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Carriers

How Life Insurers Can Successfully Overcome Social Distancing Challenges and Thrive Post Pandemic

Ray Adamson
July 2, 2020

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Insights » Insurance » Carriers » How Life Insurers Can Successfully Overcome Social Distancing Challenges and Thrive Post Pandemic

The response to the COVID-19 situation has taken many forms around the world. Schools closed, sealed borders, limited public gatherings and business now being conducted in a Work From Home (WFH) environment. Mixed messages from governments and various strategies of defense are only adding to our confusion and concerns.

As difficult as these times are, the good news is that, across the globe, the differing approaches to locking down the virus have tended to converge. It’s safe to say that all countries are looking to ‘flatten the curve’ and physical distancing measures are in place across the board.

These measures, which not too long ago would have seemed far-fetched, appear to be having an impact. The number of new cases, as a percentage of the population, in many places, is levelling and dropping. But this has been achieved at the cost of physical engagement—which we feel will have significant effects on society and business going forward.

Various countries/regions are considering loosening their isolation measures, but it’s difficult to predict when social distancing will end. Even when these measures are relaxed, we’re likely to see permanent changes in the way we live and work. Travel will likely not be as easy and convenient as it used to be. There will be fewer in-person meetings and more remote connections. For some, the days of going to work in a crowded office may be over.

This new reality will require insurance companies and distributors to find innovative ways of running their businesses, relating to advisors and clients, as well as reacting to swings in markets, consumer behavior and regulation. It means accelerating the digital transformation that has been talked about for years, but has not yet widely been embraced.

Working from home presents unique challenges for life insurers

The level of technological adoption and modernization is not uniform in countries, let alone around the world. In these difficult times, insurance companies are grappling with how to use whatever level of technology they currently have to best serve customers and maintain daily business operations at a distance.

A recent Celent Poll revealed that 97% of respondents had officially invoked their Business Continuity Plans (BCP) or specific pandemic flu plans. In almost all cases, those plans require everyone except for a handful of ‘essential’ employees to work from home.

For the insurance industry, WFH presents a unique and significant challenge. Many industries are much further along in their digitalization journeys than insurance. Digital tools make it fairly straightforward for them to adapt to remote work. For many insurance companies the reality is much different.

The decades old legacy systems that most organizations rely on to run many aspects of the business—everything from claims, to billing, to underwriting and more—have always been a weak link. But almost overnight, they have become very severe impediments to conducting business as usual.

These aging systems make remote connections difficult. Data is hard to access. The manual workflows we use as workarounds to process an app or cut a cheque are hard if not impossible to implement. How can underwriters and claims staff perform effectively when the data they need is not readily available?

Digital transformation and specifically, Policy Administration System (PAS) modernization, was always a consideration—something that had to happen, someday. CIOs have spent years working to maintain their aging infrastructure and create patches that enable their business to continue to compete. The new reality creates an even bigger burden for them.

If they could, everyone would have preferred to modernize already. We’d already be reaping the benefits of rules-based back-office systems that enable streamlined data flows, better integration, easier remote access and quicker responses to market changes.

Now, almost overnight, those longer-term considerations about upgrading legacy PAS and migrate their data to a modern platform, have been turned into issues that need to be confronted today.

The tipping point is here.

While modernization is not an overnight event, the decision-making process that can get you started on that journey can be initiated today. It can become a part of corporate strategy and the Business Continuity Plan (BCP) that helps ease current hardships and offset those that may come.

The opportunity within the difficult times we’re moving through is to:

  • enable underwriters, claims and other staff to effectively continue to do their jobs remotely
  • reduce reliance on IT, put control in the hands of the business units
  • accelerate innovation so that new products and services can be more easily created to respond to volatile markets and new regulation.

Life insurers bridge the social distance gap to deliver on elevated customer expectations

For years, insurance companies have focused on how to meet customer expectations that have been heightened by consumers’ online interactions in other industries. Amazon’s One-Click shopping, Netflix’s highly personalized recommendations, even the ability to track food deliveries to your door have created demand for accelerated, targeted online service.

Insurance has not kept pace.

Our current situation has taken customer expectations for online service to an even higher level. In a time of stringent social distancing, advisors can no longer meet face-to-face with clients—making online interactions and digital service a must-have rather than a nice-to-have. In most parts of the world, this is a significant challenge since the majority of insurance sales are still being made face-to-face, and the infrastructure to support accelerated, highly personalized online exchanges is not widely implemented.

So, how will sales that generate all important new business premiums be made when advisors can no longer meet prospects in their homes or receive them in their office? What happens when consumers can’t enter a branch to discuss a new policy? First-year-premiums are the engine of growth for our industry. Without them, what will happen to our industry?

Integrated digital front-end solutions are required to bridge the social distance gap. Advisors need to be able to connect with clients remotely—through web meetings, even by phone—and walk through a digital Financial Needs Analysis and online illustrations in order to remotely onboard customers, tools like eApps, e-Signature capability, online advisor and client service portals will become essential. The entire sales process is being reimagined. The traditional series of face-to-face meetings to gather customer information, illustrate concepts, complete apps and obtain signatures are no longer possible in our current reality. Instead, remote and more automated digital workflows are needed.

What will the life insurance business look like post pandemic?

Social distancing has put the spotlight on the need for insurance companies to reduce spending and maintain margins even more than before. Less face-to-face interaction puts pressure on revenue. Market volatility affect the investments that underpin many products.

The onus is on insurers to find ways to increase productivity and efficiency. In order to persevere through difficult times like this and prepare to meet the challenges of those to come, companies should be thinking strategically about investments that will enable automation, increase efficiencies and strengthen customer relationships.

In this context, Equisoft is speaking with carriers all over the world about how they can leverage digital solutions that address their specific needs and that will help them make business continuity planning more effective.

Integrated back-office and front-end solutions can make working from home a more effective and attractive proposition. In an emerging world of virtual transactions, Equisoft’s modern, rules-based PAS offering coupled with advanced digital tools like e-Apps and client portals enable all industry stakeholders to stay connected.

With the proper technology ecosystem in place:

  • Companies will be able to provide their customers with the accelerated, highly personal care they desire
  • Distribution intermediaries will be able to provide an outstanding user experience across all interactions from new business submissions to claims
  • Advisors will be able to effectively meet with prospects and clients virtually.

These integrated solutions go a long way towards reducing the strain on the bottom-line and will make it easier for us all to stay safe and prosper in the years ahead.

COVID-19 has reset the rules of the game and thrown up new challenges (as well as opportunities) for life insurers when virtual becomes the new normal. By offering a comprehensive digital offering spanning the entire value chain, Equisoft has geared up to help life insurers develop new products, create world-class digital customer experiences, respond quickly to emerging changes as well as effectively leverage data to generate new business opportunities.