikes.”

Most of the more-than-5,000 insurance claims filed from this storm resulted from hail damage. Across Moose Jaw reports of damage to vehicles, windows, houses, and other pieces of property were widespread. However, the northern end of the city was the hardest hit.

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $49 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and@IBC_West or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

About CatIQ
Catastrophe Indices and Quantification Inc. (CatIQ) delivers detailed analytical and meteorological information on Canadian natural and man-made catastrophes. Through its online subscription-based platform, CatIQ combines comprehensive insured loss indices and other related information to better serve the needs of the insurance and reinsurance industries, public sector and other stakeholders. To learn more, visit www.catiq.com.

If you require more information, IBC spokespeople are available to discuss the details in this media release.

SOURCE Insurance Bureau of Canada

Co-operators General Insurance Company estimates financial cost of Fort McMurray wildfire

Source: Co-operators News Release

To date, more than 4,300 claims have been reported to Co-operators General Insurance Company (Co-operators General) by clients affected by the wildfire in the Fort McMurray area. The Co-operators Emergency Response Team has been supporting clients, including on the ground in emergency evacuation centres and temporary office locations in the area.

“This has been a devastating time for the community and residents are looking forward to returning home and starting to rebuild their lives and their community,” said Kathy Bardswick, president and CEO of The Co-operators. “While the return home will mark the start of a new phase for the community, it will also be a challenging time for residents and businesses – and we will be there to help our clients through it.”

To date, 4,376 claims have been reported to Co-operators General and its subsidiaries, including property, auto, commercial and farm insurance claims. While access to the area remains restricted, the company’s preliminary estimate indicates that the after-tax cost of the wildfires to Co-operators General Insurance Company consolidated, net of reinsurance and inclusive of reinstatement premiums, will likely amount to between $70 million to $90 million.

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