We are pleased to present the second part of this article, 6 Upcoming Shifts in Post-COVID Insurance Landscape: Driven by Technology (Part 1), published last week.
In the previous blog, I discussed the shifts that are driven by technological advances. This blog highlights the upcoming shifts driven by people – the workforce, customers, and industry leaders.
4. Innovation Will Need to Become a Norm and Not Just Good-to-Have
Digital claims processing has come a long way since its inception, but the process itself can go a lot further. The insurance industry has moved towards automation, so much so that a significant quarter of the industry is looking to get automated by 2025.
However, the issue is no longer about companies willing to embrace technology or only automation. Premiums and policies can be more customized, and there can be new ways of offering insurance products based on changing consumer behavior. It may even be possible to warn customers of a potential increase in their premiums due to their driving behavior (tickets, DUIs, etc.). Telematics insurance practices can lead to various types of insurance products like:
- Pay-as-you-drive (PAYD)
- Usage-based insurance (UBI)
- Pay-how-you-drive (PHYD)
New insurance methods such as Peer-to-Peer (P2P) insurance are already here to further disrupt the insurance market. There are companies like Friendurance and Besurance that already crossed important business viability milestones. They are succeeding by leveraging technologies like AI/ML and blockchain, in addition to traditional actuarial science.
5. Ensuring the Workforce’s Well-being Will Determine a Company’s Ability to Retain Talent
The pandemic and the subsequent lockdown sent everyone scurrying to find a safe place to work. The atmosphere of fear and physical and emotional stress sent many hard-working people over the brink, and mental breakdowns and stress-related diseases have hit all workforces hard.
Insurance companies rely on human intelligence and expertise to make critical business decisions; it is the employees that perform delicate maneuvering of processes like underwriting and complex investigations function. In the near future, as the workforce returns to offices or even to hybrid working models, the insurance industry would need to invest in the well-being of its employees. Some ways to accomplish this are:
Access to stress-relieving activities like meditation and counseling on-premise and online: Stress accumulates over time; therefore, having a way to relieve it continuously by applying measures, such as talking to experienced professionals and taking a meditation break, built into one’s day can ensure employees’ good health.
Investing in technology to allow flexible work hours: Technology can help employees work from anywhere in the world and determine their own hours. Using a secure platform and functions seamlessly over the cloud can help companies retain their best talent and continue to benefit from their expertise.
Encouraging employees to keep track of their work-life balance: Having checkpoints like setting a limit on the number of hours logged for work and regular time-off is a great way to ensure that employees do not over-burden themselves.
Companies will be well served to introduce policies like above, improving both the workforce’s productivity and well-being.
6. New and Courageous Leadership Skills Will be Needed to Change the Old Paradigms
All of the points mentioned above also need one of the essential ingredients to succeed: leadership. Every transformational change flows from the top. Industry leaders who want their companies to survive and grow in this pandemic-hit world would need to step up and update the leadership playbook.
They would need to focus on bringing cohesiveness among their fellow workers, most of whom may still be suffering from after-effects of isolation and loss; at the same time, get their most innovative strategies into play. Restructuring the way the workplace functions is something that leaders would need to look at to re-invent it. Many leaders have already gone back to the basics and are asking questions like:
- Can we optimize the number of meetings by creating a global update system and then meet only for critical decisions?
- Do we have buffers built-in for recovering from the effect of the pandemic? If not, can we build some now?
- Which technologies are the best for saving time and effort, promoting collaboration across teams globally and locally?
Once efficiency and prioritization become the guiding principles that everyone in the company follows, operational and functional benefits are bound to emerge. Promoting a culture of learning and collaboration is crucial to ensure that productivity remains high.
Continuous innovation is hard, but successful leaders can find ways to reallocate and leverage resources in new and more efficient ways. They can now look at the technology options and find a mix that benefits the organization in more ways than one. For example, an AI/ML solution that allows leaders to test-run scenarios and also gives competitor insights may be something that would be beneficial for not just them but their team members working in the underwriting department. Looking for flexible and scalable options that can drive business growth with micro-investments is a great way to make significant progress.
Moving insurance data and processes towards digitization is inevitable. The only way forward is to leverage technology in such a way that it helps people deliver their best and most innovative outcomes. Choosing the right mix of technology is crucial while setting up automation, analytics, and other digital solutions. The desired results will only be seen when the strategies and processes are built with an innovation mindset.