While COVID-19 will have a significant impact across the insurance value chain, many opportunities for digitalization will be created, says GlobalData, a leading data and analytics company.
Daniel Pearce, Senior Insurance Analyst at GlobalData, comments: “Product development will be halted as liquidity concerns will limit the availability of funds required to develop new policies and move into different markets. The development of new products will also suffer as providers will look to focus on their core markets, where performance is strongest, in order to ensure business continuity.”
There is evidence that the marketing and distribution of policies has already been impacted, with some insurers pausing the sale of new policies in markets. Travel insurers is one example, as they look to limit their exposure to claims and protect existing policyholders.
Pearce continues: “Yet, despite these negative impacts, the benefits will eventually come to the industry in the longer term. The forced changes in consumer behavior in lockdowns, such as accelerating the shift towards online purchasing, will result in opportunities for the development of new products focused solely on digital channels.”
The tracking of citizens has occurred in some countries in an effort to slow the spread. This may result in some consumers becoming increasingly open to the concept of sharing their own personal data, creating opportunities in the health and life insurance space.
Pearce adds: “The wealth of data that will become available following the pandemic will greatly increase underwriting accuracy for such events in the future, allowing for providers across the industry to better mitigate their impact.
“Arguably the biggest benefit will come in the claims management and customer service areas in the form of increased digitalization. The need for social distancing has forced consumers to become comfortable with virtual interaction. As a result, insurers will have the opportunity to move towards an increasingly virtual claims and policy management system.”