In a viewpoint piece for Insurance Day, Paul McCreadie discussed how in an unpredictable year, the business outlook and day to day practices for insurers has radically changed. Despite this, he states that the sector has been resilient and many firms have expanded their operations.
Here are some highlights as to what will drive value for insurers as we look towards 2021:
Demand for digital
“While insurers have had to adopt digital processes to ensure that they can continue to operate, they have also been forced to enhance their digital offerings to meet customer expectations. Customer demand for doing business online has been growing year on year, and the pandemic has only enhanced this further as customers increasingly want to do almost everything virtually.
ECI-backed Avantia, the technology-enabled insurer behind HomeProtect, has thrived as a result of the increased customer demand for online services. Thanks to sophisticated machine learning technology, Avantia is able to quote rapidly online, with over 1m quotes per month being delivered in 700ms, based on 5 billion data points.
Not every business has managed to ramp up their digital processes at the pace required to ensure they meet customers’ demands, however. Generally, the industry incumbents have struggled to keep pace, and we are seeing the gap between them and the newer tech-enabled insurers continue to widen.”
Winners out of uncertainty
“Technology adoption aside, some lines of business have fared better than others throughout the pandemic. For example, home and motor insurance have continued to prosper as people still need to insure their homes and cars. With cars, some customers may deem it unfair that they have paid a premium based on the provision that they can drive all year round. How insurers react to this situation is important and has the potential to negatively impact their reputation.”
“Commercial lines brokers will be considering how insurers have acted throughout the crisis when they’re writing new business. Already, brokers such as ECI-backed Clear Insurance, are working hard for their customers to ensure that they’re placing business with firms who have acted fairly and reputably throughout the crisis.
It’s vital for insurers to rebuild customer trust in 2021, and continually think about how their actions will impact customers’ brand perception.”
“M&A has always been ripe in the insurance industry, with insurers often placing the buy and build model at the heart of their growth strategies. As we head into 2021, it’s expected that we will once again see an uptick in M&A activity. This will be driven by several factors, including the market slowdown meaning some deals have been delayed until 2021, and more generally, COVID-19 has made it harder for some businesses to operate and therefore some business owners may well bring plans to sell forward.”
2020 has been a year of upheaval for the insurance industry. For many, post the initial shock of the pandemic, this year has been the chance to get their ducks in a row when it comes to technology adoption and fast track their plans to create a more digitally native business.
As we look forward to 2021, the industry will continue to adapt and insurers who stay on the front foot of digital change and continue to put customers first, will undoubtedly fare best.
Read the full article here: https://insuranceday.maritimeintelligence.informa.com/ID1132575/Viewpoint-Digital-adaptation-and-trust-will-drive-value-for-insurers-in-2021