Picture: 123RF/EVERYDAY PLUS
Picture: 123RF/EVERYDAY PLUS

The insurance industry has a tough time in the Covid-19 pandemic. Several pending cases concern denied business disruption claims, and life insurance and funeral benefit claims are expected to climb.

In a seminal business interruption judgment last year the Supreme Court of Appeal ruled that Guardrisk must pay out Café Chameleon for revenues lost due to the lockdown. This precedent has since got the dominoes falling for business interruption claims from other insurers, specifically Santam and Hollard.

Despite the challenges facing the sector the following opportunities could provide value in 2021:

  • virtual health care and telemedicine;
  • behavioural modelling and internet of things;
  • product bundling and channel management; and
  • pricing optimisation and leveraging the role of digital in claims management and processing.

Many economies have experienced increased use of online health platforms as people try to respond to Covid social-distancing requirements. In China, for example, it is said in the S&P Global Market Intelligence report “China’s online health platforms see spike in usage amid coronavirus outbreak” that Ping An’s Group Doctor, which connects patients and doctors and provides online consultation services, has experienced growth of about 900% since the start of the pandemic.

There is also burgeoning growth in a platform-based health insurance in China called mutual aid — a mechanism to crowd source and share the burden of medical claims that is now reported to have more than 300-million members.

Wearable technology and devices have been increasingly used by insurance firms as they move to evidence-based risk determination. There has been growth in health monitoring in the provision of medical solutions used as a data source to inform improved mortality risk assessment. As the second wave of Covid continues to restrict economic activity, insurers can proactively reward clients who stay away from Covid hotspots, partner with institutions that have well established health protocols, and more proactively inform clients when their heart rates are elevated or their oxygen levels are below normal, using the data these wearable devices can provide.

Imaging technology

Product bundling has long been used by insurers, and in recent years it is consumers who are finding value in bundled options as they not only reduce the administrative burden of having many insurance policies in different places, but optimise their premiums and monthly account management fees. For insurers there is an added benefit in higher vertical sales integration and cross-selling opportunities, as well as better-quality underwriting, which enables them to price their products more competitively.

Due to social-distancing requirements and lockdown restrictions some insurers globally have started exploring the use of drones in the claims and damage assessment process for loss adjusters who would otherwise have to conduct site visits. We have also experienced growth in the use of imaging technology to assess claims in which images have been submitted by clients to expedite their insurance claims. This technology is also playing a pivotal role in reducing fraudulent claims as well as assessing patterns that can provide predictive insights on incident probabilities.

One of the biggest challenges insurers have had to deal with is the increased load on their call centres given the movement restrictions imposed because of the coronavirus. One insurer in the UK reported a 1,000% increase in customer inquiries and complaints related to travel insurance in particular. And with all the fatalities the country has experienced due to this deadly virus we should expect an increase in call volumes for death benefits as well.

Companies thus need to be nimble in their channel management strategies to ensure the effective resolution of client queries as well as provide a quality client experience.

This sector still offers much opportunity despite the Covid-19 pressure points, and the time has come for insurers to look for opportunities and invest into the pandemic — the winners will live to tell their story.

• Skenjana is chief economist and thought leadership executive at IQ Business.

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