When asked how he thinks innovation will change the industry in the future, Dean Connor, president and CEO of Sun Life Financial, says he believes the demand for insurance will be just as significant as it is today in the years to come. What will change – dramatically – is the ease of buying insurance.
“It has continued to improve and I think we are on the edge of quite a bit of change in that regard,” he told The Insurance and Investment Journal in an exclusive interview.
When asked if he thinks the industry could undergo “Uberization”, Connor said digital disruptors are unlikely to take on the part of the insurance business that relates to product design and running a regulated financial institution, especially with increasing compliance and regulatory change. “What they might be more interested in is distribution and I think that’s where you’re going to see 90 per cent of the innovation in our industry – in distribution.”
But the insurance is capable of avoiding disruption by harnessing technology to make it easier for people to buy insurance products and solutions. “I think our industry is incredibly well positioned, both to take advantage of that and get ahead of that. But we must do that or we could get disrupted.”
Technology advances are already making it easier for clients to do business with insurers, he adds. “You see more online opportunities to buy insurance; you’ve seen simplified underwriting changes – in our case we completely eliminated the use of ECGs. We write insurance up to $3 million dollars for people who have HIV and we’ve significantly reduced the fluids required for underwriting our insurance policies.”
Those are big changes and there are many more to come, says Connor. Sun Life, for example is currently doing a lot of experimentation on using various types of data to improve underwriting. For example, it is looking at whether credit scores could have predictive value on subsequent mortality (see sidebar, page 31). It is also exploring facial recognition software to detect age, body mass index, whether a person is a smoker or non-smoker, just by looking at a photograph. “You can imagine all the different kinds of data sets we may be exploring to try to get to underwriting decisions that are faster and less intrusive for our clients. That’s one category of change you will be seeing and you’ll see a lot more of in the future.”
Another promising new avenue is using data, predictive modelling and artificial intelligence to reach out to people at the relevant moments in their lives to have a conversation with them about insurance, says Connor. “Timing is everything in life and if we can build those activation engines using those tools, that we can ping somebody or stimulate their interest or have a conversation just at the right time of their lives – birth of a child, getting married, moving house, changing jobs – I think we’ll actually get to talk to more clients than we do today.”
This is the kind of service that Sun Life is now providing to its group clients, giving them digital nudges to let plan members know how to make better use of their benefits. For example, if someone gets married, he or she may receive a ping or email to ask whether they want to look at life insurance.
Technology could also be used to keep clients on track with their financial plan prepared for them by an advisor, says Connor. Artificial intelligence could tell clients how they’re progressing with their financial goals, perhaps suggesting when it’s time to start saving more, or time to come in and see their advisor for a refresh. “I think there’s a huge opportunity to use technology. It’s enabling the client, but it’s also enabling the advisor, so their time is best spent at the right moment with the right client.”
Serving clients at the right time is key, underlines Connor. “I think data and technology are going to really help us do that and we – as an industry – have to get ahead of that first before some digital disruptors do.”
He underlines that he does not believe that new technological tools would eliminate advisors, “because in the end, for such an important decision, most people will still want to talk to an advisor, whether an advisor face-to-face to talk about more complex financial planning needs, or a licensed representative in a call centre, or some other form of contact.”
The way that Sun Life is thinking about these tools “is kind of leveraging the productivity and effectiveness of advisors to help them build their businesses better and be more relevant and timely for their clients,” he says.
The goal is to provide clients with an “omni channel experience” through which they can access insurance products through different channels, but also via “a more proactive and personalized approach” to talking to clients about their insurance needs, explains Connor.
In terms of recent innovation, on Aug. 30, Sun Life introduced a streamlined application process called GO that enables Canadians to complete their health information and receive a quote in as little as 10 minutes. The process includes fewer health questions and can be completed from a laptop, or from a smartphone or tablet.
In group benefits, the company now enables clients to take a picture of a receipt with smartphone and submit a claim. The money can be in the client’s bank account in 24 to 48 hours. This is another example of trying to make it easier for clients to do business with Sun Life, says Connor.
Many Sun Life advisors are also using a technology service called Hearsay Social to help them find leads. This service collects information from social media sites and offers advisors insights into what is happening in their clients’ lives, which an advisor may then want to talk to them about. “We are doing that today in Canada. Not every advisor is up for it because there is a cost associated with it. But we have a large group of advisors who are using it and I’d say they’ve found it quite effective,” says Connor.
Asked what he thinks advisors should do if to survive and thrive in this changing business environment, Connors suggests they will need to invest in their businesses, whether it’s signing up for services such as Hearsay Social, or investing in technology. He adds that they’re going to need to associate themselves with Managing General Agencies that offer the technological support they need. In addition, “they’re going to need to become digital savvy in terms of knowing what people look at, and where they go to find information on insurance.”