This op-ed is a followup to our 12 Insurance Trends for 2020 blog article, originally published in December 2019.
Although there is still some debate about when the coronavirus pandemic became public knowledge, I think it’s safe to say that, in the months leading up to 2020, none of us expected to be where we are today.
The dichotomy between expectation and reality became markedly clear to me after recently looking back at our annual “12 Trends” blog, which covered topics ranging from telematics and micro-mobility to predictive analytics and virtual reality. These emerging technologies, growing challenges, and urgent calls to action suddenly pale in comparison to the global tragedy and economic turmoil we now face.
COVID-era considerations, many with potential life-or-death implications, have shifted our collective focus back to the basics of business continuity. Health and safety precautions, remote working logistics, and market instability now rank among the top concerns for most organizations.
As companies adapt to this new reality, the original twelve trends – now viewed through the lens of national crisis – have changed course from their earlier (pre-pandemic) trajectories.
12 Insurance Challenges and Opportunities in the New Normal
1. The New Face of Auto Insurance
With widespread shelter-in-place orders, the roads have become significantly less congested. This dramatic drop in traffic has resulted in fewer auto claims, allowing many auto insurance companies to offer their policyholders partial refunds on their premiums. In addition to strengthening customer relationships, these rate adjustments could pave the way for more flexible pricing structures in the future, resembling the usage-based arrangements that have been gaining momentum over the past year.
Commercial fleets are already leveraging telematics to maximize productivity while practicing social distancing, utilizing their vehicles’ automation features to replace traditionally hands-on functions. Telematics may soon see a surge in popularity in personal auto as well, as more companies decide to adopt remote work flexibility on a permanent basis, allowing former commuters to continue to experience the cost-saving benefits of usage-based premiums via mileage-tracking technology.
For now, community-shared anything increases the risk of viral spread, which has led many cities and other micro-mobility operators to temporarily pull the service. Some companies have made their fleet available exclusively to healthcare workers, providing a safer alternative to crowded public transportation systems. As the pandemic subsides and micro-mobility vehicles return to public usage, we’ll likely see a greater emphasis on basic health and safety precautions, such as disinfecting the vehicles between rides.
4. Generational Shifts
Whereas generational differences are still important considerations in your marketing and customer experience strategies, COVID-19 has produced an entirely new generational disparity. According to the Center for Disease Control (CDC), older adults have a greater risk of experiencing severe symptoms, complications, and even fatalities from the disease. As the economy begins to “open up,” multiple lines of business – life, health, liability, and workers comp, for example – may see an impact based upon the different risk levels associated with each age-group.
5. Employment Gap
No longer a “perk of the job,” remote capabilities have quickly become a workforce mainstay in this shelter-in-place environment. Some experts predict that social distancing may need to continue, at least to some extent, for many months (or even years) to come, making flexible work arrangements an essential part of your long-term employee recruitment and retention strategy.
6. Customer Experience
Many policyholders have experienced dramatic life changes over the past few months, whether it be their employment status, financial stability, place of residence, family care structure, access to basic necessities, physical health, emotional well-being, social support systems, or all of the above. The key to lasting customer relationships will be your ability to effectively engage with them remotely, removing as much friction as possible from each touch point. This might include offering multiple communication channels, flexible payment options, and creative solutions and products to meet their present needs.
7. Environmental Issues
COVID-19 may be the most immediate existential threat, but that doesn’t mean the climate change has taken a backseat. The complex relationship between public health, the economy, and sustainability is one of the many important lessons emerging from this crisis. Expect a rise in consumer demand for environmentally conscious business practices as conservation efforts continue beyond the current pandemic.
8. Going Mobile
We’ve been a mobile-first culture for several years already. But with today’s social distancing efforts, mobile is vital – and in many cases the only option – for communication between customers and businesses. Mobile-friendly websites, customer account portals, mobile payments, and apps will be key for future-proofing your business.
9. Advanced/Predictive Analytics
Advanced analytics play an important role in resolving COVID-related issues of all kinds. The information we learn from current research will help insurers develop effective strategies for policy management, fraud detection, and personalized messaging. Access to and analysis of this data will allow you to better serve policyholders throughout these rapidly changing circumstances.
With severely limited access to equipment and facilities, automation has become much more than a convenience. It’s a critical tool of the trade. By replacing resource-intensive manual tasks with automated processes, you can dedicate more time to customer care, innovation, and other functions that require your undivided attention and can be performed from a distance.
11. Technology Threats
Unfortunately, some groups are capitalizing on COVID-related vulnerabilities, doubling down on social engineering efforts to obtain personal information and gain access to systems. Be sure to communicate to your employees and policyholders the importance of diligent adherence to cybersecurity protocols.
12. Virtual Reality
Virtual reality and augmented/mixed reality simulations allow insurers to conduct training activities, site inspections, and meetings from a safe distance, which is especially valuable in a pandemics and other catastrophic events.
The fight against coronavirus has impacted the industry to a greater degree and at a faster pace than any one of the originally predicted trends. Yet to this day, innovation and adaptability remain at the heart of the business continuity conversation. The companies that continue to thrive through this difficult time are those with a strong digital infrastructure, flexible workforce, and willingness to pivot their strategies in the face of unexpected events.
To learn more about business continuity in the face of the coronavirus pandemic, visit our COVID response page.
You might also be interested in:
- Insurance Industry: 12 Trends for 2020 (original)
- Insurance Industry: 12 Trends for 2019
- Rise Together Against COVID
Disclaimer: All information provided is meant for educational purposes only. For medical advice and regulatory information regarding the novel coronavirus (COVID-19, or COVID), please contact your healthcare provider or local health department.