These two policy issues are of particular importance to direct relationship insurers and their customers.
In Canada’s insurance sector, consumers are using the Internet more and more for research purposes, for online quotes, to compare prices and to buy insurance. More than half of all consumers are using the Internet as their preferred method to research insurance products. Sales resulting from online quotes are increasing as a percentage of overall sales.
For direct relationship insurers, online interaction with customers has become a significant part of the business. The growing sophistication of online transactions and use of mobile devices has allowed companies to respond to consumer demand for convenient and accessible service.
As electronic commerce thrives and evolves, CADRI believes:
Risk variables in insurance
Insurance is important to protect individuals and families when an unexpected event—such as water damage in a home or an automobile accident—occurs. Insurance premiums paid by many are collectively used to pay for claims made by few. Those people who do not have to make a claim pay for those that do.
To make insurance as fair as possible, insurers set premiums based on how likely it is that a client will make a claim. Each client pays a premium commensurate to the risk they represent. Insurers use a variety of sophisticated and objective tools to help them evaluate this risk:
Learn more Supporting Quantitative Analysis for the Use of Credit Information for Insurance Purposes, May 2011 Research commissioned by CADRI, which provides quantitative Canadian data to support the correlation between credit scores and insurance loss predictions.