Home >Opinion >Views >Opinion | Barriers and solutions for life insurers in the wake of covid-19

In many ways, India faces the same challenges as many other parts of the world when it comes to responding to the issues presented by covid-19. Halting the spread of the virus requires testing and tracking to be implemented on a large scale. Additionally, social distancing requirements have locked down most of the country to slow the spread of the disease through our densely packed population of 1.3 billion people. The lockdown has helped curb the rate of growth of the virus, but it has come at a great economic cost.

Lack of physical engagement has hampered all business sectors. It is now necessary to accept that social distancing is not going to end soon. And even when it does, 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.

The new realities will require Indian insurance companies to innovate in all aspects. Business processes and client servicing will have to be recalibrated in order to respond to changes in consumer behaviour. Effectively, this will mean accelerating the digital transformation that has been talked about for years but has not yet been widely embraced.

Work-From-Home Challenges

For the insurance industry, Work-From-Home presents a unique and significant challenge. Many industries are ahead of Insurance in their digitalisation journeys. Digital tools make it fairly straightforward for them to adapt to remote work. In our industry, in India, the reality is much different. The decade old legacy Policy Administration System (PAS) that most companies rely on to run many aspects of the business—everything from customer onboarding, underwriting, billing, claims and more—have always been a weak link. But almost overnight, they have become an impediment to conducting business as usual.

These aging systems make remote connections difficult because data is hard to access. The manual workflows we use as workarounds to process an application 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?

New Age Realities & Transformation Aspects

Digital transformation, and specifically Policy Administration System (PAS) modernisation, 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 a bigger burden for them.

If they could, everyone would have preferred to modernise 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 whether or not to upgrade 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 modernisation is not an overnight event, the decision-making process that can get you started on the journey can be started today. It can become a part of corporate strategy and BCP that helps ease current hardships and offset those that may come.

That is the opportunity within the difficult times we’re moving through—to enable underwriters, claims and other staff to effectively continue to do their jobs remotely. To reduce reliance on IT and put control in the hands of the business units. To accelerate innovation so that new products and services can be more easily created and launched to respond to dynamic markets and new regulation.

Revolutionising the Insurance Industry

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 personalised recommendations, Swiggy’s ability to track food deliveries to your door, are all examples of customer service detail orientation. This has created a demand for accelerated, targeted online service. The Insurance industry however, 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. Clients can’t visit their local branch to make policy changes. In India, this presents bigger challenges than in some other countries since the vast majority of insurance sales are still being made face-to-face—perhaps around 90% of them.

That creates a big potential challenge. Generating new business premiums is heavily dependent on the in-person efforts of the agency and bancassurance sales forces. But how will those sales be made when advisors can no longer meet prospects in their homes or receive them in their offices? What happens when consumers can’t enter a bank branch to discuss a new policy? First year premiums are the engine of growth for our industry. Without them, what are we going to do?

New Age Systems & Solutions

Integrated digital front-end solutions are required to bridge the social distance gap. Advisors need to be able to connect with clients remotely—through Skype or similar tools, even by phone—and walk through a digital Financial Needs Analysis and online illustrations. In order to remotely onboard customers, tools like e-Applications, e-Signature capability, online advisor and client service portals will become essential.

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; therefore the onus is on insurers to find ways to increase productivity and efficiency. In order to persevere through such difficult times, forward-looking companies are thinking strategically about investments that will enable automation, increase efficiencies and strengthen customer relationships.

Wrap Up

Comprehensive digital strategies can make business continuity planning a much easier and more reliable process. Integrated back-office and front-end solutions can make Working-From-Home a more effective and attractive proposition. Modern digital tools like e-Applications and client portals enable all industry stakeholders to stay connected. Customers will receive the accelerated, highly personal care they desire. Advisors will be able to meet with prospects and clients either in person or at a distance. These integrated systems will go a long way towards reducing the strain on the bottom-line and make it easier for us all to stay safe and prosper in the years ahead.

The author is vice president, Wealth & Insurance Solutions APAC, Equisoft. Views expressed are his own.

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