Despite recent challenges in the worldwide economy – including fighting the effects of the coronavirus – the insurance industry remains resilient. While many insurers are looking for a way to achieve efficient spending, many also proactively invest in things like enhanced customer experience through digitalization and AI, and alternative product development.

In Canada, the insurance market has had a positive impact from the global rise in technology, with more than 60 percent of millennials in Canada believing in the safety of online insurance information. This opens up many possibilities for insurers to focus on a growing market, while taking into account the changing economy and shift in consumer priorities.

Let’s take a look at some of the current trends in Canada’s insurance market.

With Generation Y being the largest demographic in Canada, it also represents a large pool of consumers for insurers to target. However, according to KPMG, insurers need to change their approach if they want to target Canada’s millennials. Specifically, the focus should be on flexible insurance products and short-term solutions.

But to do this, data collection requires a complete re-think and this includes privacy protection and data security. The aim is to have real-time data that drives user-specific risk profiles.

One key element to the success of insurance companies this year and beyond, is the ability to collect and harness data on Canadians – specifically younger generations. It’s important for insurers to understand how they shift their priorities in order to create products that will support their modern lifestyles.

Chris Cornell, KMPG partner and national insurance sector leader, says, ‘Providing short-term, complementary, and personalised products means that Canadian insurance companies will need much stronger data collection and analysis tools.’ This could also lead to the ability for insurance providers to offer lower premiums while reducing their exposure to claims.

The insurance industry is home to a high level of competition and saturated areas such as home and motor insurance especially sees a lot of competitors competing for these markets. This means that to gain an edge, insurance companies need to differentiate themselves.

One way this can be achieved is by forming strategic alliances – which is different from an acquisition or merger. These alliances are common strategy among Canadian CEOs and it represents an arrangement between two providers or organizations to work together on a project while also having the ability to cut ties should it not work for either party.