NEXT NEW NORMAL - HOW CORONA IS PERMANENTLY CHANGING THE INSURANCE INDUSTRY

Posted 07 August, 2020

The corona pandemic hit the insurance industry quite unprepared in March 2020. Business has been going on since then - in economically uncertain times and under completely new framework conditions. A recent study by the Leipzig Insurance Forum shows how well this works for insurers.

Despite the many imponderables, insurers in Germany have largely adapted to the new corona conditions without any problems. And could even benefit from the digitalisation boost caused by the crisis. That is one of the conclusions of a current study by the Versicherungsforen Leipzig.

Against the background of the pandemic, the VFL scientists wanted to know what opportunities and challenges the industry in general and the individual company divisions in particular will face? Does Corona permanently change the organization and structure of insurance companies?

 

Far-reaching changes in the world of work

 

The study shows that one of the greatest opportunities that the corona pandemic will develop for the insurance industry will likely be the setting of new standards in their working environment. In order to protect against infection, more than three quarters of the employees were still in the home office at the time of the survey.

The transition to working from home - not a standard for most insurers before the pandemic - went smoothly for 88 percent of those surveyed. The home office is so popular that a large number of them hope to be able to maintain their newly gained flexibility after the crisis.

Since almost 90 percent of the respondents still want a flexible choice of place of work after the restrictions imposed by Covid-19, there are still some hurdles to be overcome before the home office can be successfully established in the long term. During the transition to mobile working, 60.3 percent struggled with the new form of collaboration.

The professional and informal exchange in particular is a challenge in the new world of work. In second place with 52.5 percent, management issues such as remote management cause difficulties.

In order for mobile working to be sustainable in the insurance industry, it is necessary in the future to create new framework conditions through suitable communication structures that minimize the challenges that have arisen and enable the advantages of flexible cooperation to be further expanded, according to one of the conclusions.

 

Corona pandemic is pushing digitization

 

The further development of digitization in the insurance industry during the pandemic will also remain exciting. The "necessity to adapt" led to a surge in digitization in the insurance industry, which will still be noticeable after the crisis.

The respondents were able to determine that digital contact has increased significantly both by customers and intermediaries. In other areas such as claims management, digital contact options such as email, chat or web forms were increasingly used to report a claim.

The contact restrictions have obviously promoted digital customer contact. In the future, customer demands for digital contact options will continue to increase.

 

Falling new business and increasing demand for business interruption insurance expected

 

In the opinion of those surveyed, the crisis is having a particularly negative impact on the areas of capital investment and sales. A significant decline in new business was observed here. In the product area, the industry reacted to the crisis at short notice with selective adjustments to its products and, above all, services, for example by designing payment modalities more flexibly or special tariff upgrades for system-relevant professions.

No significant changes in the product landscape are expected in the long term, but despite all the discussions and criticism, growing demand for business interruption insurance is expected.

Around 230 employees from different corporate divisions in the insurance industry took part in the survey, which was carried out in June and July 2020. (dr)

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