Every industry in the world comes face to face with a situation that threatens its survival, whether it is transport, FMCG, chemicals, or any other industry that one can think of, each and every one of them has had a brush with some form of threat at least once since their birth.
Ever since its inception, the insurance industry has been known for its ability to always focus on the rearview mirror and rework itself through all kinds of scenarios. Wars, recessions, and countless other events that have had a global impact seem to not deter the insurance industry in its operations. The very fact that the industry thrives on the presence of RISK in this world is what keeps it going.
With socio-cultural and technological developments across the decades, the insurance industry has witnessed fundamental changes in its operations. In fact, the very definition and scope of insurance have undergone drastic changes in the last 20 years with the rise of the internet and global connectedness. In the wake of such changes, the industry has sought to reassess its services and the products to cater to a more modern and face-paced world.
Insurance product creation and guidelines are based on historic data. The industry assesses past patterns and risks in multiple scenarios through the ages and determines how to regulate itself accordingly in order to provide reasonable insurance coverage to individuals and businesses while making a profit. Everyone knows that past trends are likely to repeat themselves and coverages and policy guidelines need to consider as well as reflect that.
The seemingly unprecedented global pandemic that COVID-19 has emerged as has caused massive panic among individuals as well as industries as countries all across the globe struggle to deal with the implications of the virus. A majority of opinions circulate around looking at this virus as a ‘never seen before’ event but what the insurance industry among many others fails to recognize is that this ‘never seen before’ phenomenon is a veritable constant. One only needs to look back at events like the 9/11 attacks, Hurricane Sandy, SARS, and MERS outbreak to verify this pattern.
Therefore, what insurers, as well as policyholders, have really learned from this pandemic is that the past can be a great determiner for the prediction of future events. Let’s look at some of the lessons insurers and policyholders both have received from COVID-19:
Implementing technological solutions:
Only a few years ago, a lot of insurers would not even consider going digital when it came to developing products and streamlining various processes present in the insurance business. Right now, with the whole world practicing social distancing and virtualizing all aspects of life, creative, technology-based solutions for policyholders is what is required the most. Whether it’s a product or a service, insurers need to step up and offer a dynamic solution to engage in a much better fashion with customers while not dropping the quality of service they provide. Products and services need to be forward-thinking and flexible so that they can be rapidly transformed yet again, should unforeseen circumstances arise. Only out of adversity, comes progress.
Clarity of Coverage:
The most challenging problem that policyholders all across the globe are facing with their insurance policies is the ambiguity that has surfaced when it comes to the scope of the coverage and the inclusions that their insurance policy upholds. It is common knowledge that most people who purchase insurance do not carefully go through their insurance coverage and bear the costs when they get to know the inclusions only after they have filed a claim. People need to be more careful about understanding their insurance policy and its inclusions.
Unfortunately, the pandemic has also brought with it countless lawsuits from policyholders due to this very ambiguity about coverages. While this is not a new phenomenon, it can certainly be mitigated by policyholders having a better and more insightful understanding of their policies and what comes with it.
These are the two most important lessons that insurers, as well as policyholders, have learned from the global pandemic that COVID-19 is.