It is safe to say that no industry is immune (for lack of a better word) from the impacts of the global COVID-19 pandemic. The insurance industry is certainly no exception. In fact, given the importance of this industry, there is considerable public interest in how insurers are maintaining both internal business continuity and seamless customer service throughout the crisis.
As insurers manage the rapidly changing challenges of day-to-day operations, they must also begin to consider what comes next. Adapting to the “new” normal will be crucial to the health of the industry.
Foremost on the minds of insurers is protecting the health and safety of all employees, adjusters, underwriters, and agents. According to recent insights from Deloitte, one of the biggest challenges could be enabling alternative work arrangements for insurance company employees, if needed, to protect staff and adapt to possible office access restrictions, all while assuring business continuity.
As many industries have done since the outbreak of COVID-19, most, if not all, insurers have put in place policies that address the need for remote working and social distancing. In the case of claims adjusters, who typically must be onsite to make proper assessments, the use of masks, gloves and other safety measures is considered prudent. These types of precautions not only serve to protect employees, they also safeguard customers.
Customers shopping for insurance are increasingly looking at digital and mobile channels to interact with agencies and brokers, rather than meeting face-to-face. Those companies that already have robust digital capabilities in place are well-positioned to meet this new demand. Digital platforms are making it possible to examine insurance offerings and interact remotely with customer service representatives. A recent survey found that 80 percent of customers are interested in utilizing digital and remote channel options for various insurance functions and transactions.
Long before the current pandemic concerns, consumers were looking to have a broader range of options when it comes to completing transactions. Savvy insurers not only accept online payment using credit and debit cards, but also mobile options such as Paypal, Apple Pay, Alipay, or Installment Payments for their convenience and universal appeal, especially to digitally native customers.
One recent trend in the industry has been that some car insurance companies are issuing refunds or discounts on policy premiums because of the reduced use of vehicles due to stay-at-home mandates in many states. Case in point, State Farm is “sending $2 billion back to customers, joining Allstate, Geico, Liberty Mutual, USAA, Chubb and other insurers.”
At the same time, claims may have increased around travel and event cancellations, business interruptions, and supply chain policies. In the case of personal claim payments, the industry might consider alternatives to issuing paper checks in order to reduce customer risks associated with visiting banks to make deposit. Issuing payment via a digital disbursement which is loaded instantly onto a prepaid card, or disbursed directly into a debit account, offers the recipient instant access to funds they may need immediate access to, removes the need for handling/cashing a paper check, and offers a more cost-efficient means of managing the disbursement process for the insurer. Once issued, the preloaded payment cards offer the end user a can immediately begin using the funds to purchase goods or services online.
Needless to say, the current health crisis has created significant economic uncertainty for a vast array of industries. No doubt, prospects for growth and profitability across the insurance industry will be impacted. According to the Insurance Information Institute, COVID-19’s impact on global growth and the insurance industry is likely to last well into the third quarter and beyond.
The report also noted that as this situation evolves, insurers are expected to continue to serve as shock absorbers for the economy and society. Because the industry prepares for the eventuality of large loss events, such as this one, it should be well-capitalized for the increase of claims resulting from COVID-19.
The argument for insures to accelerate their digital transformation is becoming more compelling than ever. Digital connectivity and advanced analytics offer a vital means for compressing the application-to-closing process, lowering onboarding costs, and minimizing consumer attrition rates. Technology offers opportunities for the industry to settle claims more quickly, dramatically improving the customer experience, which in turn strengthens the policyholder-insurer relationship and brand loyalty – something that is decidedly important in this time of growing uncertainty.
Perhaps this article from PWC describes the opportunity best. COVID-19 offers insurers a chance to build trust, brand and employee morale. Affirm to policyholders, prospects and staff that the industry’s core mission is to help manage risk and buffer against shocks.
What happens tomorrow may be in doubt, but one thing seems certain, the insurance industry can be counted on to be there for their customers.