Today, Roger Dunbar is an insurance executive – but he was once a high school student trying to take out a policy on his second-hand 1982 Dodge Mirada.
“That was a terrible car,” recalls the senior vice-president of the Toronto-based Sonnet Insurance. “It was a lemon, a complete and utter lemon.”
Regardless of the car’s condition, the 17-year-old Dunbar needed insurance. So, he did what most people did back then: went to see his family’s insurance broker, answered a lot of questions, filled out a stack of forms and got a quote.
“I didn't understand anything. I certainly didn't know what questions to ask. I trusted him because I had to trust him,” Dunbar recalls.
“Fortunately, it all worked out fine. But I had no idea why I was paying $3,000 a year or whatever it was. I couldn't afford it – I remember that.”
A few things have changed in the three decades since. Insurance sales which once took place either face-to-face, over the phone or through the mail – have moved online.
“The impersonal way of taking out a policy has always been there, but it’s much easier now,” says professor Mary Kelly, chair in insurance at Wilfrid Laurier University’s Lazaridis School of Business and Economics. “You can do it online and an insurer can pull information about, say, your home from other sources. The more information they can prepopulate, the easier it is for you to buy insurance.”
Insurance companies are trying to speed up the underwriting process by using sophisticated software to draw on diverse data sets such as municipal records, weather patterns and crime statistics, reducing the number of questions a customer has to answer and ultimately providing them a fairer quote.
“The fact that they can rely on publicly available information actually improves the accuracy of their underwriting,” Kelly says. “It benefits the customer because they can price the product accurately.”
Sonnet has also attempted to make the quotation process easier by using accessible language, rather than technical jargon. While ultimately worth it for customers, Dunbar says making complex contracts easily understandable for customers has been a long and difficult process.
“Some of that insurance language is 150 years old, maybe more,” he says. “Translating that into non-legalese that people understood, that regulators approved and that our own lawyers accepted: That was a massive task.”
Customization has also made the quotation process more transparent for customers in recent years. When you buy insurance through a broker, you have the advantage of the broker seeking to understand your needs and recommending the policy they think is right for you. But having the ability to adjust coverages and payment schedules with immediate access to see the change in premiums and self-serve by selecting preferred coverage yourself is new to customers.
When Sonnet quotes, it automatically provides three levels of insurance: a lower cost option, mid-level coverage and a completely comprehensive policy. But if none of those suits a customer’s needs, they have the option of going under the hood and fully customizing their policy.
“We present options to you so you can say, ‘I don't want flood coverage, I don't want to pay for that. I'll live with that risk,’” Dunbar says. “Then you go straight through, see the changes to the premium and coverage in real time and buy it online then and there.
Buying insurance online continues to present Canadian customers with challenges. While finding a quote from a set menu of policies on the internet is now commonplace, the ability to confirm or customize a quote and buy a plan typically requires a lengthy follow up phone call. But Sonnet has changed that, too: customers can immediately purchase the quotes they customize for themselves online, with no surprise additions or fees.
Many customers are shocked by how straightforward it is to buy insurance. In fact, “a lot of our calls are people saying they’re impressed with how easy it is to buy insurance through the Sonnet website” Dunbar says.
Content created in partnership with the Globe Content Studio.