View this article online: https://www.insurancejournal.com/news/national/2020/09/09/581458.htm

COVID-19 Cast as a Catalyst for Change. Now What?

Look around the corner, what do you see?

Answering that question is the most important part of my job as an author, speaker, advisor and VC investor. It’s a role that requires a hint of arrogance, since peering around the corner means you believe that you’ll see what others have missed. It’s also a role that requires a big lump of humility, since it’s so easy to mistake a mirage for a trend.

Looking around the corner means recognizing some fundamental, paradigm-busting change in the world, like tectonic plates shifting under our feet to give rise to new continents. Whole ecosystems begin to take hold as entrepreneurs rush to build new categories of business or entirely new industries. The moment you see the platform shift is the moment you can glimpse around the corner.

Everyone will see the shift, eventually. The hard part is to feel the tectonic plates ripple under your feet before they’ve become an earthquake. Sectors as diverse as media, transportation, and banking have experienced this in the past. Insurance is experiencing this now.

Bill Gates recognized the subsequent platform shift with his famous Tidal Wave memo foreseeing the impact of the Internet. The entrepreneurs and VCs who built on this insight had the opportunity to do quite well for themselves — there’s a long list of people who built their fortune on ecommerce, to name just one aspect of the Internet tidal wave. The same can be said of the Smartphone.

We need to recognize COVID-19 also presents a platform shift as profound as the PC, Internet or Mobile.

Of course, it’s not a computing platform per se. But the dynamics and implications for those of us trying to predict the future are much the same.

These implications fall into three categories:

1. Many long-held assumptions are thrown into chaos. Workers can’t be as productive if they’re not in the office five days a week. The only way to deliver medical care is in the doctor’s office. These kinds of presumptions look quaint in hindsight, yet they were bedrock not even a year ago.
2. Many legacy approaches become obsolete. Much as the Internet made various aspects of media delivery outmoded – I’m looking at you, Blockbuster – the COVID platform shift is a massive headwind for traditional delivery of education, retail, and B2B marketing, to name just a few.
3. Entire new businesses and even new industries are born. Ride hailing only became practical as a result of the smartphone platform shift. Obviously the COVID shift has radically accelerated remote collaboration tools – a gift to Zoom and Slack. Perhaps a bit more subtle is how it put both telehealth and ghost kitchens on wildly new trajectories, or how it’s turning mental health coverage for stressed employees into a standard employee benefit rather than an exception.

Recognizing that COVID has the hallmarks of a platform shift and identifying the direct implications is just the start of peering around this corner. It leaves open the question, Now What?

The insurance sector provides great fodder here. It has certainly seen its fair share of assumptions being thrown into chaos. “Business interruption” is at risk of taking on an expansive new definition. Workers’ Comp is seeing presumption rules for essential workers dictated by state legislatures. And even basic assumptions of driving patterns no longer hold, at least in the near term.

COVID is nudging some aspects of insurance into obsolescence. Like many other retail outlets, brick-and-mortar insurance agencies need to ensure they can serve customers through digital channels. This doesn’t mean traditional insurance brokers disappear, but those who rely solely on a physical storefront might. COVID also tilts the field in favor of self-service, remote handling of claims. Enabling the customer to document property damage without a visit by an adjuster might have been an interesting pilot pre-COVID, but now it’s an imperative across the industry.

The prospect of entirely new industries to serve, as a result of the platform shift, should be particularly intriguing to commercial insurers. Just as ride-hailing by smartphone created the need for novel auto insurance products, the growth of telehealth and ghost kitchens on the COVID platform creates the need for novel insurance products once again. Show me an insurer or an insurtech building a product tailored to telemedicine practices, and I’ll show you a company pursuing greenfield opportunities with gale-like tailwinds.

As the Danish proverb goes: It is difficult to make predictions, especially about the future. Identifying the once-in-a-decade instance of a platform shift – something as profound as the Internet or COVID – is the first step. Though terrible as it may be overall, COVID is also a catalyst for change. Let us hope some of that change can be for the better.