How many people TD says will soon buy insurance online

Canadian customers may have been slower to adopt to digital options when it comes to insurance in the past but one insurer executive expects the tables to turn rather quickly, predicting half of its customers buying insurance online in the next few years.

The Canadian Council of Insurance Regulators issued a report close to the end of 2020 that showed just 12.2% of property and casualty insurers sold through the internet in 2019 — and only 1.3% of insurance policies were sold online.

While those figures don’t account for the digital transformation many insurers undertook in 2020 as a result of the COVID-19 pandemic, TD Insurance president and CEO Ray Chun expects more and more customers to soon satisfy their insurance needs online — half of all customers in the next five years, to be specific.

He referenced another survey by McKinsley that, though U.S.-based, showed 70% of consumers surveyed said that they would shop for, purchase and service their insurance needs digitally.

“The demand is there, that’s for sure,” Chun told Canadian Underwriter. “The insurance industry in Canada is still very early in the journey for digital adoption, digital capabilities.”

The U.S. has been on a digital journey for much longer than Canada, which is why you see higher usage and adoption rates there, Chun explained. “You’re seeing the Geicos, the Progressives significantly further ahead in the adoption of digital. In sales, binding end-to-end, the numbers that I’ve heard are somewhere [near] or close to 50%.

“Our aspiration over the next five years is that we move towards 50% of our policies being bound online. And then, certainly, the majority of our simple self-serve transactions would be done through digital self-serve capabilities.”

Can TD really move to get 50% of its insurance policies sold online in just five years? “That’s our goal, five years, but hopefully sooner, to be honest,” Chun answered, adding that the key is to create an experience that is frictionless and effortless for customers when they engage with your website.

“If that’s the journey we’re on, and once we deliver on that expectation, I think consumers are already ready to adopt,” he said.

He pointed to the uptake in clients using an app on their phone to take photos of damage and submit their claim digitally — usage went from 15% pre-pandemic to 85% post. “That happened within … a few months. People significantly shifted how they engage digitally with respect to a claim.”

This push to go digital doesn’t mean other important areas like having someone ready to chat over the phone is going to go the way of the dodo.

“Insurance is a complex industry and so I think there’s always going to be the human element,” Chun observed. “It’s the organizations, in my opinion, that are going to best blend the digital experience that consumers are gravitating towards, but with the human experience when they need it.”

 

Feature image by iStock.com/AndreyPopov

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