Price alone is not driving factors for some consumers: insurer CEOs

OTTAWA – Having a clear understanding of how consumers want to be serviced will prove important for brokers and insurers alike in the future, Greg Somerville, president and chief executive officer of Aviva Canada, suggested during the CEO Panel at the Insurance Brokers Association of Ontario’s Annual Convention in Ottawa last week.

If one considers why consumers might be inclined to look elsewhere, “price, ease of doing business and self-service is our view of what drives them,” Somerville said. “We can decide how we want business to be done, but the 9 million drivers in Ontario are going to decide how they want to be serviced. If we don’t understand how they want to be serviced, how they want to buy their products and tailor solutions to meet their needs, somebody will do that,” he emphasized.

Bob Tisdale, president and chief operating officer of Pembridge Insurance Company, cited surveys in both the United States and Canada that indicate that while the majority of respondents were price-conscious, they would pay more in premium if they could get customized policies and advice.

“I still believe there is a large segment of the consumer base that really values advice and really needs advice,” said Karen Gavan, president and chief executive officer of Economical Insurance, cautioning that brokers who compete on price alone should expect “that’s going to be mechanized and digitized away.”

“So much of our issue has arisen from a focus on the broker being there to shop to get the right price, and I think those brokers that have moved away from that as their value proposition and are focusing on giving the consumer the best advice to reflect the risks and the risk tolerance of their customers are the ones that are winning with the consumer and will always win with the consumer.”

Gavan said the brokers she has seen who are coping really well “are adopting the approach where they’re focusing on the customer service, they’re engaging in the technology… they’re making themselves accessible to their consumers to provide and meet their expectations.”

Brigid Murphy, president and chief executive officer of Travelers Canada, noted that with risk changing, a rebalancing is under way. Murphy regards this as an opportunity to have a conversation. “How do we make the experience better for the customer through the broker channel?”