There’s been a lot of talk about how the coronavirus pandemic may permanently affect aspects of daily life and fundamentally alter entire industries. The future of the insurance industry deserves particular attention, considering its critical ability to help businesses weather times of extreme hardship and uncertainty. It’s also a sector that, for the most part, has clung to outdated manual processes and, like many long-established industries, has been reluctant to fully embrace digital transformation. Recent blossoming of the insurtech sector has led to what feels like the beginning of a revolution, but, for most insureds, the experience has been as time- and paper-intensive as it was decades ago. COVID-19 may prove to be the much-needed impetus for change for insurance organizations that have been operating (and largely thriving) based on decades-old procedures and tactics.
According to a recent NFIB survey, 92% of small businesses have been hurt by the outbreak of the coronavirus. 80% of those employers report slower sales, and 31% are experiencing supply chain interruptions. A survey by Goldman Sachs found that, while 81% of small businesses are continuing to operate, the pandemic has forced them to cut their workforce by 37%. The promise of insurance protecting businesses has clearly not been fulfilled during this crisis. Insureds are left holding the bag, and, worse, there’s no recipe available for protecting businesses more effectively during any future crises. To survive in a post-pandemic world, insurance organizations can’t continue to conduct business as usual. Businesses are too shell-shocked from pandemic-induced loss of income, forced layoffs, supply chain interruptions and remote work challenges -- not to mention the stress of maintaining some semblance of mental and physical well-being.
Below are five key characteristics insurance organizations should prioritize to remain relevant and most effective to customers and prospects in the months and years ahead:
- Be customer-centric.
Being customer-centric isn’t just a mindset or facet of company culture. There are concrete steps insurance organizations can take to be truly customer-driven and provide meaningful support, such as taking the time to ensure all user experiences and customer funnels are easy to navigate, designed with quality and enjoyable. Insurance organizations should also responsibly collect customer feedback and execute on it as much as possible, and provide free resources such as informative and relevant blog posts or webinar content. Another example of being customer-centric is to prioritize customers’ needs first. When a crisis like COVID-19 hits, insurance organizations need to look out for their customers by offering coping mechanisms such as payment flexibility and premium givebacks. Everything else -- including the threat to insurance organizations’ books -- needs to come second. - Go digital.
Going fully digital and providing an online experience aligns with how consumers purchase goods and services, now more than ever. Also, by providing a digital experience, insurance organizations can be more nimble in accommodating customers for whom time really matters. Small businesses and contractors, for example, typically require insurance (or even the ability to display proof of insurance) very quickly. They also often request immediate changes to their policies as a result of bringing on a new client or taking on a new type of project. By going digital, insurance organizations can satisfy such customer requirements in a seamless and scalable manner, even offering instant price adjustments if needed. - Leverage cutting edge technology.
Technology like artificial intelligence (AI) and machine learning is vital for simplifying historically complicated, human-intensive and time-consuming purchasing processes. For instance, the technology can be leveraged to automatically assess and determine what a prospect truly needs to thoroughly protect the business. AI, data science and analytics can enable 24/7, instant, customized purchase experiences and products, as well as providing more accurate pricing, thereby improving affordability for prospects and customers. The way to truly transform the industry and customer experience is to provide a technology-driven full stack service that can address the entire value chain all under one roof. - Learn from unprecedented events.
One of the many things our industry has learned from the coronavirus is that there’s an appetite for insurance coverage that helps address once-in-a-lifetime events. Now is the time to investigate how some form of government assistance or a consortium of reinsurance providers can be leveraged to provide such coverage and help share the risk so that insurance can remain affordable for smaller businesses -- even during tumultuous times. This is a hard problem that hasn’t been solved yet. Insurance organizations and government entities may need to collaborate (as was done with TRIA) to obtain a solution for this very real need. - Simplify customer experiences.
For small businesses, acquiring and maintaining insurance coverage has always been an incredibly complex task, as they typically have multiple policies and carriers involved. There’s a timely opportunity for insurance organizations to simplify and streamline the small commercial insurance experience, especially given all the challenges this demographic will continue to face as a result of the pandemic.
See also: We Are Open for Business; Now What?
Ultimately, insurance is a social good. To adapt to our “new normal” and be successful over the long term, the insurance industry needs to embrace this ethos and prioritize helping businesses in practical, meaningful ways. Rather than focusing solely on getting our revenue numbers back up, let’s collectively invest more in optimizing customer experiences and providing digital offerings that are fast, intuitive and transparent. This doesn’t mean losing sight of foundational priorities like ensuring profitability and compliance -- those pillars are as important as ever -- but they’re no longer sufficient on their own. By using technology to take insurance ownership into the future, we have the potential to significantly contribute to the rebuilding of our economy and better equip our customers for whatever lies ahead.
