Dramatic reminder of the need to shore up reserves. Business and event interruption claims will lead to both payouts and increased claims.

Technology providers which rely on high Capex, implementation and deployment costs are in for a shock.

Insurers will delay CAPEX investments, sweat assets,  defer hiring and defer major system upgrades and on premise infrastructure implementation. CTOs will move to  'Keep the lights-on" MO as witnessed by the surge in demand for COBOL programmers.

On the other Covid-19 lock-downs and isolation has changed policyholder's behaviour in two key directions and insurers will have to follow the trend.

  1. Even more reliance on Amazon and the online operations of supermarkets, bookstores, computing and device stores, wine and beer stores.
  2. Personal service from local retailers from butchers to pharmacists 

Online and Digital

Policyholders will want the same simplicity, speed and responsiveness from insurers. No more waiting for claims adjusters to collect evidence, supply chain to creak into action or payment systems to send a cheque.

Despite the restrictions noted above line of business leaders will have to accelerate digital initiatives. Some to deal with the here and now e.g. how to manage a flood of business interruption claims, litigation processes and bankruptcy applications?

Others on the post Covid-19 environment 2020 to 2023. The insurers that delight customers, reduce costs, and become more efficient will win the lion's share of premiums and profitability. But only if their technology partners also pivot and deal with the restrictions we have noted on investment and new talent.

New projects must deliver harder business performance metrics from improvement in COR to increasing customer satisfaction scores & NPS.  Reducing cost of claims and Opex by specific % points. 

AND- as we have noted without having to upgrade or change core systems which makes API connectivity even more important.

And without Capex demands, without large upfront payments and without burdening the insurer with complex training and change management work.

Digital acceleration is he mantra via business technology platforms that: -

  1. Extend online selling, distribution, MTA and claims management capabilities dramatically for customers and staff
  2. Integrate ecosystems to share apps, processes and rules
  3. Improve orchestration internally and externally
  4. Offer PAYGO licensing models
  5. Deliver short-time to value and low cash requirements

Personal service and 'local'.

As if the challenge for technology partners were not enough they have to empower insurers to become personal and feel 'local'. 

STP and automation can only be right if they free up claims adjusters to spend more time on the personal needs of policyholders. There are times when everyone wants a real person rather than a BOT to talk to. Empathy and understanding are an essential need of homo sapiens.

If your AI powered damage assessment of my long-loved MGB sports car calculates its a total loss in 5 minutes of reviewing images and telematics data I might just be upset. 

I just might want to speak to someone! Even millennials. 

Digital yet personal.

Covid-19 has changed everything for insurers and technology companies.

Next-gen platforms today.

No-Code software will come into its own. Digital acceleration is only feasible if the business itself can iterate and innovate without he need to code. Do so in native language from the desktop without being dependent on an army of the vendors developers or the consultants in systems integrators.

No-code means being able to customise workflows and processes by cut-and-paste and simple configuration tools. It might be complicated behind the scenes but for the insurer's business analysts it must be as simple as pick, choose, implement, test and publish.

If the wording on the request to upload photos and or video is a tad complicated and delaying a process then change it in minutes. Measure the change immediately as all events in a claims management system should be tome and date stamped. 

The world has changed and technology partners had better wake up the fact. This is like the time Salesforce.com hit the scene in 1999 with its NO SOFTWARE CRM solution that rocked Oracle, SAP, Siebel et al.

Now it is a world-leader that changed the economics and value of software ( its is software of course just hosted on the cloud so not requiring additional hardware or software investments by an insurer).

Of course it is challenged by lighter weight competitors like SugarCRM and Hubspot that are more flexible, less complex and lower cost and that just proves the model is right. Especially as Oracle and other legacy CRM vendors were dragged into the new world.

The new wave of established, proven and quickly deployable platforms are the Salesforce and Hubspots of today for insurers. Challenging the big and costly  on-premise vendors like Guidewire, Duck Creek, Pega and others.

Interesting times!