Each year, EY publishes our Canadian property and casualty insurance outlook, where we take the pulse of the industry and note what challenges – and opportunities – are in store for the year ahead.
It’s fair to say the industry is undergoing transformation like never before. Companies are finally starting to take a good hard look at how to effectively harness digital technology. They’re shifting greater attention to the customer. And in the midst of all this, 2013 ended up being a record claim year.
All things considered, there’s no shortage of challenges for Canada’s P&C insurers. But, as we know, where there’s a challenge, there’s often opportunity.
Take technology, for example. We all know insurers have been late adopters when it comes to digital. They’re aware of the benefits, but have taken time to understand how to use it effectively. The reality, however, is that technology can help insurers to better understand risks like flooding, while investments in state-of-the-art integrated platforms can enhance product pricing and improve the customer experience.
With increasingly severe weather, improving underwriting capabilities should be a priority. To do that, savvy insurers are tapping into the power of technology and analytics to help create better predictive models. Meanwhile, tapping into that power for things like vehicle telematics, for example, has the potential to completely change the industry.
But in all of this, it’s about so much more than simply capturing the right data. Insurers need strategies for deriving meaningful insights from the information they have, and insurers continue to lag behind other sectors in their implementation of a digital strategy.
In this new and dynamic environment, all companies need to work hard to sustain their competitive edge in the marketplace. But by taking advantage of the right opportunities, insurers can set themselves up for positive results going forward.
In our 2014 outlook, we note that to successfully position for growth, insurers need to understand and focus on the following:
- Product development and innovation, with an eye on expenses
- Digital technology and analytics
- Unpredictable weather and catastrophes
- Regulatory and accounting changes
To read more about these issues in the full report, visit www.ey.com/ca/propertyinsurance
It’s an exciting time for the P&C insurance industry. No doubt, there’s more to come. I look forward to weighing in on various industry issues on this blog – and hearing your thoughts, too.
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