By Nor Izmawati Mostapar, Vice President of e-Learning & Corporate Communications at MII
Known to be a highly complex business involving multiple processes such as administration of policies, pricing, marketing and selling new business, managing policy renewals, claims processing and customer service; it is not surprising that the COVID-19 pandemic poses a wide range of challenges for insurers to maintain their operations as the old norm sees massive disruptions. Despite the industry’s slow but progressive adoption of new technologies through Insurtech startups, forcing and accelerating drastic changes to the already complex setup will not be a walk in the park.
So, what are some of the changes to insurance operations that we may see in this post-COVID future?
Remote working is here to stay
Similar to other industries, the shift to remote working will become more acceptable and no more frowned upon. After many weeks of workplace adjustments, companies are seeing the possibility of a long-term adoption of this new way of working. Remote working is now proven to be successful as we see insurers largely still in business despite the unexpected disruption.
The future will see a smaller group of on-site staff at the office while the rest operate remotely. Many companies already have a number of staff returning to the office but most likely on an alternating A and B team shift pattern. Here, social distancing has become the new normal. Moving forward, to house a large group of people at a single time, in a confined space, will not be something easy to do. New SOPs will emerge – proof of a new normal in place.
In a positive way, the COVID-19 pandemic has accelerated the future for the industry. Business continuity is put the test and as a result, innovation is on the rise. What many thought will take years too achieve, has been accomplished in just a few weeks. Success also lies in clear and effective communication from managers and leaders, that helps staff transform. Performance is now truly measured by output.
In becoming digital
Insurers will look to expand existing alternative digital channels to include insurance offerings with other businesses, in efforts to expand reach and decrease the cost of customer acquisition. Customer acquisitions now include small businesses that are making a comeback with new digital-based business models. Small business offerings will have more delivery and takeout for restaurants, retail and grocery stores; tele-health will accelerate for medical professionals; schools and colleges may move to more online-based. With this, the industry can foresee a greater need for small businesses to insure themselves and a corresponding need for insurers to relook at risks for those businesses. This will lead to the need for new products such as cyber insurance.
To ease the pressure on processes, many insurers are waiving certain requirements and simplifying paperwork. However, it remains a challenge to deal with complex or high value claims where evaluating the physical evidence and obtaining expert reports in-person is a key part of the process. There is also a broader policy perspective that comes into play, for instance, a country’s regulations on digital documents. For example, physical signatures rather than e-signatures are still required for most agreements and this is by law.
Customer service put to the test
From issues involving travel insurance, critical illness, health cover, business interruption, or any other issue, customers are overwhelming insurers with queries over what they may or may not be covered for. As customers face increasing financial hardship, insurers will have to be prepared with queries regarding retirement products and withdrawals.
On contrary, products such as motor will see a huge decline both in customer acquisition as well as claims. When customers’ mobility is restricted or unnecessary now that many are working remotely, there is lesser need for hire purchase and that would also mean lesser cars on the road and lesser claims.
These new customer reactions require insurers to rethink their processes and segregation of manpower. Internal resources will have to move around to cater to new demands or increase in demand. With digitalisation, customer service can be automated online, which means existing personnel can contribute elsewhere within the company but out of their specialised scope of work. For instance, if there are fewer motor claims, designated personnel can assist in travel claims instead. Movement of staff will require higher frequency of internal trainings and eventually diverse skillsets becomes a must for each staff.
The rise of new risks
Mitigating against the potential for fraud is a prevalent issue, more so post-COVID. There is already an increase in the number and types of fraudulent claim attempts, such as travel claims and business interruption.
Cyber and fraud insurance claims will surge in parallel to the real-world pandemic. One contributing factor is remote working. Remote working is likely to prompt a rise in hacking attempts for various purposes such as to obtain customer data, financial information, or disrupt services. Employees should be given clear guidelines over remote connectivity protocols and best practice, including around file-sharing and data distribution. We have seen in recent weeks how virtual meetings have become a huge risk for companies.
The COVID-19 pandemic is highlighting the economic vulnerability of some segments of society. Despite the unknowns, the insurance sector is committed to give employees, customers, distribution channels, external stakeholders, and societies the support and service they need. Like many things in life, the pandemic will bring out the best and the worst in us. Even when businesses are expected to conduct their business ethically and assume a broader societal role, business leaders should keep an eye on the many changes underway in the global economy, social norms, science and technology, and changing consumer behaviour — which will help us to move on, beyond COVID-19.