Is 2019 the year of hyper-personalized, omnichannel insurance in Canada?

Meeting consumers where they already are by moving towards an omnichannel strategy is one of the trends that will reshape the Canadian insurance industry in 2019, a market intelligence agency predicts.

The application programming interface (API) mindset and integrated omnichannel marketing strategies will become drivers to better distribution as products become fast, seamless and embedded experiences, Mintel Comperemedia said Tuesday.

“Moving forward, insurance carriers must focus on meeting customers where they already are through API technology, which allows insurance firms to add value and gain new clients through a more seamless customer experience than traditional distribution options,” said the agency, which has an office in Toronto. “Expect to see carriers optimize the customer experience by moving to an omnichannel strategy that will help customers move effortlessly between devices without disrupting their experience.”

There is already a shift from multichannel to omnichannel strategies, said Tara Clemens, senior industry analyst of insurance with Mintel Comperemedia. (Multichannel is selling products across more than one channel, such as physical stores and online; omnichannel is starting an insurance transaction in a physical store and finishing it online, for example).

“APIs are an obvious and highly utilized choice for many insurance startups as they target prospective customers through enhanced distribution models,” Clemens said. “In 2019, expect to see insurance carriers focus on improving their own distribution channels and user experiences in a collective effort to reduce friction and meet customers where they are.”

Insurance carriers will also leverage new technologies that enable them to personalize messages, pricing and the customer experience, Mintel predicted. Consumers are looking for policies tailored specifically to their needs. As such, telematics has become a strategic priority among management teams across the industry. Beyond the product itself, customers are seeking a personalized experience. Looking ahead, as technology advances, carriers will leverage options that allow for more accurate risk pricing.

“As the amount of consumer data rapidly accumulates, risk assessments will become more sophisticated, allowing for hyper-personalized policies that are unique to individuals’ needs,” Clemens said. “Brands that truly understand their customers will use that information to increase engagement across the insurance value chain moving forward.”

As well, growth across the Internet of Things, wearables and connected devices will collectively open doors for carriers “as they look to become proactive, risk-mitigating participants in policyholders’ lives.”

Consumers are no longer content with purchasing insurance policies simply to collect dust, Mintel said. Instead, they are looking to their insurance providers to partner with them and mitigate risk collaboratively. In response, carriers are expanding value propositions, messaging and products to become active participants in policyholders’ lives.

“In an industry long resistant to digital innovation, insurance carriers are not only embracing change, but doing so in a way that is fundamentally altering the paradigm by which they operate,” Clemens said. “Expect to see a greater emphasis on value propositions that tout preventative qualities from both incumbent insurance carriers and insurance startups. Ultimately, the imminent growth across the Internet of Things, wearables, and connected devices will drive more opportunities for insurers to provide risk mitigating services to their policyholders.”

The final trend is a “cyber surge.” Competition in the cyber insurance market will evolve as companies respond to breaches and buyers seek dedicated limits and expanded coverage.

Mintel says high profile data breaches and widespread regulatory sanctions are propelling cyber security to the forefront of carriers’ conversations, driving growth in the cyber insurance market, particularly among small and mid-size businesses. “As companies and individuals become increasingly mindful of the risks associated with online data, expect to see insurers reassess whether cyber insurance should be a standalone product or included with other coverages, such as property and general liability.”

Small and mid-size breaches will drive much of the growth as they look to protect themselves from the threat of a devastating data breach, Clemens said.