With many experts predicting that the fallout from the coronavirus pandemic will affect the way we travel, work, and live for months – if not years – to come, it’s no surprise that the impacts on the insurance industry will also be longer term in nature.
“Insurers in particular will be managing the consequences of COVID-19 for years to come,” said Yogesh Bansal (pictured), partner – insurance at Infosys Consulting, pointing to the economic consequences that have arisen from social distancing measures and business shutdowns. However, he also noted, “Insurance executives can begin managing those consequences now by reassuring customers and employees, reassessing their business, reinforcing customer support, and preparing for a long reset.”
As businesses begin reopening and societies start returning to a ‘new normal,’ the insurance industry plays an important role in ensuring continuity of its own operations and safeguarding the well-being of both its staff and customers. First, insurers should continue to encourage clients to use mobile apps for routine customer service needs, such as starting a claim, making a payment, or reviewing a policy.
This move, alongside keeping brokers and customer support staff available for clients, will allow insurers to “make customized accommodations for clients, extend grace periods for lapsed policies and missed premium payments, and then communicate that broadly,” explained Bansal. “This can prompt customers to engage and explain their situation.”
When it comes to more policy-specific impacts, the pandemic’s ripples are already moving through commercial lines, and the industry will likewise have to address new illness-related claims that will inevitably arise as the pandemic continues to infect people. In fact, says Bansal, insurers have to prepare for more unconventional claims and an increased involvement of regulators, politicians and community stakeholders – as we’ve seen from the tense discussions around business interruption already.
“While past epidemics may have resulted in specific exclusion of epidemics from business interruption insurance policies, politicians have begun wading into the debate, and insurers will have to navigate the optics of such exclusions, which will require great care and precision,” said Bansal.
Meanwhile, when it comes to coverage, insurers will have to reframe traditional products for their new realities. A key example has been restaurants shifting to food delivery, an activity which so far is continuing in Canada and parts of the US as regions move to reopen businesses safely. This brings with it new insurance-related challenges that have come to the forefront.
“When a restaurant client shifts into the food-delivery business, its insurer and product rep should shift coverage seamlessly to adjust to the new potential liabilities that come from that change,” said Bansal. “Further, the proactive insurance partner will have studied such a change and be able to bring some risk management advice to the client.”
Since insurance offices have, for the most part, remained closed during the pandemic, with insurance professionals, including brokers and agents, working remotely, technology has likewise become an important factor in continuing operations. Experts have in turn predicted that techy tools will become pivotal for the industry in the near-term. Bansal recommends that insurers consider ways to “reimagine and apply technology more broadly to traditional functions.”
He continued: “COVID-19-related rules and changes will delay and interrupt the typical work of a property and casualty inspector. Digitally adept insurers could consider deploying drones to collect images for inspectors to review remotely and enabling customers to submit digital information, including high-resolution photos and data files for processing.”
In the same vein, sales and underwriting roles can and should utilize digital tools to “adjust to the disrupted status quo,” said Bansal, noting that this “starts with using digital channels for sales and lead generation.”
