The 7 Deadly Sins of Insurance. Presented by Rob Galbraith, CPCU, CLU, ChFC 2018 Insurance-Canada.ca Executive Forum Toronto, Ontario August 28, 2018

Transcription

1 The 7 Deadly Sins of Insurance Presented by Rob Galbraith, CPCU, CLU, ChFC 2018 Insurance-Canada.ca Executive Forum Toronto, Ontario August 28, 2018

2 The Digital Future of Insurance: Is Risk Passé? To understand today s environment and what s changed, must first see where industry falls short Insurance has long standing fatal flaws that provide openings for industry disruption Can these be solved through NEW technology, NEW talent and NEW sources of funding?

3 The 7 Deadly Sins of Insurance 1. Too expensive 2. Too confusing 3. Too easy to game the system 4. Cash drain 5. Doesn t cover all perils 6. Doesn t cover everything 7. Doesn t cover everyone

4 1. Too expensive Insurance makes up a sizable portion of a household s monthly budget While the bulk of premiums used to pay losses, expenses are far from an insignificant portion Unlike other large monthly expenses, there is no day-to-day tangible value received from insurance

5 2. Too confusing It is not straightforward to use insurance Too many non-intuitive concepts: limits, coverages, deductibles, perils, etc. Requires specially trained and licensed people to help you acquire and use your insurance policy

6 3. Too easy to game system Despite best efforts of insurers, fraud is still an insidious part of the insurance ecosystem Restrictions are put in place to combat fraud but process checks slow down settlements, add cost Cost associated both with fraud & steps to prevent

7 4. Cash drain Large drain on household liquidity Forced savings for events that likely won t occur Many low-dollar losses are not covered and must be paid another way

8 5. Doesn t cover all perils Some perils are not covered on a standard policy Other perils are subject to exclusions, higher deductibles, sublimits & more restrictions Does not cover maintenance items

9 6. Doesn t cover everything Not every item is covered by a standard policy Optional coverages often prohibitively expensive Consumers often must find insurance alternatives such as using credit cards or purchasing extended warranties to cover certain exposures

10 7. Doesn t cover everyone Each catastrophic event usually highlights a coverage gap of uninsured or underinsured Governments & nonprofits spend large sums on disaster relief paid for by taxpayers and donors Lowering the cost of providing insurance can help tap into underserved markets

11 Forces of change New technologies (insurtech) New talent (millennials and Gen Z) New sources of funding (venture capital & more)

12 Forces of constraint Global economic environment Reality of entrepreneurism Regulation and legal environment

13 The digital future Technological change is inevitable and accelerating Time in position beginning to become a disadvantage impediment to innovation While most startup ventures will fail, some will have moderate success and it only takes one!

14 Future of risk & must do s Risk still ever present (and growing) Must blend strong insurance fundamentals with ability to react quickly to market opportunities Must invest in updating core systems & processes and technologies that enable speed to market Must promote diverse thinking at all levels of leadership & place premium on retaining top talent Must be easy to partner with - focus on core competencies and leverage third parties for the rest

15 This Is The End Of Insurance As We Know It Find me at: LinkedIn: Rob Galbraith