CAFII Holds Webinar on Deloitte Research Project on Best Practices in the Digitization of Credit Protection Insurance (June 2, 2022)
Deloitte Partner Melissa Carruthers and her colleague Marc Lewis presented to regulators, policy-makers, and government officials on 2 June, 2022 the high-level findings of their CAFII-commissioned research study on the best practices in the digitization of credit protection insurance. There was excellent representation from regulators and policy-makers with the following registering for the webinar:
- The Alberta Insurance Council;
- The Autorité des marches financiers, or the AMF, in Quebec;
- The Insurance Council of BC;
- The British Columbia Financial Services Authority, BCFSA;
- The BC Ministry of Finance;
- The Government of Alberta;
- The Canadian Council of Insurance Regulators, CCIR;
- The Government of Yukon;
- The Nova Scotia Office of the Superintendent of Insurance;
- The Nova Scotia Department of Finance & Treasury Board;
- The Ontario Ministry of Finance; and
- The Financial Services Regulatory Authority of Ontario, FSRA.
The webinar covered the background on the purpose of the research, noting that it intended to identify best practices for CPI firms to adopt digitization, and drew on the March 2021 Pollara research study on the preferences of Canadians around digitization. It noted that industry has experienced an accelerated shift towards digital purchasing and servicing following the events of COVID-19, however the insurance industry has also been historically slow at transforming its traditional business models to be more customer centric.
The presenters noted that the methodology for the research included interviews with CAFII members along with Deloitte’s own digitization models and knowledge. The key findings were that:
- Digitizing CPI is a strategic priority for Canadian financial institutions;
- Relative to other insurance industries, Canadian CPI has unique challenges with regards to its digitization, accentuated by the multiple stakeholders involved;
- The CPI digital experience offered is highly dependent upon the lending journey (i.e., mortgages, lines of credit);
- The regulatory environment surrounding CPI can be perceived difficult to navigate digitally, especially for national organizations offering CPI across provinces;
- Several CPI distributors and underwriters have taken a leadership position by relatively investing more in digital over the past years;
- Adoption from representatives as well as clients in digital experiences continues to be an inhibitor to realizing the benefits of digital investments;
- Successful digitization of CPI extends beyond client-facing experiences, and includes back / mid-office operations;
- Digital experiences enabled by automation across the value chain with partners (e.g., underwriting, claims) were the most cited friction points;
- Collaboration across Distributors, Underwriter and Regulators will be key to delivering “Best-in-Class” experiences.
It was noted that the factors driving a move towards digitization in CPI were heightened customer expectations; an increasingly competitive landscape; pressure on back-office operational efficiency; and the availability and ability to activate data. Deloitte spent time explaining their ideal digital model and how to move from expectations to actually delivering, noting that the key attributes of successful digital insurers were:
- an articulated strategy and digital ambition;
- user centric digital experiences;
- being hyper focused on operational efficiency;
- sophisticated data, analytics and insights;
- scalable technology architecture;
- and digital talent and culture.
Deloitte also noted that there are unique challenges to digitization in CPI, including the evolving and regional regulatory environment; group underwriting in CPI; the strong ties of the product to lending; the multiple stakeholders; and eligibility practices.
