Report: Canadian Insurance Market to Focus on Technology in 2015

By Casey Houser
Contributing Writer

Business processing services provider Xchanging Insurance Services recently announced the results of an industry survey it completed regarding the Canadian insurance market. To complete the survey, it partnered with Insurance-Canada.ca, which completes seminars and survey to help inform consumers and insurance professionals about the latest in technological innovation in the insurance market.

Xchanging helped complete the survey in October and November 2014. It reached out to Insurance-Canada.ca subscribers as well as relevant Canadian communities within the business networking website LinkedIn (News - Alert). The bulk of respondents worked in the property and casualty insurance markets while the remainder worked in life and annuity, reinsurance, and multi-line insurance. Overall, respondents suggested that Canadian insurance businesses will invest heavily in technology in the coming year as indicated by their priorities. Underwriting, quoting, big data, and mobile categories ranked high regarding the specific technologies on which respondents said they intended to focus.

Sean Allen, the vice president of sales at Xchanging in North America, said he found the survey responses encouraging because new technologies could improve outcomes for customers and insurance companies alike.

“With approximately $46 billion in direct premiums written, it's clear that the Canadian market is growing exponentially,” Allen said. “It's encouraging to see the market making a concerted and dedicated effort toward investing in modernizing its technological infrastructure to better serve its growing customer base, capitalize on growth opportunities and ward off rising competition.”

A total of 49 percent of respondents said technology was their top priority; only 23 percent said underwriting, the next highest category, was their top priority. As indicated earlier, businesses said they will focus on underwriting and quoting, big data, analytics, and mobile applications.

The most surprising statistic within the report is the lack of focus on security. Only 14 percent of respondents cited cybersecurity as their top priority. That figure does not appear to follow the global trend of security which, for the data center security market, is predicted to reach $13.77 billion by 2018—a market which includes both network security for elements such as virtual private networks and physical security for hardware such as surveillance cameras.

Respondents said their biggest challenges were addressing modernization, competing with other players in the market, and innovating products and services. Their top-two goals include increasing their businesses' market shares and addressing customers through multiple platforms. That said there appears to be a focus on both customers and core business growth, so neither side of the equation will likely be left out.

Allen's quote suggests that there is a lot of money flowing through the market that officials can spread to various areas. It looks as if they have a good eye toward addressing technology that has the potential to increase revenue as well as address customer needs. However, there may be a gap between the severity of cyberthreats and the priority of insurance officials in addressing those threats.