Opportunities for Modernization Exist in Credit Protection Insurance

Copy of Speech by Tolga Yalkin

On April 8, 2025, CAFII held its first Board meeting of the year, which was followed by its April Reception Event. TD Canada hosted the reception with drinks and hors d’oeuvres and concluded with an informative speech from Tolga Yalkin, the BC Financial Services Authority’s (BCFSA) new CEO. A summary of T. Yalkin’s speech has been included below.

Before introducing Tolga Yalkin, CAFII’s Board Chair, Val Gillis, introduced the new TD building, thanked CAFII for hosting, and expressed her gratitude for the many CAFII members and volunteers whose hard work allows CAFII to succeed. She then discussed TD as an insurer and its support for many Canadians. TD is a diverse business that caters to numerous insurance industries. It has an unrelenting focus on its clients. She spoke about her team and how they work to strengthen their relationship with customers, both face-to-face and digitally. Ease is a huge part of consumer treatment; how can TD make everything more efficient and simpler? V. Gillis concluded her speech by mentioning CAFII and its educational efforts. She emphasized the numerous critical research studies that CAFII has conducted, which serve to benefit Canadian customers.

V. Gillis introduced the keynote speaker, Tolga Yalkin, who joined the BCFSA in 2025. She briefly detailed T. Yalkin’s career achievements, including his time at OSFI.

T. Yalkin thanked V. Gillis, TD, and CAFII for inviting him. He discussed his time at OSFI and explained that things were repetitive there, whereas at BCFSA, he has the opportunity to wear many hats and his responsibilities vary greatly. T. Yalkin explained that he views speaking events, such as CAFII’s reception, as opportunities to share and learn; he is just as eager to convey messages to the industry as he is for the industry to express its thoughts to him. He feels this sort of open dialogue is and should remain ongoing.

T. Yalkin then spoke about the state of Canada, noting that the ongoing strife with the US and the impending election have left the country in a state of unrest. To him, this all reinforces the criticality of collaborating across industries. He feels it is essential to identify shared interests. Given the prevailing sense of powerlessness due to socio-political issues, our country needs to unify. He analogized Canada to a bridge; all the components must work together to maintain the structure’s integrity. This is true of industry; we must work together to maintain the security of our nation.

Due to his previous work at OSFI, T. Yalkin explained that he is familiar with the insurance industry. He said that, considering the role of CAFII and its members in Canada, there is a shared purpose—offering Canadians financial well-being. Especially now, providing Canadians with confidence and assurance in industry is essential. As the CEO of a regulatory body, he wants people to have access to the right products and tools to understand them.

CAFII plays a central role in helping regulators and industry deliver on the commitment to the fair treatment of customers. At BCFSA, regulations are not just ends in themselves. They are tools to reinforce confidence in the financial sector. Today, more than ever, confidence is wavering. Folks are often unaware of their coverage or are generally uninformed. Insurance products are often complex, which can be both a boon and a hindrance. For this reason, providers must consider how the industry ensures consumer financial awareness. T. Yalkin added that he is not trying to tell industry how to operate but rather to express shared values.

T. Yalkin then spoke about the moment when “things go sideways.” This is when a crisis arises, and the affected individuals must, therefore, submit a claim. When disaster hits, people often feel panicked. Then they remember that they are insured and have coverage. Now, imagine purchasing a policy only to learn that, when it is needed, it isn’t what you believed it to be. That is a horrible feeling. This is what industry and providers want to design against. Structural difficulties and failings have a real human impact. While individual insurers offer specific products, the reality is that people tend to generalize the system as a whole. This is because industry relies on all its components. If industry can prevent a moment of fear and pain, that’s all that matters.

Moving on, T. Yalkin spoke about the relationship between regulators and the industry, commenting on the critical importance of both sides. He listed the following three issues that he sees taking shape in Canada:

1. Accessing or affording insurance is becoming increasingly more complex. Sometimes it’s price, sometimes it’s underwriting, sometimes it’s availability, sometimes it’s economic uncertainties. People can be and are left exposed. If the system doesn’t reach everyone, then it isn’t serving everyone.
2. Industry is operating in an increasingly fragmented regulatory environment. Numerous differences exist between jurisdictions. However, the degree of idiosyncratic differences is not often worth it, yet it remains. This is not to say that jurisdictions cannot have specific characteristics; rather, it is about achieving harmonization. How can regulators create a regulatory framework that is as efficient and optimal as possible? This highlights the importance of harmonization in safeguarding both consumers and the industry. T. Yalkin added that regulators need to think beyond themselves to truly serve the interests of Canada. He added that he will be looking for opportunities and areas where the BCFSA can harmonize. When things are harmonized, expectations are more likely to be met.
3. Distribution models are changing. T. Yalkin explained that he is in favour of expanding access to better serve the consumer. At the same time, the industry must be mindful of potential oversight and third-party risks. He expressed appreciation for the helpful dialogue that happened with CAFII on maintaining strong oversight of the FTC across the entire supply chain.

Broader modernization efforts are being made in BC. The province is preparing for the RIA regime, which will be overseen by the Insurance Council. T. Yalkin hopes it underscores the collective ethos that the BCFSA is committed to ensuring that different channels and sales models are available. This is about a diverse marketplace.

T. Yalkin concluded his speech by reflecting on meaningful progress—access to products, clarity of products and policies, and focus on the FTC. This isn’t just about regulation but a shared responsibility to these ideals. Industry and CAFII members are uniquely positioned to facilitate this. He expressed his excitement about future work and collaboration to identify gaps in the industry. Through collaboration, customer experiences can only improve. There needs to be a balance between profit and consumer interest.

T. Yalkin then opened the floor to questions. Fern Karsh, Senior Policy & Technical Lead at FSRA, asked if any changes would be made to the BCFSA’s mandate. T. Yalkin explained that, relating to insurance, there are two key things where there are clear mandates:

• Amalgamated entity. One of the first things T. Yalkin did when he joined the BCFSA was to create a shared vision and purpose. The BCFSA needed a clear, compelling vision as a regulator and a part of the insurance ecosystem. The vision has expanded beyond the organization to impact British Columbia consumers. This is an ongoing process, but a critical one. It begs the question: what kind of insurance industry should exist in BC, and what is the BCFSA’s role in this? It is about building and maintaining consumer confidence. Regulators must create confidence in their sector and themselves.
• Open and continuous communication. While there is a focus on curiosity and collaboration, a degree of distance often exists, resulting in insufficient dialogue between industry, regulators, and consumers. The BCFSA board informed T. Yalkin that they want more dialogue across the industry and enhanced stakeholder engagement. This is another big part of the new mandate. A rich dialogue between industry and regulators is key. The challenges Canada is facing (economic, for example) will impact all of us. The only way to navigate this complex time is through collaboration. Figuring out how to share and then leverage the collective knowledge will only serve to benefit Canada.

Byren Innes, Managing Director and CEO of Jennings Consulting, commented on T. Yalkin’s mention of FTC and asked if this included fair value. When pressed for clarification, B. Innes mentioned the UK and how it focuses on customers getting the correct value for what they buy. T. Yalkin replied that he had not heard this term before and, thus, didn’t have a specific BCFSA response to offer. He commented that the BCFSA has ongoing conversations around affordability and availability, which may encompass fair value. T. Yalkin said he would research fair value further to consider the BCFSA’s role in this and the parameters, including the mandate, to determine if this would be important to them as a regulator. While affordability and availability are concerns, so are deductibles and the awareness of stipulations.

T. Yalkin concluded the Q&A session by commenting that educating consumers is not necessarily the sole responsibility of regulators or the industry, but rather a shared responsibility of both. He then thanked CAFII and TD for having him. V. Gillis thanked T. Yalkin. The night continued with further food, drinks, and a prize draw.

Presentation: Exploring Emerging Technology Trends in CPI

On April 1, 2025, the Canadian Association of Financial Institutions in Insurance (CAFII) held its second webinar of 2025 – Exploring Emerging Technology Impacts on Credit Protection Insurance. CAFII’s Executive Director, Keith Martin, moderated the webinar. He was joined by Melissa Carruthers, Partner at Deloitte (Deloitte’s Strategy Consulting practice), and Marc Lewis, Senior Manager in Insurance Strategy at Deloitte.

Many representatives from CAFII’s 14 member companies and 9 Associates attended the webinar, as did representatives from allied industry associations such as the Canadian Life and Health Insurance Association, or CLHIA, and the Travel and Health Insurance Association, or THIA. Many insurance and financial services regulators and policy-making authorities attended as well, including the following government organizations:

• The Insurance Council of British Columbia;
• The Government of British Columbia;
• The Government of Alberta;
• Québec’s Autorité des marchés financiers, or the AMF;
• The Financial Services Regulatory Authority of Ontario, or FSRA;
• The Financial Consumer Agency of Canada, or FCAC; and,
• The Federal Department of Finance.

After a brief introduction, Keith Martin turned the webinar over to Melissa Carruthers and Marc Lewis for a detailed breakdown of the key research findings, including specific CPI technology priorities for underwriters and distributors across the value chain. M. Carruthers explained that the insurance industry, like many others across Canada, has experienced significant change, specifically due to new and emerging technologies. As a result, CAFII was keen to understand the implications and opportunities for their members and, thus, commissioned Deloitte to conduct a study on the topic.

Deloitte performed comprehensive primary and secondary research, which included the engagement of global industry leaders, surveys and interviews with CAFII members, and an international insurance industry market scan. The study revealed that CPI organizations will prioritize technologies focusing on client-facing digital experiences for distributors. Furthermore, the research found that distributors have the most ambition when reimagining the client, employee, and agent experiences. On the CPI side for underwriters, most of the appetite and prioritization were around investing in emerging technologies that will improve back-office operational efficiencies across servicing and claims.

Some of the CPI-specific challenges hindering the advancement of technology solutions were related to legacy systems, infrastructure, and a dependency on or prioritization of broader banking initiatives. CAFII members expected these issues to negatively impact modernization efforts and technology investment allocation.

As CPI stakeholders look to leverage emerging technologies to deliver on strategic priorities, including enhancing the value supplied to clients and employees, the research identified four areas of opportunity for growth and business benefit:

1. Reimagine the Customer/Employee Experience: CPI distributors have a significant opportunity to leverage digital tools, customer data analytics, and GenAI to simplify client, employee, and agent experiences, including introducing scalable educational tools and resources.
2. Modernize Products and Platforms: There are opportunities for both underwriters and distributors to invest in modernizing their core technology systems that may challenge or impede speed-to-market. They can also consider introducing more flexible and modular products.
3. Transform Operations & Streamline Engagement Models: These opportunities will depend on an organization’s investment in the previous two points. No regret investment areas for underwriters include automating the underwriting and claims process, while distributors can automate CPI application intake and enable real-time partner data integrations.
4. Accelerate Through Ecosystem Partnerships: Partnerships can accelerate access to and implementation of emerging technologies, minimizing the need for CPI stakeholders to develop entirely new solutions and capabilities in-house.

The research report aimed to determine how emerging technologies and GenAI impacted the CPI industry. To do so, Deloitte gathered insights and lessons learned from global insurers and identified priorities and strategic investment areas that CAFII members and those with the CPI ecosystem have already made to determine their current maturity relative to their technology goals. Deloitte conducted a quantitative survey of CAFII members to understand where investments are being prioritized for certain technologies.

From the secondary research, Deloitte found several factors it predicts will influence the future of insurance globally and inevitably increase technology investments. They are:

•  Emerging Technology & Analytics: The increased availability of data and technologies enables providers to optimize operations and explore and adopt new, more efficient business models.
• Evolving Customer Preference: Customers continue to demand products that are easy to understand, simple to buy, and flexible, but opportunities exist to introduce new scalable engagement models and products supported by personal data.
• Increasing Competitive Landscape: The emergence of new, non-traditional players from within and outside of insurance with technology-enabled business models and platforms threatens traditional business models and continues to compress profit margins.
• Macroeconomic Environment: The recent macroeconomic environment has been characterized by high inflation and interest rates, influencing household spending habits and discretionary income. Businesses are facing challenges adapting to these shifts in consumer demands.
• Changing Regulatory Environment: Players are responding to regulatory changes with a heightened focus on transparency and accessibility (e.g., IFRS 17, commission disclosure, data protection act, etc.), which are expected to impact business models, product offerings, and profitability.

Deloitte identified eight key emerging technologies that it believes are the most likely to impact the future of insurance and CPI. They are:

• Advanced Analytics;
• GenAI;
• Cloud Computing;
• Cyber & Security;
• CRM/Client Management;
• Modern Platforms;
• Mobile & Digital Assets; and,
• Process Automation.

M. Carruthers commented that, while the eight technologies are essential, what matters is how insurers are applying them. The research found four key areas where insurers are investing in these emerging technologies. They are:

1. Reimagining the Customer/Employee Experience: Meeting customer and employee expectations through digitally enabled engagement modelsfor CPI products, leveraging existing and new data to enable hybrid models.
2. Modernizing Products and Platforms: Foundational investments in core technologies and product innovation are required to deliver target state capabilities across the value chain.
3. Transforming Operations and Streamlining Engagement: Modernizing operations to achieve both greater efficiencyand higher quality engagementswith customers and partnersthat support long-term value.
4. Acceleration through Ecosystem Partnerships: The CPI industry has an opportunity to leverage ecosystem partnerships to access new emerging technology capabilities and unlock new sources of value with greater speed to market.

Deloitte found advanced analytics to be the most common and prominent technology for global insurers’ data strategies and investment priorities. CAFII members and industry stakeholders indicated that data and advanced analytics were considered the most significant short-term opportunity to unlock customer and partner value. However, most L&H insurers trail behind P&C insurers when making the necessary foundational investments. While substantial data is available to personalize experiences, it is not being utilized.  

While touted as a game-changer, GenAI is an area where the industry, both globally and in CPI, has the lowest maturity but the largest appetite to invest and drive change within organizations. Most organizations are working on their governance frameworks and determining where to begin with GenAI. This is an opportunity for CPI distributors to leverage investments at the enterprise level to accelerate their maturity within CPI.

Cloud computing pairs nicely with cybersecurity. While many have shifted towards the cloud, insurers are still hesitant because of the additional risks. This is where cybersecurity becomes crucial. Interestingly, most of the surveyed CPI organizations felt they had significant and sufficient maturity, given that they are large, highly regulated institutions. There was less of an appetite to accelerate investments in cloud computing for this reason.

Many CPI distributors indicated that their top priority was better understanding their clients’ needs. Insurance remains a highly intermediated industry. Therefore, advisors typically own the relationships and needs of customers. Globally, insurers have doubled down on the need for better client management tools. This trend has followed suit across CPI. Unfortunately, there have been limited investments in advanced CRM capabilities across CAFII members, but they do see this as an opportune area for short-term investments in the coming years.

 One of the biggest hurdles preventing CAFII members from accelerating their technological maturity is legacy systems. Given the increasing number of technology providers, many debate whether now is the right time to re-platform. Modernizing platforms is one of the top three priorities for CAFII members.

Mobile and Digital Assets have seen significant investment, especially where insurers have employer or group benefits. Engagement is much higher with the end client in terms of servicing and claims experience. Deloitte found a growing appetite for mobile and digital assets as a means of engaging directly with clients, agents, and advisors. M. Carruthers suggested that CPI stakeholders who want to protect their lending clients beyond the point of sale should consider investing in these technologies.

Lastly, one of the largest technological opportunities is process automation. This means simplifying operating and business models to support new business services and back-office claims automation. If an organization is unwilling or unable to invest in modernizing its core platforms, automating the processes around the core system will be the next option.

At this point, Marc Lewis stepped in to discuss the emerging opportunities around CPI and technology. He explained several key themes emerged from Deloitte’s engagement with CAFII members. They are:

• Retention: Proactively identifying opportunities to improve value to existing customers and prevent cancellation/changes.
• Digital Discovery: Create an engaging digital experience that would otherwise be found with agents and branches. This would also help customers understand CPI and the coverages available.
• Improved Penetration: The lending experience has digitized faster than CPI; being able to merge experiences would improve penetration across target segments.
• Simplify and Streamline Operations: Driving additional value both internally and for customers through operational enhancements.

CAFII members’ current tech priorities pertain to meeting customer preferences, building value on the data already available, increasing flexibility around products and personalization, increasing digitalization, and smoother internal data sharing across the entire value chain.

Looking at the future, M. Lewis noted a need for some foundational changes to CPI products, which have remained the same for quite some time. This is about product innovation. Insurers need to consider what value customers derive from CPI products and whether new or different sources of value can be added. Things like AI-enabled tools are excellent ways to equip employees, both on the frontline and in the back office, with helpful resources. AI can be used to personalize customer experiences and the CPI journey. Automation can minimize turnaround times and costs, particularly for underwriting and claims. M. Lewis then spoke about the CPI industry’s key challenges and risks. Deloitte found the biggest hurdles to be legacy platforms, limited investment prioritization and capacity, regulatory limitations, and the unrelenting pace of change. The key risks related to data privacy, GenAI issues, client perception, the economic landscape, and, frankly, other products stifling the perceived value of CPI. To mitigate risks and challenges, Deloitte suggested strengthening data governance, aligning on ethical AI guardrails, considering strategic partnerships, offering flexible products, integrating principles of scalability and agility, and leveraging joint innovation across departments.

M. Lewis opened the floor for questions.  K. Martin asked how fundamentally transformative AI will be in the coming years. M. Carruthers replied that it is too early to tell. Though there is significant media discourse around its value, it is still relatively new, and folks are apprehensive about its security and accuracy.

K. Martin then asked M. Carruthers about her perspective on Canada’s insurance and whether it is lagging in its investment in leading technologies. He gave the example of the US, the UK, and Singapore, all of which are quite advanced in this area. M. Carruthers replied that, though it varies per technology, Canada is lagging; it tends to be a follower rather than a leader for transformative change in this area. There are a number of different factors contributing to this. Asia is the most advanced, while the US is playing catch-up with the UK. An audience member asked what kind of technologies Asia and the UK are investing in that make them more advanced than Canada. In particular, where are they prioritizing tech spend as opposed to Canada? M. Carruthers said she sees the most investment in digital experiences and client management, CRM, customer data and analytics, digital marketing, and alternative sales and distribution models. Furthermore, the P&C industry has already begun replacing legacy systems with modern policy administration, billings, and claims systems. M. Lewis added that there seems to be more customer engagement in Asia.

K. Martin asked for additional comments on cybersecurity and cyber risks. M. Carruthers commented that this is a significantly important area for FIs. In fact, she has found that some organizations invest in cybersecurity before they invest in the capabilities that will drive business benefits.

M. Carruthers concluded the webinar by noting that industry continues to be slower than it would like when it comes to emerging technologies. She feels the real roadblock to innovation and adoption is ambition; there are so many new technology solutions and assets available that it truly is up to FIs to invest in them. There is a serious opportunity for growth and change; it does not have to be monumental to have a transformative, modernizing impact.