COVID-19 has impacted almost every aspect of our everyday life and at times it is hard to see past the negative implications it has posed. However, there are some unique trends to consider within the insurance industry. As brick-and-mortar doors open, planes take off and life begins to return to “normal” -- insurance carriers and brokers will likely see that improving financial stability will increase industry demand.
With an influx of demand for insurance coverage for the items above – it poses the question of whether Insurance Companies are ready for this sudden change in demand?
What trends we can anticipate to see influence the Insurance landscape post COVID:
- Increased demand for auto insurance
- Increased demand for health insurance
- Financial stability and an increase in per capita disposable income
- Digital acceleration within the insurance industry
- The number of employees returning to work
Increased Demand for Auto Insurance
With a higher level of financial stability coupled with increased employment and the need to transition from an at-home work environment to an office or hybrid work situation – the need for transportation is far greater than it was during the pandemic.
At the peak of the pandemic, many insurance companies offered their customers reduced billing for auto insurance or the ability to pause their auto policies, due to remote work, reduced wages, unemployment, or medical adversity. As we transition towards a post COVID environment, there are two opportunities that Insurance Companies can capitalize on.
- Within most policy communications, there is a compliant communication window in which insurance companies can contact their policyholders with automated notifications. Insurance companies now have the unique opportunity to proactively alert policyholders to take the necessary steps to become re-insured and/or change policies. Being proactive allows companies to build brand trust while potentially eliminating the possibility of policyholder churn and policy cancellation.
- The increased demand for transportation creates a need for insurance operators. Whether that be to issue new auto insurance for customers buying new cars or renew auto policies that may have been suspended or change policies that may have been reduced. Thereby forcing the need for more policy related services and creating the ability for insurance companies to adjust premiums accordingly.
Taking this all into consideration, we can anticipate that Insurance Brokers/ Carriers will see a large increase in the number of policies being issued and or renewed, as well as more claim submissions as a result of people hitting the road again. All of which begs the question of whether you are prepared to address and respond to these needs in a timely manner given your current operational processes?
Increased Demand for Health Insurance
Due to an array of factors such as unemployment, reduced work hours, lower income levels, and or redistribution of funds – customers who were normally enrolled in private health care were able to meet the expanded Medicare eligibility, during the pandemic.
The rising demand for health insurance policies coupled with increasing total health expenditure presents an opportunity for insurance operators to expect an influx of policies as well as the need to manage and alert customers of rising premiums for both personal and business related health insurance needs.
Financial Stability & An Increase in Per Capita Disposable Income
We can anticipate that per capita disposable income will rise following the pandemic, reinstating customers' confidence in their financial stability. Customers will start to resume larger ticket purchases that may have been paused such as: specialty event tickets, and travel-related expenses, etc. Insurance carriers and brokers can bank on customer demand for industry operators’ services to increase in areas such as policy issuance, renewal or changes, quote follow up, and claim issuance.
Susan Rivera, Tokio Marine HCC CEO, commented that “We [now] have a tremendous opportunity to embrace change and rise to these new challenges, and reflect and reinforce why our industry exists” Susan explains that “the role of insurance is to provide a healthier and safer society. Insurance provides tremendous protection for the wealth of society, it reduces fear and uncertainty, helps stimulate growth and production, and [ensures that] economic security is maximized”
With the challenges that individuals have faced or may still be facing during the pandemic and in the recuperation phases still yet to come, the insurance industry is needed more, not less. Insurance policyholders and claimants will rely on their insurance companies to innovate within their current processes to create a customer journey that reinstates their sense of trust and security and reinforces consumers increased buying habits.
If COVID-19 has taught us anything, it is that we need to be prepared to anticipate whatever may come our way. In doing so, we now need to respond effectively and efficiently to customer queries and claims –review and renew business processes and contingency plans while proactively taking steps to restore policyholder confidence.
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