Craig Olivier, Chief Technical Officer, Genasys Group, offers some insights into how insurance has changed after Covid-19 and puts the case that opportunities for online innovation are everywhere right now.
The world has changed massively over the past few months.
The global pandemic has affected all our lives: how we work; how we socialise; how we buy things; how we interact. While there may be some return to the life we knew before Covid-19 struck, the reality is it has forced a lot of change from which there will be no going back.
It is driving the emergence of a new consumer – one that is financially constrained, more advanced in their use of digital technologies, more selective in their decision making and who sees Covid-19 as an opportunity to reset certain values in the world.
And they’ll be looking for new insurance covers. That may be a different way to insure their car as they won’t be driving as much so pay-as-you-go would be more suitable to their needs, or it may be a desire for totally new cover for new perceived risks associated with a pandemic. At the same time, they’ll be looking to engage differently. As both individuals and companies alike will be working differently, 24/7 flexible engagement points will be essential.
The insurance industry itself has had to adapt during the pandemic, shifting thousands of people to working from home while having to cope with a massive increase in customers contacting them. The requirement to leverage the digital channel to reserve precious phone lines for the most urgent cases shone a bright spotlight on not only how far they have come in their individual digital journeys but also how this has enabled or, in some cases, impeded the customer experience.
If you consider KPMG’s Six Pillars of Customer Experience, in the current climate two stand out: the need for integrity and empathy. Putting current court cases around business interruption claims to one side, I think it’s important to acknowledge some of the positive moves the insurance industry has made in line with these two pillars. Premiums on some products have been reduced while small refunds have been made on others; default periods and payment terms have been revised and offered; business cover has been extended to provide cover for working from home. And some innovation has taken place – for example, GENRIC’s launch of its Pandemic Shield health cover in Africa.
There’s no getting away from the fact that Covid-19 is acting as a catalyst for change in the insurance industry both in terms of new as well as more personalised products. It has also highlighted the need to review how products are sold and serviced.
All this points to the need to improve and digitise operations and claims functions and if you can possibly forget the driver behind all of this, arguably there’s never been a more exciting time for the industry when it comes to innovation. And perhaps, if some needed a bigger carrot dangled in front of them, there is the very real possibility in my view that change will be forced on them by future regulations if they don’t initiate change themselves.
Digitalisation isn’t a new phenomenon for the industry of course, but I think the rapid changes the pandemic has enforced has highlighted that perhaps many of the initiatives undertaken have not transformed that much and that the industry – true to its reputation – has taken a fairly cautious approach to date. One consulting firm, Detecon, has nicely classified the challenges of digitalisation for the insurance industry in four areas:
· Customer interface and customer experience – effectively the need for secure cross-channel customer communications and a seamless journey across all media
· Business models and insurers’ products – rethinking their business model from the ground up to offer services rather than products which will require building or joining digital ecosystems to deliver them
· Operational excellence for insurers – embracing the latest technology and using modern IT systems to be able to optimise business processes, securely and in a compliant way
· Digital mindset and digital culture – the fundamental principal underpinning all the above
There’s a lot to do but when it comes to the practical implementation, for me the core area for the industry to focus on is building an omni-channel capability. Products and services have to be online, they have to be available through mobile technology, the customer interface has to be able to allow customers to self-serve – but there has to be a human being somewhere along the line as if we’ve learned nothing more from the pandemic than this, we crave human contact when it’s denied us.
Data enrichment is going to play an increasingly important part of every process as a digitalised offering has to be simpler – asking fewer questions means sourcing information required to accurately assess risk from numerous external sources, all within the blink of an eye. This is also an essential if insurers are ever going to be able to offer truly personalised products.
I think most importantly, the industry has to get over its fear of failure. Using modern IT systems provide the flexibility to test, fail fast, respond and get back out to market – and those systems interact with any number of others to build in different services and skills that lie outside the insurance company’s own core areas of expertise. Modern tech stacks facilitate out of the box thinking that enables innovation.
The new normal that we find ourselves in requires us to change the way we have all done business in the past. We have to think about the customer first and that’s why, in my humble opinion, digital engagement in the insurance industry is quickly going to become its new normal.
This article was produced in association with Genasys Technologies