The COVID-19 pandemic has triggered some long-lasting changes to the insurance industry as we know it.
Challenges have come from all directions. The industry has been tasked with dealing with one of the most systemic loss-driving events of the past century, while at the same time trying to maintain the long-term sustainability of the industry amid a sustained low interest rate environment and a fast-changing risk landscape, dominated by increasingly intangible risks.
Insurers are challenged with balancing cost efficiencies and meeting evolving customer expectations. They’re having to walk the fine line between automation and expertise in their interaction with customers, in their risk selection and underwriting processes, and in their claims management practices. And at the same time, they’re under pressure to implement corporate social responsibility (CSR) initiatives, and to engage with communities in a more holistic manner.
A lot of these trends were around prior to COVID-19, but many have been exacerbated by the pandemic-driven shift towards a digital economy. In the claims management space, for example, there is now an “exponential reliance on technology,” according to Eric Malterre, chief client officer – International at Sedgwick, a global claims management company.
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Speaking at RIMS Live 2021, Malterre said: “The use of remote technology such as robots, drones, and digital tools, in replacement of field visits has grown substantially, and this is a future that is here to stay. Indeed, COVID-19 has accelerated that change, which was starting to arrive anyway, and somehow this is a positive impact of that crisis.”
The pandemic has accelerated a shift in consumption patterns, according to Malterre, in which people expect easier access and more tailored service from their insurance providers, both at the onset of their insurance journey and on the back-end should they experience a claim.
As a result, there has been an acceleration of the adoption of automation in the claims management process, to simplify and improve the customer experience and to reduce costs. Malterre commented: “We see a better usage of data, and of behavioural science, combined with the application of skill sets and technical knowledge to manage those claims.”
Unfortunately, the COVID-19 pandemic has done nothing for the insurance industry’s public reputation. As Malterre pointed out, global uncertainty around the settlement of business interruption claims has further “damaged the reputation of the industry” in the eyes of the public.
“We are at a pivotal moment here, all of us,” he said. “This is an opportunity to change that perception. As claims managers, we see ourselves in a unique position to restore that trust between the client and insurance companies as a bridge.
“We also believe that the industry has a social role to play, and somehow, the current situation we’re in creates an opportunity to address it. It’s an opportunity, as a profession, to demonstrate our ability to go beyond our own technicality, which could make us misunderstood and somehow undervalued. Clearly, COVID-19, like other pandemics to come, or global Nat Cat events for instance, should remind us that we need to work more collaboratively within the industry and beyond, exploring public-private partnerships, for instance, to build capacity and an ability to service risks of that magnitude.”