Economical Insurance’s recently-launched direct writer, Sonnet, is one example of “disruptive innovation” in the Canadian industry, a speaker told insurance professionals at a recent conference, though a senior executive of Economical suggested there is a “significant segment” of the market that will “continue to value” the advice that brokers provide.
There are “two different approaches” to innovation, Sue Britton, founder and chief executive officer of Fin + Tech Growth Syndicate Inc., said Tuesday at the Insurance-Canada.ca Technology Conference.
One approach is technology innovation and the other is business model innovation, Britton added during an Insurance-Canada.ca Technology Conference session titled What an Insurer Must do to Retain Clients.
“I think Sonnet is a great business model innovation example – where it’s about doing business differently,” Britton said of Economical Insurance’s online direct channel, which went live May 9, 2016.
Through Sonnet, Economical offers personal auto, homeowner, condo, tenant and landlord insurance.
Sonnet was designed to “target a segment of the consumers who are really comfortable making all their financial transactions online,” said Karen Gavan, then Economical’s chief executive officer, at the Insurance Brokers Association of Ontario annual convention in October, 2016. “They don’t want to talk to anyone, including whether it’s a call centre or a broker’s office. They want to be self-empowered and they want to be able to cancel whenever they want to, they want to be able to make changes whenever they want, that’s what our research showed.”
At Insurance-Canada.ca Technology Conference, Britton told attendees there are different models of business innovation.
“Is it about sustaining your current business? If it is, I think the most important thing that I would like to leave with you is the thought that you have to involve your existing employees in that type of innovation,” Britton said Tuesday.
Insurance-Canada.ca Technology Conference was held at the Allstream Centre in Toronto, the former automotive building at the Canadian National Exhibition grounds.
“Disruptive innovation – which is a key area for everyone – in my opinion needs to be outside of the organization, because it’s very distracting,” Britton said. “It’s also much more difficult when you are thinking about something that is disruptive, like, for instance, Sonnet launching a direct to consumer solution. It’s best outside the organization, leveraging talent that you likely don’t have.”
Also speaking at Insurance-Canada.ca Technology Conference, at a different session, was Alice Keung, Economical’s chief information officer.
“There is a significant segment who will continue to value the advice of a broker,” Keung said during a session titled InsureTech and MatureTech: Blending New and Old. “So in our case, while Sonnet is certainly Canada’s first digital end to end direct, for us the broker is still a valuable partnership. But I do think that in the world of the broker channel, it makes the integration work on the technology side extremely complicated.”
Keung noted there are broker management systems and then there are systems from quoting vendors.
“You have all kinds of middle layers, then you have your own systems, then you have a third-party data provider,” Keung said. “Integrating all of that is really just so messy that every time you think of it you say, ‘Okay, forget this, maybe I will just put it in next year’s business plan.’ So you really have to map it out and work together and say, ‘How do we transform that experience?’ So we need the brokers to provide that input and we need to provide them with the support because after all they are here to stay and they are an important part of the landscape.”
