Coronavirus and the Insurance Industry

The Coronavirus also known as COVID-19 has had a great impact on various aspects of social life as well as business and major industries. It is impossible for one to ignore the various changes the pandemic has brought to normal day living globally. In the insurance industry, the impact is not in any way less.  The insurance industry is facing various challenges due to the uncertainties and panic accompanying the spread of the virus. The Pandemic has presented numerous challenges to the insurance industry but has also presented opportunities for adaptation and growth.

Even though businesses and for that matter Insurance companies and Intermediaries alike might have had their Crises Communication Plans and Business Continuity Plans in place for events that would disrupt their operation, very few would have predicted the magnitude of impact we are experiencing. Insurance companies and Intermediaries are having to change if not develop an all new Business Continuity Plans that is capable of withstanding the windstorm brought by the COVID19 Pandemic. The past few months has seen drastic changes in the strategies of insurance companies and intermediaries.

Drastic measures have been taken by some of these companies to safeguard their employees as well as reduce the impact of this Pandemic on operations of these companies. These drastic measures have often related to actions that allow them to change from largely personal interaction mode of selling and interaction with clients to more the use of electronic media in interacting and selling of products. Others have also engaged courier service providers in delivering insurance policies. In addition, measures taken by some companies include some cost cutting initiatives as revenues in the form of premiums and commissions are expected to be strongly hit.

The safety of employees of insurance companies and intermediaries alike is a matter that has received widespread attention as most insurers have moved to institute various measures to reduce the exposure of their employees. These measures have included providing logistics to ensure staffs observe the recommended WHO hygiene procedures, scheduling staff to work on shift system even whilst they are working from home. This presents a challenge as most employees aren’t use to working independently from different locations.

Insurance sale on a normal day is already a tedious adventure, as the rate of understanding of insurance, its benefits and hence penetration in Ghana is currently low. However, in the advent of the Corona Virus pandemic, the problem has been magnified as it has become even more difficult for sales people to discuss insurance with their prospective clients whilst they are dealing with the containment of a pandemic and all the uncertainties surrounding it. These uncertainties surrounding the Pandemic have also had an effect on renewals as well. However, Insurers and Intermediaries alike should focus energies towards ensuring that the assets and liabilities of their existing clients are well protected even during this period by ensuring that all renewals during this period are secured.

Another major threat to operations of insurance players is where there is the need for conducting a post-loss or pre-loss survey. Due to the nature and magnitude of certain risk, they cannot be underwritten without a proper assessment of these risks. Also, the nature and magnitude of some losses will require that a post-loss survey is conducted. Due to the increased risk associated with travelling within this period, it is largely challenging carrying out either of these important risk assessment exercises thereby hindering the effectiveness and timeliness of underwriting and claims settlement by insurance companies.

Over the last few weeks, there have been drastic changes in the strategies of insurance companies which have been largely driven by the use of technology. An industry which hitherto used traditional means of distributing their insurance products has been hit by the impact of COVID19 safety protocols which recommends limiting personal interaction. Insurance companies have to adapt to new ways of doing business and new means of reaching their target clients. Nonetheless, technological advancements provide endless opportunities to the industry to enable companies overcome these challenges. As rightly put by Christof Mascher, COO, Allianz SE, “How to get to a higher frequency of interaction with customers was always a big challenge for insurers. The digital age has brought us countless opportunities and frequent touch points.”

Some Insurers in Ghana have embraced insurance technology (Insurtech) to some extent taking actions to develop mobile applications where customers are able to purchase certain classes of insurance as well as allowing for policies to be bought directly from their websites. Insurance companies and intermediaries who have online applications for accessing their services have also heavily publicized these apps for the insuring public to be able to access their services even under these COVID19 restrictions. Other Insurers, even before the outbreak of COVID19 were sending electronic copies of policies written to their clients.

These advances in technology provide endless opportunities for insurance companies to overcome some of the challenges the Virus has brought with it, including the issuing and delivery of policies whilst observing safety protocols. Clients are able to access their basic insurance products such as motor insurance through these apps and call or email where more complex risk is involved. Insurance companies have also provided various payment platforms including Mobile Money Platform, Bank Transfer Details, Mobile Payment Apps to provide clients with ease of payment during this period.

Also, industry players have also resorted to online platforms for correspondence with their clients, employees and the general public. Emails and Video conference services have been heavily used by insurance companies and their staff for correspondence and meetings respectively. An expected challenge with correspondence via video conferencing is poor network at some locations as video calls require wider network bandwidth which is unavailable to some people.

Another opportunity presented by the restrictions of COVID19 is the increase in screen time of people across the globe as some individuals seem to have more time off work to spend on social media. We have observed an increase in online activity of most insurers in their attempt to take advantage to boost their online presence and hence increase awareness of their brands. This is a perfect scenario of opportunity meeting preparation. These social media advertisements are often graphical illustrations of different products offered by the companies; new guidelines and portals to access their products; COVID19 awareness messages etc. which are aimed at deepening the brand of those companies.

Furthermore, we believe and support the popular outcry by speakers and leaders across who have used the COVID19 opportunity to call on all persons to take advantage of this period to learn more, so when this storm is over, they will come out stronger, smarter and more productive. Insurance Professionals must take advantage of this period to take up courses on online study applications such as Coursera, EDX, LinkedIn Learning, etc. There are available free courses and courses with very minimal fees on all these platforms.

These are hard and uncertain times for the insurance industry. The question that remains is, whether the actions taken by industry players is capable of suppressing the challenges presented by the COVID19 Pandemic whilst taking advantage of the opportunities presented by it. 

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