March 07, 2019
6 minutes

How Aviva Is Bringing Insurance Innovation To The Forefront of Fintech

Crowdlinker recently joined forces with InnovationTO and Aviva Canada to organize a panel discussion featuring insurance innovation leaders from different segments of the InsurTech industry. The monthly InnovationTO meetup is dedicated to fostering connections between corporate innovation labs and startup entrepreneurs based in Toronto.

The event, Ahead of the Curve: Disruptive Innovation within Insurance, attracted attendees from a variety of insurance companies and ancillary businesses including large Property & Casualty (P&C) insurance companies, multinational consulting firms, and insurance scaleups.

The InsurTech Community is Expanding

Insurance has typically not been the hottest topic at most tech meetups. However, that seems to be changing within the Fintech community.

The event hosted over 70 insurance and tech professionals who came out to hear from and network with Toronto’s top InsurTech authorities. The panel featured Eric Arnold, CEO of Planswell, Kevin Kliman, CEO of Humi, Kelvin Lam, Sr. Manager at Deloitte’s insurance group. The discussion was moderated by Ryan Spinner, Head of Innovation at Aviva Canada.

The event started with CEO of Crowdlinker, Aram Melkoumov, introducing our company and highlighting some of the work we’ve done for our clients in the Insurtech space such as League, Zensurance and Planswell.

The panel took place in Aviva’s Digital Garage, one of three internal innovation labs operated by the 320-year-old insurance company. Aviva operates in 16 markets globally and has two Digital Garage operations in London and Singapore. Aviva Canada is a major player in the Canadian P&C insurance industry and plans to release many new innovative products, features and new user experiences in their roadmap.

Free SaaS Software On Top, Highly Personalized Insurance Products Underneath

The panel was moderated by Aviva Canada’s head of innovation Ryan Spinner, a leader in the insurance innovation space. Ryan began the panel discussion addressing Humi’s Founder Kevin, a former dentist, asking why he made the transition from a stable career in medicine to the health insurance industry.

Kevin spoke about seeing a need for a solution in HR processing for small and medium-sized businesses. His idea was to provide SMBs with free HR software to handle employee payment processing and employee benefits management. He then is able to monetize his platform by serving a number of FinTech products underneath.

Specifically, Humi operates an in-house insurance brokerage distributing employee group benefit plans. Humi also offers payment processing of debiting and crediting from employees accounts, whereby Humi earns the fees from each transaction. The platform essentially looks like a SaaS acquisition on the front end that feeds into a zero cost of acquisition (CAC) of Fintech solutions on the back end.

Ryan then moved the conversation over to Deloitte consultant Kelvin Lam, asking what the future of insurance will look like and the opportunities he thinks will succeed in the market. Kelvin explained the two types of insurance models, traditional mutuals as well as introducing a new model known as usage-based insurance. He also addressed how innovative companies like Aviva are staying ahead of the curve by figuring out ways to cover new technologies that are emerging right now. He used drone insurance as an example, citing two popular apps Verify and Flock Cover, whereby you pay premiums as you are flying your drone and not paying for the time you are not in the air.

What The Banks Don’t Want You To Know About Technology

Next, Ryan turned his attention to Planswell CEO Eric Arnold, asking about his company slogan: “Your bank will hate us, as much as you love us.” Eric spoke about his initial company vision to disrupt the entire personal financial services industry and change the world. Planswell soon realized after coming to market though that they were not going to become the best at every aspect of the personal finance industry, so they pivoted their focus to client acquisition, an area of strength.

Eric went on to speak at length about the resistance his company faced from bigs banks, and how they were reluctant in integrating Planswells’ technology into their own offering because it actually worked to reduce interest costs to consumers, ultimately hurting the banks’ profitability. Planswell did, however, find several fantastic partnerships on the insurance side of the financial services industry.

The Planswell Founder also spoke about his desire to focus on the types of insurance that could substantially impact people’s ability to maintain their lifestyle. Eric stressed that he is less concerned about helping people save a few dollars on car insurance and more focussed on life, disability and critical illness insurance, as well as wealth management.

Why Fair Access To Sound Financial Advice For Everyone Should Be a Thing

Currently, in Canada, only 1% of the population has access to high net worth wealth management services. As a result, Planswell wants to serve the rest of the 99% with their automated system. What Planswell is trying to figure out is how to move traditional life insurance sales away from the current survival-of-the-fittest, winner-takes-all and multi-level-marketing models to a platform where financial advisors can engage prospects and provide value upfront. The key is to execute on these trust-building activities while also employing a scalable approach.

Convenience Vs. Privacy

Kelvin Lam of Deloitte brought up the fact that in the future of insurance, we will most likely see an exchange of privacy for convenience. He thinks insurance companies will continue the current trend of collecting data to create more efficient insurance underwriting processes and accurate pricing models.

As consumers give up more data around their activities, behaviours and interests, we will get access to more personalized insurance products. However, this highly engaging user experience will come at the expense of giving up some of our freedoms to privacy. The reality is insurance companies will continue to leverage technologies such as Artificial Intelligence (AI) to mine our data and find better ways to price our insurable interests and premiums.

Humi CEO Kevin discussed his vision of the future of insurance coming to fruition in three phases. First, he sees disruption occurring in the distribution of insurance products, both in B2B markets like Humi’s and also direct-to-consumer markets. This first stage will create more transparency and accessibility to insurance products. The next stage will see innovations as they relate to servicing insurance, where insurance companies will begin to build an affinity with customers.

How Insurance Product Innovation Will Roll Out

Lastly, Kevin predicts the insurance industry will begin innovating the actual insurance products themselves. In this final stage insurance companies will ultimately be able to create personalized products that policyholders will love. He was unsure of how long the industry could take to transform but predicted it could take 3-5 years for insurance companies to successfully innovate on their sales distribution models alone.

The discussion portion of the panel ended with Eric sharing an entertaining story from a recent meeting he had with the President of a major life insurance carrier. The Planswell founder described how excited he was to pitch his ideas on how machine learning (ML) will revolutionize marketing and sales of Accidental Death & Dismemberment life insurance in the future. He then when on to explain how the insurance company President proceeded to ‘put him in his place’ by explaining the obvious fact that it could take 80 years to complete each use case, as you have to wait for the insured to die before capturing any meaningful data.

Working With Regulators

During the Q & A session, when questions were raised asking panelists about their relationships with regulators Eric declared his satisfaction in dealing with regulators. The moderator Ryan offered an opposite opinion from Aviva Canada’s point of view stating that they have faced resistance from regulators on the general insurance side.

Should Insurance Policy Ownership Be Decentralized?

Muneer Nawab, the head of our digital marketing division CrowdDigital, asked the panelists for their take on the future applications of blockchain technology on the direct-to-consumer markets. Ryan noted that Aviva is very excited to integrate emerging technologies such as blockchain into their operations.

The Head of Innovation expects to see several smart contract use cases that will bring about new products that can offer an unprecedented level of sophistication. He mentioned that he is already seeing the use of blockchain on the B2B side of insurance, where insurance companies are transacting with reinsurance companies.

In conclusion, the event was very informative and lots of innovative ideas were shared. We plan to host more InsurTech focused events in the future.

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