As the insurance industry begins to settle into the new norm of working from home (WFH), most companies will be questioning the very fundamentals of their day-to-day operating models. Staff will, of course, be looking forward to the day when the coronavirus crisis is over, and the social interaction that everyone is missing once again returns.
Despite being criticized for often not being forward-thinking or early adopters of technology, the industry has still functioned during this mass transformation towards WFH. As a result, many (virtual) boardrooms in the industry are probably asking the question, “Can we really return to business as usual after this crisis?”
The insurance industry rightly has been criticized for being significantly behind the curve compared to the rest of the financial services sector regarding the adoption of digital technologies. Banking has had to adopt practices such as mobile apps that insurance companies have been slower to develop.
Insurance companies still employ vast numbers of employees who have to show up to city-center buildings to carry out their roles, such as inputting and classification of claims forms. This paper-based way of working involves a large workforce carrying out low value and often repetitive tasks in expensive locations. Time and again it has been stated that this is inefficient. Now, it does not just look inefficient – it looks unfit for purpose.
Vast swathes of the economy have already morphed into digital and remote working. From hailing a taxi to buying clothes and sending flowers, consumers expect to make purchases from the comfort of their smartphones, tablets, laptops or computers. With bars and restaurants closed in many countries during the coronavirus lockdown, the only way any of us can enjoy a takeaway meal is by ordering through an app such as DoorDash or Uber Eats. With online becoming the new norm, there will be an increased expectation that we can continue to buy goods and services this way when the crisis is over.
As Mark Breading, a partner in the insurance transformation specialists Strategy Meets Action (SMA), wrote recently in a blog: “The more that people and businesses get used to operating remotely via digital tools, the more it will be expected – even after the virus is contained. The genie is out of the bottle, and it will be hard to put it back.”
Remote working has not only allowed the insurance industry to continue to operate, it has enabled it to keep the workforce safe by following the guidance of many governments to self-isolate at home.
Before the pandemic, the insurance industry had started on the road to digital processing. To varying degrees, insurers have digitized documents and made it easier for policyholders, claims adjusters and brokers to interact with them online.
The current crisis is forcing insurance companies, however, to seriously assess the extent to which their businesses are able to operate digitally. Insurers are aware that even if the current lockdown in many countries is lifted and people are able to return to their corporate offices, there is every possibility that the restrictions could be re-imposed if the coronavirus flares up again.
In other words, all businesses need to start looking at their contingency plans to ensure they can continue to function remotely.
The prospect of lockdowns reoccurring should be sharply focusing the minds of insurance executives into looking at their current operating systems to assess if they are able to pivot towards operating more online and digitally.
What can businesses do to significantly overhaul core operating systems to ensure they are digitally-enabled? What steps can they take to integrate new technologies that can improve operational efficiency such as artificial intelligence (AI), robotics, and machine learning? Most importantly, what do they need to do to be prepared for the new and ongoing business reality of having to run huge organizations when staff may not be able to come to the office on a more permanent basis?
It is clear that this crisis will significantly change the way the insurance industry works, creating new norms that will not be reversed.
As a result, this is an ideal time for businesses to increase their use of online platforms, to develop digital processes and systems that can withstand any future natural or manmade disasters.
The current crisis is extraordinary, and it is safe to say that few, if any businesses, foresaw the scale of the global disruption a pandemic could bring. But through great challenge comes great opportunity and when the insurance industry emerges from this pandemic, it will be anything but business as usual – it will undoubtedly be business done better.
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