In usual times, people might not think of their insurance products as much. But the pandemic has caused pervasive uncertainty and diverted consumer focus with unparalleled speed and magnitude. People are now eager to understand their policy coverage, free up money, and address risks. Whereas, insurance companies have been scrambling to adapt their operations, expand digital challenges, and meet the needs of their customers.
The insurance industry now stands on the precipice of profound change. And it is not just the digital disruption. Covid-19 challenges, demanding customers, new competitors, and a changing work environment are all transforming the insurance industry. All the more, the leading players are going way beyond, simply surviving by taking these challenges to their advantage.
This reflects insurers’ readiness as they have responded to disruption on multiple fronts, including regulation, new technology, and shifting customer expectations. Moreover, the industry has fastened its pace on transformation. As an outcome of this transformation, insurance providers have become stronger and proficient in delivering more for less. They are adopting a faster, more intuitive, and user-friendly system to enrich customer experience.
The Covid-19 situation has provided insurers a unique opportunity to rethink and innovate their infrastructure as per need of time and customers’ expectations.
Adversity Driving Innovation and Change
The pandemic has lead to the realization of the need for new products that would be payable in the case of pandemics or epidemics. Also, it has made it notable that there could be an increase in demand for usage-based insurance (UBI) products where premiums are based on the extent to which a certain activity is performed.
However, the most significant changes that will be seen in the way insurance products are sold, serviced, and the usage of customer data. These changes will increase the levels of personalization and eventually change the customer experience and value proposition.
Insurance has long been a product-centric industry. It has long struggled with the fact that it’s not as customer-centric as other products. The products are relatively standardized and customers purchase their cover infrequently, seldom indirectly via an agent or broker. This might be a grudge purchase for most customers. Despite their inconvenience with the product, it might become a compulsory spend for customers.
The market reports indicate that through COVID-19 situations, this situation will start to change. Insurance providers are recognizing that they need to add more value to their customers, with more personalized offerings and communications on a more segmented basis. In correspondence to the situation, there has been a great surge in online communication between people, including via video. Also, there are indications that insurance products will begin to be sold via a digital medium where customers can engage with policy providers via a video call in the first instance, before the sale moves to other channels. It will increase value for money and lead to reduced distribution costs for the insurer and increased access to personalized advice for the customer.
Last but not the least, digital advancements and opportunities for insurance players have extended beyond the customer and insurer interactions at the point of sale. The pandemic COVID-19 has brought to light the need for insurers to streamline, improve, and digitize operations, and claims functions. Insurers are increasingly realizing the linkage between customer experience and the digital strategy, transformation approach, and operational improvement.
Though the concern about regulations and technological change are still intact in insurers’ hearts, but the survey reports display that these concerns are less severe than in the past.
