It is common knowledge that there is virtually no industry that has been immune to the effects of COVID-19. The global pandemic has caused massive shifts in individual and industrial behavior and will continue to do so in the months, if not years, to come. The P&C industry, like many others, is reeling from the effects of the virus. Amidst all these events, it is important to assess how the insurtech industry is going to be affected by COVID-19.
What is crucial for everyone to understand is that COVID-19 comes with several long-term as well as short-term implications. And these implications differ in intensity and scope among insurers and tech companies. What matters the most is how governments across the world are dealing with minimizing the spread of the virus and what are their policies to control the situation.
The pandemic is also changing the face of the insurance industry and how we look at insurance policies and coverages. Let’s look at how insurtech is being forced to regulate itself in the wake of this global pandemic:
Changing business models:
Insurtech companies like Root, Lemonade, and Next which cater to face-paced businesses and individuals will likely see themselves in a position where the business will grow substantially. In a post-corona, world, insurance buyers would look at short term, highly flexible, digital solutions, as the whole world embraces technological transformation in all aspects of professional and personal lives. These companies, which cater to small businesses and individuals who function in a high-paced environment will focus more on generating faster claim solutions and offering better customer support to its customers.
As personal and professional lives go digital, most of the processes involved-from buying insurance policies to filing a claim and receiving compensation-in customer-insurer relationships will go online. Insurtech companies that leverage their ability to process everything online will see an increase in user-base as people take their businesses and security worries online in an effort to protect themselves from further dangers. Fewer cars on the road and lesser people moving into new apartments will lead to a decline in auto and property insurance while the pandemic will give rise to health and life insurance sectors.
Increased focus on cybersecurity:
Due to the larger online presence of people and businesses, cybersecurity will witness a new level of engagement as more and more people will seek to protect valuable information and business operations that have now emerged online. With the escalation of online business, cybercrime will also witness a rise and the necessary precautions that need to be taken against such attacks will be handled by the insurtech industry as it prepares itself to handle an unprecedented level of the customer base.
Through these three primary ways, COVID-19 is changing the way insurtech operates right now and with time, as the pandemic accelerates or decelerates, insurtech companies will be positioned to strengthen their presence and expand their business in a digitally structured world.