Insurance needs a redesign: Manulife Canada CEO

When Manulife Financial Corp.’s president and CEO of Canadian operations Michael Doughty thinks about his biggest competitors, a few names make the list that have nothing to do with insurance: Apple and Netflix.

“We no longer really think of ourselves as competing against other life insurance companies around the world,” said Doughty at the Canada 360 Economic Summit on Wednesday. “We’re really competing against other companies that are delivering the kind of customer experience that all customers want.”

The customer experience offered by streaming platform Netflix Inc. and consumer electronics brand Apple Inc. is constantly on Doughty’s mind as Manulife tries to win over customers while grappling with relative newcomers to the insurance space, including Toronto-based customizable benefits brand League, which is picking up attention and raising big money.

“These new services that are so slick and seamless and intuitive and they’re really designed with the customer experience in mind, is what people expect from everything that they do business with,” he said.

Doughty believes they can teach the industry a bit about how to tackle the “massive” numbers of Canadians that have no life insurance and have forgone such protection because they are spending their money on things like Netflix subscriptions and iPhones.

An RBC Insurance survey of 1,001 Canadians between the ages of 25 and 50 revealed that 74% of Canadians are kept awake at night, worrying about their financial situation. Despite being so concerned, the 2018 poll found few would give up daily “luxuries” to pay for life insurance instead.

Of those that are willing to forfeit some of “life’s little pleasures,” 35% said they would sacrifice one dinner out a month, 34% would forgo a trendy clothing item, 28% would nix buying lunch at work one less time per week, 35% would give up a bottle of wine or case of beer and only 25% said they’d agree to ditch their daily coffee.

Such a scenario has presented a “huge opportunity” for Manulife, but also highlighted how often a business like Doughty’s needs to engage with consumers.

To take advantage of that opportunity, Doughty says the company launched Manulife Vitality, a platform with smart watch and fitness tracker integration that allows consumers to receive prizes and discounts for doing things like going for a walk or getting a flu shot.

“In the past, you would buy life insurance… and then you would sort of like put it in a safe deposit box and hope that you never needed it and pay a premium every month,” Doughty said.

“Manulife Vitality turned all that on its head and said why don’t we engage with you so you actually live and a long and happy life because if we can encourage you to be active, have a nutritious diet, not smoke, see your doctor regularly, it is probably going to improve your longevity and that is good for us.”

Vitality has pushed consumers to interact with Manulife on average 23 times a month, a significant jump from the two times a year — when they receive their annual statement and when they get a premium bill — that they used to turn to the brand, says Doughty.

It’s also been an example of how he thinks businesses can “reinvent a traditional product to eliminate some of the barriers that have stopped it from being as popular as it should be.”

“This movement towards what is the customer is something that all industries are having to reinvent,” he says.

“You have to make sure you are reinventing every interaction, every process, from the consumer’s point of view.”

Tara Deschamps, The Canadian Press

Tara Deschamps is a reporter with The Canadian Press, a national news agency headquartered in Toronto and founded in 1917.