Competitive insurance industry urged to collaborate more often

To get the best out of your collaboration efforts, get outside of your comfort zone.

The best companies understand the value of collaboration, said Sven Roehl, co-founder of Cookhouse Lab, an insurtech innovation firm. But they also understand they need to go beyond their inner circle of trusted friends.

“What they’re now doing more than ever is focusing with industry peers and also with organizations outside of the industry where they get more knowledge [and] access to new customer profiles,” he said during a workshop at InsurTech North in Toronto May 23.

“This is really where you learn more. I would really encourage anybody working in the industry to try to get out of the box and try to collaborate with other organizations. It will open your horizons in such a tremendous way.”

Arguing that a company has done things one way for decades and thus will continue to do so for a few more is, frankly, bad strategy, Roehl said. It doesn’t foster innovation and ignores collaboration. Change is forcing the need for businesses to think differently.

“I think this is now the opportunity to say, ‘Okay, what kind of new business models do we need?’” Roehl said.

Regulation is commonly cited as an impediment to innovation in the insurance industry. The industry has rules everywhere, from how claims are handled, to telematics, to how documents can be distributed, just to name a few.

“Navigating these rules can be extremely frustrating,” said Ryan Stein, executive director of auto research at the Insurance Bureau of Canada. “It’s frustrating for insurance companies, it’s frustrating for anyone who wants to get into the industry, or work with the industry on innovations.”

Blaming regulations is easy, but it’s not the right way to go about things, Stein said. Regulators are doing their part to make things a little easier.

“It’s actually more manageable now than it used to be, because regulators are starting to focus more than on just protecting consumers,” Stein observed. “They still focus on that – that’s their raison d’etre – but they’re also focusing on the health of the market, facilitating innovation, and encouraging competition. So there’s this sort of change in mindset at the government and regulatory level and you’re starting to actually see that play out in the market.”

Regulators are understanding the need to make the consumer experience better. That should be the goal of every innovation venture.

“The one thing that is very important when doing this is you need to connect and understand your customer even better, even more than you ever did before,” Roehl said. “This really means you need to be able to connect to the customer using technologies like [the internet of things], but also using customer experience information from feedback and other behavioural data – getting closer to the customer and understanding the risk.”

Stein brought up the example of Uber. When the ridesharing company came to Canada, there was no insurance product to cover drivers. Government and regulators needed to change the rules.

“So you see in over the last few years this sort of shift in trying to modernize the insurance laws to offer a better customer experience,” he said.