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When the COVID crisis struck, many people were left wondering how the industry was going to cope with the disruption. As it turned out, the insurance industry hardly broke stride in managing the crisis. The requirement of automated placement was forced on the industry and the industry has ably risen to the occasion.
In its September 2019 “Quantum Leap” strategic plan, SCOR tried to predict the trends that could unfold over the next three to five year period. The digital transformation that they said could take three to five years actually unfolded staggeringly fast – taking in some cases, just a matter of a few months!
Business leaders like Toby Esser, chairman of AFL Insurance Brokers, are finding that they don’t need paper – they can conduct business electronically and that they can very easily process electronically too. The need of the hour now is to ensure that there is a continuous improvement in the systems that are used to process electronically.
David Flandro, Managing Director, Analytics, at London-based Hyperion X is of the firm opinion that the COVID-19 crisis has precipitated a real growth in online trading and in digital marketplace trading. He also feels that the insurance industry has now learned that it is not absolutely necessary to do everything face to face and that a lot of the business can actually be carried out virtually. And, this is true not just for the business operations but also for the business relationships. Flandro says that this is true not only for the small stuff but also for the larger and complicated aspects of the insurance business as well. Even new business opportunities can be created virtually – using technology.
Jean-Paul Conoscente, CEO of SCOR Global P&C, opined that as insurers were able to continue to run their businesses remotely, continue to have client meetings, quarter closings, settling of claims and carrying out audits, is actually a great advantage for the industry. However, he also cautioned that it significantly increased the risks inherent with digital transactions.and highlighted the need for investments into strong cyber security and business process environments.
Isabelle Santenac, EY’s Global Insurance Leader, noted that the lockdown had highlighted problems with operating models for some of the insurers and this resulted in them having to revisit and conduct an in-depth review of their supply chains. Many industry sectors including insurers had sought help early in the lockdown to create call centres back in their own countries as many of their call centres could not operate. Additional issues with the supply chain for insurers cropped up when it was found that some third-party providers did not have an acceptable level of security for their home-working employees.
Some insurers made changes in quick time by switching to other service providers as it was placing unacceptable levels of risk on their own IT infrastructure with parts of the supply chain being too weak in terms of security.
Some insurers with business processes that were off-shored overseas, faced concerns with work continuity due to multiple issues like a less than robust infrastructure, lack of equipment and inadequate password and firewall protection. They are now considering if these hurdles can be easily overcome or if a re-shoring of processes are necessary.
Is digitisation here to stay?
Most industry leaders realise that some of the simpler tasks which have been standardised and digitised, will never be done face-to-face again. However, some of the very high-value and complicated deals will almost certainly get back to being high touch.