The coronavirus pandemic has brought unprecedented disruption to the insurance sector, prompting many industry players to rethink their strategies to adapt to the new normal. But the situation has also opened great opportunities for many to improve their services.
In a recent Virtual Reinsurance Renewal Season fireside chat, Aon chief executive officer Greg Case and AXA CEO Thomas Burberl talked about the positive impact COVID-19 has had on the insurance industry.
Case, who hosted the virtual chat, said that although the coronavirus pandemic has dealt a huge blow to the industry, it has also “created a window for change and innovation that the industry has never seen before.” He then asked Burberl what he thought were the biggest lessons the industry could take away from the pandemic.
Buberl said, for one, the lockdown had emphasized the importance of digital interaction with customers.
“We have invested more in technology to meet demand and we want to continue on this journey,” he said. “Also, as with others in the industry, we have all seen a call for greater [insurance] contract clarity. Customers, brokers and insurers see the need for clear contracts.”
Burberl also said that providing adequate coverage for pandemic risk calls for risk sharing between private companies and public entities in a manner that is already in place for terrorism and natural catastrophe risks. He added that cyber risk will likely need the same approach.
Case said that cyber security events could pose as much of a threat as the coronavirus pandemic but warned that the market for cyber risk insurance is still underdeveloped.
Burberl said that cyber risk could become “the next digital pandemic” and if the industry wants to “crack the market and build better coverages,” more data sharing is needed with customers and government bodies.
He added that the industry needs to move from “payer to partner” and shift the focus to helping clients with loss prevention and in making a speedy recovery.
“Insurance from a customer perspective has always been a necessary evil,” Burberl said. “Things have started to change, hopefully, but we must put more ourselves in our customers’ shoes and take a risk management approach to come up with solutions that combine service with insurance coverage.”
Case said investment in analytics within the industry is “unprecedented” but argued that it is also necessary for the industry to progress.
“If we do not take action based on new insights, it is hard for our clients to take on those new solutions,” he said. “We all need to think harder about how we use analytics otherwise we will stagnate.”
Burberl added the industry should move quickly in terms of innovating, “because if we don’t do it, someone else will…”
“Just signing the policy and giving you the wording is not enough,” he said. “We need to really think how we can help our customers in this transformation process when it comes to risks and mitigating risks, which is fundamentally different to what we have been doing for the past 50 years.”