April 1, 2025

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:

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.
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.
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.
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:

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.
Modernizing Products and Platforms: Foundational investments in core technologies and product innovation are required to deliver target state capabilities across the value chain.
Transforming Operations and Streamlining Engagement: Modernizing operations to achieve both greater efficiencyand higher quality engagementswith customers and partnersthat support long-term value.
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.