Freedom with responsibility In the fall of 2019, I spoke with an industry colleague who works for an American insurance company. The office ...
Freedom with responsibility
In the fall of 2019, I spoke with an industry colleague who works for an American insurance company. The office where the person normally works when he or she is not forced to work from home is a centrally located office in Stockholm that has become a central meeting point not only for customer meetings but also internal meetings for colleagues who come from other offices within the organization.
As with many other offices located in the more central parts of Stockholm, office space is often limited due to the high price per square meter that has been standard in recent years. The person noted that in principle it was always full in the office and all-conference rooms were always occupied and suggested to the CEO: n that one might establish some form of schedule where those who could and wanted to work from home on certain days could do so in order to free up vacant office space for those who came into the office. The proposal was received with a cold hand by the CEO, who explained that it would then be impossible to keep track of what the employees actually have on the days.
Today, employees are offered to work from home permanently at the larger insurance companies if they so wish even after the pandemic is over, both in the USA and abroad.
The time of innovation
With the exception of the Insuretech companies, which constantly develop products and generally do so based on new behavioural patterns and do not digitize old ones, several digital achievements have taken place in the insurance industry in the last year:
An insurance company now offers its private customers compensation via Swish
Distribution is shifted: Some airlines offer their customers the same travel cover as in the home insurance in the ticket price
A platform for a digital occupational pension for self-employed people is offered by one of the larger online brokers
The circular economy is forcing out insurance companies in the digital world that suddenly offer insurance on demand and not just annual contracts
The risks are changing
Not entirely unexpectedly, the number of reported claims during the corona crisis has decreased for all insurance branches. Above all, the number of reported claims for home and villa insurance has fallen as more people work from home. Claims also decreased in motor and motor vehicle insurance and the number of reported claims in corporate and property insurance decreased by as much as 9.1 percent. This according to statistics from Svensk Försäkring.
On the other hand, what has hit the insurance industry hard in terms of results is business interruptions in various forms. Two weeks ago, the British Supreme Court ruled that corporate interruption insurance should apply even if the business interruption was caused by the corona pandemic.
This will cost the insurance industry somewhere between 3.4 and 7.4 billion pounds, equivalent to 39-84 billion kronor and may open up for a further interpretation of interruption insurance. So far, the USA insurance market has resisted and in the legal proceedings that are underway, the insurance companies where claims have been made continue to maintain that this is the exception under the insurance terms.
Not entirely unexpectedly, the demand for interrupt insurance that includes protection against pandemics is judged to be very high, the analysis company GlobalData predicts in a survey. One of the more surprising results of the survey is that travel insurance is expected to benefit from the pandemic. As with interruption insurance, this may be because customers want to be more careful when booking travel in the future, and therefore take out travel insurance to a greater extent.
It could thus be the case that several insurance products may recover and even benefit in the long term from the corona pandemic, despite the fact that the pandemic has been challenging for many segments in the insurance industry.
The will to change
In a survey conducted by the consulting company Deloitte, managers of the 200 largest players in the insurance industry were asked about the lessons learned from Covid-19 in order to promote change in the way they do business. An example is the Ping An Life Insurance Company of China, which with the help of an advanced risk model handled more than 18 million policyholders in 2019 and approved 96% of all insurance cases through automated underwriting. This reduced the processing time from an average of 3.8 days of manual underwriting to 10 minutes.
With the ultimate goal of better using AI and more advanced calculation models to better predict risk outcomes, hopefully more time is freed up for the insurer or analyst at the insurance company to interact with their customers and other partners. The importance of an adviser, regardless of whether he is an insurance company, is an insurance manager with a customer or an intermediary, efficiently uses and analyzes data in order to make the right decision and provide the right advice is becoming increasingly important in the market of the future.
But business is not just done through statistics and analysis. As many studies show about the effects of the pandemic in recent years, the picture is confirmed by the fact that it is through social gatherings, small talk with colleagues and in the customer meeting that different tasks are solved. To borrow a partner's expression, we will need to be both physical and digital in the future. More digital, quite simply.