FAIR Innovation Survey

Purchasing

Low-income or barriered individuals may face challenges purchasing insurance through traditional sales channels. Improving access to insurance through alternative sales channels is a second important aspect of reducing barriers for underinsured individuals.

Current Industry Practices

The insurance industry currently employs a range of tactics to provide accessibility to products and services including:

a)  Insurance Brokers and Agents: A wide network of insurance brokers and agents is committed to serving diverse communities across Canada. They play a crucial role in bridging the gap between insurers and communities by providing personalized guidance and support tailored to individual needs.

b)  Professional Associations and Community Groups: Insurers actively collaborate with various professional associations and community groups to extend tailored insurance solutions to their members. These partnerships aim to provide inclusive coverage options and address the unique needs of different demographics.

c)  Collaboration with Landlords: For low-income individuals living in rental properties, insurers work with landlords to offer innovative solutions such as master commercial insurance policies. These policies allow landlords to extend coverage to their tenants at a significantly lower cost, which can be incorporated into the monthly rent. This approach ensures that tenants have access to essential insurance coverage without imposing a significant financial burden.

d)  Mobile Applications: Offering user-friendly mobile applications that provide convenient access to insurance information, policy details, and account management features. These apps are designed to be accessible and intuitive, allowing policyholders from marginalized populations to easily navigate and manage their insurance policies directly from their smartphones.

e)  Digital Platforms: Digital platforms, including websites and online portals, offer comprehensive information about insurance products, coverage options, and pricing. These platforms are accessible from any internet-enabled device, providing individuals from marginalized populations with the ability to research, compare, and purchase insurance policies online, at their convenience.

Product and Service Innovations

The International Association of Insurance Supervisors (IAIS, 2015) has identified a range of alternatives to the traditional individual sales model with direct interaction between customer and sales agent or broker. These include:

a)       Proxy sales whereby a non-insurance aggregator sells to their existing customers, possibly through cross-selling or including insurance as an embedded product attached to a different product, such as utility bills.

b)      Group sales where members of a group are insured by virtue of being a member of a group. In this approach, a group collectively decides to obtain insurance and negotiates insurance on behalf of members, or a third party purchases insurance on behalf of a pre-determined group of people.

c)       Engage non-traditional intermediaries as sales agents. MAPFRE Economics (2020) identifies a variety of potential non-traditional sales and delivery partners including banking and other financial institutions and public utilities.