Changes in the insurance field tend to follow changes in the local microeconomy and macroeconomy as a whole at large. It’s only as we begin to get used to the slightly prolonged Covid-19 crisis and the crisis it caused that it becomes possible to get a bird’s eye view of the way insurance will function in a changing world. Check out the text below to learn about some of the ways the pandemic has affected the economy, and the changes the broker industry will have to implement to adapt to the changing world.
Digitalization and Automation
People’s own homes, previously their most valuable possessions, have now become their offices, schools, kindergartens, and schools. The Covid-19 related restrictive safety measures have forced people and businesses to adjust to working from home, with varying success. Even though the Covid-19 vaccine is becoming more and more available to the general public worldwide, insurance companies have had to find a way to transfer all aspects of their work online. Insurance brokers who have already had an app and an email marketing plan in place have had a huge head start compared to competitors. Auto insurance, home insurance, health insurance, business disruption insurance, etc. can all benefit a great deal from automation.
A company such as Pathway offers automated processes to insurance brokers to facilitate communication between insurance companies and policyholders, and boost marketing efforts at the same time. The automation process handles insurance policy renewals and email workflows, even boosting online reviews, helping brokers build up online authority. With automation, brokerage’s call volume is reduced, and customer experience is improved by giving policyholders 24/7 access to their policy documents, proof of insurance, etc. In some cases, clients can even make payments through the mobile app and widget, without having to take a trip to the bank. Insurance brokers can improve their services based on feedback and online reviews, and they can test their clients’ sentiment easily through industry-standard surveys, such as NPS ®, which are integrated into these communication platforms. Sending automated emails triggered by clients’ online behavior such as purchasing policies or the nearing of their policy expiry date, can result in email click rates, open rates, response rates, and conversion rates skyrocketing.
A Shift in Consumer Expectations
As people start shopping, going to school, and working for home, more and more are deciding to purchase cyber insurance to protect their data. Many companies as well are likely to purchase cyber insurance to protect their company data, as well as some confidential client data with which they have been entrusted. This shift to doing business online and even the rise of connected, IoT devices in homes and businesses has made cybersecurity more challenging, forcing many natural and legal persons to purchase cybercrime insurance in 2021, and probably in the future as well. Also, according to a recent Accenture report, consumers are becoming more and more price-sensitive, as millions of people have lost their jobs, or are facing reduced salaries and heightened uncertainty in their overall financial lives. In the same report, policyholders stated that getting their value for money was their biggest priority, even more important than gaining insight into the peculiarities of their policies, and easier access to insurance-related information online.
The Need to Rebuild a Favorable Reputation Among Consumers
Only 42.5% of policyholders in the U.S. reported that their insurer delivered on the needed support throughout the Covid-19 crisis, and the figures are even worse on a global scale. Around 18% of policyholders claim their insurers even failed to communicate their response to the pandemic in a way they can understand. Insurers’ reputation all over the world has suffered as the particular wording of insurance policies allowed insurance companies to not cover Covid-19-caused damages. People felt cheated due to a poor understanding of the details of what their policies cover. In 2021 and the subsequent years, doing a better job in bridging this communication gap will be the top priority of both insurers and insurance brokers. Even though retention rates have remained stable in most states, brokers are safe to assume this complaint should be addressed in the future. One way to do this is again email marketing and insurance apps, reminding policyholders to review and carefully read through their insurance policies, and making all insurance information available to them online, just a click away.
To get with the times, insurance brokers will have to go beyond their customer acquisition and retention statistics and look into online surveys and reviews. Listening to the changing needs and both positive and negative feedback from policyholders will likely give some brokerages the competitive edge they need to stand out over the next couple of years. Finally, the Covid-19 crisis has shown us that digitization and automation, if used correctly, are the answer to many of the market’s current issues.