The race is on for Canada’s life and health insurers to adopt revolutionary new technologies amid fast-changing marketplace demographics and the need to meet evolving customer expectations in the digital economy. Younger consumers are rapidly reshaping the marketplace as they pursue modern digital products and convenient personalized services.
The pressure is also on for insurers to embrace digital technology that will reduce transaction costs and enhance operationally efficiency. Adding to the pressure is a slowdown in growth among Canadian insurers and the need to optimize costs. In this blog, we focus on four top themes we’ve identified regarding the need for insurers to enhance both customer experiences and operational efficiency – and how CGI is making a difference as insurers address today’s demographic shift.
As market research shows, between 2015 and 2021, the Gen Z segment of Canada’s population grew to 28%, while millennials grew to 21% of the total population.
Source: Statistics Canada
Theme 1: The drive for ESG practices is on
As market demographics and consumer expectations evolve, environmental, social and governance (ESG) practices are in sharp focus. Sustainable products and services are a high priority for consumers everywhere today - particularly among climate-conscious young customers.
Our research shows that among insurers, digital leaders are more influenced by climate change than their slower-moving competitors, and are farther along on digital transformation in response to evolving consumer expectations.
Source: 2022 CGI Voice of Our Clients
Insurers are going digital with key customer documents such as policies and premium-payment notices, while enhancing the customer experience via convenient access to online information and transactions, self-serve capabilities and enhanced data security.
Some leading insurers are looking to see straight through processing (STP) via digital capabilities reach up to 85% of customer transactions. CGI is helping insurers achieve these goals with tools such as DocuSign, which offers encrypted online tools as an environmentally friendly alternative to paper-based documents.
Theme 2: Bringing customer well-being into products and services
Insurers are recognizing the growing importance of well-being in the industry and are integrating this theme into their products and services to better meet customer needs and promote health outcomes, while enhancing operational efficiency via digital tools. This includes:
- Innovative wellness programs that offer incentives for healthy behaviors such as regular exercise and healthy eating;
- Comprehensive coverage for mental health, recognizing the importance of mental well-being on overall health;
- Prevention and early intervention initiatives to improve health outcomes and reduce the cost of care;
- Convenient access to care via telemedicine and remote patient-monitoring using wearable technology;
- New services for financial and retirement planning to improve financial and personal well-being.
Tools such as CGI Precision and CGI ProperPay are available in today’s market to augment insurers’ well-being offerings. CGI Precision offers better control of operations and a claims process aligned with industry standards, while ProperPay provides a data-driven solution to predict, identify, manage and recover claims paid improperly.
Theme 3: Artificial intelligence is breaking new ground for insurers
Artificial intelligence (AI) offers breakthrough capabilities for both services and business efficiency. Insurers are just scratching the surface right now but the future is about big data and predictive AI models. Insurers are looking to incorporate AI into more products and services to unlock advantages that include:
- Predictive modeling, using AI to analyze large amounts of data such as medical records and claims data to predict health outcomes;
- Automated underwriting workbenches and processes that quickly assess the risk of insuring an individual or group;
- AI-powered chatbots and virtual assistants that provide customers with personalized information regarding policies and claims;
- Personalized pricing of policies based on individual factors such as age, health history and lifestyle;
- AI-powered tools to assist in care management, such as identifying patients at risk of hospitalization or in need of personalized treatments.
Solutions available to insurers today offer predictive modelling in actuarial and decision sciences, plus straight-through processing (STP) in sales, operations and claims.
Insurers can also gain assistance to identify and partner with today’s leading insurtechs, many of whom have shifted from disrupting the traditional insurance model to partnering with insurers and augmenting their capabilities and services.
Theme 4: Unlocking new advantages with the Internet of Things
The future includes the Internet of Things (IoT) in the life and health insurance industry. IoT refers to the interconnectedness of devices such as smartphones, wearables and other digital devices that collect and transmit consumer data.
Beyond tracking and monitoring customer data to dramatically improve service, the IoT will revolutionize telemedicine. We saw advances in that area during the outbreak of the global pandemic and the increased reliance on technology to eliminate the need for physical visits to medical practitioners. The IoT is still very new for insurers. At the moment we are seeing just one US life and health insurance product taking advantage of the IoT to incentivize customers based on their use of wearable devices to monitor individual health data.
In conclusion, insurers looking for growth and efficiency in today’s hypercompetitive reality realize that the future is digital and data-driven. There is no time to lose for today’s insurers to transform services and capabilities in ways that will meet ever-evolving consumer expectations and demands while dramatically enhancing business operations and efficiency.
We welcome you to reach out to our experts, Navjeet Nehra, Aditya Malshe, and Helene Dore, for more sights and actionable recommendations.