Working from home, increased cyber threats and the need for improved customer service are three key areas of opportunity for the re/insurance industry that have emerged out of the COVID-19 pandemic, according to Sara Ager, chief executive officer of GreenKite Associates, a consultancy for the insurance and financial services industries.
“If people are working from home, we need to think about the response and cover under their home policies,” Ager told Monte Carlo Today.
“For instance, does their household cover extend to their working from home? What about EL cover—does that cover them if they are working from home if there has not been a health and safety assessment?
“At the moment the answer’s no, but some changes will be afoot to respond to the change in environment, and there are real product development opportunities there.”
She added that while the pandemic has raised plenty of challenges, it has pushed the financial services sector to develop more resilient business models, with a focus on adapting systems and making sure that the operation is resilient and agile enough to cope with a scenario similar to COVID-19 in the future.
“We are definitely finding our clients are more willing to invest management time and resources; they are spending more time thinking about how and why they should innovate—they are not automating for the sake of it; they are starting to think about why they are doing it.”
Ager said that the rise in cyber threats during the pandemic has highlighted significant opportunities to improve and boost customer trust.
“Definitely for the re/insurance sector there is a recognition that they need to protect their business and their customer data from this type of attack if they are going to be the insurer of choice going forward,” she said.
“There is an awareness now of the importance of data security policies, an understanding that cyber threats come in all different shapes and forms, and that every firm needs a proper way of responding to them.”
“One of the problems we face as an industry is the whole issue around customer trust.”
Insurtech for claims
Another key opportunity to improve customer confidence comes from recent claims surges.
“Claims is an area of the insurance sector that hasn’t really been digitised yet; even in the insurtech space it’s more about add-ons and streamlining the current process rather than reinventing the process,” Ager said.
“Reinsurers and insurers have an opportunity to make better use of the technology they have and they are now more willing to invest in technology to complement their staff in times of surges, so that they can increase client interaction, servicing and confidence.
“One of the problems we face as an industry is the whole issue around customer trust, and claims is the main area where that gap can be bridged.
“In the managing general agent (MGA) and insurtech space it’s created an opportunity because MGAs are proving themselves to be agile. During COVID-19 they have shown a willingness and ability to contact customers and keep the interaction going more readily
“Particularly for reinsurers that sit behind insurtechs and MGA businesses, there is an opportunity for that sector to grow and be stabilised.”
Ager added that while the impact of COVID-19 is a key topic of discussion in the industry, it is important not to overlook the other issues and opportunities facing it.
“While COVID-19 has been happening there have been many other cat events—floods in Scotland, wildfires in California, Hurricane Laura—so alongside the impact of COVID-19 we are dealing with unusual amounts of claims and events which would normally take priority, and some credit is due to the industry for that,” she said.
“There have also been some technological advances that we should not forget during COVID-19: driverless cars, for example, are going to be out on the streets in a matter of months.
“I’m not sure the industry has fully thought through the insurance and societal ramifications,” she concluded.
Main image: shutterstock.com / Peshkova