With lock down in the UK set to continue for the time being many businesses are having to adapt, Insurance Times asked what the industry might look like after the pandemic
Julian Enoizi, chief executive at Pool Re
If the insurance industry is to remain relevant, then its future beyond Covid-19 will depend on our willingness to work imaginatively within the new reality that it has disclosed. Crucially, how insureds view us will hinge on our ability to provide new products that respond to crises such as these, rather than wider and more robust exclusions. Insurance is fundamental to society, but we have been painfully reminded of the practical limits of what commercial insurance can offer against systemic, correlated losses.
As such, I believe we must collectively lift our sights, designing models and partnerships capable of being a part of the solution in times of national crisis. But there is no need for a blank canvas; we have innovated in the face of market failures before. Indeed, many have cited existing public-private models for managing risks our sector cannot adequately insure alone, such as Pool Re.
As the UK industry’s terrorism mutual backed by government, we have created a partnership that unlocks and grows the capacity our industry is able to deploy in a way which would not be possible without government guaranteeing the tail. Post-Covid-19, an ambitious strategic partnership with the state would stimulate industry dynamism and ensure that vital protection is available to UK businesses.
Glen Clarke, head of transformational propositions at Allianz
There will be many strands to the aftermath of Covid-19 and insurance is likely to play a key role. Companies of all shapes and sizes will clearly be thinking more about their resilience, their risk management capabilities and the detail of their insurance needs going forward. This clearly reasserts the role of the broker in providing the expert advice required to guide the customer through these considerations. We may also see increasing customer demand, at least in the short term, for propositions which provide greater levels of flexibility as customers look forward expecting a period of economic uncertainty.
On a wider scale the chief executive of Allianz Group, Oliver Bate, described the impact as hitting our industry “like a meteorite” and the industry will need to consider how it can work with government. Is there potential to build a fund to support financial distress caused by future pandemics and potentially significant climate related events? These are things that lie outside the remit of what core insurance cover can provide and yet are increasingly probable in this fast-changing world.
Andrew Brown Allan, director at Carrot Insurance
One school of thought thinks insurance will simply revert to the way it was, but I disagree. Customers will have a different view of what they want from their insurance provider. Take motor insurance, where the traditional annual renewable policy was already being disrupted by telematics, pay as you go and miles based UBI products before the crisis. I expect this kind of insurance to accelerate massively, since people have been paying their premiums while their vehicles have been immobile for most of March and April, and they won’t wear that cost any longer.
And, enter stage left: vehicle manufacturers, who will see insurance as a new means of extracting value from each car that roll offs the production line. They’ll have to, because fewer people, especially in cities, will want to own a car. Instead they’ll graduate towards new and shared mobility (including car subscription, car clubs and rental) because they’ll want far more flexibility than traditional car ownership provides. Also, we can expect an increase in delivery fleets and gig economy delivery drivers as familiarity with food and medicine delivery increases during the disruption. They’ll need a different type of insurance too, such as pay as you go insurance, multi-use policies, or miles-based programmes to suit reduced and or changing vehicle use after Covid-19.
Gary Humphreys, group underwriting director at Markerstudy
The insurance landscape in personal lines will be largely unchanged in most areas.
During this difficult period, we’ve seen evidence of less shopping around and increased purchase of ancillary products, which implies that people have had more time to review their cover and needs.
Post-lockdown, if customers have had a positive experience with their insurer, it may increase their loyalty. Conversely, a poor customer experience and bad PR can have an amplified effect during a time when there is more focus on the media and publicity attaching to company behaviour during the crisis.
The impact of positive pricing and support of keyworkers is something that many insurers are particularly keen to offer. Of course, there may also be some real losses to local insurance broker businesses which may have wider reaching impacts on smaller communities.
Justin Elks, managing director and UK ERM and insurance lead at Crowe
In these unprecedented times, the importance of trust in everyday life has become startlingly apparent, and no more so than for insurers.
Trust is the foundation of insurance. How insurers respond to claims and support customers during this crisis will have a direct impact on their reputation and people’s trust in the industry. When trust is breached, people will become more cautious in how they interact with companies.
We don’t know exactly how the pandemic will change the world - but there will be a lasting change. I’d anticipate that we will see people placing greater value on the trust they have in organisations, and how that’s supported by the operational resilience of those organisations.
Richard Beaven, chief operations officer at Brightside Group
The insurance industry will change forever, along with so many other aspects of our current lives. Systems, practices and processes for companies like Brightside Group will all need to change. It was always our intention to transform ourselves to work entirely more flexibly, to the benefit of customers, colleagues and the business, but the pandemic has dramatically accelerated that. Everyone will be digital and with it will come ever higher customer expectations, while voice will no longer be the key channel, even for our older, offline business.
Talent pools will widen, shift patterns will change in line with the ability to successfully operate businesses with motivated colleagues who can work from home, but companies will need to pay ever more attention to well-being. I’m convinced that businesses wishing to grow their employer brand must take heed of and be responsible for dealing with this fast-emerging social issue, especially mental health, where existing health systems are inadequate and underfunded.
But with us being more engaged with our employees comes the chance to re-create a new social contract with colleagues, where they look to us for a sense of purpose, a sense of community (even remotely) and a sense of care.
Shirley Woolham, chief executive at Minster Law
Without digital, gripping and dealing with the impact of Covid-19 would have been impossible. Now, our work and domestic life during the lockdown - from business to shopping - has largely moved online. Technology is, more than ever, a life essential and from now on the online experience of their customers will be the yardstick by which all consumer-facing businesses will be judged.
Claims companies too cannot continue to protect their business models by avoiding technology, so their leaders will need to change tack fast. Remote injury assessments and rehab, as well as moving most if not all civil justice online will simply become ‘the standard way to do claims.’
Customers will expect their claim be done and dusted super quick with a tech journey that’s as good as Amazon, or Zoom.
Paul White, chief executive at Sedgwick International UK
Our experience has shown that remote working can work incredibly well; our technology has held up to increased demand and colleagues have adapted quickly.
Site visits on claims across the market were already declining as more could be done from the desk. However, this current situation has accelerated the use of claims technology such as remote video streaming. This is demonstrating that, in many situations, just as much can be achieved through this interaction as on a visit. The customer still benefits from the skills, knowledge and empathy of our people - just via a different type of engagement.
There are benefits to everyone in the appropriate use of this technology. It is efficient and flexible, but customers don’t lose the human interaction. Our skilled and experienced claims handlers are still there to help customers, mitigate costs and settle the claim.
Of course, visits will still be needed, but where technology can help then the current situation has proven that it’s a valuable option, one that will likely become the norm quite quickly.
There are wider benefits too. A reduction in travel is good from an environmental perspective and may help colleagues to achieve a greater work life balance by working more flexibly from home.
Matthew Maxwell Scott, executive director at the Association of Consumer Support Organisations
While a small minority of insurers are living up to the industry’s reputation for avoiding paying out on claims, most are trying to do the right thing in exceptionally difficult circumstances. To put it another way, don’t be distracted by the snowflake celeb snivelling in their pyjamas when thousands of normal people are donating to centurion Captain Tom Moore’s marvellous mission to walk 2.5km for the NHS.
Asking insurers to return premium seems premature and will undermine future criticisms of them not settling genuine claims when times get hard. We all have to accept the rough with the smooth, given this situation is nobody’s fault and many people still need their vehicles for essential work or in case of emergency.
Ian Hughes chief executive at Consumer Intelligence
The personal lines business has fixated on price over value. Consumers are learning fast which insurers are really there to catch them when they fall, and which really don’t care about them. The current crisis is putting a magnifying glass on the industry, enabling customers to quickly make the distinction without even making a claim.
Our research has proven analytically that engaging with your customers is key to achieving a dramatic uplift at renewal. Brands should be asking themselves ‘how do we want to be remembered tomorrow?’ and taking steps to connect with their customers on an authentic and human level.
This could be the turning point for an industry plagued with a bad reputation. Get it right now and be remembered favourably for a long time to come.
The Big Question January/February 2020: Will the LiP portal empower personal injury claimants?
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The Big Question May 2020: How do you think insurance will look post-Covid-19?