Every generation brings with it a different way of doing
business. As the baby boomers leave the workplace, an entire
generation weaned on the conveniences of the internet is coming to
the fore of Canadian society and industry. As the millennials take
up the mantle of acquiring wealth, buying homes, opening
businesses, and moving into positions of leadership in the
marketplace, their demand for insurance products will only continue
For insurers, success in this marketplace will require focusing
on the needs, the wants, and the business mentality of a new
generation that has grown up with the world at their fingertips.
Every transaction is available online, from buying a pizza to
investing in mutual funds. Expectations are no different when it
comes to insurance: buying it should be quick, convenient, and
available to anyone with a smartphone.
In Canada, insurance regulators have begun to anticipate the
changing tide and are preparing the groundwork for the growing
market pressure to make insurance available online.
The guidelines suggest that regulators are prepared to take a
generally permissive approach to the online distribution of
Even so, they must address concerns about public protection,
which is why they are calling for safeguards. Among them, the
online provider must put in place an adequate online
self-assessment tool that consumers can use to make informed
decisions about the insurance products they need. The tool would
have to, at least, allow access to an insurance representative and
would have to remind consumers of the value of obtaining expert
advice from certified insurance professionals.
The AMF would also require that the online system clearly bring
product features, coverage, exclusions, premiums, and rights to
cancellation, among other important facets, to consumers'
attention in a "step-by-step" approach designed to have
them read key information about the transaction. Given that an
expert intermediary is not present to interpret any technical
jargon, the insurance product must be written in plain
A potential difficulty lies in the handling of more complex and
tailor made policies. A one-size-fits-all approach to purchasing
insurance products online won't always be suitable for more
complicated policies that are difficult to translate into
layman's terms. Access to professional advice should be
tailored to the complexity of the product.
Currently, the relevant legislation in Quebec,
An Act Respecting the Distribution of Financial Products and
Services3, does not account for insurance e-commerce
and there is growing pressure to update the law.
Lawmakers in Quebec are contemplating4 whether they
need to intervene to better regulate an increasingly popular means
of financial product distribution. The goal, in such modernization
projects, is to give industry the means to adapt to a changing
market while remaining sufficiently open to constant evolution.
Given the growing consensus among Canadian regulators, it is likely
that any future government action will largely follow their
Whatever form regulation may take, the fact remains that online
insurance distribution is here to stay.
The challenge for all industry players is to find a balanced
approach that meets clients' desire for online options while
adequately protecting them in their haste to click "I
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