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Priorities for Insurers in a Post COVID-19 World

by Kevin Dunn, Vice President Marketing and Business Development, FJA

 

COVID-19 has dramatically changed the way customer’s view, buy and assess the products they buy and insurance is no exception.  Companies in all industries have had to change the way they operate to manage the critical processes that impact the customer’s experience and purchase decision.

Home is now the center of the universe for both consumers and the companies that provide products to consumers. This critical link between home and the outside world is now paramount. Whether or not this will remain true post Covid is difficult to say. Perhaps Yogi Berra said it best: “It’s tough to make predictions, especially about the future.”

This pandemic however will likely have a permanent impact on the way companies operate. Industries whose high-flying growth helped create the modern global city have necessarily abandoned ritzy downtown offices for on-line alternatives and companies are seeing the benefits.

According to McKinsey & Company, “Many companies have been forced to accelerate investment in e-commerce and expand their capabilities such as in regards to customer delivery. The ramifications of these shifts will be felt for some time and continue to shape consumer choices long after the pandemic is over.”

Remote Work

For most companies remote work has lowered costs and increased productivity per employee.  An on-site worker for example costs an employer an average of $10,000 per year in real estate expenses and in a recent FlexJobs survey 51% of respondents said they were more productive when working from home. In another survey, company’s report seeing productivity of remote workers increasing by as much as twenty five percent compared to when they worked on-site.

Additionally, companies are also no longer confined by geography when recruiting key employees and remote work has fostered an improvement with employee loyalty. Eighty one percent of respondents from the FlexJob survey said that having remote work options would increase their loyalty to their employer.

Not only are companies understanding the benefits of remote work so are their employees. Many have taken this opportunity to move to areas more affordable leading to significantly improved living conditions. According to the same FlexJobs survey, 73% said that since COVID-19, working from home improved their work-life balance. This allowed them to spend more time with their partner, family or pets. More than one third of respondents in the FlexJobs survey indicated they spent two or more hours each workday commuting to and from the office.

Eliminating the commute is one of the many reasons remote workers have been more productive. Remote work has fostered happier, healthier and more productive employees who have less commuting stress, greater location autonomy and a better work-life balance. It will be extremely difficult, even foolish to’ buck this trend.’ Companies will have to embrace a new agile, digital, remote workforce.

For insurance companies, several have come to the realization that many operations can be effectively undertaken away from the office with employees working virtually while maintaining productivity and a streamlined service. In fact, COVID-19 is accelerating the digitization of back-office processes. Critical processes like pricing, underwriting and case install must and can be made accessible and manageable to a new distributed, on-line workforce.

The pandemic is powering a permanent shift away from office-based teams which will have a dramatic impact on company culture. Insurers must adopt tools that foster collaboration and keep workers engaged. Consequently, control and security frameworks must be hardened to keep up with increased cyber threats.

A New Customer Engagement Model

Home is the new primary access point for customer interactions. As a result, insurers will have to embrace a new on-line consumer engagement model.

The shift away from face-to-face distribution will gain momentum and self-service will increasingly dominate customer interactions. Indeed, regulatory supervisors have been proactive in encouraging the use of digital channels with initiatives such as encouraging digital service delivery and relaxing previous face-to-face requirements.

As consumers have grown accustomed to buying more and more products and services online, expectations for fast delivery times continue to rise. On-line consumers of insurance will therefore expect real time feedback during the insurance purchasing process. Insurance companies will be forced to integrate front-end consumer facing applications to back-end systems in order to facilitate automated workflow and instantaneous product recommendations and coverage approvals.

Highlights and Recommendations

Remote work has fostered a familiarity and trust with on-line services. This has removed many of the barriers to information sharing on-line. Policyholders and prospects are likely more willing to have their personal data used to provide them a more personalized product or granular premium.

Integrating consumer facing applications to back-end systems will better enable tools like AI and machine learning. By engaging the customer in an on-line session, insurance companies will be able to ascertain consumer needs in real-time and make offers based on the customer’s unique situation. Insurance generally follows life.

As we begin to emerge from this crisis, a new on-line engagement model will facilitate a clearer and more holistic view of how customer’s lives will have shifted and how an insurance company can best meet the customers’ newly discovered needs.

As on-line users reveal profile, usage and expectation data, insurance companies will be able to more effectively:

  • Tailor product and service offerings to customers’ needs
  • Increase credibility and boost consumers’ trust in the company
  • Increase customer engagement
  • Facilitate the attraction of new customers

The recent technical innovations triggered by the pandemic have been accelerating in response to the challenges of life under lockdown.  Many of these innovations have been introduced incredibly quickly, demonstrating just how fast things can change. A return to ‘business as usual’ would be a monumental failure of imagination. We’ve learned just how vulnerable business can be to disruption and now industry has the opportunity to make sure we remain resilient. This could be the most hopeful legacy of these most challenging times. The insurance companies who embrace these new realities will be the winners in this post COVID-19, changed world.

Addressing Radical Change

Today the insurance sector is undergoing radical change driven by digital transformation, cost reduction, increased competition, and the need for better engagement tools to drive a superior customer experience.

COVID-19 has only accelerated the rate of this radical change.

FJA delivers technology solutions to help carriers profitably combat current and future challenges, no matter how big or small, and that facilitate a competitive edge. Our end-to-end or modular solutions allow carriers to profitably build, sell, manage and distribute products that meet their customers’ needs. They are designed to address the specific needs of insurance carriers and their customers by automating the critical processes that facilitate an insurance company’s ability to improve profit and deliver superior customer experiences.

Companies report seeing productivity of remote workers increasing by as much as 25 percent

With home as the new access point of customer interactions a new customer engagement model is required