Canadian Insurance

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Consumer Preferences Canadian Insurance

Canadian insurance consumers learn about insurance products or companies mainly through comparison shopping, which they do either by consulting insurance brokers or researching on their own on browsers or aggregators. They are often reached by brokers through social media channels such as Facebook, LinkedIn, and Twitter. Their motivation for buying a specific insurance product could be any of the following: digital innovation, price competitiveness, or quality of service. Insurance, car insurance, auto insurance, and home insurance are some of the top keywords they use when searching for insurance products.

HOW CONSUMERS IN CANADA LEARN ABOUT INSURANCE PRODUCTS/companies

Based on information we have gathered below, it appears insurance consumers in Canada learn about insurance products or companies through comparison shopping. While some Canadians conduct online research on their computers, smartphones, or tablets and use aggregators or comparison sites, most Canadians still comparison shop through traditional methods. Insurance brokers reach prospects through social media channels such as Facebook, LinkedIn, and Twitter.

Insurance shopping behavior
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Based on Figures 25 and 26 of Bain & Company's 2016 report on insurance customer behavior, around 70% of property and casualty insurance customers in Canada comparison shop first before making a purchase, and most of this comparison shopping is done the traditional way, not through aggregators or comparison sites. (We understand from this project's chat transcript that the subject of interest is property and casualty insurance or non-life insurance, such as home or car insurance.)

Compared to continental Europe and the United Kingdom, Canada lags in terms of comparison site usage. Finaccord's survey reveals that 40% of respondents in the United Kingdom used an aggregator to purchase car insurance, while only less than 5% of respondents in Canada did so.

Thirty percent of insurance customers in Canada use digital channels to buy a property and casualty insurance product, according to Figure 14 of Bain's report. For research, Figure 18 of the report shows that around 15% of insurance customers in the country use the browser on their computer, while only around 6% use the browser or an app on their smartphone or tablet.
Consumer self-education is becoming increasingly common, and some brokers are considering this trend a serious challenge they must face. Among insurance brokers in Canada, consumer self-education is the sixth most serious challenge after industry consolidation, the emergence of the direct-to-consumer model, customer demographic changes, regulatory changes, and high levels of risk.

It is now possible for Canadians to ask smart speakers such as Google Home and Amazon Alexa for insurance quotes, such as car insurance quotes, or an explanation of insurance jargon, but statistics signifying how prevalent such use is are not yet available.

Media channels used
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Facebook, LinkedIn, and Twitter appear to be the most effective social media channels for communication with prospects and clients. These are the three social media channels that property and casualty insurance brokerages in Canada most commonly use, according to a recent survey by Economical, one of the country's top property and casualty insurance companies.

Facebook, LinkedIn, and Twitter were cited by 90%, 61%, and around 50% of the survey's participants, respectively. Eighty-five percent of survey respondents believe that brokerages with a strong social media presence have an edge over those without. Most brokerages use social media for generating sales and leads (79.5%), improving brand awareness (75.9%), and engaging current clients (69.9%). Almost 300 insurance professionals in Canada were polled in Economical's survey.

WHAT CONSUMERS IN CANADA SEEK IN INSURANCE PRODUCTS/companies

As mentioned above, insurance consumers in Canada either consult brokers or comparison shop on their own on browsers or aggregators. As for their preferences and motivations for choosing a specific product, it appears from the information we have gathered below that depending on their persona, they will be heavily influenced by one of the following factors: digital innovation, price competitiveness, or service quality. Most Canadian insurance consumers prefer insurers that offer value-added services. It appears as well that car insurance, auto insurance, and home insurance are some of the most popular property and casualty insurance-related search queries in Canada.

Preferences
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When it comes to auto insurance, it appears Canadians would prefer insurance companies that offer policyholders the option to receive communications electronically and that determine premiums on the basis of vehicle usage or driving performance. A recent survey by the Insurance Bureau of Canada (IBC) reveals that more than half or 58% of auto insurance consumers would opt for digital communications. Also, 66% of auto insurance consumers think it is fair for premiums to be contingent on vehicle usage or driving performance. Over a thousand participated in IBC's survey.

Canadian's preference for digital communications is echoed in the following statement from Ernst & Young's 2017 Canadian Property and Casualty (P&C) Insurance Outlook: "P&C insurers will increasingly use digital technology to reach new clients, upsell insurance services and products, and enhance interfaces between sales agents/brokers and customers." Please note, however, that according to Figure 12 of Bain & Company's 2017 report on the behavior of insurance customers, of the 20 countries that were examined, Canada had the lowest "share of digitally active customers" in 2017.

More than 60% of Canadian insurance consumers want insurance products that offer value-added services, according to Figure 9 of Bain & Company's 2016 report on insurance customer behavior. For example, for auto insurance, they want services that track driving behavior, allow trading of cars, offer repair advice, or reduce the risk of theft. For home insurance, they want services associated with home monitoring systems, home repair, flood monitoring, and real estate sales.

On page 38 of Canadian Underwriter's report on the results of its inaugural National Broker Survey, it was noted that most customers shop for the lowest premium. Page 36 of the report shows that 709 insurance brokers participated in the survey.

Motivations for purchasing a specific insurance product
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Based on a report Accenture published last year, Canadian consumers of financial services, including insurance, can be categorized into the following personas: nomads, hunters, and quality seekers. Nomads have a strong appetite for new, digital models of insurance delivery. They value automated servicing and digital innovation. Hunters look for the "best deal on price." Traditional delivery methods and human advisors are important to them. Quality seekers, on the other hand, prefer providers that offer excellent data protection and customer service. Based on page 14 of the report, of financial service consumers in Canada, 55% are quality seekers, 23% are nomads, and another 23% are hunters. Percentages do not total 100% due to rounding. Messaging to Canadian insurance consumers should be aligned with these consumer personas.

Top search keywords
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A comparison of insurance-related search terms on Google Trends reveals that, apart from the term 'insurance' of course, the top property and casualty insurance-related search queries in Canada, in order of decreasing popularity, are: car insurance, travel insurance, td insurance, auto insurance, employment insurance, health insurance, rbc insurance, home insurance, intact insurance, insurance quote, insurance companies, insurance broker, johnson insurance, aviva insurance, unemployment insurance, icbc insurance, icbc, car insurance ontario, desjardins insurance, personal insurance, and travel insurance canada.

CONCLUSION

It is through comparison shopping that Canadian insurance consumers learn about insurance products or companies, and they do this comparison shopping through a mix of traditional and modern ways. Canadian insurance consumers are more commonly reached by insurance brokers via Facebook, LinkedIn, and Twitter. When buying an insurance product, it appears they are influenced by the following factors: digital innovation, price competitiveness, or quality of service. The most popular search terms that Canadian insurance consumers use when searching for an insurance product include insurance, car insurance, auto insurance, and home insurance.
Sources
Sources