COVID-19 has made every industry rework on its strategies, be it for managing in-house/external operations, dealing with market instability/remote working logistics, or providing customer service, and the insurance industry is not an exception to it. In fact, the insurance industry has been hit hard the most since corona positive patients are requesting insurers to cover their expenses under health coverage.
This surely has made things complicated for the insurers, since, at one surface, they have unwanted expenses and, on the other, the fear of losing clients and rupturing business image. So, let us know how insurers are dealing with the current crisis and what plans they have for the future.
Insurance Market Trends during COVID19
1. Emerged Patterns during the Crisis
A lot of patterns have emerged during the corona crisis and going by the Google searches, life insurance coverage is being searched the most by consumers. Also, disability insurance’s demand has increased to quite an extent.
2. New Changes to Underwriting Process
The underwriting process has got a makeover during the crisis since no one wants to have the medical examiner in their house concerning life insurance coverage. This has made insurers look for other options such as electronic medical records, and underwriters are using the same data. Apart from this, other options like prescription drugs, self-testing kits to enable consumers to do their own blood testing are being considered for underwriting.
3. Refined Handling of Risk Consumers
During COVID-19, most of the insurers have stopped accepting older people’s applications, especially the ones aged 70 and above, along with postponing applications of people who have recently traveled abroad or have any plans for the same. Also, some insurers demand a complete good health statement before finalizing any policy.
Insurance Challenges and Opportunities
1. The New Auto Insurance Face
Due to COVID-19, fewer vehicles come on the road, lowering the chances of accidents/injuries and reducing the number of auto/health claims. Insurers are leveraging this opportunity and offering partial premium refunds to win the hearts of consumers and strengthen the relationships between customers.
2. Customer Experience
As per one of the latest Deloitte reports, customers have become the No.1 disruptive force in the insurance sector during the corona crisis more than any specific technology. Consumers are demanding personalized services from insurers through digital mediums so that every doubt concerning their claims is addressed at the earliest. Insurers who understand this and offer the same are definitely going to benefit from it in the present and the future.
3. Environmental Issues
The consumers are opting for insurance services from providers who take care of their environmental chores. This is a huge opportunity for insurers to adopt initiatives for internal sustainability like recycling plastic, paper, and organize events for community cleanup and win these consumers.
4. Telematics
Using telematics, insurers obtain real-time information for driving habits of consumers and make changes to policies accordingly. Insurers are looking to make use of this technology the most since it helps them know about the risk profiles.
5. Micro-Mobility
Due to coronavirus, people are avoiding public transports and traveling to their offices using micro-mobility. People are required to take proper safety precautions, wear helmets, etc., and most of them are also doing so. However, several other factors like insufficient vehicle maintenance, outdated ordinances, inadequate road repairs, etc., make things challenging for insurers from the liability point of view.
6. Generational Shifts
The consumers prefer those insurers who are technically more advanced in terms of digital engagement, especially during the crisis. Although it is a challenge for insurers to give up on their traditional processes and replace them with integrated insurance solutions, it is definitely worth investing owing to the demands of customers.
7. Going Mobile
With 86% of Americans having a Smartphone and 96% having a cellphone, going mobile is not an option for insurers but a necessity, especially during COVID-19 crisis. This is the reason that almost 74% of insurers are already offering their services through apps.
However, with rising competition, insurers have to not only focus on their app but make their website more mobile-friendly as well since it helps consumers to file claims, get quotes, make payments, access accounts, etc., all through the convenience of their phones.
8. Advanced/Predictive Analytics
This new technology is helping insurers with underwriting immensely since they are able to gain valuable insights into data concerning gender, driving habits, medical records, location, age, etc., of consumers.
In other ways, underwriters can easily assess the risk/fraud level within every profile and make changes to the policy accordingly. As far as COVID-19 is concerned, previous medical history is proving to be of maximum use to the underwriters.
9. Automation
Chat bots, touchless claims, predictive modeling, Telematics, and other robotic process automation (RPA) areas are changing insurance processes completely, along with becoming a great help in times of crisis where few employees are available for work.
Although, this is considered as an opportunity by some insurers, there are some who are concerned about its potential to create a negative effect on human jobs presently and in the future.
10. Technology Threats
COVID-19 has forced everyone to shut down their physician offices and instead opt for remote working. Although this has helped insurers in ensuring smooth work operations, it has also made things complicated for them in terms of data security.
Employees who work from home do not have proper security measures in place, which is increasing the risk of data breach incidents. This is the reason most of the insurers are opting for insurance bpo services due to their technical expertise and high-end security infrastructures.
Insurers are already struggling to make consumers satisfied during corona crisis and if they experience a data breach under any circumstances, it will shatter their image in the eyes of consumers not just in the present but for the future as well.
What can Insurers Expect from the Future?
Due to COVID-19, insurers have realized the importance of using technology for remote working and serving customers digitally. While most of the insurers will continue to keep using new age processes, some will even continue with remote working as well to offer work flexibility to employees. If we talk about claims management, an aggressive approach by business owners is expected post-pandemic.
The reason being minimal injury occurrences are being witnessed like slip and fall/bodily injuries due to lockdown but as the number of cases will increase post-pandemic, medical providers and lawyers who specialize in personal injury claims will try and cover up their loses and in case of people, they will file more claims.
Also, a lot of employees moved from their offices to their homes and this will likely have an impact on their compensation claims. Apart from this, claim departments can leverage subrogation opportunities through the use of advanced analytics.
Conclusion
Surely, COVID-19 has made things complicated for insurers in the present. With lockdown, a shortage of staff, dependency on remote working, the threat of a data breach, and the growing number of unsatisfied customers, insurers have a lot to deal with.
There is no denying technology is making things sorted for insurers and most of them will continue incorporating the use of technology in their processes so that they can not only streamline their internal processes but provide enhanced customer service in the future, enabling them to achieve a higher customer retention and acquisition rate.
James Crook is a business and financial author living in the US. James has been writing from years
Atif says
Your comments are insightful! I can’t wait for this pandemic to be over.
John Watson says
Very well written article.
Thankyou for sharing insurance emerging trends and challenges in this uncertain economic condition. It is really helpful to know about future of insurance industry.