IBC: Insurance industry should not use regulations as an excuse to not innovate
Published: June 2, 2019
Updated: June 3, 2019
Author: Luke Jones
CATEGORY: Industry News
Insurance companies and brokers are being told to embrace collaboration to drive innovation and industry growth. However, collaboration is often stifled by regulations. Red tape can be problematic, but the Insurance Bureau of Canada (IBC) says working with regulators is easier than fighting.
Speaking at InsurTech North in Toronto on May 23, Ryan Stein, executive director of auto research for the IBC, said regulations can be frustrating.
Insurance companies often point to regulation as the main stumbling block preventing increased innovation within the industry. With so many rules, driving the growth of innovations such as digital documentation, telematics, and data sharing can be hard.
“Navigating these rules can be extremely frustrating,” said Stein. “It’s frustrating for insurance companies, it’s frustrating for anyone who wants to get into the industry, or work with the industry on innovations.”
While insurance frustrations can often be legitimate, Stein thinks simply blaming regulations is counterproductive. Furthermore, he says regulators are working to improve systems for growth.
“It’s actually more manageable now than it used to be, because regulators are starting to focus more than on just protecting consumers,” Stein added. “They still focus on that – that’s their raison deter – but they’re also focusing on the health of the market, facilitating innovation, and encouraging competition. So, there’s this sort of change in mindset at the government and regulatory level and you’re starting to actually see that play out in the market.”
Regulatory bodies are increasingly understanding the need to improve the consumer experience and are making reforms towards helping the industry embrace change. Stein says Uber is a perfect example. He points out the company entered Canada as a rouge company operating outside any regulations.
However, regulators embraced the technology and changed rules to allow ridesharing to operate. Perhaps insurance companies would argue the process of regulating Uber was entirely too slow and has still not been finished in some places (such as British Columbia). Stein admits there has been a “soft shift”, but the movement towards modernization is underway.
“So, you see in over the last few years this sort of shift in trying to modernize the insurance laws to offer a better customer experience,” he said.