If you’ve never had a chance to visit Silicon Valley in California, a tour of the Communitech Hub in Kitchener should give you an idea of what you’re missing. Housed in the Tannery building, whose origins date back to the 1850s and which was once the home of Google, you’ll find new start-ups, burgeoning tech companies, and innovation outposts for major brands, from General Motors to Deloitte, as well as government entities, such as the Workplace Safety & Insurance Board and the LCBO.
The hub is intended to promote collaboration among entrepreneurs and innovators, and provide support for companies at all stages by giving them access to consumers, capital, and talent. Old or new, many businesses have found benefits in coming to Communitech, which is why Canada’s largest property and casualty mutual insurer, the Wawanesa Mutual Insurance Company is also nestled among the open office space.
The company officially unveiled its Communitech innovation outpost in June 2018 and has already brought its first project, done in collaboration with ProNavigator and the Excalibur Insurance Group, to market. The end result has been an interactive voice technology that connects customers who have an Amazon Alexa virtual assistant device with their brokers when they’re looking for a quote on home or auto insurance. The device knows its user’s postal code, and asks a handful of questions to generate a quick quote, while providing answers to common insurance questions. During off-hours, the voice agent can also assist clients, should they have an urgent insurance-related query at 3am, when most brokers are asleep.
With Wawanesa going ‘100% broker,’ focusing exclusively on that distribution channel across Canada, including Quebec, getting brokers to be more efficient and excel at what they do best – which is selling and servicing insurance – is a priority for the insurer’s innovation team, said David Arbuthnot, director of the Wawanesa innovation outpost, who added that putting aside the time to create and test solutions is what innovation groups do differently than traditional companies.
“It’s all about building something and trying it in a real situation, getting the feedback from the broker and consumer, learning from that, and iterating. It’s not about thinking about an idea and delivering it 12 months later,” Arbuthnot told Insurance Business. Wawanesa’s broker partners have meanwhile welcomed the insurer’s efforts with open arms.
“Not only are they open to it, but we now actually in many cases have had brokers come to us with ideas or thoughts about, ‘if you could do this, it would be great.’ They want to help,” said Arbuthnot. “We know there are issues and we want to go figure them out together.”
In fact, the innovation outpost often hosts brokers and offer tours of the space in Kitchener as well Wawanesa’s larger innovation lab in Winnipeg, which opened in January 2017 after Al McLeod, the VP of innovation for Wawanesa, was tasked with building an innovation team from the ground up and discovered that they needed a space in which to collaborate. Soon after the opening, the team started looking to tap into other insurance and technology hubs in Canada, and turned to Communitech after falling in love with its atmosphere, community and academic spirit, as well as the opportunity to gain access to a number of insurtechs that operate in Eastern Canada. Today, the Kitchener outpost is focused on scouting insurtechs and longer-term innovation, while the lab in Winnipeg keeps its eye on innovation for the near-term horizon.
Keeping everyone involved in innovation, whether its broker partners or its own staff, is crucial for Wawanesa.
“Everybody is busy with day to day activities, so it’s trying to make sure that we have enough time in our day and that our business partners provide enough time in the day, because it’s not like we’re going to go off and just innovate without them,” explained McLeod. “Our team is very small, but it’s purposefully small because what we do is we collaborate with all the other groups.”
Nonetheless, leaving room for innovation can be hard to accomplish for many insurance companies, as they are already tasked with staying profitable and supporting policyholders.
“That consumes almost all the oxygen in the room, so what we see as our role is to be out there and looking ahead to what’s next and trying to provide that leadership,” said McLeod. “We don’t know what broker distribution will look like in three to five years, and if you need innovation anywhere, it’s where you have uncertainty.”
Whether it’s AI or blockchain, claims or backend processes in commercial insurance, Wawanesa has both the physical spaces and the teams in place to consider where the future of insurance lies. Arbuthnot highlighted the component of uncertainty as a primary driver underpinning the need for innovation.
“If the environment is certain, you don’t need innovation,” he said. “Where innovation comes in are those areas where there’s high uncertainty. Do we know if blockchain is going to be important? No-one knows, [but] could it be hugely important? Absolutely, so how do you take that recognition, that there’s this highly uncertain piece of technology that may be the greatest thing since sliced bread for insurance or it may not be important at all, and how do you go down the path of reducing that uncertainty [by] figuring out if it can help – and if [so], where can it help, where can it not help, and where is it important to have investments, both in terms of time and resources?”
