Our recent blog series has explored the impact of COVID-19 on insurers. It has highlighted some important considerations as insurers respond to, and recover from, this period of significant uncertainty.
Although COVID-19 vaccine developments are, fortunately, beginning to show promise, people around the globe are coming to accept what the medical experts have said all along – that we may be dealing with this health threat for some time. That said, while officials may now enforce tighter protective measures, such as mandatory mask-wearing in many places, there may be reduced public acceptance of extended or reinstated lockdowns.
Significant uncertainty about health and economic impacts remains. Yet insurers, and other enterprises, cannot exist in limbo for another 18 months or more. While insurers must continue to pay attention to financial resilience, there is a danger that those who only “plan for the worst” will be left behind by those with a vision to “recover and thrive” – those able to identify and act upon new needs and opportunities.
There are some actions insurers can take to strengthen their businesses, regardless of which future economic or market outcomes come to pass. Deloitte’s own research explores a range of scenarios that insurers now face and considers how to deal with the road ahead in order to thrive.
For example, digital transformation and great customer experience were key to insurers’ success before COVID-19. Changing customer expectations through lockdown and beyond has only strengthened the need to invest in relevant initiatives.
Alternative risk-transfer mechanisms, including peer to peer, are emerging overseas and in adjacent industries. Thus insurers now, more than ever, need to ensure that their service offering fits with the expectations of increasingly tech-savvy customers. How much of the perception that insurance is “sold, not bought” is a result of customers stumbling over wordy policy documents or navigating lengthy underwriting processes?
The future of work has been thrust upon us and insurers must ensure that, as well as offering flexible work arrangements to attract and retain talented teams, their product offerings adapt to reflect customers’ own new ways of working. Insurers need to focus on operational efficiency, not just as a cost-saving measure, but especially to reduce friction in customer experience and to accelerate time to market when responding to changing needs.
Our sincere hope is that insurers will explore the challenges and opportunities this blog series has identified. We are confident that most will have already. Doing so will ensure greater resilience in today’s changing landscape, setting in place a firm foundation and creating momentum for good.
Catch up on the series at the links below:
Richard has enjoyed a long and diverse career in the general insurance industry, in the UK and New Zealand. He has been the Appointed Actuary for one of New Zealand’s largest insurance groups, and developed Pricing and Customer analytics for one of New Zealand’s best known insurance brands. Richard’s focus is on helping insurers and other businesses to understand and provide for their customers’ needs, achieve their strategic goals and remain financially sound in the long run. Our talented team works with colleagues from across our wider Deloitte firm and Deloitte’s global network to advise on customer analytics, product design and pricing, liability valuation, capital, and regulatory matters, to help firms navigate an increasingly complex commercial environment.
Having worked in the NZ Life Insurance industry for most of the last twenty years, I delight in sharing my deep understanding and insights gained from being involved in a range of roles and projects that touch on all aspects of the business. One of my strengths is the ability to bring to light key issues and explain complex technical matters in simple terms. Recently I have been applying this skill to assist insurers in understanding the impacts of IFRS 17 on their business and planning for implementation of the new standard.