Is COVID-19 forcing the digital transformation of Commercial Insurance?

Jacqueline McNamee 30.04.2020
Necessity, they say, is the mother of Invention.  Why change unless there is some compelling reason to do so. Without a catalyst most change or improvements occur incrementally. But occasionally events are so seismic in nature that they have a fundamental impact. The meteor collision with earth that caused the mass extinction of the dinosaurs is the one we first learn about in school.  Less cataclysmic events such as two world wars led to huge changes that transformed societies and economies.
Arguably, with the COVID-19 pandemic, we are in the middle of another defining event that will have long lasting consequences for all of us.  Clearly the impact on humanity is profound with millions infected and many thousands dying.  In the commercial world businesses large and small are relying on Government for life support, at least in the short term. Without that financial support many would cease to exist including large companies with famous and enduring brands.  Size is not necessarily a guarantee to survival – look what happened to the dinosaurs.
The lockdown tactic most Governments are using to prevent the spread of the virus and the resulting advice to work from home is already transforming organisations. Those that can adapt quickly to the new reality are more likely to survive and prosper. This may be the opportunity that Insurtech businesses need to truly prove their worth.
When the Prime Minister announced the UK lockdown on 23 March and urged all who could to work from home, it caused a certain degree of panic in some quarters of the Insurance industry.  Business continuity plans had to be triggered.  However, temporary sites maintained for business continuity purposes such as a fire or flood were not an option.  Business had to cope with their entire staff working remotely from each other. What’s more, how long this state of affairs would last was, and still is, unknown.  The possibility of months of disruption continues to loom over the industry.
For businesses traditionally reliant on old technology this was and is a major challenge. Rumours circulated of London Market Brokers and Underwriters taking reams of paper files home. Similarly stories spread that it took some companies days to implement robust and secure communications capabilities with their staff.  There were few, if any, Commercial Insurance Businesses that weren’t severely disrupted.  In effect the system broke down for awhile.  A month later and it’s questionable if customer service has been restored, or how sustainable the necessary work-arounds are.
Businesses that were able to work normally were those agile organisations enabled with new technology.  Cloud-based technology and modern communication capability allowed businesses like C-Quence to continue operating as normal even though all staff had been working from home nearly two weeks before the general lockdown was announced.
The use of third party data to facilitate precise and consistent underwriting was not disrupted. Neither was the capability to automatically complete Compliance checks or produce complete and accurate policy documentation at point of sale.
More importantly Brokers were able to continue to place their clients’ risks from their own homes on their own computers or tablets as C-Quence’s cloud based trading and underwriting platform continued as normal, as did all communications with underwriters.  The company has seen a marked uptick in unique users over the last five weeks.  It is the Insurance industry parallel to spike in usage of online delivery companies like Amazon and Ocado and is just one example of an Insurtech being able to prove it’s worth at this critical time.
There are others.  Qlaims which provides live video streaming for Loss Adjusters and claims handlers to view property claims remotely has said initially adoption had been slow in the UK, but understandably there’s been a surge of interest recently.  The tech connects to any smartphone via an app or browser allowing instant remote viewing.
This has been backed up by others within the industry such as Tom Helm, head of claims consulting at Willis Towers Watson PLC, who concede the shift to working from home is likely to establish new working patterns, once the world emerges from the pandemic.
But what about the future? Imagine the pandemic is over.  Will we simply go back to “doing thing things the way we used to” or will we have moved on?  Will our expectations have changed?  Will our customers now expect more now that they have experienced quicker, more reliable, accurate and tailored service?
The challenge for the traditional players in the industry may well be to adopt and adapt to what promises to be a new order, one that is service driven underpinned by technology. Companies are already contemplating change which in some measure will also be driven by the demands of their own staff who have now experienced the reality of flexible working.
For now, some Insurtechs have an advantage and are setting the standard. The challenge is to maintain and promote the lead they have.

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