Canada’s long-standing productivity challenge is showing few signs of easing – and according to Puneet Chattree (pictured), insurance industry lead at Accenture Canada, the insurance sector mirrors that broader trend.
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While Canada ranks second lowest among OECD countries in productivity, Chattree said progress since 2020 has been minimal, held back by both macroeconomic and structural factors. “We’ve seen very little traction in how Canada has evolved on productivity,” he explained.
One of the biggest drivers, he noted, is a lack of competitive intensity. Domestic market concentration, slow-moving policy frameworks, and challenges around capital access have all contributed to stagnation.
“We’ve seen exits happen – large multinational conglomerates acquiring smaller Canadian-owned businesses – and that decreases competitiveness, which has a direct impact on productivity,” Chattree said.
Tariff-related uncertainty over the past year, he added, has also made it more difficult to strengthen cross-border and interprovincial competition. “The opportunity is there”, he said, pointing to interprovincial trade as a potential area for growth. “But what we’ve actually seen is more exits than expansions.”
Beyond competitiveness, Canada’s slow adoption of technology has become a drag on productivity. Chattree pointed to lagging national policies to support research, development, and innovation ecosystems, including in insurtech, fintech, and health tech.
“A really good example is how long it has taken us to move forward with frameworks like open banking,” he said, “which has a direct relationship to open insurance down the line.”
He noted that beyond government policy, Canadian businesses themselves tend to have a lower risk appetite than their counterparts in the US. Especially in insurance, where a few companies hold a large portion of market share, there’s less urgency to be the first mover, he said.
“That’s created a lack of acceleration in the adoption of technology – which has a direct impact on productivity,” he said.
Within that broader context, insurance ranks among the least productive major sectors of the Canadian economy, according to Accenture analysis. But Chattree emphasized that the gap also represents opportunity.
“When we look specifically at insurance, the potential productivity upside is in the range of 7% to 10%, depending on the segment,” he said. “It’s a little higher in P&C and somewhat lower in life, but as a whole sector, the [potential] gains are significant.”
However, the next leap forward, Chattree said, could come from AI-driven transformation. When properly embedded across processes, AI can lift productivity by as much as 30% to 40%.
“That’s where the biggest shift will happen,” he noted. “AI has the potential to redefine how work gets done – not just in underwriting or claims, but across the entire insurance value chain.”
Unlocking those gains, he said, will require a sharper focus on technology adoption, capital access, and competition. Digital transformation and AI will play a central role – but cultural change will be just as important in ensuring insurers embrace innovation rather than wait for others to lead.
Chattree said that insurance is among the top five industries where AI can most directly improve productivity. The study he referenced analyzed more than 19,000 tasks across sectors, identifying three key value chain areas for insurers: claims, underwriting, and marketing and lead generation.
He said claims in particular illustrate how automation and human augmentation can work hand in hand. Roughly half of the productivity gains in claims, he explained, come from automating low-value manual tasks – such as those between first notice of loss and payment.
“There's still a number of low-value tasks being done manually,” he said. “And if we think about parametric coverages, which rely heavily on automation and unstructured data, there’s a big opportunity for expansion.”
The other half comes from augmentation – enabling adjusters to make better, faster decisions. “For more complex claims, it’s about enabling adjusters to have better conversations and focus less on the transaction, more on the advice,” he said. “It’s about becoming more advice-driven.”
Underwriting follows a similar pattern. “When we think about underwriting and pricing sophistication, there’s a lot of augmentation that sits there,” Chattree said. “The question is: how do we use better data sources to get more accurate and smarter in pricing?”
In marketing and lead generation, AI’s augmentation potential is even more pronounced. “AI can make us smarter about segmentation, smarter about identifying the next best action, and smarter about where the highest hit ratios are – whether that’s on the intermediary side or the direct-to-consumer side,” he said.
These insights, he added, have direct implications for conversion and retention. “It’s about knowing where to focus effort for the greatest impact,” he said.
